Setting responsible goals

Setting responsible goals

Reading Time: 2 minutes

Far from increasing the daylight between itself and another brand, companies that are fixated on achieving an objective can do themselves, their brands and their reputations serious harm. Pushing the wrong boundaries can push a brand over the edge. This is of course anathema to conventional management theory which has preached for some time that pushing people to excel brings out the best in them.

But take the case of the Ford Pinto, where senior management’s insistence on a car that weighed less than 2,000 pounds and sold for under $2,000 led to a vehicle that could go up in flames if it was rear-ended. At Enron, the decision to reward salespeople based on revenue volume rather than whether the trades were sound or profitable, contributed to one of the most famous implosions in American corporate history. Indeed one could well argue that the GFC sprang directly from financial institutions pursuing goals that made no sense but that those on the selling side were generously incentivised to pursue at any cost.

The goal can create the problem

According to this research, goals that are too specific often lead employees to develop such a narrow focus that they fail to recognise obvious problems unrelated to the target. They become fixated with beating one another and/or “the other guy”. Quality loses out to completion as workers, pressured by specific and ambitious targets, risk everything in order to meet the goals they have been set. That situation doubles down when participants are rewarded with money or prestige for hitting a number.

The clear takeout is that bad things happen when goals are quantitatively and not qualitatively driven. A goal that is just a number is a bad goal – because as my favourite renegade accountant Hamish Edwards puts it, “numbers are just there to keep score”. When the score becomes the goal, there’s enormous temptation to rig the game in order to keep winning, at least in the short term.

Be careful what you ask your people to aim for.

The mighty challenge with goal setting it seems to me is not setting the goals themselves, but understanding the nature of the goals that are best set. Brands that set low goals undersell their capacity. Brands that over-reach set themselves up for disappointment and/or bad behaviours. Perhaps not surprisingly, goal setting itself often defies sense. Senior decision makers will their brands to do what they want them to do rather than working through what they would be best to do. They stretch when they should be stabilising, and constrain when they should stretching.

In a work entitled “The Paradox of Stretch Goals: Organizations in Pursuit of the Seemingly Impossible”, Sim Sitkin, Kelly See, Chet Miller, Michael Lawless and Andrew Carton observe that “whereas weak organizations might pursue stretch goals out of desperation and make their dire circumstances worse, those with the capabilities to truly benefit from stretch goals typically fail to do so because the same characteristics that make them well positioned to benefit from stretch goals also limit their inclination to actually pursue them.”

The learning for me from this is simple. Be careful what you ask your people to aim for. A target for a brand is also a signal to its culture and the collateral damage from ambitious targets based on the wrong context or intention may be far-reaching and unexpected. Machiavelli was a prince and not a CEO for a reason.

2 thoughts on “Setting responsible goals

  1. So true Mark. Why is it do you think that those setting the goals are so blind to the potential damage to their brand?
    How can they get so far down a path and not realise the direction is has taken the brand in?
    Is it an unfortunate CEO trait – to win at all cost?

  2. Hi Lauren – great questions (of course). There is so much pressure quarter by quarter pressure that the fixation with targets often seems to carry through to longer term thinking. Decision makers get locked in on making something happen rather than continually sense-checking whether the thing itself is right. The light goes green and everyone moves – and they keep moving towards that target until it is reached. As they do so, group dynamics kick in and objectivity walks. There’s plenty of research to show that once people have invested in something (money, reputation, time, anticipation of reward), they find it very difficult to admit that it’s no longer right or that the investment should cease. Hope you guys are good. Lovely to hear from you. Mark.

Leave a Reply

Your email address will not be published. Required fields are marked *