We See The Obvious But Fail to See The Less Obvious.., Obviously -- Part 1 – Historical Perspective



illustrated by William Wallace Denslow

             All of us are familiar with the Mother Goose nursery rhyme Little Jack Horner but look at his experience the next Christmas.

Little Jack Horner sat in a corner, eating his Christmas pie; he put in his thumb and pulled out mincemeat and said, “What is this?? What a mess! This isn’t plum pie, now I have to wash my hand and cook will box my ears and I’ll get nothing for my pilfering.”

             Little Jack Horner experienced the impact of unintended consequences. The previous Christmas he had tried the same stunt with cook; stole a pie from the cooling rack and in a quick stroke stuck his thumb into the pie and hit a plum. He loves plums and felt very fortunate. Latter cook found him and boxed his ears but he felt vindicated. He got the plum. This year he tried the same trick; he stole a pie from the cooling rack, but didn’t realize it was mincemeat. In his haste to avoid cook he didn’t look closely. He hates mincemeat and when he failed to spear a plumb with his thumb he was sorely disappointed at a handful of mincemeat! Yuck, no, double yuck. Not only did he have to wash his hand but he didn’t get a plum and cook still boxed his ears. Not at all satisfactory. What went wrong, he says to himself. “It worked so well last year. I did the same things, why no plum?”

             In  1776 Adam Smith’s book, The Wealth of Nations was published in which he discusses his “invisible hand” which is a famous metaphor and is an example of a positive unintended consequence. His contention  that the baker, butcher and others do things for their own self interest and yet they supply food for the greater public provides the positive impact to their own selfish acts of acquiring money through the sale of goods (food). Hence, a positive unintended consequence.

             Earlier, John Locke the English philosopher and physician urged the defeat of a parliamentary bill in 1692. The bill was designed to cut the maximum permissible rate of interest charged on loans. Locke argued that instead of benefiting borrowers, especially small borrowers which was the stated purpose of the legislation it would hurt the very people it was meant to help. He suggested the actual results would be less available credit not more credit and a redistribution of income away from “widows, orphans and all those who have estates in money.” This is an example of the more common perverse nature of unanticipated or unintended consequences unlike Adam Smith’s positive unintended consequences.

             In 1850 Frederic Bastiat, a well respected French economist, published a paper shortly before his death titled What is Seen and What is Not Seen, or Political Economy in One Lesson. Bastiat was very aware of what he called “seen” and “unseen”. The seen were the easily recognized, obvious or visible consequences. The unseen were the less easily recognized, less obvious or unintended consequences. He was concerned that politicians,  policy makers, economists, bureaucrats and others were ignoring the impact of the unintended. He made the following statement, “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” I think Bastiat is suggesting that more effort is required to be a good economist than a bad one. It takes effort, time, energy and knowledge to “foresee” possible impacts from current rules and activities. To explore the possible impacts is much more challenging than looking at the immediate, visible impacts only. I believe such actions require a much greater commitment to finding the answers or truth than most of our current political and business leaders are willing to allocate. The lack of effort is unfortunate in the most benign cases and very damaging in the worst cases.

             One of the most comprehensive analysis on the concept of unintended consequences was done by Robert K. Merton in 1936 in an article titled The Unanticipated Consequences of Purposive Social Action. Merton identified five sources of unanticipated consequences; 1) ignorance, 2) error, 3) imperious immediacy of interest, 4) basic values, and 5) self-defeating prediction (also the reverse of the idea would be the self-fulfilling prophecy). Merton suggests that the first two are the most pervasive but the others can and are destructive too. The imperious immediacy of interest refers to instances were the individual wants the intended consequence so much that he purposefully chooses to ignore any unintended effects. Think of blind obedience to a program or course of action or willful ignorance. An example of this would be that the Food and Drug Administration creates enormously destructive unintended consequences with its regulation of pharmaceutical drugs. By requiring drugs not only be safe but efficacious for a specific use the agency slows the introduction of life saving drugs, many times by years. Time when many sufferers may die or suffer needlessly because the drugs are not available. According to some articles, the consequences have been so well documented that regulators and legislators now foresee it but accept it. Merton suggests that the basic values consequence can be seen in the Protestant work ethic. He says it “paradoxically leads to its own decline through the accumulation of wealth and possessions.” In his final point, self-defeating predications, he points to the population growth warnings in the early 20^th century which would lead to mass starvation. The very fact that people were concerned lead to increased research and development of food production which increased production and has since made the likelihood of mass starvation very much reduced.

             The law of unintended consequences is working always and everywhere. I believe governments and bureaucrats are particularly susceptible to ignoring or discounting unintended consequences. Also special interest groups tend to pick and choose their desired results, regularly disregarding unintended consequences as minor problems or inconveniences. Trade policies help one industry at the cost to some other industry or group. After the September 11^th, 2001 terror attacks there was an outpouring of support and concern which was needed and helped the country work through the trials, destruction, death and pain. However, it has been suggested that so much money was funneled to the 9/11 effort that other important charities and causes suffered significant problems for some time after trying to raise funds for important and worthy causes in disease control, relief of hunger, basic research and other humanitarian aid. Where does one draw the line? One final example I found relates to the case of the Exxon Valdez oil spill in 1989. Afterward, many coastal states enacted laws placing unlimited liability on tanker operators. As a result, the Royal Dutch/Shell group, one of the world’s biggest oil companies, began hiring independent ships to deliver oil to the United States instead of using its own forty-six-tanker fleet. Oil specialists fretted that other reputable shippers would flee as well rather than face such unquantifiable risk, leaving the field to fly-by-night tanker operators with leaky ships and iffy insurance. Thus, the probability of spills probably increased and the likelihood of collecting damages probably decreased as a consequence of the new laws.

             In following blogs we will examine Bastiat and Merton more fully. Bastiat, looking and writing in the 1800’s sees things with a certain clarity. Merton 80 years later created terms and thoughts that help clarify and expand the concepts. Finally, we will look at modern workplace, government and society for current examples and situations. Don’t make snap judgments on this, stay with it and let’s see just what unintended consequences we may discover.

The Bear Trap that Looks Like a Cookie: The Seduction of Goal Setting Part 4 – Practical Experiences or How Not to Succeed in Goal Setting

             Many of you have likely been exposed to goals and goal setting at one time or another. Some experiences may be pretty good but I am willing to bet that many have been either pretty poor or down right dangerous. For a variety of reasons, most people required to set goals either have no training or no knowledge of good goal setting techniques. They may be driven by upper management or team leaders who are themselves ill-prepared to help or even harbor dangerous ideas when it comes to the overall organization mission. Below I have shared a few of the situations I have encountered in my working career regarding goals, goal setting and the results of goal setting. We can see the results of poor goal setting in the Wells Fargo Bank illegal practice of opening unauthorized accounts. The news broke around the first part of September, 2016 and caused significant problems for the bank and is still on-going at this time. Investigations by federal agencies, penalties and fines of $185 million (which some think is small potatoes for Wells Fargo), the CEO, John Strumpf, stepping down and significant headaches for the bank’s legal, ethics, and customer service groups are all causing problems for the bank. All because of bad goals. (Google Wells Fargo unauthorized accounts, for a list of several news organizations and articles on this.)

In my early career days I worked for a utility company in their finance group. We were different from the accounting department but still under the company treasurer. One of our main functions was to estimate future  weather (temperatures) and the effect it would have on revenues. We were very interested in average temperatures. Since our product, natural gas, was used by retail customers mainly for heating we tried to gauge the impact of varying weather scenarios. This was especially true for how cold we thought things would get. We would start with general cold weather estimates and based on historical data, which we had quite a bit of, we would estimate average per customer usage in various areas throughout our service territory. Then during the year I would compare actual sales to our projected sales and see how we did. It was especially helpful when the differences in average temperature vs. actual temperatures supported the difference in usage and revenue generated. Sometimes the differences were opposite the expected impact and we had to look for other things that might affect usage and revenue.

             One year the treasurer asked me to prepare the forecast usage (weather impact) and the corresponding revenue generated for the annual budget. I spent several days going over the historical data and making adjustments I thought were reasonable and justifiable. When done I took the forecast and revenue generated to be reviewed. The treasurer didn’t look at my model or assumptions or discussion but at the bottom line, the revenue. He said “Bruce, this total revenue number needs to be $1.0 million higher” and handed it back to me. I started to explain how the average temperatures and regional adjustments had been developed and that I felt very confident that there wasn’t an error. The treasurer gently stopped me before I got very far and commented that he wasn’t concerned about the model or assumptions but that the model needed to generate $1.0 million more revenue. It took me a little while and a couple of trips back to him but I finally caught on and added an “other revenue” line to the budget that contained $1.0 million. It was then signed off. During the year I would compare the actual weather vs. the average weather forecast to see where revenue differences could be explained and I used the “other revenue” line to absorb changes I couldn’t explain.

             That was one of the first experiences I had with goal setting and reaching the goal. The treasurer either had set a goal or had been given a goal to generate so much revenue. It was not as important that the forecast model was right or wrong as it was to have the correct revenue generated. This illustrates how goals can impact in ways and places we might not normally expect. Who would have suspected that weather manipulation was so important. It wasn’t of course but it was a means to an end. No one knew what the weather was going to be but we had established, over many years, a process that had been well vetted and well received. That particular year the process was changed because of a goal.

             Some time later I was a manager in the public finance group of a large financial services company. I managed a group of very highly trained professionals with unique skill sets and knowledge. In an organization of over 100,000 employees my group of 4 to 6 people were the only employees that did what we did. They were not clerical people but like most professionals knew and could perform some clerical functions. At one point I was approached by a new HR representative asking about the performance reviews I had prepared for my people. She had reviewed my performance reports and had prepared new performance review reports she wanted me to use. The new forms were a series of statements with check boxes I was to use to show if my people were under, at or above performance levels as contained in the statements. The HR person was concerned that I had not set enough goals  for my people. Her main concern was that I did not have sufficient concrete goals to see if my people had “performed” fully. The performance reports I had been using were ones used for several years and I had thought, adequate. HR decided to “update” the process. I was not involved in writing or helping create the new reports that would be used for my people who were the only people in the company that did what we did. I was not given the chance to review or comment on the new reports. I was told to fill out the new reports by a date specific and return them to her. It was a mess. The reports were essentially a modified clerical position performance review report. Since some of my most junior people were on a similar pay level as some of the most senior clerical people, it appeared the HR person had just modified  clerical performance forms. As you would suspect it didn’t work, at all. It took me about 4 months to get things straightened out. In the end I was able to get goals that allowed my people enough flexibility to do their varied jobs and some freedom to try new things and ideas.  But I still had to include some goals with check boxes. I have trouble understanding the need for checkboxes.

             Sometimes a company wants to make drastic changes to its business model. New goals can be an effective way to implement changes quickly. During the great recession of 2007 – 2009 the organization I was working for bought out a competitor. In my business area the purchased firm was given control of the operations not the buying firm. The people who had been bought out by our company convinced executive management that extreme changes needed to be make which would make division look more like the bought out company. There was a lot of difference between the two division (old division and purchased division) philosophies. The bought out division was able to quickly make changes through establishing new goals. Many people who didn’t fit the new look or mold were fired, several quit because they didn’t agree with the new direction and goals and the change was completed fairly quickly but with a fair amount of disruption to the new combined division.

             This concludes the series of blogs on goal and goal setting. Don’t give up hope on goals but don’t be snowed under by them either. As the authors of the Harvard Business study on goal setting I referenced in part 1 of this series, goal setting should be used judiciously and with much thought and regular, consistent review. It is not something to take lightly.

The Bear Trap That Looks Like a Cookie: The Seduction of Goal Setting Part 3 - It's All About the Goals, Stupid

             We have been talking about problems associated with goals and goal setting, especially performance goals. We will continue the process of reviewing and uncovering the pitfalls and traps of poorly worked and implemented goals. Remember, it is easier to create poor goals than good ones, as many of you may experience regularly.

             Many claim that goals set at the most challenging levels create the greatest inspiration or commitment or performance. You have all heard that if we don’t shoot for the stars we will never hit them. The logic is flawed. Many may look at such goals and see the impossible nature and just not try. If employees do try for such goals they may resort to excessive risk taking, unethical behavior or dishonesty in their efforts to reach such goals.

             A problem of risk taking is that it may very well distort the risk preferences of the company or manager. Extreme goals can drive excessive risk taking. It does no good for a manager to claim they didn’t want excessive risk when there are few or limited options to success. Excessive risk can be generated by management and managers who are fixated on goals to the exclusion of common sense. Some managers may associate the goals with the idea of destiny or an idealized future for themselves. Goals then drive the justification for risk taking. Risk taking can also be used to justify face-saving activities if goals are not meet. At Wells Fargo during the great recession of 2008 the company acquired Wachovia Bank. At that time senior management designated Wachovia management as in charge of Wells Fargo public finance responsibilities and other related functions. The new management decided that it was necessary to change the focus (goals) for these related areas to become more like what is called a New York investment house. In order to do that it was necessary to create significant changes in goals and emphasis. Many employees were either let go or quite rather than take on the new goals and requirements which many considered overly ambitious and did not serve the bank’s client base. Since that time there has been significant changes in the type of clients served and not served as well as employee turnover and change.

             As mentioned earlier, overly challenging goals can lead to unethical behavior. If missing the goal contains a high price of failure, it may be easier to “fudge” the difference in the actual performance and the goal by cheating or misrepresenting the performance. Extreme goals can make unethical behavior more likely. Aggressive goals can make unethical behavior more rewarding or increase the likelihood of unethical activities or behavior. With such pressure there has to be greater vigilance to watch for and correct unethical behavior.

             Too challenging goals can cause dissatisfaction and lead to psychological consequences of failure. Missed goals can also affect future performance. Dissatisfaction can lead to employees quitting the organization, creating unfavorable comments and stories or other things that lead to loss of clients and customer and reduction in general company goodwill. Wells Fargo’s current problems including $185 million in fines and review by several Federal agencies was created by employees trying to reach over-challenging goals.

             Performance goals can have a negative impact on complex tasks. As individuals concentrate on specific,  challenging goals, they may learn less from the experience which will degrade overall performance. There may be better outcomes from encouraging one to do their best which allows for innovative thinking and solutions outside the box of the goal parameters. Specific, challenging goals may inhibit alternate solutions by creating a too narrow focus and penalize creative thinking. Narrow focused goals may encourage and inspire performance but at the cost of learning and innovation. If the challenge is to put more widgets together that can be addressed by a specific performance goal. However, the likelihood of finding a better way to put widgets together is greatly reduced.

             Goals can become a means unto themselves. They become their own reward. The final outcome moves from improvement to finishing the goal. Managers are likely to overvalue and overuse goals. Management can also use goals as a cop-out to cover poor management skills. This is particularly true in those situations where managers set a challenging new goal (or just a new goal) and then do not provide training, materials or guidance specific to the goals. The individual is left to “use their initiative” to solve the managers problem. The very nature of performance goals can create their own internal problems and barriers to success.

             Individuals may loose their ability to think creatively and independently, instead looking for the solutions only to the goal. The goals then create the drive and focus and may eliminate the ability to see the greater interactions and overall aims. Such things as mission statements and general purposes can get lost in the rush of reaching for the specific performance goal.

             Goals can create perceptions of unfairness which can be a significant problem. This is especially true when everyone has individual goals. One may feel that their goals are much harder or more difficult to accomplish than another. Allegations of favoritism can easily start which seriously damages team work and team communications. If all aspects of a goal are not thought through then it is easier to game such goals. Creative or productive energy is spent gaming the goals instead of improving the overall activity.

             As a former middle manager I was caught in the middle of goal setting; receiving goals from upper management and having to translate and create goals for my people. It was difficult and frustrating. Part of any goal is the need to monitor and control. Cheating on goals is fostered when rewards are dependent on performance quantity and not on quality outcomes. But quality requires more effort, planning and review than quantity. We may inadvertently put individuals into difficult ethical dilemmas by the type of goals we create thus forcing people to make choices that can and do have profound impacts on themselves and the company. Just look at Wells Fargo’s current problems.

The Bear Trap That Looks Like a Cookie: The Seduction of Goal Setting Part 2 - The Several Faces of Motivation

I am listening to the rock group, Journey and the song What it Takes To Win, from the album Revelation. This song is best played loud and with lots of bass. Daniel and I enjoy this song. Daniel and Ian and I have spent much time over the years in the mountains and deserts of Utah and Idaho hiking, rock climbing, mountaineering and camping. This song reminds me of how we approached some of the trails we hiked together. Some trails were vicious, hiking at altitude or in  the oven of Utah deserts. We did it to see unimaginable vistas. Deserts that are brutally beautiful. And to prove to ourselves and each other that we could do it.

             The song reminds me of some of the goal setting sessions I have been involved in over the years. If you get the chance, listen to it and see if it reminds you of some of your experiences, either in the outdoors or the office. Sometimes the goals and goal setting process we experience and endure in our employment may seem like the hiking experiences with my boys or like parts of this song. The song should be played loud to feel the rhythm and beat which complements the majesty around you (mountain or manager). If you are picturing a work situation, the song and lyrics can also block out voices of reason and moderation, especially when played loud. Picture in your mind a strong drum beat with bass guitar in the background playing strong, straight cords. The lead guitar plays a straightforward cord repetition supported by the base drum on the down beat. The lead vocalist sings with a strong voice and supporting vocals add depth on the chorus.  “Will you look in their eyes. They want you gone, they want the prize. When day is done, risk it all. One will stand, and one will fall “. Is your manager one of those that treats everything like a game, competition or battle, “With a hunger that never ends. When you want to prove. You are the best that’s ever been”. Your performance is based on your ability to make the goal. “ Seal the Deal. Get it done. Earn the right to say you have won.” The goal is the thing, it is bigger than you, than anything else. You are there to make the goal. “Stand your ground. Stay in the zone, now do not back down. More than pride. Your depend. Fighting hard ‘til the very end”. At the end of the day the numbers are the measure of success. Either you stand proud in the sunshine on the summit of success or wallow in the shadows of the valley of failure. Does this describe your goals and goal setting experience? This method and message occasionally works, such as on the sports field.

             The process of goal setting is fraught with potential bear traps. Goals can be too specific. One type of too specific goal is the narrow focus goal. People tend to concentrate on the thing which is emphasized and too narrow a focus leads to problems. The siren song is that narrow focus goals are easier to measure and establish, which is usually correct. The problems compound when the narrow focus goal limits important interactions outside the goal’s parameters. People tend not to look beyond the goal especially when it is being heavy emphasized (think the drum beat). Goals will naturally limit view and vision in an organization. The larger or bigger picture can be easily lost or subverted by narrow focus goals. Even worse, wrong, poorly thought out or poorly monitored goals can cause considerable damage and lead to poor results or unethical behavior through the process of omission.

             An additional problem of too specific a goal is when many specific goals are used to define the overall aim of the company or department. The goals may be related to each other or they may not. It is tough to multi-task or monitor many goals, specific or otherwise. Quality will be sacrificed as individuals try to cover all the goals or conversely people will emphasize one or two perceived higher value goals and ignore or apply minimal efforts to the rest. Individuals may assign a high priority to goals that, from the company standpoint, are not considered such. The individual will try to maximize their reward be it money, time or prestige.  Additionally, it is easier to measure quantity then quality. Quantity goals will likely get more attention then quality goals.

             Tied up in all this is the problem of what is known as inappropriate time horizons for goals. Short term goals generate returns and recognition to the individual sooner than long term goals. Immediate performance rewards focus efforts in the here and now to the detriment of the long run. Goals may be perceived as ceilings (maximum effort needed) rather than floors (minimum effort required). People may want to take a break, relax, rest or pause at completion of a goal. There may have been substantial energy, overtime or sacrifice involved in reaching a goal. Or as in the example of the sales person who reaches his sales goal earlier in the month, takes a couple of days off to play golf before he has to get started on the next month’s goal.

             Too many goals which may contain long and short term and quantity and quality requirements will tend to lead to the short term, quantity goals being completed. This will likely lead to results different than envisioned by the goal setting person. The manager may have been trying to generate a well rounded effort which will not be reached. This is very visible in public companies which have to juggle increasing short term shareholder growth as shown by quarterly profits (short term quantity goals) and  increasing the company net worth (long term quality goals).

             Goals can harm motivation. They can become a means unto themselves or their own reward. Managers generally overvalue and overuse goals, especially when goals are used as strictly a motivational tool (as opposed to team building, for example). Simple or poorly conceived goals can become a cop-out for managers who are not willing to properly construct and monitor goals. An extreme situation might be where a manager gives the challenging goal to increase the district’s revenue by 15% this quarter. Further, he tells you he is giving you a “free reign” to reach the goal. He wants you to use your initiative and solve his problem. It is one thing to consult employees in goal setting but quite another to require the employee to create the goal. Having employees set non-supervised goals may lead to goals that are in their best interest, not the company. Without some goal setting training the process of goal setting is a sham. Poor managers blame the employees when they themselves are to blame.

             In conclusion, it is easier to create problems than solve problems through goals and goal setting. Too narrow a focus goals, quantity vs. quality goals, inappropriate time horizons all lead to poor or destructive goals. The question becomes, is a particular goal really helping or hurting, reaching the desired outcome or missing the target. It is neither an easy nor straightforward process to create well crafted goals regardless of what you hear or are told.

 

 

The Bear Trap That Looks Like a Cookie: The Seduction of Goal Setting - Introduction (Part 1)

At the beginning of this new year I want to review the idea of goal setting. I am familiar with personal goals and the need to establish things to do and ways to try and improve. However, I will sound the call to watch and be mindful of goal setting. This is particularly true in business and employment settings.

            One of the problems of any business is how to motivate employees. The possible solutions can be land mines or cornucopias. Over the next few weeks I will briefly explore the nature of goal setting, one of the main methods of inspiring or damaging employees and the business itself. This blog will explore the problems of goal setting that I believe are not properly considered when goals are established to motivate and direct employee efforts. I am using as the basis for and drawing heavily on in this and subsequent blogs personal experiences, current news articles, and the article, Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting by Lisa D. Ordonez, Maurice E. Schweitzer, Adam D. Galinsky and Max H. Baxerman. Originally available from the Harvard Business School as Working Paper 09-083. (HBS paper) I recommend that anyone interested in beginning to understand the problems of goal setting read the entire article, it is not particularly long.

           Goal setting is used extensively in business to motivate and inspire employees to increase their contributions to a business or business unit. The idea is to give employees something to work toward, shoot for, strive to reach or expand their ability to generate some predetermined results for the company. The manager or HR group setting the goals may expect the goals to create better or improved results for the company or improve the individual but that is not a guaranteed outcome of the goals or may not even be a reasonable outcome depending on the type of goals. The authors of the above listed paper make a very strong case that one can not assume positive results from goal setting. In fact, they suggest it may be quite difficult to get really positive results without significant effort and considerable monitoring of the goal setting process and constant review. I wish to suggest it may be easier to get negative results than good solid returns. The authors suggestion is goal setting be used sparingly.

           The authors suggest that goals can negatively impact the company in one or more of five areas. Goal setting can create a narrow focus that harmfully impacts non-goal areas. Goal setting can create an environment that fosters unethical behavior; involving the individual, the company and the goals themselves. Depending on how goals are structured, they can lead to distorted risk preferences. Goals can create situations that cause employees to take harmful risks to the company. Goals can also undermine an organization’s culture by causing employees to ignore or circumvent company mission statements and underlying values. And finally, poorly thought out (or even well thought out and poorly executed) goals can reduce natural motivation. Goals do not need to be poorly constructed, ambiguous or incomplete to cause problems. Well structured and well thought out goals can cause unintended consequences. The interaction of individual initiative, team objectives or personal goals can impact company goals and create unexpected situations. Goals and goal setting is a complicated process that is fraught with pits and traps for the unwary manager and should not be treated lightly or without considerable thought. Adding to the problem is many managers or team leaders who are required to create or set goals for individuals, teams, divisions or even company wide have not received any type of training that would help them create good goals or avoid the pitfalls inherent in goal setting. Managers or upper management that require others to create and set goals without training, instruction and guidelines are creating a serious problem. The manager who says you or your team needs to increase revenue by 50% without additional guidance, direction, instruction and assistance is setting you up to fail, trying to protect themselves with vague or unrealistic expectations, dislikes you and wants to get rid of you, doesn’t understand his job (or yours) is just plain not very bright, is creating a cop-out for himself or all of the above. It shows poorly on the manager and the organization.

           There are some organizations and subsets of organizations that are very successful with goal setting. Yet we see many team leaders, managers and companies set goals that create significant problems and who knows how may goals are just ineffective or wasteful and some are very destructive. I am referring to Wells Fargo and their recent debacle involving fraudulently opened banking accounts and signing customers up for unrequested services. (See The New York Times news article; Wells Fargo Fined $185 Million for Fraudulently Opening Accounts, September 8, 2016 by Michael Corkery). Wells Fargo Bank’s problems can be traced back to goals and goal setting problems. I don’t believe the problems are yet over for the bank. It has cost John Stumpf his job and many feel that there should be additional and stronger penalties against not only Stumpf but the bank and other management members too. Wells Fargo disclosed in its standard regulatory filings that the SEC was investigating its sales practices. It also stated that there were “formal and informal inquires, investigations and examinations” being conducted by U.S. Department of Justice, congressional committees, the SEC (as stated above), California state prosecutors and attorneys general. Banks do not want attention from regulatory agencies and like very quiet, low profiles. Wells Fargo is anything but quiet or low key at this time.

           Subsequent posts will go into some specific aspects of goal setting and the problems that can be generated. I will also give some personal experiences and examples.