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.
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