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.