Why Setting Goals can Backfire

Dr. Deming long ago stated in his 14 obligations of management: “Eliminate numerical goals, numerical quotas and management by objectives.” I think he was right then, and is right now. A goal can help set the scope of the effort. If you are aiming for 2% improvement different strategies may make sense than if you are aiming at 50% improvement. But that type of use is rare. The problem with goals is what actually happens in organizations. They create serious systemic problems and should be avoided (other than in setting the scope). They are deeply ingrained in the way many people think, but we would be better if we could eliminate the use of goals, as they are used now (mainly as arbitrary numerical goals).

Ready, Aim … Fail, Why setting goals can backfire

In clawing toward its number, GM offered deep discounts and no-interest car loans. The energy and time that might have been applied to the longer-term problem of designing better cars went instead toward selling more of its generally unloved vehicles. As a result, GM was less prepared for the future, and made less money on the cars it did sell. In other words, the world’s largest car company – a title it lost to Toyota last year – fell victim to a goal.

Rather than reflexively relying on goals, argues Max Bazerman, a Harvard Business School professor and the fourth coauthor of “Goals Gone Wild,” we might also be better off creating workplaces and schools that foster our own inherent interest in the work. “There are lots of organizations where people want to do well, and they don’t need those goals,” he says. Bazerman and others hold up Google as an example of a company that manages to do this, in part by explicitly setting aside time for employees to pursue their own projects and interests.

Today, as the economic situation upends millions of lives, it is also forcing the reexamination of millions of goals – not only the revenue targets of battered firms, but the career aims of workers and students, and even the ambitions of the newly installed administration. And while it never feels good to give up on a goal, it may be a good time to ask which of the goals we had set for ourselves were things we really needed to achieve, and which were things we only thought we should – and what the difference has been costing us.

Related: Measuring and Managing Performance in OrganizationsArbitrary Rules Don’t WorkThe Defect Black MarketGoals can Distract from ImprovementBe Careful What You Measure

This entry was posted in Data, Deming, Management, Process improvement, Psychology, Systems thinking and tagged , , , , . Bookmark the permalink.

2 Responses to Why Setting Goals can Backfire

  1. Google *does* have a goal:
    “Google’s mission is to organize the world’s information and make it universally accessible and useful.”

    Goals are not the problem. It’s how top management selects and applies goals where things go wrong.

  2. David says:

    I think that the problem in goal setting is the glib grab at numerical goals that are detached from analysis of the problem or opportunity, and do not connect to actions. So where did GM’s 29 come from? A hat, or extensive research studies that showed that was the capacity of the market for its goods? A hat, I’ll bet, or some work that ignored the market and GM’s capability to meet it’s needs.
    In my own organisation we’ve just had a meeting about goals. Preparing the budget for one of our services, we decided that our desire for efficiency improvements have been unmet becuase there is no target (apart from other things, which are being addressed). So what is improvement? Is it 1% better, or 5% or 50%. And which one are we likely to hit and sustain. Our biggest problem is in the number of labour agency staff we have to employ. Get that nu mber down and we make about a 2% improvement. So we will create a budget benchmark so everyone knows the number, but we’ll also develop an implementation pathway that will deal with the specific problem we can see: not enough permanent staff. Once this is under way, we’ll likely look at the next piece of hanging fruit.

Comments are closed.