Now that we have discussed how to formulate and communicate a vision and inspire teams here, it's time to set goals to achieve that vision. In this article, we will discuss some thoughts on setting goals.
Why are goals important?
Why are goals important?
- Helps set direction that is aligned to the vision, and prune away fluff
- Energizes and motivates people (IMHO because of the clarity it brings: you are not thinking about everything under the Sun, you are narrowly focused on one/few things).
- Increases effort
- Helps us learn: new skills and strategies that help us achieve the goal
- Whether the team has accepted and internalized those goals (see research here and here that demonstrates that if people reject a goal, their performance drops precipitously). People accept goals when:
- They are reasonable, and clear to understand
- They are meaningful (this is where vision becomes important)
- They are aligned to the ability of the people
- The environment in the team is conducive (you accept when the team accepts, and you reject when the team rejects)
- As goals become more difficult, it tends to encourage unethical behavior: inflating numbers, under-reporting risks. Several examples from Sears, miniscribe etc.
- People become more dissatisfied as they set/are given aggressive goals. As you fail to attain the more difficult goals, you only see where you fell short, as opposed to the person who set/was given more achievable goals because these people see their accomplishments and how they separated themselves from those who did not achieve these goals (see research by Medvec and Gilovich here about bronze medalists being happier than silver medalists).
Given the above cautionary notes on setting goals, SMART is a good framework to use to set goals:
- Specific
- Measurable
- Agreed-upon (remember that acceptance is important for performance)
- Reasonable (remember that you do not want super difficult goals)
- Time-bound
There are certain downsides to the SMART framework, that would be wise to take into consideration:
- The goals could be very tactical, and not very strategic. Take Ford Pinto, that sacrificed safety for inexpensive cars.
- The specificity of the goal (not just the aggressiveness of it) could encourage unethical behavior. Especially for those who are super close to achieving the goal. Encourage a certain tolerance to failure to counteract this.
- Goals could be in conflict across different teams in the organization. For example, increase sales AND reduce ad budgets.
- Goals can also cause a lack of cooperation. The helping hand you give might benefit other teams, but will not be helpful to your grading.
- Very specific Goals can cause tunnel vision; you are so narrowly focused on the goal that you lack peripheral vision (for example, see the invisible gorilla experiment here).
- Very specific goals can stifle learning and creativity. You are scrambling to meet a particular goal, and you suffer from attention deficiency and impatience and dismissing certain strategies too quickly. This is especially important to be aware of when the business environment is complex and not fully understood.
- SMART goals can turn out to not be meaningful. They do not motivate employees. Some ways to make goals meaningful are:
- Leverage customers and the impact the work has on them. For example, showing medical device engineers how patients have benefited from pacemakers.
- Customers help show the impact to employees
- Appreciation for the work done by employees
- Helps build empathy for customers, and thus makes product better.
- Enable learning of new skills. For example, rotation of workers in a circular assembly line.
- Increase autonomy of employees. For example, the "stop" button in an assembly line.
