Introduction
Setting company goals is nothing new. According to Mr. William R. Blackburn, “goal-setting should be part of the strategic and tactical planning process. Goals that are inspiring and simple, measurable, achievable, relevant and time-based (SMART) should be included with each strategic objective so everyone can know whether or not the objective was achieved.”[1] Blackburn goes on to say that a plan goals “framed around sustainability issues brings a company’s sustainability policy to life; without such goals, the company statement becomes a mere “trophy policy,” which – like the moose head hung on the wall to impress visitors – is simply dead.”[2] However, despite the best laid plans, goals-set does not always mean goals-realized.
Why Goals Fail to Deliver Performance
Mr. Blackburn, in figure 7.1 in his book details 11 reasons ‘Why Goals and Other Indicators Fail to Deliver Performance,’ they are:
1. The measures aren't credible with intended data users because:
a. the measures are based on unreliable, sparse, or old data
b. the measures are being collected, compiled, and/or reported by people who are not trained or held accountable for doing so
c. the meaning of the measures isn't clear
d. the measures are not thought to be valuable of a priority by those who must perform to produce the desired results, or are not linked to important objectives of those people
e. the people whose performance is needed for results are not aware of the measured results
f. there are confounding factors other than those intended to be stimulated or controlled that affect the results; the cause-effect relationship is unclear; the actions needed to improve performance under the measures are not clear
2. The use of the measures isn't readily visible, management isn't interested in the results
3. There are too many measures or they are reported too frequently, which overwhelms data compilers and users
4. Results are reported too infrequently to keep the organization on course
5. There are too measures and their context relative to other factors isn't well understood, e.g., having sales figures without profit figures
6. Not enough time is allowed for corrective actions to take effect, goals are to short term
7. There is no accountability of recognition for performance under the measure
8. Goal targets are unrealistic
9. The goals drive the wrong performance
10. The results aren’t reported clearly or with sufficient detail and explanation
11. The results aren’t used to make business decisions[3]
Numerous companies have set goals and fail to achieve those goals in recent years. General Motors, for example, set a target in the early 2000’s that they would “recapture 29 percent of the American market, the share it had ebbed past in 1999.”[4] GM never did regain 29 percent of the market. And while the “causes of GM's woes are many - from poor design to high labor costs to a prostrate economy - industry analysts argue that one of the most damaging things the company did was to set that goal.”[5] According to Drake Bennet, writer for the Boston Globe, “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.”[6]
Another way that organizations often fail to achieve goals and strategic planning targets is because they are “set top down, by executives who lack crucial information and are out of touch with staff challenges. The goals are unrealistic and they fail to consider organization resources and capabilities. Staff members don't believe that the rewards they will receive for goal accomplishment will equal the energy they invest to achieve them. Frequently, managers are intimidated when they fear job loss for failure.”[7]
According to Susan M. Heathfield, a former Siebel Systems executive said, "My favorite goal setting story of all time was how Siebel set sales goals for its District Managers: everyone's quota was $3.5 million. There, no more thought needed to go into it, no discussion - just do it or you're fired! So the District Manager calling on Citibank had the same quota as the District Manager calling on the States of Louisiana, Mississippi and Alabama. Guess which guy got fired?
I also remember how I used to spend the last day of every sales quarter at Siebel performing unnatural acts to close business and save my job. At the end of the year, I had to work until 10:00 p.m. on the last day of the sales quarter (while we had company over at home) to get one last deal closed. This deal saved my job. I was one of two state and local district managers that avoided the axe two weeks later."[8]
The Need for Goal-Setting
Despite the risks involved in setting goals, “It is a given in American life that goals are inseparable from accomplishment.”[9] America has been home to several, seemingly impossible goals over the years, President Kennedy's 1961 “promise to put an American on the moon by the end of the decade is held up as an example of a world-changing goal, the kind of inspirational beacon needed to surmount immense societal challenges. Among psychologists, the link between setting goals and achievement is one of the clearest there is, with studies on everyone from woodworkers to CEOs showing that we concentrate better, work longer, and do more if we set specific, measurable goals for ourselves. Goal-setting is one of the seven habits of highly effective people, says self-help guru Stephen Covey, and even Henry David Thoreau, the philosopher of dropping out, celebrates the work of goal setting. "If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them," he writes in Walden.”[10]
Blackburn details a list of eleven ‘Benefits and Purposes of Measurable Goals,’ they are:
- Focuses organizations on a common mission, enhances teamwork
- Helps define accountability for action
- Documents accomplishments; marks point of success
- Serves as basis for granting rewards
- Motivates people to perform
- Provides early warning device for alerting organizations if performance is slipping
- Helps organizations manage and improve processes
- Reveals the strengths and opportunities for improvement in tactics, programs, processes, people, and organizations
- Makes personal performance evaluations more objective
- Guides organization in allocating resources
- Demonstrates responsiveness to stakeholders
Conclusion
While setting unrealistic goals and goals that cannot be adequately managed to ensure completion can surely bad goals that have the capacity to cause great harm to a company, the goal that is modest and well managed has the potential for huge potential. America was founded on setting goals that seemed wild and perhaps unrealistic. The America ability to accept risk as a natural byproduct of success is part of the reason why the United States has such a high rate of entrepreneurship. While the emphasis and types of goals has changed due to increased interests in CSR, desires at delivering an environmentally friendly product, and creating sustainable communities, the potential failures of goal-setting is still the same.
[1] Blackburn, William R. (2007). The Sustainability Handbook. London, England. Earthscan. Page 227. [2] Blackburn, William R. (2007). The Sustainability Handbook. London, England. Earthscan. Page 227. [3] Ibid, page 226. [4] http://www.boston.com/bostonglobe/ideas/articles/2009/03/15/ready_aim____fail/ [5] Ibid. [6] Ibid. [7] http://humanresources.about.com/cs/strategichr/a/aadark_goals.htm [8] Ibid. [9] http://www.boston.com/bostonglobe/ideas/articles/2009/03/15/ready_aim____fail/?page=1 [10] Ibid.
No comments:
Post a Comment