Consider Not Setting Goals in 2013

The point bears repeating: when you set an incentive tied to a measurable target, you will get behavior that focuses on that target, even if everything else has to suffer.

Give your CEO a bonus based on revenue, and profit will suffer. Base it on profit, and quality will suffer. If you tell your customer service people to bring down the average length of calls, they will do so by hanging up on people. Tell them they have a bonus based on post-call satisfaction surveys, and on-hold times will go up.

Those are all well-intentioned goals. If you set a really bizarre goal, things can go really wrong. And if you don't set goals at all, nobody knows what you think needs improvement.

Management is hard.

The really fun thing about this is that folks have realized this and, instead of focusing on intrinsic motivation, have just added more metrics to try and balance things out. Enter the "balanced scorecard" with 30 different metrics that the manager or employees have little/no direct control over.

http://www.sciencedirect.com/science/article/pii/S0263237399...

Yes, the Balanced Scorecard has some use but I think it's still missing the point.

I like the author's suggestion of setting a focus rather than a specific goal. For example, weekly revenue growth rate (from pg's growth essay).

A company wide focus on growth rate can crystallize alignment on the most important dimension. But setting a specific pass/fail goal ("growth will be 5% a week") could reduce intrinsic motivation, cause weird short term behaviors, and even cap the upside.

Benchmarks are very useful (5-7% is great, 1% means you're still lost, 10% is a blockbuster), but there's no need to set a specific number. Just get everyone rowing in the same direction.

Personally, where I have control, I treat goals as objectives or things to strive for vs. tasks or some sort of SLA.

Why? If you make goals checkboxes, you end up doing whatever is necessary to meet the minimum criteria for "done". The article used a football quarterback being given a financially backed goal of "Don't throw interceptions; if you do, you will be penalized $X".

The lesson to be learned there isn't "Goals are bad". The lesson is "Don't establish dumb goals".

I worked in a sales organization when I was in college that determined that selling a specific high margin add-on product was critical to the organizations success. They gave sales management the ability to cut margin on the base product to increase sales of the add-on product. My incentive was based on selling the add-on, and my boss's bonus was tied to the ratio of base-product/high-margin product. His boss was paid based on ranking of total add-on product sales vs. his peers. Guess what happened? We sold the base product at a loss, hit our KPIs, and made a bunch of money. The company did not.

Some of these examples have less to do with the fact that a goal was set, and more to do with the fact that there was a financial incentive tied to it.

Financial incentives can have the side effect of reducing intrinsic motivation (see Daniel Pink's book "Drive" for research and examples).

Set goals! Set goals! For the love of god, set goals! You'll make my startup fail: http://chizzl.com/

I like to keep a light journal of tasks I accomplish every day. I think of this as goals in reverse. It gives me a sense of accomplishment, similar to achieving a goal, but at the same time allows me to focus on the present, as the author suggests. Looking back on the journal also allows me to put the present and the future in a well-defined perspective, which helps me give the time estimates that business types inevitably require.

tl;dr: Focus on journeys, not destinations.

Or perhaps, draw the right conclusion from the data: setting bad goals is really bad. Don't set bad goals.

This reminds me of a Stephen Fry interview commenting on the same point.

http://youtu.be/4byn2CIwec0

I'm not. I'm setting and doing goals all year long, this year won't be any different.