Goals Gone Wild: Systematic Side Effects of Over-Prescribing Goal Setting (2009)

The best lesson I ever got about goals I got from learning to play (6-max, limit, texas hold'em) poker. Poker has stupidly high variance to profit ratio, and an endless amount of metrics you could measure to track progress.

Obviously, the goal of playing is to make money, and almost equally obviously, focusing on how much money you made is actively harmful if done for sample sizes lower than 100k hands or so.

The solution to improvement through quantitative analysis in that environment is to find key drivers that you believe impact your overall goal, analyse trends you see in those drivers, and based on those find a few areas that you want to qualitatively drill into to figure out changes you can make. I.e. - "I open 20% of the time from early position and 25% from late position - if I compare to other successful players that is too low a difference, so lets see if I can find some situations where I may be making bad decisions and plug those holes".

That is what we want to do with goal setting in business as well. Yes we have some high level KPIs that we want to improve, but actively working "to improve your revenue" is harmful and will no doubt lead to selling cars that explode etc. To be successful you set your overall KPI(s), then you forget about it and focus on smaller things that will over time incrementally add to your overall goal.

If you have managers and employees who cant make that separation or want to take short cuts to directly affect the overall goal without focusing on the smaller bits, or comparing to some kind of "best known" practise, then you end up with exploding cars, tools that has all features and no usability etc.

Abstract from the paper:

"Goal setting is one of the most replicated and influential paradigms in the management literature. Hundreds of studies conducted in numerous countries and contexts have consistently demonstrated that setting specific, challenging goals can powerfully drive behavior and boost performance. Advocates of goal setting have had a substantial impact on research, management education, and management practice. In this article, we argue that the beneficial effects of goal setting have been overstated and that systematic harm caused by goal setting has been largely ignored. We identify specific side effects associated with goal setting, including a narrow focus that neglects non-goal areas, a rise in unethical behavior, distorted risk preferences, corrosion of organizational culture, and reduced intrinsic motivation. Rather than dispensing goal setting as a benign, over-the-counter treatment for motivation, managers and scholars need to conceptualize goal setting as a prescription-strength medication that requires careful dosing, consideration of harmful side effects, and close supervision. We offer a warning label to accompany the practice of setting goals."

I've witnessed this first hand - we recently started rolling out measured goals in our warehouses. This involved staff getting set daily goal counts for certain tasks (products shipped, products put on shelves etc.). As soon as we rolled out metrics everything that wasn't measured became a low priority. For example, we were not measuring cycle counts (stock take) so immediately the number of cycle counts plummeted, which increased our out-of-stock errors. We had instances of staff hoarding incoming shipments from suppliers at their workstations in order to get higher rankings.

Overall the warehouses went from being generally efficient to extreme performers on measured metrics. I think metrics can be clearly powerful, but you have to be very careful about what metrics you choose to implement.

I work as a contractor for a company where employees must set a couple of goals yearly and meet them. Set them too low, you're considered lazy, fail to meet one and you're considered unreliable.

There's also a mandatory quota of trainings, which employees must elaborate and then train their colleagues, and "charitable work" they must participate.

I don't want to be hired.

A glass of wine per day is ok. Maybe even good. Two six-packs a day isn't. Anything is ok in moderation, and with full knowledge of both positive and negative effects. I have long-term objectives for sure, but avoid setting long-term SMART objectives for myself, because life happens. At work during the annual review I set SMART objectives as required, but completely ignore if not forget them during the rest of the year.

Short term is another story. Every evening I decide exactly what I want to accomplish during the next 24 hours, always looking at how what I'm planning for the day aligns with my longer term objectives. That's been crazy useful to me.

Amusingly, that sentiment has a middle ground which I apply to software development projects - I live and die by a project's vision/scope, which is really an objective for a project.

Part of the problem here is the problem of aggregation.

We measure things in the aggregate, but we influence them in the minuscule.

So I might measure the fact that a certain fast food restaurant makes french fries slower than another one, but there could be a thousand reasons why this is so. Simply setting a goal of increasing the number of french fries delivered doesn't actually make it happen. Instead, it ends up perversely impacting all the other areas of the restaurant.

We look at things in big, fuzzy ways, so we naturally think we can influence them in the same way. We measure in the aggregate, then find some correlations in the aggregate, declare causality, then set goals. Doesn't work like that. This is the way things are commonly done, and there are multiple logical errors here. [Add in long discussion about the implications of this on public policy-making]

There are many types of ambition.

Goal-focused ambition is only one type, it may be the most recognizable, maybe due to the influence of goal-seeking sports competitions.

Goals are great for some games, some of which are competitive. Not everything is a game.

Sometimes a team benefits from a goal more than an individual.

What if you have a goal that is not recognized or appreciated?

What if you've already reached your goals?

What if you have stronger ambition by nature than the goal-seeking type?

What if your goal was to perform without a specific goal while still outperforming those who focused on it?

What if you recognized the factors identified in the original PDF decades ago and groomed yourself to be able to sometimes engage in more effective goal-seeking than the pure devotees, while also outperforming them toward their own goals while yourself being unfocused, whenever you wanted to according to the situation?

"Given that small actions within an organization can have broad implications for organizational culture (Fleming & Zyglidopoulos, 2008), we postulate that aggressive goal setting within an organization will foster an organizational climate ripe for unethical behavior. That is, not only does goal setting directly motivate unethical behavior, but its introduction may also motivate unethical behavior indirectly by subtly altering an organization’s culture. In sum, although many factors contribute to unethical behavior, the point cannot be overstated: goal setting motivates unethical behavior."

What a rubbish article. Without goals, how would anyone know what needs to be done? How would you know what is expected of you? If it is a generic company, the main goals are to make sure the company stays around and to make a profit. You then create sub-goals to achieve the main goals and repeat this until everyone knows what needs to be done. If the sub-goals do not agree with the main goals you get the mess which the article describes. This is caused by WRONG goals.