Goal Setting

I’ve recently started swimming again, and I took my usual approach – think of the end goal and break up the goal and the time to create a plan to work up to it. In no time at all I was falling behind, feeling a failure and somewhat guilty. So I flipped it. I’ve now set myself a lower “must do” limit, and I challenge myself to see how far into “bonus” I can get. The result is interesting; I find I’m focusing more on technique, I feel successful, I’m enjoying the swim. (And I’ll still reach my goal).

This made me think about goal setting in other situations.

The common wisdom says you should set tough goals for your organisation, your team, yourself. In their 1996 article “Building Your Company’s Vision” James Collins and Jerry Porras invented the term “BHAG” standing for “Big Hairy Audacious Goal”

A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines.

Examples of BHAGs used to motivate successful companies;

• Google: Organize the world’s information and make it universally accessible and useful.
• Ford: “Democratize the automobile.”
• Microsoft: “A computer on every desk and in every home.”

They’re all big and hairy, they’re all audacious. None of them are time bound, all of them are far in the future. They would all fail if strategies and tactics weren’t put in place to build the results to support the goal.

Done well they’re a source of inspiration, but all the talk of big goals and stretch assignments can be a little tiring, daunting even, at times. And if you’re on the receiving end of unsupported talk of the big goals it would be easy to become cynical.

I think some managers remember the big hairy audacious bit, and forget to build a strategy and plan the actions needed to get there.

There’s also some evidence that setting goals can lead to failure. In much the same way as I sensed I was failing when I stuck too rigidly to my swimming goals companies can fail when they stick too rigidly to their goals. One examply cited in recent research was GM’s dedication to “29” the market share percentage it aspired to for the early part of this decade. Dedication to this goal was a factor contributing to their failure, and ultimately its current near-bankruptcy status.

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.

It must be a serious issue because the guys of Harvard have been working on it and wrote a paper “Goals Gone Wild“, they list issues including goals that are too specific, goals with unrealistic timelines, goals with conflicting quality and quantity dimensions. They also point to specific ethical problems that arise when goals are set incorrectly giving examples such as Sears – where sales stretch-goals lead to overcharging, and the fraud at Enron. I’m sure they could now add plenty of examples from the current financial crisis.