Are Big Goals a Burden to Business?
The latest on the banking catastrophes and the debate about bonuses has got me thinking about goal-setting.
Specifically, do highly ambitious and stretching goals that significantly raise the bar help or hinder organisational performance?
The case for challenging goals
- They encourage innovation and the development of new solutions and sources of value. Instead of trying to incrementally beat competitors, big goals encourage organisations to create new businesses that make their competitors irrelevant.
- They help build focus across an organisation, a sense of mission and a desire to go for it. JFK didn't say to the US that it should improve its space programme. He said that Americans should put a man on the moon by the end of the decade. The difference in resources, commitment and results is clear.
- They create the impetus for movement and progress, even if the ultimate goal is not realised. "The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it," according to Michelangelo.
- They lead to manipulation of results and the creation of questionable products and services so that the big bonuses will be paid out. Enron is the avatar of this approach.
- Unless there is a history of success they can foster a feeling of cynicism across the organisation and a lack of belief in the management. "Stretch goals are like stretch pants -- they are a sign that you have given up!" That's Dilbert.
- They prevent organisations from delivering smaller, yet important improvements to customers and organisational performance. 3M, the creator of post-it notes, is highly innovative and successful, but eschews big goals. In "Built to Last", Jim Collins and Jerry Porras claimed it operated using aphorisms such as "make a little, sell a little", "take small steps" and "no end product is so small as to be scorned". (But Collins and Porras were also the inventors of the "big, hairy audacious" goal.)
(Illustration: Hikingartist, CC2.0)