We have all heard this advice: Set goals if you want to accomplish anything substantial. That advice comes from personal coaches, self-help gurus, management consultants, managers and executives and is deeply imbedded in leadership practices.

In organizations, “stretch goals,” or “hairy audacious goals,” as a management motivational and performance strategy, is widely practiced. Yet, there is evidence that goal setting may actually be counter productive if not a waste of time.

Our society, at both the individual level and in organizations, has an obsession with goal setting, particularly “stretch” goals or “audacious goals.” We tie goals to accomplishment. In our culture, an individual or organizations cannot be considered successful unless goals are achieved. And the usual motivation method used by leaders to achieve these goals is the continual focus on “improvement,” “bigger and better,” through harder and harder work, and increased productivity. And the way to measure that success is to measure goal attainment.

The following is a typical template for goal setting:

  • Write down the goals;
  • Make goals specific and clear;
  • Indicate how you’ll measure goal accomplishment;
  • Have goal timelines and deadlines;
  • State goals in terms of specific outcomes or results;
  • Attach rewards, incentives for attainment and punishment for failure.

 

 

The support for setting goals has reportedly come from both academic/research sources and popular self-help sources. With the respect to the first, researchers reportedly surveyed the graduating seniors from the class of 1953 at Yale University. They asked if the class members had written goals for their future. Three percent did. The rest did not. Twenty years later, researchers were said to have gone back to the surviving members of the class. They discovered that those with written life goals had accumulated more wealth than all their classmates put together.

The only problem with this powerful finding is that there was no such study. Researchers at Yale and members of the class of 1953 all swear they never conducted or participated in any such study.

The second source of support has come from such self-help sources as The Secret, which encourages people to set ambitious goals through a process of visualization. There is no study that I am aware of that demonstrates a causal link between visualizing goals and their attainment.

Despite the popularity of goal setting, there is compelling evidence that regardless of good intentions and effort, people and organizations consistently fall short of achieving their goals. More often than not, the fault is attributed to the goal setter. But the real problem may be in the efficacy of goal setting itself.

 

What’s Wrong With Setting Ambitious Goals?

 

Aubrey Daniels, in his book, Oops! 13 Management Practices That Waste Time And Money, argues that stretch goals are an ineffective management practice. Daniels cites a study that shows when individuals repeatedly fail to reach stretch goals, their performance declines. Another study showed 10% of employees actually achieved stretch goals. Daniels argues that goals are motivating people only when they have received positive rewards and feedback from reaching them in the past.

The Center For Disease Control estimates that 34% of Americans are overweight and a further 34% are obese, which means almost 70% of the population are dangerously unhealthy. That’s a curious result, despite the proliferation of weight loss programs that usually focus on weight-loss goals. The easy explanation would be to attribute fault to individual for lack of will or effort. But the problem may be inherent in the validity of goal setting.

 

 

Sim Sitkin a Duke University business school professor, completed a study of stretch goals, and found they were most likely to be pursued by desperate, embattled companies that would have difficulty adapting if the goals failed. He says: “We conclude that stretch goals are, paradoxically, most seductive for organizations that can least afford the risks associated with them.”

L.A. King and C.M. Burton in an article entitled, The Hazards of Goal Pursuit, for the American Psychological Association, argue that goals should be used only in the narrowest of circumstances: “The optimally striving individual ought to endeavor to achieve and approach goals that only slightly implicate the self; that are only moderately important, fairly easy, and moderately abstract; that do not conflict with each other, and that concern the accomplishment of something other than financial gain.”

Adam Galinsky, a professor at Northwestern University’s Kellogg School of Management and one of the authors of a Harvard Business School report called Goals Gone Wild,” argues that “goal setting has been treated like an over-the-counter medication when it should really be treated with more care, as a prescription-strength mediation.” He argues that goal setting can focus attention too much or on the wrong things and can lead people to participate in extreme behaviors to achieve the goals.

The authors of Goals Gone Wild, have identified several specific negative side effects associated with goal setting: “An overly narrow focus that neglects non-goal areas; a rise in unethical behavior; distorted risk preferences; corrosion of organizational culture; and reduced intrinsic motivation.”

Maurice Schweitzer of the University of Pennsylvania and Lisa Ordonez of the University of Arizona, co-authors of Goals Gone Wild, have studied the psychology of goal attainment, and in several experiments have shown that when people self-report their achievement of goals, if they are not entirely successful, a significant percentage of them lie to make up the difference.

One inherent problem with goal setting is related to how the brain works. Recent neuroscience research shows the brain works in a protective way, resistant to change. Therefore, any goals that require substantial behavioral change, or thinking-pattern change, will automatically be resisted. The brain is wired to seek rewards and avoid pain or discomfort, including fear. When fear of failure creeps into the mind of the goal setter, it becomes a “demotivator,” with a desire to return to known, comfortable behavior and thought patterns.

New research in the INFORMS journal Organization Science shows that this is the exception, and not the rule. For many organizations, stretch goals can serve to undermine performance.

The study, “Stretch Goals and the Distribution of Organizational Performance,” was conducted by Michael Shayne Gary of UNSW Business School in Sydney, Miles Yang of Curtin University, Philip Yetton of Deakin University, and John Sterman of the Sloan School of Management at MIT. They examined the impact of assigning stretch or moderate goals to managers. Study participants were assigned moderate or stretch goals to manage the widely used interactive, computer-based People Express business simulation.

The researchers found that about 80 percent of participants failed to reach the assigned stretch goals. Compared with moderate goals, stretch goals improved performance for a few, but many abandoned the stretch goals in favor of lower self-set goals or adopted a survival goal when faced with the threat of bankruptcy. Consequently, stretch goals generated higher variation in performance across organizations, created large performance shortfalls that increased risk taking, undermined goal commitment, and generated lower risk-adjusted performance.

“We find that stretch goals are not a rule for riches for all organizations. Instead, they lead to riches for a few organizations,” said Gary. “Instead of being evidence that organizations should adopt stretch goals, the small number of successful cases is evidence that stretch goals do not benefit most organizations. Many organizations do not benefit and may even suffer from adopting stretch goals.”

The authors suggest that whether boards or top management should adopt stretch goals in their organization depends on their attitudes toward risk. Those with large appetites for risk may still prefer stretch goals. In venture capital or private equity, the value created by “big winners” can more than offset the poor returns or losses on the majority of organizations in the portfolio. These organizations may also be more able to absorb the poor returns or losses created by aggressive goals. However, for those who are risk neutral or risk averse, stretch goals may not be desirable because of the lower expected risk-adjusted returns. For example, stretch goals may not be appropriate for medium-sized or family-owned businesses that may not be positioned to recover from potential losses.

 

Examples of Goal Setting Gone Wrong

 

In the early 2000’s , General Motors had set a goal to capture 29% of the American auto market. It even produced corporate pins for people to wear with the number 29 on them. Needless to say they never achieved that goal, and without a government bailout, GM may not have even survived.

In the early 1990s, Sears gave a sales quota of $147 per hour to its auto repair staff. Faced with this target, the staff overcharged for work and performed unnecessary repairs. Sears’ Chairman at the time, Ed Brennan, acknowledged that the stretch goal gave employees a powerful incentive to deceive customers.

Or take the Ford Pinto. Presented with a goal to build a car “under 2,000 pounds and under $2,000 by 1970, employees overlooked safety testing and designed a car where the gas tank was vulnerable to explosion from rear-end collisions. Fifty-three people died as a result.

In the late 1990s, specific, challenging goals fuelled energy-trading company Enron’s rapid financial success. Dan Ackman, writing in Forbes compares Enron’s incentive system to “paying a salesman a commission based on the volume of sales and letting him set the price of goods sold.” Even during Enron’s final days, Enron executives were rewarded with large bonuses for meeting specific revenue goals. In sum, “Enron executives were meeting their goals, but they were the wrong goals,” according to employee compensation expert Solange Charas. By focusing on revenue rather than profit, Enron executives drove the company into the ground.

Max Bazerman, a Harvard Business School professor and co-author of Goals Gone Wild, argues the following in the study:

  • People can focus so much on reaching the stretch goal that they fail to realize how this has dumped other work on their co-workers.
  • With goals, people narrow their focus. This intense focus can blind people to important issues that appear unrelated to their goal;
  • A related problem occurs when employees pursue multiple goals at one time. Individuals with multiple goals are prone to concentrate on only one goal;
  • Overemphasis on short-term thinking. Goals that emphasize immediate performance (e.g., this quarter’s profits) prompt managers to engage in myopic, short-term behavior that harms the organization in the long run;
  • People motivated by specific, challenging goals adopt riskier strategies and choose riskier gambles than do those with less challenging or vague goals;
  • Goal setting can promote two different types of cheating behavior. First, when motivated by a goal, people may choose to use unethical methods to reach it; second, goal setting can motivate people to misrepresent their performance level—in other words, to report that they met a goal when in fact they fell short;
  • Goals create a culture of competition. Organizations that rely heavily on goal setting may erode the foundation of cooperation that holds groups together;
  • As goal setting increases extrinsic motivation, it can harm intrinsic motivation – engaging in a task for its own sake.

 

© 2016 Pearson Education, Inc.

 

So What’s The Alternative?

 

In his classic article, “Small Wins,” psychologist Karl Weick argued that people often become overwhelmed and discouraged when faced with massive and complex problems. He advocated recasting larger problems into smaller, tractable challenges that produce visible results, and maintained that the strategy of “small wins” can often generate more action and more complete solutions to major problems because it enables people to make slow, steady progress.

In their recent book, The Progress Principle, Teresa Amabile and Steven Kramer build on the same argument and clearly demonstrate how even the smallest, most mundane steps forward — for example, achieving clear consensus in a meeting — can motivate and inspire workers. Ever wonder why people will so often write down an item they’ve already completed on their to-do-list? It’s so that they can have the satisfaction of immediately crossing it off and experiencing the sense of progress.

Focusing on small wins in combination with process improvement will driveyourorganizationforward without the negative consequences of stretch goals. However, this approach requires a willingness to abandon the “ready, fire, aim” approach to problem solving. The heavy lifting has to be done at the outset — a deep understanding of the current condition is a prerequisite for true improvement. This approach also requires a subtle — but critical — shift in focus from improving outcome metrics to improving the process by which those outcomes are achieved.

 

If You Must Set Goals

 

If you must set goals, consider these questions to guide you, suggested by Max Bazerman:

  • Are the goals too specific? Narrow goals can blind people to important aspects of a problem. Be sure that goals are comprehensive and include all of the critical components for firm success (e.g., quantity and quality);
  • Are the goals too challenging? What will happen if goals are not met? How will individual employees and outcomes be evaluated? Will failure harm motivation and self-efficacy? Provide skills and training to enable employees to reach goals. Avoid harsh punishment for failure to reach a goal;
  • Who sets the goals? People will become more committed to goals they help to set. At the same time, people may be tempted to set easy to reach goals;
  • Is the time horizon appropriate? Be sure that short-term efforts to reach a goal do not harm investment in long-term outcomes. For example, consider eliminating quarterly reports as Coca-Cola did;
  • Consider how might goals influence risk taking? Be sure to articulate acceptable levels of risk;
  • Consider how might goals motivate unethical behavior? Goals narrow focus, such that employees may be less likely to recognize ethical issues. Goals also induce employees to rationalize their unethical behavior and can corrupt organizational cultures. Multiple safeguards may be necessary to ensure ethical behavior while attaining goals (e.g., leaders as exemplars of ethical behavior, making the costs of cheating far greater than the benefit, strong oversight);
  • Can goals be idiosyncratically tailored for individual abilities and circumstances while preserving fairness? Strive to set goals that use common standards and account for individual variation;
  • How will goals influence organizational culture? If cooperation is essential, consider setting team-based rather than individual goals;
  • Are individuals intrinsically motivated? Assess intrinsic motivation and recognize that goals can curtail intrinsic motivation;
  • Consider the ultimate goals of the organization and what type of goal (performance or learning) is most appropriate? In complex, changing environments learning goals may be more effective.

 

The Psychological Manifestations

 

Finally, there are psychological manifestations of not achieving goals that may be more damaging that not having any goals at all. The process sets up desires that are removed from everyday reality. Whenever we desire things that we don’t have, we set our brain’s nervous system to produce negative emotions. Second, highly aspirational goals require us to develop new competencies, some of which may be beyond current capabilities. As we develop these competencies, we are likely to experience failures, which then become de-motivational. Thirdly, goal setting sets up an either-or polarity of success. The only true measure can either be 100% attainment or perfection, or 99% and less, which is failure. We can then excessively focus on the missing or incomplete part of our efforts, ignoring the successful parts. Fourthly, goal setting doesn’t take into account random forces of chance. You can’t control all the environmental variables to guarantee 100% success.

The other problem is that goals are often cast in the image of the ideal or perfection, which activates the self-judging thinking of “I should be this way.” This counteracts the positive need for self-acceptance.

And if the goal is not attained, we can often engage in thinking we are failures, not good enough, not smart enough, not beautiful enough, etc. So the non-attainment of goals can create emotions of unworthiness.

We must also make a distinction between our intentions vs. goals. An intention is a direction we want to pursue, preferably with passion. My experience is that people are often confused, and unclear about the intentions of how they want to live and achieve, and therefore a focus on goals doesn’t assist them with clarifying their intentions.

When I work with people as their coach and mentor, they often tell me they’ve set goals such as “I want to be wealthy,” or “I want to be more beautiful/popular,” “I want a better relationship/ideal partner.” They don’t realize they’ve just described the symptoms or outcomes of the problems in their life. The cause of the problem, which many resist facing, is themselves. They don’t realize that for a change to occur, if one is desirable, they must change themselves. Once they make the personal changes, everything around them can alter, which may make the goal irrelevant.

Mindfulness has gathered the attention of brain researchers, coaches, psychologists and medical practitioners recently. A fundamental concept in mindfulness, is focusing on being in the moment, the present. This presents an interesting problem for the goal setter, where the focus is on the future. How can you be focusing on the present and also be thinking about the future?

 

When we set goals several psychological processes go on in our brains. Of these the activation of the inner critic or judge and the victim is common, which can act to sabotage our goal efforts.

The other problem is that goals are often cast in the image of the ideal or perfection, which activates the self-judging thinking of “I should be this way.” This counteracts the positive need for self-acceptance.

And if the goal is not attained, we can often engage in thinking we are failures, not good enough, not smart enough, not beautiful enough, etc. So the non-attainment of goals can create emotions of unworthiness.

We must also make a distinction between our intentions vs. goals. An intention is a direction we want to pursue, preferable with passion. My experience is that people are often confused, and unclear about the intentions of how they want to live and achieve, and therefore a focus on goals doesn’t assist them with clarifying their intentions.

When I work with people as their coach and mentor, they often tell me they’ve set goals such as “I want to be wealthy,” or “I want to be more beautiful/popular,” “I want a better relationship/ideal partner.” They don’t realize they’ve just described the symptoms or outcomes of the problems in their life. The cause of the problem, that many resist facing, is themselves. They don’t realize that for a change to occur, if one is desirable, they must change themselves. Once they make the personal changes, everything around them can alter, which may make the goal irrelevant.

P. Marijn Poortvliet, of Tilburg University in the Netherlands, and Céline Darnon, of France’s Clermont University, are interested in the social context of these goals — what they do to your relationships. Poortvliet’s work focuses on information exchange — whether people are open and honest when they are working together. “People with performance goals are more deceitful” and less likely to share information with coworkers, both in the laboratory and in real-world offices he has studied, Poortvliet says. “The reason is fairly obvious — when you want to outperform others, it doesn’t make sense to be honest about information.”

On the other hand, people who are trying to improve themselves are quite open, he says. “If the ultimate goal is to improve yourself, one way to do it is to be very cooperative with other people.” This can help improve the work environment, even though the people with these goals aren’t necessarily thinking about social relations. “They’re not really altruists, per se. They see the social exchange as a means toward the ends of self improvement.” Other research has found that people with these self-improvement goals are more open to hearing different perspectives, while people with a performance goal “would rather just say, ‘I’m just right and you are wrong.'”

It’s not always bad to be competitive, Poortvliet says. “For example, if you want to be the Olympic champion, of course it’s nice to have mastery goals and you should probably have mastery goals, but you definitely need performance goals because you want to be the winner and not the runner-up.”

But it’s important to think about how goals affect the social environment. “If you really want to establish constructive and long-lasting working relationships, then you should really balance the different levels of goals,” Poortvliet says — thinking not only about each person’s achievement, but also about the team as a whole.

Some people are naturally more competitive than others. But it’s also possible for managers to shift the kinds of goals people have by, for example, giving a bonus for the best employee. That might encourage people to set performance goals and compete against each other. On the other hand, it would also be possible to structure a bonus program to give people rewards based on their individual improvement over time.

In a subsequent article, I will suggest that establishing good habits and eliminating bad habits is a far more effective way of being productive and having positive well being. In the meantime, consider this: There’s an old saying: “you don’t get what you want in life, you get in life what you are .”

 

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