Author: Michael Stus
Heard an interesting piece on NPR this evening (transcript here). One of the participants, Lisa Ordonez, a management professor at the University of Arizona was citing some examples of what she calls "Goals Gone Wild." Here is what Ordonez had to say about a corporate goal of GM's to achieve 29 percent market share:
And this led to, for them, a focus away from profitability. And to achieve this goal myopically. Now I'm not going to say that that goal was the entire downfall of GM, but obviously strict adherence to goals can cause these kinds of problems.
Also in the piece Ordonez describes how parental incentives to their school aged children to achieve all A's have lead to "unethical behavior like cheating on an exam or having someone write a paper for you." Something to think about I suppose. What bothered me about the story was the sentiment that goals are bad by nature. I didn't catch the title of the story until I went looking for the transcript --"It's not always good to create goals." Yes, the title seems to support that sentiment.
Sure, if a corporate goal does not align with good business principals you're looking for trouble. GM's problem was not having and promoting a goal but rather that its goal allowed neglect of margin and product quality. Additionally incentives and goals should be presented in the proper context and not overemphasized; that the pursuit and achievement of goals should never compromise ethics needs continual reinforcement. What a great lesson to teach a child: It's good to strive for success but not at the expense of doing what's right. Goals, properly set and reinforced are excellent tools to promote desired outcomes.
Don't blame the goal or the incentive as a concept. When they are negatively targeted the problem usually lies with improper alignment or distorted emphasis.