The Darkside of Goal-Setting: What Management Gurus Don’t Want You To Know

It is perhaps the most enduring formula for life & career success, and it has a darkside they’d rather you didn’t know about

Goal setting is trendy, isn’t it? It has been that way for a long time, and you’ll find very few voices countering its elite status amongst management experts and business talking heads. Look at the acronym S.M.A.R.T.; it makes you want to make it yours, doesn’t it? After all, it is smart, therefore smart people use this tool, right? Goal setting is the starting point for all worldly achievement and material gain powerfully driving behaviour and boosting performance. We don’t doubt its theoretical foundation or its efficacy in achieving personal success in life. It is engrained in the western industrialised mind, pervasive and unquestioned in business & management literature and the popular press.

Mitchell & Daniels in their handbook on motivation from 2002 suggested that goal setting is, “quite easily the single most dominant theory in the field, with over a thousand articles and reviews published on the topic in a little over 30 years.”

Since Goal-Setting Theory first reared its head, we have been told persistently that those who have specific, challenging, and non-conflicting goals consistently achieve higher results in life than those without goals. Both research and practice insist that with goal-setting, the higher the goal, the higher the outcome, and the greater our personal growth and contribution to society.

“[with goal-setting] rewards result in high satisfaction as well as high self-efficacy regarding perceived ability to meet future challenges through the setting of even higher goals. — Latham & Pinder

Little to concern ourselves with then, right? Goal-setting seems to be the secret potion for personal and societal achievement, the panacea for the pains of all human desire.

Ok, not so fast.

An old bloke on the building site one day told me laughing, that assumption is the mother and father of all fuck-ups. He wasn’t an academic; he was a tradesman — a skilled and experienced man near retirement who had lived enough life to know confirmation bias when he saw it. Assuming by the sheer weight of momentum behind an idea, that the idea is unquestionably accurate, is like walking around with blinkers on. And when it comes to Edwin Locke’s goal-setting theory and all those who reinforced it, we acquired the mother and father of all assumptions.

As with Nassim Nicholas Taleb’s Black Swan Theory, the absence of evidence to the contrary does not prove the infallibility of a theory. It merely means we haven’t found evidence yet, so proceed tentatively. But proceeding with caution is not what happens with goal-setting. The message is still strong; if you want to achieve something in life, set a goal, layout the steps you’ll take towards it, work your bollocks off, and hey presto! It assumes linear cause and effect; it blinkers us to the potential for harm and disruption, and it assumes a simplistic version of reality. In short, goal-setting turns us into dopes and means begin to justify ends.

Blind pursuit of goals

In a 2009 article in the Academy of Management, the authors highlight several cases where the blinkered pursuit of corporate goals resulted in unscrupulous behaviour, disaster, and even the death of people. One such case was that of the Ford Pinto.

The Pinto Case

Consider the case of the Ford Motor Company in the late 1960s. The company was losing market share to cheaper Japanese imports and the pressure from shareholders was high. Their CEO, Lee Iacocca, introduced the specific, measurable and challenging goal of producing and delivering to the market, a vehicle that was “under 2,000 pounds and under $2,000” within two years. Enter the subsequently highly successful Ford Pinto.

Within the limits of the focused and results driven goal, they had settled on the design and had tooled their assembly lines. Coupled with a tight deadline, this meant that any changes resulting from crash tests would be impossible. Management signed off on production despite a critical fuel tank safety failure. They positioned it behind the rear axle in a tight space, and tests showed the tank was prone to rupturing on impact. Executives knew about the fault and subsequent investigations revealed they remained steadfastly committed to their goal instead of correcting the faulty design. Their decision is as remarkable upon reflection as it was catastrophic. Apparently, a favourite saying of Lee Iacocca was, “safety doesn’t sell.”

“You have to keep in mind, that the price elasticity on these subcompacts is extremely tight. You can price yourself right out of the market by adding $25 to the production cost of the model. And nobody understands that better than Iacocca.” — Engineer at Ford.

Their calculations revealed that the costs of lawsuits to Ford coming from Pinto collision fires would be less than that of the cost of fixing the design. Lawsuits show that 53 people lost their lives in fires resulting from Pinto ruptured fuel tanks, and countless were physically and emotionally damaged. However, an article in Mother Jones magazine suggests that by conservative estimates, Pinto crashes caused at least 500 burn deaths, although the figure could be as high as 900.

The remarkable thing about Ford’s decision was that the cost of correcting the fault would have only been a few dollars per unit. However, the narrowness of their specific and measurable goal closed them off to the human cost. Speed to market, fuel efficiency, and cost were the only factors worth considering. Safety, ethical behavior, personal and company reputation didn’t come into the decision-making process. This example is extreme. Nonetheless, it illustrates the problem.

The flaws and side-effects of goal-setting

The authors of the Academy of Management study suggest that too often, the systematic flaws and serious side-effects of goal-setting are ignored for the sake of short-term gain. They say that goal setting can degrade our performance, motivates risk taking and unethical behavior, inhibits learning, reduces intrinsic motivation, and erodes healthy organisational culture.

Quite the opposite of what you might have thought previously, perhaps. Here’s a bit more on the problems they highlight and some lessons we might learn from them.

The problem of narrow goals

In research by Simons and Chabris examining the omission of important information in decision making, they highlighted inattentional blindness as a distinct feature. Have you ever seen their monkey suit experiment? You can check it out here. In essence, what this research shows is that when our attention is too narrowly focused, we omit information that can prove vital. With the Ford Pinto, this played out to disastrous ends.

Goals inform us about what behavior superiors value and what ones are appropriate in a given situation. Recognising what behaviour is desired can lead us to focus on short-term gains while losing sight of the potential for devastating long-term effects.

Takeaway: Time is the key. When under pressure to deliver, we tend to leave out important aspects. Take more time and review your assumptions asking yourself; what am I missing here?

The problem of having too many goals

When we have multiple goals, we are prone to concentrate on only one goal. Say in the workplace, for example, where goals may be quality or quantity based, human beings have a tendency to prioritise the number. This was shown in research by Gilliland and Landis in 1992. They gave participants both quality based goals and quantity based goals under various conditions. The researchers found that when quantity and quality goals were both difficult, participants were willing to sacrifice quality for quantity. In other words, goals that we find easier to achieve, we tend to give more attention than other goals.

Takeaway: Multi-tasking is dead. Take one job at a time and give it your best effort. Take your time and focus on quality. That’s what you’ll be remembered for.

The danger of setting an inappropriate time horizon

Here we go back to the time component. Mistakes are made under pressurised situations. Even where we set goals to the appropriate aspect — quantity or quality — our expectation for completion may be inappropriate. Studies from the business world show us that goals emphasising immediate performance such as this month’s sales targets, prompt short-term based behavior that harms the organisation in the long run. Cheng, Subramanyam, and Zhang showed in their research that companies frequently issuing quarterly earnings tended to meet or beat expectations. However, they also had a tendency to invest less in research and development and were at the expense of long-term growth.

Takeaway: As mentioned already — slow down, take a long view. It’s a marathon, not a sprint. You’ll be dead someday, no sense rushing things.

How goal-setting increases risk taking

Goal setting distorts our preference and appetite for risk. Evidence shows that when we are motivated by specific, challenging goals we tend towards riskier strategies and gamble on outcomes. It’s not so with less challenging or vague goals.

A high-profile example is the Mount Everest disaster on 10th May 1996, which resulted in eight climbers, including two guides, losing their lives. Reports of the disaster suggest that the decisions of two team leaders were an example of a “destructive goal pursuit.” The high-altitude guides, Rob Hall and Scott Fischer, were so immersed in their goal to reach the summit, that they were prepared to play roulette with their own lives and that of six of their clients’.

Takeaway: Set a plan with boundaries on how much you're prepared to spend in terms of money and effort. Make it flexible and be prepared to walk away with nothing. It’s a maximum acceptable loss scenario. Avoid falling foul to sunk cost effect.

Why goal-setting increases unethical behaviour

There’s no doubt about it, the Ford Pinto case highlighted in very clear terms that rigid goals leave no room for correcting our course. As such, all kinds of crazy behaviour creeps in. As the ends justify the means, we become contemporary Niccolo Machiavellis.

Consider the 1990s case of US company Sears, whose executives set sales goals for its car mechanics of $147 per hour. This specific, challenging goal encouraged workers to overcharge for their work and to carry out unnecessary repairs to customers’ vehicles. The problem extended company wide and Edward Brennan, Sears chairperson, was forced to acknowledge that the goal set for staff had motivated the deception of their customers.

Takeaway: Don’t be greedy — seriously! Setting earnings goals, goals that are numbers-based and assume little consideration for the human-in-the-transaction, might work short term, but they will kill a reputation overnight.

Goal-setting creates a culture of competition

This negative aspect of goal-setting is linked to the previous one. As with the Sears case of over-charging, the drive for profit overshadowed the importance of collective effort, comradeship, and empathy. The Sears staff might have had concern for the human being on the end of the transaction, but the goal laid down by bosses took precedence. We don’t know how the instruction was delivered, but it seems that charging a high rate was linked to job security. It made the individual’s survival paramount over the quality of service and pitted workers against one another.

Takeaway: Where a survival of the fittest mentality prevails, sacrifice of even those closest to us can be justified. Narrowly focused goals, as with all other outcomes, results in detrimental outcomes. Nurture a culture of collaboration rather than competition. Link earnings to collective effort rather than individual.

A final note

I’ve had a problem with goal-setting forever, I just couldn’t put my finger on it. Goal-setting felt shallow and unsubstantial to me, and every time I attempted to execute the process I fell flat. It didn’t work for me, end of.

So I quit trying. I decided instead to throw myself into things I enjoyed and see what happens instead of planning my life to the end degree. In essence, I was detoxing myself from shallow material based striving that didn’t serve me.

My daily work needed to be more than a mere transaction. It needed to have inherent value to me first. And that’s the problem with modern work, the dominant narrative around value and expertise, and our sense of personal worth. It’s far too materialistic and quantity driven. All style and no substance.

I believe that without that inherent personal value, our work becomes soulless and sterile — a means to an end. And whether you work as a solo operator or are the head of a larger ongoing concern, the work itself needs to be the reason we get up in the morning, and not some measurable outcome. Otherwise we might as well be robots.

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Writer on Psychology, Philosophy, Society & Culture | Examining Happiness at Work | Slight Perfectionist | Introvert | Humanist Socialist | larrygmaguire.com

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