Companies use performance goals all the time--for good reason. Performance goals provide people with a clear target that is usually difficult but, ideally, still achievable. Companies also give people stretch goals that typically seem somewhat out-of-reach, i.e., low probability, high outcome events (for both the company and the employee). Both of these goals constitute a "task push" that is fundamental and critical because, without a push, people don't do as much as they otherwise would.
There's a big problem with performance goals, however, one that leaders rarely recognize. When leaders pay so much attention to performance goals, they often lose sight of other equally or even more important goals, like the company's "really big picture" goals or your own ultimate goals as a leader.
When leaders and their companies set performance goals, e.g., cost reductions or performance achievements (sales targets, P&L gains, etc.), people pay attention, and not just momentarily, because they realize that their evaluations, their salaries, their promotions, and their bonuses depend on achieving these goals. Performance goals usually include numerical targets--this makes their achievement measurable. Unfortunately, for many leaders and their team members, "hitting the numbers" can become all-consuming, especially as deadlines approach.
People who understand how goals work have long known that performance goals should have three characteristics: they should be measurable, schedulable, and accountable. In other words, a particular person or team must achieve a clear target by a particular time. Following this wisdom results in goals that are both unambiguous and noteworthy. As a result, people pay attention to how they are progressing toward the goal and to whether they will achieve these desired outcomes. The difficulty in this all-too-common process is that well-specified, numeric performance goals not only don't encourage consideration of other critical aspects of a work team's process, they can also crowd out other goals, particularly goals that are harder to specify, even though these other goals may be critically important. This is the problem with performance goals.
The world of sports provides many examples. Imagine that you are playing golf with a few friends on a beautiful day. You went to the course early so that you could stretch and hit a few practice balls before you began. You had plenty of time, on the drive to the course and before you teed off on the first hole to think about your day. In fact, you informally set a nice set of goals for yourself: getting a good score, getting away from the rat-race, communing with nature, getting some fresh air and exercise, and hanging out with your friends. Thus, before you started, you hoped that your day at the course would achieve a variety of different goals.
Your round started well and, after four holes, your score was tremendous--far better than normal. You can't help thinking that this could be a special round. If you are like most golfers, you now focus almost entirely on achieving a great score, maybe even a personal-best. This seems normal and natural--and it is. Unfortunately, what does this do to your other goals? Unfortunately, you have reactivated the rat-race, this time on the golf course rather than at the office, and communing with nature, getting some fresh air and exercise and hanging out with your friends quickly fade into the background. In a word, your performance goal has taken over: all of your motivations are now focused on achieving a great final score. You are playing well and all you need to do is keep it up.
What is the end result of this all-too-common process, both immediately and for the rest of the round? If you are like many, many golfers, your performance will immediately disintegrate--all the good things that you had been doing well disappear and your score skyrockets, often to the point where you do worse than normal, even after your wonderful start. By shifting your focus to a specific performance goal you have, paradoxically, made it almost impossible for you to achieve it.
This is obviously not always true; for routine tasks, increasing your effort and sharpening your concentration can result in better performance. For tasks that require tremendous focus and mental concentration, however, (like golf) focusing too much on a performance goal can be devastating.
The moral of this story is important, because leaders also face tasks that require a strong cognitive focus and the application of a strong intellect. When you naturally slip into the trap of focusing too much on your final outcome, it can be deadly--substituting specific, outcome-oriented, short-term goals for broader, superordinate, long-term goals can hurt, even in the short run. At the extreme, this kind of singular focus on performance goals can shift your attention away from the central reasons why you are doing what you are doing to outcomes that are more mundane, more immediate, and, in the end, far less satisfying.
This doesn't mean that we should completely do away with performance goals; they still have tremendous value as a task push. Instead, it is critical to keep them in perspective so that other important goals still get our attention.
Thus, let's retain the idea that you will continue to use performance goals to help your team hit your numbers. But let's see what we can do to alter the process to avoid these kinds of problems. This means we must first analyze the root causes of the problem.
For instance, what happens when you and your team have achieved a performance goal? In most cases, it disappears and is almost always replaced, immediately, by a more challenging, more difficult goal. As a result, most people can't remember their old performance goals, not even from as little as 3 years ago. In other words, their old goals truly and completely disappear. Not only that, asking leaders whether they ever get performance goals that get easier over time always leads to a wicked laugh--it's pretty much unheard of.
Thus, people pay a lot of attention to goals that they quickly forget, and each previous goal is rapidly replaced by a new, tougher goal. In economies that focus on quarterly reports--a truly common phenomenon--goals can be replaced and increased as often as every three months. Add a consistent, emphatic push from the company's bosses to hit your numbers and it is no wonder that people pay so much attention on their performance goals. This means that they neglect other critical goals, especially less specific goals that may not naturally garner as much of their attention. In particular, by paying attention to performance goals, leaders often lose complete sight of learning goals.
Why are learning goals so important? Think about it this way: if you and your team's abilities stay the same and your performance goals continuously increase, pretty soon you won't have the ability to achieve them. Thus, to stay ahead of the curve as your performance goals increase, your ability must also increase. When you and your team members focus too much on performance goals that interfere with your attention and your devotion to achieving your learning goals, you are bound for failure: how soon depends on how much your performance goals increase, how able your team is now, and whether those new goals require new skills.
The bottom line is simple: most leaders need to ignore their performance goals. Will they be successful? Never! That's exactly why they should try to ignore them--because they are so specific and on people's minds so much, you will never be able to ignore them completely. But by paying less attention to performance goals, you can pay more attention to learning--to increasing your own skill sets and those of your team members. You must continuously boost your collective ability to stay ahead in our fast-changing world and the only way to do that is to continuously focus on learning, on getting better, on knowing more. Ironically, it's also the only way to consistently hit those ever-increasing performance goals.
Adapted from Do Nothing: How To Stop Overmanaging And Become A Great Leader . Published by Portfolio/Penguin. Copyright (c) J. Keith Murnighan, 2012.
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