A few weeks ago, we discussed corporate culture and how it influences, for better or worse, the interview process. This week, I’d like to take a look at goal setting practices. I’ve noticed over the years that there are some harmful processes that are worth looking at in the corporate world. For example, recently I watched a sale’s associate receive his annual sale’s goal. It was one million dollars. It was apparent by the look on his face that he wasn’t thrilled with the goal. First, let’s start with the obvious.
Why did his supervisors pick one million dollars for the sale goal? Was it based on past performance? Was it founded in any qualification studies to arrive at this number? No, it was just a nice round number. This was the sale’s associate’s, we’ll call him Peter, second year at the organization. The previous year he had hit just over $600,000 in sales, which was $400,000 under his one million dollar goal. This year, his supervisors gave Peter the same goal. I jokingly asked if that was one million Canadian dollars or if it had to be US currency.
As one might expect, this had a detrimental effect on Peter. You see, in the world of sales, it takes time to build a portfolio. It’s also unlikely that a portfolio will grow by 60% in a single year. Peter had fulfilled all the other short-term goals—making a certain number of calls per week, meeting a certain number of clients per week, and so on. However, those goals didn’t mesh with the one million dollar number. A simple feasibility study would tell the supervisors that this goal was likely to lead to disappointment. Particularly because the quarterly profit projections are based on goals like Peter’s, accuracy is critical. Ultimately, Peter may decide to resign because he thinks the goals are unachievable. Sadly, this will reset Peter’s portfolio and the company he works for will end up even shorter on the planned goal. Equally important, Peter’s replacement will also sell less because it will be his or her first year. This problem exists across the sectors. I’ve watched as my colleagues in IT were told by supervisors what a go live date for a project would be. It didn’t matter that there was no way to physically make that goal. That was the goal and that was final. As my colleagues snicker at the sheer impossibility, the team lead is already crafting a letter explaining the “rogue” elements that caused the “unexpected delays” in the go live date. A date that other teams in IT are surely predicating their projects on.
To be clear, I don’t fault the supervisors for this issue, which I sadly see is more the norm than the exception. It’s easy to just pick arbitrary numbers and dates for goals, and it’s challenging to have an honest conversation with your colleagues on what a realistic goal looks like. It might mean disagreeing or disappointing a board, but it’s probably better to have that conversation prior to missing a goal. Sure, they may say you just need to work harder, but at least you tried to warn them. This is yet another example of having done things a certain way for so long that it’s hard for people to even imagine not doing it that way. It’s worth thinking about new ways to set goals, and it’s worth having that conversation with your peers, supervisors, and subordinates now.