10 LIES ABOUT WORK/Lie Nr. 5 – The most successful companies cascade goals.

DO MEANINGFUL WORK. Instead of setting goals it would be better first to UNDERSTAND WHY YOU DO WHAT YOU DO.

Again this is of course an illusion. It is a very big lie which most people are so brainwashed that finally they truly believe that it’s a great truth. No it’s not. It’s another fat mistake that an incredibly big amount of companies continue to use it in their business. Goals are the same like feedbacks (as I said in my previous Lie -Lie nr.4). People don’t need feedback they need attention. The same here, people don’t need to receive a set goals for their work, they need to understand the meaning of their work.

Unfortunately in the majority of big German companies/organization (such as VW, BMW, CONTINETAL, BOSCH, AUDI, DAIMLER,SIEMENS, etc… and put any other like that in the list) they still promote this idea that people must have a set of goals for their work. In fact this trend is more or less present in all international organization worldwide, not only within the German ones. I am talking here about big organization because this is according to what I’ve seen so far during my work experience. But I may be wrong in the case of other small enterprises or Start-ups. At least in the case of Start-Ups I would not be surprised to see different approaches. But due to this wide-spread concept between big corporation, it can be general accepted that in order to be successful in business , it’s necessary to cascade goals.

A typical Process of Cascading Foals used in big organizations.

Well, I DON’T agree with that. No, absolutely not. goals are not necessary to be set or cascaded, and above that it is completely a nonsense to evaluate someone’s performance strictly based on how much of his/her imposed goals have been reached at the end of the fiscal year. In my future company I will never cascade goals for my employees, instead I will definitively cascade MEANING. But to make it more clear what I want to say with that, allow me to go more deep in detail with this. I will explain why I thing like that. So here is my argument…..

Goals are everywhere at work – it’s hard to find many companies that do not engage in some sort of annual or semi-annual goal-setting regimen. At some point in the year, usually at the start of a fiscal year or after bonuses and raises have been paid, the organization’s senior leaders set their goals for the upcoming 6 or 12 months, and then share them with their teams. Each team member looks at each of the leader’s goals, and figures out what to do to advance that goal, and thus sets a sort of minigoal that reflects some part of the leader’s goal. This continues down the chain, until you, and every other employee, has a set of goals that are miniversions of some larger goal further up in the organization. In some organizations, goals are also grouped into categories, so that each person is asked to set, say: strategic goals, operational goals, people goals, and innovation goals.

Once the goals have been created, each is then approved by the person’s immediate leader, and then by the leader above that person, and so on, with each layer assessing whether each goal is sufficiently challenging, and whether it’s properly aligned with the goals above, up and up and up the chain. As the year unfolds, you may well be asked to record what percentage of your goals you’ve completed. This “percent complete” data is then aggregated into bigger and bigger groups so that the company can, at any point during the year, say things like, “65 % of our teams have completed 46 % of their goals. We need to speed up!”

The only one who truly wins in this equation is the CEO.

And, at the end of the year, you’re asked to write a brief self-assessment reflecting how you feel you’ve done on each goal, after which your team leader will review this assessment and add his own, in some cases also saying whether he thinks each goal was actually met, or not. After HR has nudged him a couple of times, he’ll input all this information into the company performance management system, where upon it’ll serve as a permanent record of your performance for the year, and will guide your pay, promotion opportunities, and even continued employment.

If you’re in sales for example, your sales quota will work in a similar way – an overall corporate sales goal is sliced into parts and distributed across the organization. The only difference being that your quota, or your team’s quota, is usually just a single number handed down to you from above, defining you and your work throughout the year – which is why salespeople, in most companies, are referred to not as people but simply as “quota carriers.”

And, in the era of the smartphone, once-a-year goal-setting has been deemed Not Enough, and so your phone will soon be dramatically upping the frequency of all this goal – setting, assessing, and tracking, if it hasn’t done so already – all because we have come to believe that the successful companies cascade goals.

The names we give these goals have changed over the years. It started with MBOs, (Management by Objectives). Then came SMART goals, (goals that are: Specific, Measurable, Actionable, Realistic, and Time-bound), followed shortly by KPIs (Key Performance Indicators). The latest incarnation, OKRs (Objectives and Key Results), originated at Intel and is now used for defining and tracking goals and measuring them against your “key results.” Across all the different technologies and methodologies, massive amounts of time and money are invested in this goal-setting. When companies like these shell out dose to €1 billion on something every year, there must be some truly extraordinary benefits. What are they?

Well, every company is different, of course, and each makes its own calculus, but the three most common reasons put forth for all this goal-setting are:

  1. The First = that goals stimulate and coordinate performance by aligning everyone’s work;
  2. The Second = that tracking goals’ “percent complete” yields valuable data on the team’s or company’s progress throughout the year;
  3. The Third = that goal attainment allows companies to evaluate team members’ performance at the end of the year.

So, companies invest in goals because goals are seen as a stimulator, a tracker, and an evaluator – and these three core functions of goals are why we spend so much time, energy, and money on them. And this is precisely where the trouble begins. In terms of goals as a simulator of performance, one great fear of senior leaders is that the work of their people is misaligned, and that effort is being wasted in activities that drag the company hither and yon, like a rudderless boat in a choppy sea. The creation of a cascade of goals calms this fear, and gives leaders the confidence that everyone on the boat is pulling on the oars in the same direction. Of course, none of this alignment is worth very much, if the goals themselves don’t result in greater activity – if the boat doesn’t actually go anywhere. As it happens, no research exists showing that goals set for you from above stimulate you to greater productivity. In fact, the weight of evidence suggests that cascaded goals do the opposite: they limit performance. They slow your boat down.

Before to continue, let me ask you something: Have you ever tried to hail a cab in New York City on a rainy day?

They are many but seems that still not enough.

Believe me, it’s not easy. That’s exactly what happened to me when I was in New York. But this not just an isolated case, it is really happening in general almost all the time when it rains. You stand there on the corner of 52nd Street and 3rd Avenue waving frantically at any vehicle that’s even vaguely yellow and bemoaning the fact that every one of the (suddenly scarce) cabs is taken. If you’re up on your economics, you might even surmise, as the water drips off your nose, that the rain has increased the number of taxi hailers (demand) while not changing the number of taxi drivers (supply), hence the problem.

But actually that’s not quite what’s going on. Cab drivers have an informal “daily goal”, or quota, for the fares they want to earn before they allow themselves to stop working – for most cabbies that number is twice the cost of renting the cab for the day. The moment the day’s receipts add up to twice their rental fee, they head home and rest up for the next day of battle. Now, they have this goal every day, but on rainy days – because more people choose to take a cab – they hit that goal earlier in their shift, and the moment they do they vanish off home.

The same thing happens with sales quotas. Leaders set quotas because they want to stimulate the performance of their salespeople. But quotas don’t actually work like that. The very best salespeople hit their quota months before the end of the year, whereupon they do the sales equivalent of vanishing off home – that is, they start to delay the closing of their deals so that they can “bank” them and ensure that they begin the next year with a head start. Sales goals actually degrade the performance of top sales people – they function, as they do for New York City cab drivers, as a ceiling on performance, not a catalyst for more of it.

Of course not. Even if they have daily goals in sales, they become stressed by not reaching their goals.

But what about salespeople who are struggling, or middle-of-the-road? Won’t goals serve to stretch them upward toward their quota, in much the same way as a guy who runs a marathon goal will help to stretch him upward toward greater endurance? Well, again, not exactly. In reality, what happens to middling or struggling salespeople is that their imposed quota increases the pressure on them. And this is not the self-imposed pressure that comes from attempting to achieve something we feel is important the sort our marathon-training friend will feel on a Sunday morning when he forces himself to get up and go running. No, this pressure to achieve company-imposed goals is coercion, and coercion is a cousin to fear. In the worst cases, fear-fueled employees push and push and, falling short, resort to inappropriate and sometimes illegal tactics in order to meet their goals.

None of which is to say that sales quotas are useless. In fact, they can be an excellent forecasting device. Senior leaders can use them to estimate what the company’s top line is going to be for any given period, and then announce this to the board and the investment community so that all interested parties can get a sense of the expected revenues, against which costs, investments, and ultimately cash flow can be assessed. The best executives are good guesstimators – they have a sense, born of long experience, of what the median quota should be, the “line of best fit” around which the variation of salespeople’s performance will cluster. Some will outperform their quota by 10 %, others will fall short by 10 %, and thus at year’s end the sales goals, when guessed well, will be hit. But these sales goals don’t beget more sales; they just anticipate what the sales will be.

Don’t ever expect to be the vice-versa, It will simply not happen.

How about tracking performance? Do goals allow companies to do that? Hardly.

Imposed goals are meaningless. Don’t evaluate performance based on that.

Even though so many companies ask employees to write down their yearly goals and track their progress using some sort of software; even though there are written books which say that humans love to track their progress and that they derive joy from each achievement; and even though, in the last few years, the trend is to see more goal tracking and not less; none of this tracking does what it is intended to, for the simple reason that your progress toward a goal is not linear.

If your goal is set too high, you most probably quit before to reach your goal.

Take our marathon-running friend. If, at the end of February, he calculates that his training regimen is 62% complete, does that mean that he has only 38 % of his marathon goal left to go? Obviously NOT: he has 100 % left because he hasn’t yet started his actual marathon. And what happens when he does indeed run his race? When he has finished his first 13 km does that mean he is now 13 out of 26 km, or 50 % of the way toward completing the race? Again, NO.

As every marathon runner discovers, the first half of the marathon is the comparatively easy part. It’s the last half – in particular, the last 6 km – that’s brutal. Only when you pass the 20 km mark do you begin to feel the legs harden and the mind weaken; only then do you know whether you have the physical and mental strength to complete your goal. And what percentage of the whole does the refining fire of the last 6 km represent-40 %? 60 %? 90 %? It’s impossible to put an accurate number on it because, in truth, the first 20 km of a marathon are one thing, and the last 6 km a very different thing.

So our friend can’t be 62 % done with his marathon preparation, nor he can be 50 % done with his actual marathon. He can only either complete the goal or not complete it. All goals, at least in the real world, function in this same way. You are either done, or you are not done: goal attainment is binary. You might want to set some intermediate goals along the way, and tick these goals off as they are done (or not done). But you won’t ever be able to assign a “percent complete” to your bigger goal as you tick off these mini-goals. And if you attempt to, or if your company asks you to, you will only be generating falsely precise data about the state of your progress.

Finally, what about evaluating employees? Can we evaluate a person based on how many goals he or she has achieved? Many companies do this, for sure. But here’s the snag: unless we can standardize the difficulty of each person’s goals it’s impossible to objectively judge the relative performance of each employee.

The result can be ridiculous.

Let’s say we have two employees we’re evaluating, Sarah and Albert. Each is aiming to complete five goals, and at year’s end Sarah has achieved three goals and Albert has achieved five. Does that mean Albert is a higher performer? Not necessarily. Maybe one of Sarah’s five goals was “Govern an empire” and one of Albert’s five goals was “Make a cup of tea.” For us to use goal attainment to evaluate Sarah and Albert, we need to be able to perfectly calibrate each and every goal for difficulty – we need each manager, with perfect consistency, to be able to weigh the stretchiness or slackness of a given goal in exactly the same way as every other manager. And as it happens this sort of calibration is a practical impossibility, so we can’t. Sorry, Albert.

Despite this evidence, however, it remains true that goals, and cascaded goals in particular, have an intuitive appeal to many leaders who find themselves in search of ways to ensure efficient and aligned execution in their organizations. And, at the same time, it also remains true that for those of us in the trenches, our experience of goals feels non-intuitive, mechanical, fake, even demeaning. Why is that?

Well, in the real world, this is what’s going on. Firstly, and oddly, when you sit down to write your goals, you already have a pretty good idea of the work that you’re about to do. After all, it’s not as though you roll up to the office on a Monday morning desperately trying to figure out how you’re going to fill the time. So what the goal-setting process is asking you to do is to write down work that you already know you’re going to do. Your work goals aren’t out ahead of you, pulling you along like our marathoner’s goal; instead they’re just behind you, being tugged along by your own preexisting understanding of the work you’re going to do anyway.

The goal categories – strategic, operational, innovation, people, and so on – are odd simply because work doesn’t come in categories. You don’t plan your time by thinking, “Well, on Tuesday I’ll do some operational, and hopefully make time for a bit of innovation on Thursday afternoon.” Work usually comes in projects, with deadlines and deliverables, and so when you’re asked to translate it back into category goals, you (and most every other employee) fudge it and force – fit your work to the categories, while hoping no one will mind too much.

And while it’s not unreasonable to hope that the work you do matches up to what your team leader wants you to do, setting goals that are a subset of his goals, or reviewing your goals against his, is actually a pretty strange way of going about this. Your team leader already knows what you’re doing, because in the real world you talk to him about it, all the time. If you’re off working on origami and he’d rather you were working on quilting, he’ll tell you. And when something changes, a few days later, and he needs you to shift your focus over to glass-blowing, again, he’ll just tell you. Even if he doesn’t tell you, and you continue to potter away at something that’s all of a sudden out of whack, the very last thing he’d think of doing to communicate this to you is to go back into your goal form, change your goals, and hope you’ll notice.

Again, cascaded goals are tagging along behind the work, not out ahead of it: as used in the real world, goal setting is more a system of record keeping than a system of work making. Then there’s the fact that you don’t go and look at your goals once you’ve set them. If they were supposed to be guiding your work, you’ d think you might.

And what about the gritty point of it all, at year’s end, when you’re supposed to self-evaluate against your goals?

You just works towards goals but you don’t understand the meaning of your work.

While your boss may imagine that you’re engaging in honest and earnest reflection on the year gone by, you’re probably trying to find the elusive sweet spot between, on the one hand, saying that you hit all your goals out of the park, by which you’d risk seeming arrogant or deluded, and, on the other, acknowledging that some things didn’t go as planned, by which you’d risk giving your boss – or some unseen higher-up-an excuse to decrease your bonus. Self-evaluation of goals isn’t really about evaluating your work, in other words: it’s a careful exercise in self-promotion and political positioning, in figuring out how much to reveal honestly and how much to couch carefully.

This is no comment on you, by the way. Carefully calibrating your self-evaluation to find this sweet spot is a practical response to a bizarre situation. The company has asked you to evaluate yourself against a list of abstract goals that were irrelevant a couple of weeks after you wrote them down. You’re being asked to do something meaningless and pretend it’s meaningful. It’s enough to make you a little crazy.

And your team leader’s in on the crazy. When the end of the year comes around and he has to sit down with a stack of goal forms and write-under each goal you typed in months and months ago one or two little sentences describing how you’ve done against each one, what must be going through his mind?

More than likely it isn’t related to you or how he thinks you’ve done, but is more about how quickly he can get through the stack and cross “goal review” off his to-do list. Like you, he’s got a nagging feeling that he’s wasting his time – because what’s in front of him now is a random subset of things you thought you might be doing a while ago, shoehorned into whatever categories you thought you could get away with at the time, written so as to look maximally impressive for anyone reading the form, and now garnished with your delicately positioned self-evaluation. He knows that the work changed an equally long time ago and has very little to do with what’s on the form, and that he’s already told you how well you did on the work that actually happened, by talking to you about it as the year went along. To his this form filling is the worst kind of administriviamasquerading-as-management, so he writes the little sentences and hopes that no one will complain if they’re shorter than last year’s.

In the real world, there is work-stuff that you have to get done. In theory world, there are goals.

The difference is obvious.

But it doesn’t have to be this way. Goals can be a force for good.

Look again at our soon-to-be-marathoner friend: he has taken something he deems valuable (fitness) and turned it into a tangible achievement (the marathon). He has made it real. This, ultimately, is what goals are for: to help you manifest your values. They are your best mechanism for taking what’s inside of you and bringing it out where you and others can see it, and where you and they can benefit from it. Your goals define the dent you want to make in the world.

And this in turn means that the only criterion for what makes a good goal is that the person working toward it must set it for him- or herself, voluntarily. The only way a goal has any use at all is if it comes out of you as an expression of what you deem valuable. It doesn’t have to be SMART, or big, hairy, and audacious. It doesn’t need to contain key performance indicators or be built from objectives and key results. If a goal is going to be useful, if it is going to help you contribute more, then the only criterion is that you must set it for yourself, voluntarily.

This is the result of an imposed goal.

This doesn’t mean, though, that there is nothing we should cascade in our organizations. Since goals, done properly, are only and always an expression of what a person finds most meaningful, then to create alignment in our company we should do everything we can to ensure that everyone in the company understands what matters most. And so the truth:

Understanding your WHY first is mandatory.

So, in addition to giving our teams and their members a real-time understanding of what is happening in the world, we need to give them a sense of which hill we’re trying to take. Instead of cascading goals, instead of cascading instructions for actions, we should cascade meaning and purpose.

Whereas cascaded goals are a control mechanism, cascaded meaning is a release mechanism. It brings to life the context within which everyone works, but it leaves the locus of control – for choosing, deciding, prioritizing, goal setting – where it truly resides, and where understanding of the world and the ability to do something about it intersect: with the team member.

Therefore the prevailing assumption is that we need goals because our deficit at work is a deficit of aligned action. We’re mistaken. What we face instead is a deficit of meaning, of a clear and detailed understanding of the purpose of our work, and of the values we should honor in deciding how to get it done. OUR PEOPLE DON’T NEED TO BE TOLD WHAT TO DO; THEY WANT TO BE TOLD WHY.

To be specific, here are the three levers to be used in order to create such great effect by cascading meaning.

THE FIRST LEVER = Expressed Values : which is what you write on the walls.

This how to create value at work.

I don’t mean that you should literally write out your “values.” Many leaders and many companies set about doing this and wind up with a list of generic values such as integrity, innovation, or , teamwork – and then wonder why the whole exercise doesn’t seem to have made much difference. Instead, apply some creativity to how you want to bring your meaning to life for your people. Don’t tell them what you value, show them.

  • What do you actually want them to see and to bump into at work?.
  • What are your expressed values?
  • What have you written on your walls?
  • What do your people encounter when they walk in through the door?
  • What do they see when they turn to the left?
  • And what do those things tell them about who you are?

THE SECOND LEVER = Through rituals.

Some examples of team rituals

Facebook has their famous bimonthly hack-a-thon; Chick-fil-A stops work on Sundays. Sam Walton, founder of Walmart and Sam’s Club, had a ritual he practiced every single Friday until he was physically unable to do it anymore: he would pick a store, move the merchandise around on a particular end-cap display, and come back on Saturday to see what had sold. It was his own version of QMI, (Quick Market Intelligence), and what it signaled, to his employees, was his deep belief that no one, not even the boss, knows the brain of the customer better than the customer.

You already have rituals, whether they are conscious or unconscious, and these rituals-the things you do repeatedly-communicate to your people what is meaningful to you. If we followed you around for a week, we’d see them. Let’s say you have a meeting:

  • What time do you show up?
  • Are you five minutes early, or five minutes late?
  • What are you wearing?
  • Do you catch up with your team members about their personal lives or do you launch right into business?
  • Who talks first?
  • Do you allow your team members to speak, or do you cut them off?
  • Does the meeting go long?
  • Do you hold people back to finish things up?

These are all aspects of your rituals, and we, your team, see them, make sense of them, and draw our conclusions-whether you want us to or not. The question, then, isn’t whether you have rituals or not. The question is whether or not you are deliberate about what your rituals communicate.

THE THIRD LEVER = Through stories.

Cascade meaning by telling stories that matter and inspire.

Chick-fil-A for example makes an art of its storytelling through the operator profiles during Seminar. The company dedicates time to going out to each operator’s store, taking photos, and learning about his or her family and community, precisely so it can share these stories with the rest of the company.

Many of the best leaders are story tellers, not in the sense of writing a novel or a screenplay, but because they cascade meaning through vignettes, anecdotes, or stories told at meetings, on email chains, or on phone calls. They are always telling these little stories, because the stories that they choose to tell convey what they value. Stories make sense of the world: they are meaning, made human. That’s why religions tell stories about their messiah and the creation of the earth, and include parables within those stories that help us learn what is meaningful. And that’s why you can tell a lot about what matters to a team by the stories that the team members tell themselves.You tell stories, whether you know it or not, and you’re telling them all the time, in every conversation and at every meeting.

  • What stories are you telling?
  • And what do they say about what you find meaningful?

As a leader, you are trying to unlock the judgment, the choices, the insight, and the creativity of your people. The way we go about this doesn’t make much sense. We cloister information in our planning systems, and we cascade directives in our goal-setting systems. Instead, we should unlock information through intelligence systems, and cascade meaning through our expressed values, rituals, and stories. We should let our people know what’s going on in the world, and which hill we’re trying to take, and then we should trust them to figure out how to make a contribution.

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