I was prompted to write this post after reading Daniel Markovitz’s recent article in HBR in which he makes a really good case for challenging the value of Stretch Goals. To summarize he makes 3 key statements:
- Stretch goals can be terribly demotivating.
- Stretch goals have a dangerous tendency to foster unethical behavior.
- Stretch goals can also — tragically — lead to excessive risk taking.
The way in which goals, targets and objectives are applied in many of our companies and organisations is now open to question and review. The principles and methods by which they are applied has changed little from the industrial days of their birth.
Within a factory-based model of production, when tasks were well-defined and output easily measured, targets, and especially stretch targets, were useful ways to drive up productivity. After all, if you wanted to increase widget production by 10%, you worked people harder, increased the speed of the conveyor, offered bonus targets (or overtime payment), and measured the success of your intervention immediately and directly.
However, most problems and challenges we face today are not of this order. Companies, organisations and governments are looking for creative, innovative solutions to intangible and intellectual problems. We don’t even know the right question in many cases yet, let alone reward people for achieving stretch goals that produce answers that may not even be correct or appropriate. Despite this, we appear reluctant to break away from the traditional factory model of reward and motivation.
The evidence, however, is clear. Stretch goals and offering people bigger rewards to solve intellectual problems actually has the effect of lowering performance. It is in fact a disincentive. They work in the case of clear, well-defined and narrowly focused tasks, but with complex, intellectual problems they actually dull thinking and cause people to have too narrow a focus.
This is addressed excellently by Dan Pink in a TED talk on “the surprising science of motivation”. If you haven’t watched this, I thoroughly recommend it to you.
The entire concept is flawed. The incentives system is allegedly “designed to sharpen thinking and accelerate creativity, and it does just the opposite. It dulls thinking and blocks creativity.” (Dan Pink)
But, let’s be clear. I am not saying that having aspirational and stretching goals or targets is a bad thing. Of course not. Shooting for the stars and seeking to stretch beyond “normal limits” is what fuels human discovery and advancement.
What is flawed is attempting to generate discoveries and breakthroughs to complex intellectual problems by using a reward and incentives system based on a ‘production line’ mind-set.
It is time for our business leaders to take the courageous step of turning the traditional performance and reward model on its head, by recognising that setting people stretch goals is not the way to generate the major breakthroughs their companies need. The science is clear. It is time for our leaders to stop ignoring the evidence. Our collective brain-power and ingenuity needs to be unleashed and not suppressed by out-dated thinking.
In my experience, targets get delivered – either through real achievement, or more likely a convenient re-interpretation of whatever the target was. Gaming the system if you like. What is clear to me is that many of our targets are clumsy attempts to simply fit the key characteristics of the role to an inflexible system of ‘smart’ (ironically, dumb) objectives. In doing so, they tend to limit innovation and people’s willingness to do the right things. You see, the important point many pundits seem to miss is that the incentives actually do work. They drive the outcomes you specify in the objectives. The problem isn’t incentives per se. It’s the ludicrous obsession with specifying limits on outcomes.
Since writing my last reply to you Dan, I have seen this post from Seth Godin which is really relevant. Especially the comment “Just about every great, brave or beautiful thing in our culture was created by someone who didn’t do it for money.” http://bit.ly/K6ofpT
Good points Dan. You’re right that targets ‘usually’ get met (by hook or by crook) which effectively reinforces the point you are making about us all participating in a kind of elaborate ‘game’. And, yes, incentives do work in the right circumstances. If the task is understood, proven, tried and tested, and what needs to be done is clear. For example, the 100 metres. The runners know exactly what they need to do. Run fast! The Olympic Gold is a fantastic incentive. In this case the runners need a narrowed focus (their lane and the finishing tape basically). Shutting out all other distractions is a good thing. However, trying to apply the same sort of principles to obscure, ambiguous, complex problems needs the opposite and has been shown not to work. I don’t have the evidence to back it up, but I would be surprised if many of humanity’s biggest breakthroughs in thinking (such as medical discoveries, negotiated political solutions to long-term war zones, welfare reform, creation of the next killer digital product) have occurred because of someone dangling a juicy incentive (or by setting a target that the breakthrough is found quicker or cheaper).
Good article. We need to also remember that what works for one person at one time won’t always be right to use on other people or at other times on the same person. Agree that indivuals are complex and only they can state what truly makes their mind work. So effective communication is key..
Agreed Harjit. Thanks for taking the time to read and comment.
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