GOAL SETTING - WHEN TARGETS BACKFIRE

This newsletter is all about goal setting, which was the subject of our recent workshop.

Goal setting has become a part of business life. We all know we should have goals and that we should make our goals SMART (although mention of the SMART acronym induces a profound sense of lethargy in most people).

Traditional goal setting theory relies on setting goals based on performance and outcomes. An example is setting billing targets for fee earners. However, surprising new research shows that this can backfire, and can make performance WORSE than having no goal at all.

Types of Goals

The three types of goals we look at in this newsletter are:

OUTCOME goals – these are the normal kinds of goals. They represent what we want the partnership, the fast car, the billing figures, the income . . .

PROCESS goals – these are goals about HOW we do something, and we usually set them to help us achieve an outcome goal. So an outcome goal might be to get some new clients and an associated process goal to go to at least one networking meeting per month.

LEARNING goals – these are a particular type of goal that requires us to learn something new.

Effectivness of outcome goals

There is a huge body of evidence that specific outcome goals can improve performance.

When these goals work well, they cause a person to:

spend more time on activities related to the goal
be more motivated
be more persistent

than they would be without the goal.

The dangerous exceptions

However, recent research has suggested that outcome goals are not always effective.

An outcome goal alone can increase anxiety and actually reduce performance.

When people were performing complex tasks (air traffic control, doing maths problems) they performed WORSE when assigned challenging outcome goals than when simply told to do their best.

Also, in experiments where entrepreneurs ran fictitious companies, setting LEARNING goals was most effective.

The researchers concluded that outcome goals only work well when a person already has the skills and knowledge needed to perform the task.

If the person doesn't know exactly how to perform the task, an outcome goal needs to be broken down into shorter term learning and process goals. An outcome goal alone can increase anxiety and actually reduce performance.

Billing targets in professional firms

Billing targets in professional firms are outcome goals and can be effective if the fee earner knows how to bill the required amount but simply isn't putting in the effort.

On the other hand, if the fee earner is already working hard but needs to learn new ways to be more effective, an outcome goal alone may backfire. It may cause the fee earner to be less likely to learn new approaches, because the learning process temporarily takes focus away from billable activities. During the learning period, the fee earner may go backwards in relation to the outcome goal (target), which is very de-motivating if it is not supported by management.

Eventually the fee earner may unconsciously learn new strategies and meet the target. However, it is equally likely that they will choose to ignore the target, become anxious and be less effective or decide to leave the firm.

Many firms don't take control of the above. Some are happy to accept that people either sink or swim, and are prepared to lose potentially good fee earners.

However, many firms are now choosing to take more control of the above process and support their fee earners in learning new skills. They are working out the strategies of their top fee earners and using appraisals or coaching to set learning and process goals to help others develop these strategies.

The rest of life

These findings don't just apply at work. Most of the important outcome goals we have in our lives are complex, and require more than just dogged persistence. They require the ability to learn new skills, change our tactics, respond to feedback and be flexible.

In recent goal setting workshop, we looked at the different types of obstacles that stop people achieving their goals, from "lack of time" to "other people" to "fear". We then looked at turning these obstacles into learning or process goals to bring them under control and make them surmountable. This is one of the important things coaching does for you, but with an understanding of the different types of goals and their effect on performance, you can start to do this for yourself.