On Individual and Departmental Goals

It’s that time of year again whereupon three months into the year, organizations everywhere begin the exciting task of examining the tabula rasa of a new year filled with potential of achieving amazing things. As part of that task, many organizations set goals for individuals and departments in hopes that they will lead said individuals and departments to greater success for the company. There is no shortage of information on this topic, freely available after a short Google search.

One common theme to goal setting is that they must be SMART which is a fun HR derived acronym for Specific, Measurable, Aggressive, Realistic and Time-bound. Substantial evidence shows that goals set in this manner are in fact correlated with happier, more motivated employees and greater success in the achievement of the goals. However, I would argue that the resultant success and happiness are not caused by the fact that goals are SMART but instead by the underlying process through which the goals are worked towards. It is quite feasible that an organization would set SMART goals and then still have highly unhappy employees who achieve few if any of the goals nine months later. This happens because goals alone are useless regardless of how SMART they are. Goal achievement relies on the underlying system and strategy that support the goals.

Scott Adams has written about the difference between systems and goals. We all have regular experience with goals gone awry. Many of us are sure this will be the time that we lose 20 lbs or exercise more or read more books or whatever. It does not matter if the goal is SMART or not. I can say “I will read 24 books in 2021” which is Specific (read more books), Measurable (24), Aggressive (I read 7 last year), Realistic (outside any context of course which is critical) and Time-Bound (one year). But if there is no underlying system and strategy for accomplishing this goal, all the smartness in the world will result in the same failure.

A system is a set of things—people, cells, molecules, or whatever—interconnected in such a way that they produce their own pattern of behavior over time. The system may be buffeted, constricted, triggered, or driven by outside forces. But the system’s response to these forces is characteristic of itself, and that response is seldom simple in the real world.

Donella Meadows, Thinking In Systems

System has a specific definition and meaning in this setting. It is the interconnected nature of the pieces of the system that produce the results that the system outputs. In order for an organization or a department or an individual to achieve goals, there must be an underlying system of management designed at least in part to facilitate the necessary behavior of goal accomplishment. If this system is designed, either intentionally or more often haphazardly, to produce behavior other than goal accomplishment, no amount of SMARTness will ever overcome it.

A trivial example applied to my desire to read more books. On its face, the goal seems SMART. However, that is only so if the underlying system that I use to make choices with my free time has taken into consideration the constraints on that time. Unless I have examined the amount of free time I had in 2020 and discovered a great deal more of it and then dedicated my future expenditures of that time to reading via a disciplined schedule, the goal of 24 books is much more likely to be DUMB (Definitely Underestimating My Behavior) than it is to be SMART even though on the surface, the goal seems to conform to the definition.

I would actually argue that one of the core principles of good management is the diagnosis and analysis of the Realistic in SMART. This is the area where management skills make or break the underlying system that allow successful goal achievement. In order to determine if a goal is realistic, a manager must understand and be able to answer the following questions:

• What is the underlying system of how work gets done by the organization?
• What is the underlying system of how work gets done by the department?
• What is the underlying motivational type of the individual (if setting individual goals)?
• Are all of these cohesive with each other?
• Are they congruent with each other? (see Esther Derby’s work on Change and Congruence)
• What are the constraints on work within the system?
• How much work can the org, department or individual realistically do given the system within which it operates?
• And so on and so on.

The key to successful goal setting and achievement is to have an underlying system of behavior that clearly defines what is realistic. It is not realistic to lose 10 lbs if you do not throw away all the Cheetohs in the pantry and continue to eat donuts every Saturday morning because it is a family tradition. The system that includes Cheetohs and donuts will overcome any amount of SMART goal setting because it is the system that produces the behavior that leads to outcomes. It is not realistic to have 8 priority one departmental goals if the underlying system of the organization is such that at any moment the entire department may be reallocated to focus on unrelated organizational goals.

A good manager understands the constraints on what is and is not realistic for an organization, department and individual. Here lie the dragons of management. Most goal setting exercises I have been a part of have applied a great deal of wishful thinking and magical handwaving around the capacity of the organizational structure. Most of these exercises identify several things that seem highly desirable and then ask “can we do all this?” Because humans are naturally inclined to be good, your experience with social media notwithstanding, the result is often a half-hearted “yes” if only so that we can get on about the business of actually doing work. But in order to have not only successful goal setting but also goal achievement, we must have a more rigorous system around what is realistic. At the very least, a manager must understand the constraints of the system within which she operates and have a strategy for dealing with those constraints.

The strategy work of Richard Rumelt is very helpful here. Specifically, we must realize that good strategy is about policy choice and commitment to action. We have to write strategies for our goals that lay out policies to guide action towards the system behavior that we want. We must lay out consequences for violating the strategy and be prepared to defend them. Circling back to my personal goal, when I discover I have 30 minutes of free time and am thinking about practicing my guitar, I must realize that this hampers the realistic definition of my reading goal and that there are consequences to that choice. The same goes for reducing technical debt of an engineering organization. When faced with opportunity of some free time, if we fill it with yet another story delivering business value instead of dedicating it to removing NHibernate (don’t ask), we have violated the Realistic nature of our goal. To prevent this from happening, we have to have hard policies that say things like “when presented with available resource time, we will always choose to apply that time to the reduction of technical debt”. This guides teams actions but does not dictate it. They can still choose what actions to take within the guardrails of the policy. We must also then ensure that free time both exists and is encouraged. If it does not or cannot be created due to organizational constraints, no amount of SMART goal setting will ever result in a different behavior.

By building a system that produces the behavior we want, goals become mostly secondary in nature. If there are clear policies and feedback loops built into the system to confirm, analyze and affirm behavior, goals will just happen. We must understand the constraints of the system and operate within them as well. We must know the inputs and the outputs of the system and how those interact to balance or reinforce behavior. We must work to ensure that goals are written in such a way that they do not violate the boundaries of the system because that guarantees failure. Successful goal setting is really about system design and is just as hard as more concrete problems like making an API faster or migrating to the cloud.