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How Smart People Get Stupid

Exhibit A. Google conducted a multi-year, multi-million dollar study called Project Aristotle to determine just what distinguishes successful teams from unsuccessful ones. Tons of data were examined, decades of research studied, multiple hypotheses explored.

The answer? Drum roll: successful team members display more sensitivity toward their colleagues, e.g. granting them equal talk time.

THAT’S IT!

If you find that a stunningly unsurprising flash of the obvious, you don’t understand how things work in business these days. Here’s the reaction of one Googler to that study:

“‘Just having data that proves to people that these things are worth paying attention to sometimes is the most important step in getting them to actually pay attention…I had research telling me that it was O.K. to follow my gut,’’ she said. ‘‘So that’s what I did. The data helped me feel safe enough to do what I thought was right.’’

I’m not picking on Google; they are not unique. (And they are, indeed, really smart). But let me restate what Exhibit A is really telling us:

Millions of years of evolution have brought humans incredibly complex and exquisitely tuned neurological systems, capable of instantly intuiting not just friend vs. foe, but parsing a spectacularly wide array of emotional messages being sent out by our fellow humans.

Yet the smartest of the smart among us have determined that you can’t trust that system – unless it’s backed up by years of technological research that couldn’t have been done even just ten years ago.  Fortunately, we have now been given permission by that research to ‘trust your gut.’

It’s a wonder the human race stumbled along without that study for so many years.

 

Exhibit B. We recently got a plaintive email from a genuinely perplexed  client.

He said:

I hear constantly that being authentic is crucial. But it’s hard to get a clear grasp on the idea. It’s especially hard to figure out how I can know (instead of just feeling or believing) that I am authentic – much less know that someone else is.

Absent knowing we’re authentic, can’t anyone believing they’re authentic just claim to be so? How could anyone prove otherwise?  And since we can’t really know authenticity, doesn’t that also mean we can’t measure it, so we can’t compare it across people or time or situations?

Hasn’t someone come up with a way of getting at authenticity by way of knowing, rather than feeling or believing? I’m struggling to know how I can know I’m authentic. I hope this makes some sense.

This person’s pain is real, and deep; I don’t want to appear insensitive by citing it as a cautionary example, we can all relate to the sentiment. Yet, contrary to their hope, the query makes no good sense at all. Instead, it represents the abandonment of commonsense.

Authenticity – to pick that particular example – speaks to an alignment of beliefs and feelings with the cognitive functions that our writer called “knowing.”  When we run across someone who accesses solely their cognitive talents, we don’t think of them as authentic – we think of them as Sheldon Cooper. They are inauthentic because they are presenting not their full selves, but only their frontal cortexes to others.

“Authentic” is what we feel instantly in our pre- and sub-conscious instinctive feelings about other people. It is the same kind of feeling we get when we jump away from the speeding car, recoil at the sight of a snake, or feel our hearts tug when a puppy wags its tail at us.

An Outbreak of Reductionism

This is hardly the first outbreak of hyper-rationalization. In the social sciences it has a name – physics envy. It is particularly virulent today in neuroscience, where some, having locating certain emotions in particular areas of the brain, claim to have “explained” those emotions. Description is by far the narrowest form of explanation – it’s more akin to translation.

But the disease affects business as well. We have no trouble smiling at the naiveté of Frederick Taylor and his stopwatch, measuring people like machines. Yet we are every bit as mechanical and naive today.

Today, it is an article of faith in many of our most successful companies that “management” is a matter of decomposing goals into a series of cascading behaviors which, properly measured and carefully matched to incentives, produce an internally consistent, humming machine. All you need is a dashboard, which is easily available in the form of widgets.

The manifestation of this belief system (codified in “if you can’t measure it you can’t manage it”) is the enormous investment in training, goal-setting, reporting, progress discussion, and performance reviews – all of them non-direct value-adding processes.  All of them are built around a behavioral view of meaningfulness, a pyramid view of behaviors, and a system for metrics and incentives.

Every training department knows to use the Skinnerian language (“attendees will learn the behaviors associated with mastering the skills of XYZ…and will be rated regularly thereafter on a four-point scale of Early, Maturing, Mature, and Master.”)

Petrification by Metrification

This is precisely the technique used decades ago by Harold Geneen, who believed in rolling up data from all his subsidiaries and managing by the numbers. Except Geneen was measuring profit margins, inventory turns and capital costs. (And it turned out it was Geneen’s outsized personality, not his system, that made it work).

Today’s managers are applying the Geneen model to manage things like trust, authenticity, ethics and vulnerability – with the same tools they apply to measuring click-through rates. There is a huge mismatch. Entire organizations – and not just Left-coast tech companies – are being managed by cascading goals and KPIs, each firm with its own acronym for the process.

This continued reduction of higher order human functions to behavioral minutiae, coupled with the rats-and-cheese-in-the-maze approach to incentives, succeeds only in hollowing out those functions. Try this thought experiment: How do you incent unselfishness?

In the words of ex-consultant and CEO Jim McCurry, all this leads to “petrification by metrification.”  You don’t get the genuine article, but a fossilized replica. It may look real, but it’s checkbox stuff.

Scaling the Soft Skills

George Burns once said, “The most important thing in life is sincerity; if you can fake that, you’ve got it made.”

Ironically, the management teams who try to apply Big Data techniques to rich, basic human interactions are swimming upstream. The right way to scale soft skills and sensitivity not only looks different than the way you incent car  salespeople, but it’s a lot cheaper and faster. It has to do with leading with values, engineering conversations, and role-modeling.

But that’s fodder for another blogpost.

 

 

 

Is Measurement the Enemy of Management?

Growing up as a cub consultant, billable hours were without question the defining metric in the consulting industry. It seemed obvious therefore, that achieving success would be dependent on increasing my billable hours. I was hardly the only young consultant to come to this obvious conclusion.

Fortunately for me, I found a mentor who took me aside one day and explained that billable hours shouldn’t be seen as a goal; instead, I should see them as the outcome of the quality of my work. In other words, if my work was good, there would be no shortage of hours. From that perspective, billable hours were an indirect and lagging indicator of quality.

His message was loud and clear: I should worry less about my direct output metric, and focus more on the principles, behaviors, and attitudes with which I approached my work. It was, in retrospect, the most important lesson of my consulting career and one too few others are taught.

In that light, two recent blog posts caught my attention. One was by Charlie Green, in which he recounted a fable with a choice between trust and measurement.   Another was by Chris Brogan, extolling the virtues of a trust agent at LinkedIn. The coincident timing of these two posts, with my own experience, drove the title of this post.

Is it possible that, as my mentor warned, we have systemically driven a wedge between the practice of good management and the tools of measurement? Has the relationship between driver and driven been reversed? Has the metric become the goal in itself rather than the outcome it sought to measure? Has measurement become the enemy of management?

 Management and Measurement

Of course, good measurement should serve management. It has always been an important element of managing, it tells the good manager where to look although not what to do. There is nothing intrinsically that sets management at odds with measurement until the manager uses the metric as a substitute for judgment. How many companies established arbitrary targets for reductions in force in the recent recession rather than gaining a broad and deep understanding of where capacity could be reduced without damaging long-term capability?

 I’m beginning to fear however, that measurement is replacing management. Several pervasive and tectonic factors have driven the two apart. One is simply, for lack of a better term, the modularization of business. Business process reengineering, supposedly invented 25 years ago, has taught us to break businesses into many pieces, and to achieve full scale economies (hopefully at a global level) in each of them.

That kind of approach demands that each module fit neatly with the next, the same way that couplers enable railcars to effectively and efficiently hook up and create a train. The “couplers” of choice have almost always been metrics. If we can specify measurements that our suppliers must meet, then we can have the best of both worlds – customization and scale. The more modularized our businesses, the more we manage by measurement.

Question: Did the folks managing the Deepwater Horizon rig think about the revenues and profit BP would gain from a safe and successful well in the Gulf and conversely the risk of a disaster? Or did they think about the bonuses that would go along with meeting budget and timing expectations for getting the drilling done and the rig moved?

Of perhaps more direct importance is that we have simply become more short-term and reward driven in business then we were 100,000 years ago when I was a pup. My fellow consultants who obsessed about their billable hours may not have had as much long term success in their individual careers as those who paid attention to quality and long-term relationships, but it seems that they have won the measurement war. The true tragedy is that the measures that may have merit when looking at a large scale organization, may destroy trust and relationships at the individual level. Charlie wrote about the dangers of measurement focus as it relates to sales and client relationships in his February 2, Business Week article, Metrics: Overmeasuring Our Way to Management.

The dominant belief systems today in business include “maximize shareholder value,” “if you can’t measure it you can’t manage it,” and “what’s the net present monetized value of that.”  Finance is the driving function of today’s business world; in my day, that claim was held by the value producers. Too often we drive for the metric itself, forgetting that the metric is supposed to measure something bigger, deeper, more important and fundamental. To use the consulting analogy, we are all focused on monthly billable hours instead of value for the client. “Pay-for-performance” has become shorthand for lazy management. If you assume that the numbers are everything, then you don’t need to dig beneath the numbers to find out their drivers.

Actually, I suspect it goes deeper. “Pay-for-performance” is also an expression of lack of trust. It comes from an unwillingness to trust others to do the right thing in a business context; what we view as risk mitigation is in fact a form of management by asphyxiation. Managers throughout organizations know that it is the metrics that matter…the overall outcome is incidental. We have replaced “no pain, no gain” with “no risk, no loss” when it comes to developing managers and finding creative ways to add new value.

To go back to Chris Brogan’s trust agents, does your company know who its trust agents are? Does your organization support, value and reward its trust agents? These are the people who chose door number one in Charlie’s fable….choosing to have the highest level of trust while giving up the ability to have it measured. 

So a question for the readers: Has measurement become the enemy of management? Or can we have it both ways?

The Trust Reader Volume 4

Greetings, and welcome to this month’s ebook, Volume 4 of the TrustReader. The TrustReader series announces the publication of new articles on the Trusted Advisor website.

This month, we lead with the effects over-measurement and value can have on a business. From the most recent Olympics, contest shows, and more we seem to be knee-deep in rating systems. But is it possible that the ever-growing need to rank our business practices and relationships can in fact be a deterrent?

The lead article explores this theme by looking directly at measurement itself. The other two articles reflect a similar theme; what we lose when we rely too much on abstract, quantified approaches to business.

In this edition of the Trust Reader Volume 4 we feature:

  • Metrics: Over-measuring Our Way to Management
  • Why Value Propositions are Overrated
  • The Point of Listening is Not What You Hear, But the Listening Itself

GET THE TRUST READER VOLUME 4 HERE

I welcome your comments, and hope your entry into Spring is as welcome as the warmer weather.

Metrics: Overmeasuring Our Way to Management

Contrary to the popular saying (“if you can’t measure it, you can’t manage it”), the ability to manage is not dependent on the ability to measure. 

In fact, overmeasurement has some serious downsides.

TrustMatters readers have heard this theme before, but I’m happy to say this time it’s being published in the Management Channel at Businessweek.com

Read the full article at: Metrics: Overmeasuring Our Way to Management

And have a great Wednesday.
 

Employment Law: When Solutions Make Problems Worse

Continuing this week’s theme of highlighting the role of the personal in business.

I was at a reception the other day, and ended up at a table with doctors and an employment lawyer. The lawyer specialized in advising corporate clients about equal opportunity employment law.

This partly means advising clients who have been sued. I asked him whether clients also invited him to make themselves lawsuit-proof, or whether the bulk of his practice was after-the-lawsuit defense. "Once they’ve been sued, they get religion and invite me in to design policies," he said.

"And it’s a helluva business. I worried at first that it would die out, but it turns out it’s the law practice that keeps on giving."

Maybe I was being a little feisty, I don’t know. But that’s where the fun started.

Managing People, or Managing Process

"It would seem to me," I ventured, "that the best way to prevent EEOC lawsuits is to be really good at basic people management: telling people the truth, face to face, about the role they are expected to play, getting great at giving and receiving feedback about how well they are or are not doing it."

"Oh, no no NO NO NO!" the lawyer responded. "That’ll get you killed in court. You have to have processes, document those processes, train on them, document that you’re training on them, and do everything short of tape-recording every conversation with every employee you have to make sure that no one’s saying something that could be interpreted wrongly.

"I tell all my clients a simple story–a small off-color joke. They laugh at it and it helps them bond with me in my presentation. Then I tell them how that joke could cost them a million bucks. It puts the fear of God in them. Employment law is the gift that keeps on giving."

When to Talk, and When to Blog

I am gradually, over my many years of experience, learning when to pick fights, and when to walk away from them. There was no point in arguing with someone I’ll never meet again over an issue I’ll never convince them about. (I was reminded of this wisdom by Judy kicking me under the table). 

On the other hand, it’s a great topic to blog about, and I hope it’ll stimulate some conversation. So let me be very blunt about my point of view.

That lawyer is the kind of pompous bureaucrat who gives bureaucracy a bad name. His intentions are not bad; not at all.  But he is a highly paid content-expert who is sowing discontent, alienating people, and creating inefficiency, all the while believing he’s contributing to our great system of private enterprise.

Harsh?  Well, here’s a few caveats.  First, not all lawyers agree with him. Second, this is an issue hardly unique to employment law. Third, there’s nothing wrong with processes per se.

But still: what I said.

Why Good Management Mitigates the Need for Process Management

I worked for two consulting firms. One had detailed employee contracts outlining things like intellectual property and non-competes; it got sued a couple times per year. The other had no such clauses and its employment contracts were 20% the length of those of the first firm. It had no employee lawsuits in 20 years.

The reason is simple: one managed by process and contract, the other by people. The latter obviates much of the need for the former.

If you treat people as objects to be controlled, they will oblige by meeting your (low) expectations. If you tell entire industries that they’ll be managed by regulation and laws, they will stop behaving ethically and do what they please until you make it illegal.

If you start making process compliance the guts of employment law, you lose the very human relationship that makes employment work. The problem lies not so much in the law as in ignorance of how human relations work.

Lawyers have no training in management. No fault there, neither do doctors or rabbis or engineers. But managers do. They are supposed to manage. When they default their management tasks to lawyers, they get what they deserve–employees who are suspicious of the motives behind their communications. And the employees are not wrong to feel that way.

Managers abdicate personal management at their own risk. The cost of running bureaucratic compliance operations to compensate for a failure in basic supervision is massive.

The answer is not more bureaucracy–it’s more truth and honesty, transparency, and responsibility-taking.  Don’t treat people like caustic assets who might sue you unless you insulate yourself with processes.  Instead, treat them like human beings who can be developed through good management, and who will serve you well in return.

 

Invictus: Real Leadership, Real Management

This week we’ll be exploring the theme that business is inherently personal, and that we’ve forgotten that fact to our detriment.

Last weekend I saw the movie Invictus, Clint Eastwood’s latest, about the early days of Nelson Mandela’s presidency in South Africa. It stars Morgan Freeman (of course) as Mandela, and Matt Damon, as captain of the hapless rugby Springboks, South Africa’s version of the Chicago Cubs.

Mandela knew that the Springboks were as hated by the black population as they were beloved by the Afrikaaner whites. His insight was to see the power of reconciliation that could be achieved if the team were to pull off the equivalent of the 1980 US Olympic hockey team’s victory.

The movie reviews are mostly positive; even the critical ones suggest that Eastwood got the critical story right. And the true story itself is so enormous that it needs no embellishment. For my part, Eastwood has rounded the sharp edges over the years, and increased the role of heart. For me, he has earned the right (since as far back as The Good, the Bad and the Ugly et al) to jerk my heart around pretty much as he wishes.

But this is a business blog, not a movie blog.

The Best Way to Lead, and the Best Way to Manage

We meet Mandela just after he has been elected president, after nearly 30 years in prison. His power lies in the overwhelming respect he merits by forgiving all those who imprisoned him.

In his first meeting with the Matt Damon character, Pinnear, Mandela asks him a question: How do you lead? Pinnear’s answer is clear, and Mandela delightedly agrees with him.

The best way to lead is to lead by example.

Mandela leads by refusing to fire the white former security officers, thus personally demonstrating reconciliation of the highest order on Day One of his administration.

The second question Mandela poses is, what is the best way to manage? And his answer is equally clear.

The best way to manage is through inspiration. And the best way to inspire is to demand of others things they cannot themselves conceive of accomplishing.

As Pinnear’s wife asks him how the meeting went, it dawns on Pinnear that Mandela has just acted on those two questions–by asking him to lead the hapless Springboks to (gasp) the World Cup championship, a goal he himself could hardly conceive of.

Leadership and Management: Whatever Happened to Role-modeling and Inspiration?

It was only 15 years ago that Collins and Poras conceived of BHAGs–Big, Hairy, Audacious Goals.

It was 21 years ago that C.K. Prahalad suggested that Strategic Intent–basically a "stretch" view based on direction, discovery and destiny–should inform strategy.

Warren Bennis has been preaching for many decades now the importance of role-modeling.

Yet what do we have these days?

  • Chuck Prince, former CEO of Citibank, says "As long as the music’s playing, you’ve got to get up and dance." Role-modeling? I don’t think so.
  • The image that remains today from "Shoeless" Joe Jackson’s 1919 conspiracy to fix the World Series is that of a kid saying, "Say it ain’t so, Joe!" In other words, dismay at the betrayal of a role-model. The fallout from today’s flame-out by Tiger Woods is discussed more in terms of brand image than of leadership.
  • The dialogue these days about the financial meltdown is centering on compensation incentives and structural reform. Management by inspiration? Not in evidence lately.

 

The point is not whether scientific management doesn’t have its place; surely it does. But that place has been overdone to the detriment of both leadership and management.

This is not some untested thesis. Mandela accomplished some remarkable things by applying these human principles to an "organization" of some 50 million people, and to problems as intractable as racism. Makes Citibank look like a walk in the park.

Whether you liked the movie or not, Clint Eastwood is channeling a message for our times.

Grounded Corporate Culture vs. Up In The Air Management

Over the holiday weekend we gorged on movies; Sherlock Holmes, Broken Embraces, a few others. One that got decidedly mixed reviews was Up In the Air. Personally, I liked it. The New Yorker explains it very well.

But you don’t have to agree with me for us to use the metaphor. George Clooney plays a globe-trotting firer-for-hire; an outsider hired by management to terminate people at arm’s length. (Never mind such jobs basically don’t exist, this is Hollywood). 

On a dozen levels, the movie deals with the issue of intimacy in business. Firing people by proxy; quitting a job by texting; romance in the friendly skies—or is it romance? And throughout it all, can we tell the difference?

Intimacy in Business

Also over the weekend, I had a cuppa with a client, a partner at a large global professional services firm. Call him Ishmael.

We talked about his business and mine, mine consisting in part of selling to his. Like many large firms, his has cut back virtually 100% on internal travel. 

Ishmael: A global business of collegial professionals can exist for a year without mixing with your partners. Maybe even a little longer. But at some point it begins to exact a toll. We’ve been webinared to death.   Worse, we only have two-dimensional, sensory-deprived images of each other. 

There’s only so much you can do to maintain a connection without the physical, breathing presence of each other. Avatars and holograms and con-calls don’t do it. Cultures don’t live by cloud-computing alone. To make a firm, you’ve got to drink beer together, play golf together, smell each other, laugh and cry in the same room at the same time. 

Is that a real poncho, or is that a Sears poncho? (Frank Zappa)

Up in the Air Management

What I liked about the movie was that the Clooney character actually does have the ability to be real: he shows it in a scene where he cuts through the cynical hatred of a terminated employee (the talented J.K. Simmons) to jarringly put him back in touch with his youthful dreams. And yet Clooney’s character is so practiced in the Plastic Ways that he ultimately can’t recognize when he’s lost touch with that ability.

The best movies are metaphors for life. There’s fodder enough here to rail against the twittering, ADD-ridden, thumb-dancing toys that threaten to reduce our attention to a tiny screen. But that’s not all.

Those new technologies are also metaphors in addition to being virtual reality centers. They are metaphors for other forms of anti-intimacy management tools–blind auctions; outsourcing; management by process; modular design; over-use of legal agreements; online employment search.

There’s nothing wrong per se with any of these tools. But taken uncritically, and at too great a strength, you end up with Clooney in the skies, aiming at what you think is real, but which ends up being just a pale reflection.  

…like a Sale sign in the window; you go in, and find it is only the sign that is for sale. (Soren Kierkegaard)

Applying Business Best Practices to Relationships

Metrics money managementI ran across a blog the other day singing the importance of relationships in business. Fair enough.

As I recall, it started by saying:

“Let’s start with some undeniable facts. What gets measured gets managed.” ‘Uh oh,’ I thought, ‘I’m gonna have to write about this one.’

All right, let’s trot out the whole set of logical fallacies.

1. If you can’t measure it, you can’t manage it
2. If you can measure it, you can manage it
3. If you can’t manage it, it’s because you’re not measuring it
4. If you can manage it, it’s because you are measuring it.

Not one of those is true.

First, there is management by fear and intimidation; by shared values; by guilt-tripping; by walking around; by praise; and so on. None of which require measurement.

Second, the act of measuring per se does nothing to cause “management” to happen.

Of course, just because something is illogical doesn’t mean people don’t assign meaning to it. But why do so many people insist so strongly on connecting management and measurement?

I can suggest two reasons.

Go back to “what gets measured, gets managed.” What that really means is, “I’m the kind of person who, when someone measures me, falls into line and behaves according to the desired metrics.”

This view is the choice of the one being measured; it’s not a trait of the measurer, nor an outcome of the act of measuring. It’s a rather passive choice by the measuree: it doesn’t require much thinking, and doesn’t invite challenge.

Which is exactly what most managers intend measurement to do: to communicate desires from boss to employee, in narrow, quantitative, often financial, terms.

But most of all, “what gets measured gets managed” reflects a belief that measurement is good, and that more measurement is better. Break it down to the elemental levels, let’s really manage this puppy.

Well, let’s test-drive that idea. Go ask your wife how you’re doing as a spouse (or reverse, etc.). On a scale of 1-10, please.

Now, that might get you into a pretty good conversation. It might even be so good that your actual performance as a spouse improves as a result.

Suppose further that you work in a company that believes “what gets measured gets managed,” and decide to apply this “obvious fact” to your home life as well. So you ask the wife the same question next month. Scale of 1-10 again, please.

Your spouse says, “didn’t we just have this conversation a few weeks ago?”

“Why, yes,” you say, “and it was really useful, and I want to be an even better spouse, so I figured I’d starting taking regular metrics readings so I can establish a benchmark performance level and track my improvement. I learned that technique at work. Do you think monthly reports on my spousal performance will be enough? Maybe I should ask you for weekly ratings?  And let’s be s ure to talk about rewards for achieving and exceeding my metrics.”

Now, if your spouse has any relationship skills, and any self-image to speak of, you’re gonna be sleeping on the sofa for a while.

And while explaining these new arrangements to you, you may hear something like, “and by the way, thanks for ruining that great conversation we had a few weeks ago, because now I see you never meant it, you were just in it for your own ego-gratification, and I feel like an idiot because I actually thought you might have cared, but now I see not only are you a jerk, but I deluded myself, and I now don’t even trust my own assessment skills, I was so far off in even thinking we had a good thing going, now I feel even worse, etc.”

This is the emotional equivalent of the Heisenberg Uncertainty Principle. You have just proven that the act of measurement can alter the thing being measured. (And by the way, who cares that you meant well, anyway?)

I have a friend who works at GE designing sophisticated fluid control measurement tools used in the oil industry. Crude oil doesn’t much care how often or how precisely you measure it. Unfortunately, spouses do.  As do people in general.

Which is why the unthinking, inane concatenations of measurement and management so often fail when applied to people.

Best practices aren’t universal. The management of capital and hydrocarbon resources doesn’t necessarily tell us much about the management of human “resources,” aka people.

Sacred Cows, or Goals Gone Wild

Personally, I love seeing sacred cows sacrificed. Maybe it’s that contrarian thinking helps learning. Maybe skepticism came with studying philosophy and doing strategy consulting.

Maybe I’m just a little bent. Whatever.

Let’s take goal-setting. That’s about as big a sacred cow as you get in business. Googling “goal setting” gets you 5.6 million hits.

Jack Welch praises it. Scottie Hamilton and Michael Phelps get cited as examples of it. Martial artists swear by it. Management by objectives is built around it.

I’m not sure there’s any more common theme in self-help and business success books. It’s just so, like, obvious. Goal-setting may be the secret behind the success of Motherhood and Apple Pie. I’m pretty sure it explains the Boy Scouts.

So–what an unexpected delight to find a balloon-pricking, mellow-harshing, skeptical piece of inquiry in, of all places, Harvard Business School.  (Actually, it’s in the HBS Working Knowledge series, which does a fine job of exploring quirky ideas. They’re just not usually so big as this one).  A little bonus: the smirky title, "Goals Gone Wild: the Systematic Side Effects of Over-prescribing Goals Setting."

The paper is summarized here and co-author Max Bazerman is interviewed here:

From the executive summary:

• The harmful side effects of goal setting are far more serious and systematic than prior work has acknowledged.

• Goal setting harms organizations in systematic and predictable ways.

• The use of goal setting can degrade employee performance, shift focus away from important but non-specified goals, harm interpersonal relationships, corrode organizational culture, and motivate risky and unethical behaviors.

• In many situations, the damaging effects of goal setting outweigh its benefits.

But surely, you say, this is a case of excess, of bad apples. Goals are not the problem, people who use goals badly are the problem. (You remember–guns don’t kill people, people kill people).

No, says Bazerman. When the adoption of goals so predictably and systematically produces negative results, it is fair to say it is goals themselves that are the problem. (Are you listening, NRA?)

Well, you might say, if goal-setting is so dangerous, how’d we get to use it so much and so deeply?

Says Bazerman:

It is easy to implement. It is easy to measure. It is easy to document successes. And in laboratory experiments, it has been shown to be extremely successful at improving the measured behavior. [we] simply argue that goals have gone wild in terms of their impact on other unmeasured outcomes. When we factor in the consistent findings that stretch and specific goals both narrow focus on a limited set of behaviors while increasing risk-taking and unethical behavior, their simple implementation can become a vice.

Bazerman and his co-authors are not saying goal-setting is bad per se; they’re not raving nut-jobs. They’re just asking a question that doesn’t get asked nearly often enough.

They have taken a sober, holistic look at one of the most pervasive, unchallenged, unexamined mantras of business—and brought some welcome fresh air to the issue.

Bravo.

We’ve All Caught the Detroit Disease

Ward’s Automotive was for decades a major US auto industry trade publication. Each year, Ward’s published a yearbook, with a one-page market share table near the center.

Each year the book detailed share stats for not just GM, but Chevrolet, and within Chevy, Impalas and BelAirs. Plymouths, Dodges, Ramblers—all got detailed at the model level.

Except for one line.

Imports.

From the late 50s until the late 80s, the industry lumped together Rolls Royces and Volkswagens and Toyotas in one simple category. Imports.

Not until the late 80s—when “imports” finally exceeded 25% of the US market—did they get broken out. Last week, BusinessWeek reported that GM’s US market share was at 22.6% A reversal of fortune (in 1963, GM had 51% of the US market).

Over the years, Detroit came up with dozens of excuses. They blamed “deathtrap” used cars (whose only real threat, of course, was to prices of new cars). Roger Smith blamed technology. Detroit blamed fashion quirks in California. It blamed excise taxes. It blamed Japan, Inc.

As recently as May 8, 2005 (on George Stephanopoulos’ ABC News show), none other than Jack Welch blamed labor—high health care costs, “negotiated at a time of no competition”—and argued for a break. Welch conveniently forgets who negotiated all those contracts—Detroit. Without a gun to its head.

The truth is, Detroit had—and still has—an American disease. It has a few key symptoms:

• Belief that we are the biggest, standalone market—immune from global competition—and that the Big 3 had dominant market share

• Belief that GNP growth drives auto sales, that growth means growth in market share, and that buyers are price-driven

• Belief that, in the immortal words of Lee Iacocca, brought back a few years ago from the taxidermist to re-appear on TV, “the most important thing is—the deal!”

The Japanese in particular always believed it was a global market, far bigger than the US, and that they—including Toyota—were small players on a global stage. For them it was always about growth, not share. And for them, price was not something you jacked up with leader models and white-walls and radios—it was something you set low, for growth, and built in all the quality you could, until you earned the right to sell at higher price points. It was not "the deal"—it was, profoundly, the relationship.

They were—oh, what’s the word?—right.

So, perhaps we should go outside Detroit? Maybe tap the American zeitgeist and come up with—private equity, and an industry outsider!

And so we have Bob Nardelli, late of Home Depot fame, coming in as CEO of Chrysler for Cerberus Capital, Chrysler’s new private equity owner. According to Newsweek, Detroit insiders say they expect Cerberus to shake up the moribund American auto industry. Private equity has a lot going for it—but long-term thinking tends not to be part of it. Industry expertise isn’t all bad—and Nardelli has none of it. Pardon my scepticism in this case—I don’t see this ending well.

True, Detroit is easy to pick on. But you’d think the rest of US industry would catch a clue.

On Wall Street, a new phrase was invented only a few years ago—IBGYBG. I’ll be gone, you’ll be gone—so let’s do the deal and let the suckers pay for it.

Now consumers are suckered into no-income second mortgages (“hey they wouldn’t lend me the money if they didn’t think I could pay it back, right?”) which are then sliced and diced and tranched and resold and leveraged and omigosh, looks like a credit crisis! The spirit of Iacocca lives.

In Bentonville, they learned the volume lesson, but not the price/quality lesson. WalMart is teaching a nation that anything worth having is worth having at half the price and one third the quality so you can get more things worth having—to replace yesterday’s list. Planned obsolescence lives.

In Washington, the courage to face long-term financial issues is in short supply, and the belief that we stand alone—politically, militarily, culturally—is the reverse.

We’ve ended up with: here-now, cheaper by the dozen, do the transaction, no money down, quarterly earnings—and get your buyout package just before you default on the schnooks’ pension plans.

We’ve learned well from Detroit—the wrong lessons.

Update: "We”ve All Caught the Detroit Disease" is a featured post at the the Huffington Post.  Trust Matters readers may want to check out the discussion there as well.