Goal setting successfully: hard goals, short horizons and the side effects nobody mentions

Every January I watch the same ritual. An away-day produces a list of annual objectives, each one described as strategic, few of them owned by a single person, most of them impossible to fail because nobody wrote down what failure would look like. By March the calendar has eaten them. By September someone proposes a re-forecast. By December the team is writing next year’s list on top of this year’s unfinished one.

The irony is that goal setting is one of the best-evidenced tools in management. The problem is rarely the idea. It is the dose, the design and the follow-through.

So here is my position. Specific, challenging goals work — but only when they are few, owned, tied to a leading indicator and reviewed every week, and when someone is watching for their side effects. A goal is a prescription-strength tool, not a slogan. Used well, it turns aspiration into weekly wins the board can see. Used carelessly, it produces sandbagging, short cuts and the occasional scandal.

This is the third focus area in From vision to execution. The chapter sets out owner, metric and cadence. Here I want to go further into why goals work, what goes wrong when they are overused, and how to design a quarter so the benefits arrive without the damage.

Why hard, specific goals work

The core finding is old and robust. Reviewing laboratory and field research in 1981, Edwin Locke, Gary Latham and colleagues found that specific, challenging goals led to higher performance than easy goals, “do your best” goals or no goals, with 90% of the studies showing positive or partially positive results. They also described how: goals direct attention, mobilise effort, increase persistence and push people to develop strategies.

The conditions they listed matter more to a chief executive than the headline. Goals worked best when people had the ability to reach them, when feedback showed progress against the goal, when the manager was supportive and when the goal was actually accepted. Read that list again as a design brief. It says a goal set in the boardroom and announced by email is missing at least three of the ingredients.

Acceptance is where most executive teams fall down, and it is where the Gallup research on goal setting is most useful. When employees were not included in setting their goals, 47% strongly agreed that they knew what was expected of them at work. When they were included, the figure was 76%. Employees whose managers involved them were 2.3 times more likely to say their goals were realistic. Involvement is not softness. It is how a goal moves from the slide into someone’s head.

The side effects nobody mentions

In 2009 Lisa Ordóñez, Maurice Schweitzer, Adam Galinsky and Max Bazerman published a paper with a deliberately provocative title, Goals Gone Wild. Their argument was that the benefits of goal setting had been overstated and its harms largely ignored. They listed the side effects: a narrow focus that neglects everything outside the goal, a rise in unethical behaviour, distorted appetite for risk, corrosion of culture and reduced intrinsic motivation. Their prescription was not to abandon goals but to treat them as a prescription-strength medicine that needs careful dosing and close supervision.

Their opening example is one every chief executive should know. In the early 1990s Sears set its auto-repair staff a sales goal of $147 an hour. The paper describes how that specific, challenging goal led staff to overcharge customers and carry out unnecessary repairs across the company, and how the chairman later acknowledged that the goal-setting process had created an environment where mistakes occurred.

I do not read that as an argument against hard goals. I read it as an argument for design. Each side effect has a guardrail, and most of them cost very little.

Side effect	What it looks like in the business	The guardrail
Narrow focus	The goal is hit; the area next to it quietly decays	Write what the goal must not break, and review it in the same meeting
Unethical short cuts	Discounts, pulled-forward revenue, creative reporting near quarter end	Pair every number with a quality or integrity measure
Distorted risk	Big, reckless bets to close a gap, or timid ones to protect a bonus	Discuss the risk taken, not only the result, at the midpoint review
Corroded culture	Colleagues compete when they should co-operate	Make some goals shared across functions, with one accountable owner
Lost learning	People repeat what they know because experiments might miss	Use learning goals for genuinely new work: what we will find out by when

The guardrail column is the practical behaviour. If your weekly operating meeting only ever asks about the number, you are telling the company that the number is all that matters. People are very good at hearing that.

Designing the quarter

Hold two horizons. The long picture is the vision, which I cover in transfer vision effectively. The short scoreboard is ninety days. A year is too long to hold a team’s attention, and a month is too short for most meaningful outcomes. Ninety days is long enough to move something and short enough that a miss is still recoverable.

Each ninety-day goal needs five things:

• A specific, hard target. A number, a segment and a date, set high enough that you might miss it.
• One owner. A name, not a function, with written decision rights over the people, money and scope the goal needs.
• A leading indicator. Something you can see moving weekly that predicts the lagging result. Revenue is a lag; qualified pipeline or cycle time can be a lead.
• A guardrail. What the goal must not break, from the table above.
• A review date that already exists. A weekly slot in the operating meeting and a midpoint decision at week six: keep, change or kill.

Then keep the list short. Three to five company goals is enough for most executive teams. More than that and the goals start competing for the same people, and the owners stop believing that any of them really matter. Choosing which goals make the list is a Choices decision in the sense I describe in the leadership landscape; everything that does not make the list goes into the operating plan, not onto the scoreboard.

Make progress visible every week

The phrase in my description of this focus area that leaders tend to skip is “weekly wins the board can see”. It is not a flourish. It rests on some of the most useful research on motivation I know.

Teresa Amabile and Steven Kramer studied nearly 12,000 diary entries from 238 people in 26 project teams. Progress in meaningful work was the single most important thing lifting people’s emotions, motivation and perceptions of their work. Steps forward occurred on 76% of people’s best-mood days. Yet when they asked 669 managers to rank five motivators, only 35 of them — 5% — put progress first. Most ranked it last.

That is why the leading indicator and the weekly review matter so much. A ninety-day goal reviewed only at the end gives people one moment of progress, or one moment of failure, per quarter. The same goal with a visible weekly lead gives them twelve chances to see movement and correct course. It also builds the kind of momentum that makes the next quarter easier, rather than the stop-start rhythm that drains it.

Sport works the same way. Nobody trains for a season by checking the result at the end. You ride to power numbers and lap times every week, and the race result is the lag. I write more about that on the elite-sport page.

Arguments

The case for

The evidence for specific, hard goals is about as strong as management research gets: Locke and Latham’s review found positive or partially positive results in 90% of studies, in the field as well as the laboratory. Involving people raises clarity and realism sharply, as the Gallup data shows. And visible progress is a powerful motivator in its own right, which is exactly what a weekly leading indicator delivers. A company that sets few, hard, owned goals and reviews them weekly is using well-tested tools in the way they were designed to be used.

The case against

The strongest objection comes from the goal-setting research itself. Ordóñez and colleagues showed that hard goals can narrow attention, encourage short cuts, distort risk and corrode culture, and the Sears case shows how expensive that can get. A second objection is that goals suit known work but fit poorly with genuine exploration; when nobody knows the answer, a hard performance target can push people to repeat what they already know.

A third is that ninety-day cycles can create short-termism, with long-term bets starved because they do not move this quarter’s number. And a fourth is practical: goal systems often become bureaucracy, with more time spent formatting objectives than pursuing them. In novel, highly uncertain work, the opposite of my thesis can be true: fewer hard targets and more learning goals serve the company better.

Where I stand

I set hard, specific goals — with the guardrails in place. Every number gets a constraint, every quarter gets a midpoint decision, and genuinely new work gets learning goals instead of performance targets. Long-term bets get their own goal on the scoreboard so they are not starved by the quarter.

In my seven-step coaching process, this work runs across three steps. Step 3, Challenges, is where we narrow to the vital few priorities for the next ninety days. Step 5, Improvement, is the observe, adjust, advance loop that keeps goals honest week by week. Step 6, Impact, is where leading and lagging measures sit on one dashboard so behaviour can be connected to results. I would add one personal point: the enterprise will not outrun the chief executive. Put one goal for your own behaviour on the list, and treat it like the others — which is what your personal development plan is for.

Try this: rebuild one goal this week

Take one current goal — the one you suspect is wallpaper — and rebuild it in an hour with its owner.

1. Make it specific and hard. Rewrite it as a number, a segment and a date. Ask the owner how likely they are to hit it. If the answer is “certain”, raise it.
2. Name one owner. Write the person’s name and three decisions they may take without coming back to you.
3. Find the lead. Agree one indicator you can see move every week that predicts the result.
4. Write the guardrail. What must this goal not break? Write it next to the goal.
5. Book the reviews. Weekly in the existing operating meeting, and a keep, change or kill decision at week six.
6. Show the progress. Put the lead indicator where the team can see it every week, not just in the board pack.

Then sit with these questions:

• Which of our current goals could not actually be failed?
• Where might a hard goal be tempting someone to cut a corner we would be ashamed of?
• Did the people who own our goals help set them, or were they told?
• Which goal has not been reviewed in the last thirty days?
• What goal have I set for my own behaviour this quarter, and who knows about it?

Where to go next

Goals are the last link in the chain this chapter describes. Without a picture people can carry, there is nothing to aim at, so start with transfer vision effectively if the destination is still blurred. If the goal list keeps growing, the gap is usually Choices, which the leadership landscape explains. Goals also depend on honest feedback about progress, so giving and receiving praise and feedback is a natural companion. For a wider look at ownership, my field note on how to build an accountability culture that scales goes further.

When the goals belong to a whole executive team, the work is best done with the team in the room, which is what executive team coaching is for. If you want to rebuild your own scoreboard with someone who spent more than 25 years as a chief executive, book a 30-minute strategy call.