Why Your Goals May Not be Working

Every January my team and I review our results from the prior year. I am not saying that I am competitive, but each statistic is then compared to the other regions in the company. Success is relative, after all. After the tough questions and/or “patting ourselves on the back,” we get to work on finalizing the goals for the current year. I have learned to use some simple tools and philosophies to keep us on track.

Sometimes, I get teased for being a “simpleton” because our goals seem basic. After all, geniuses created genius goals with the complexity of a binary code. But what is the purpose of goal setting? If the purpose is to motivate and inspire others to reach new heights, complex “binary type” goals will only confuse others while making you feel smart. Do you want to sound smart or be truly effective?

It is important to keep two things in mind when you’re setting goals: they should be simple and measurable. If goals are wordy and fancy, sure you might impress people with your vocabulary skills (trying to be smart again?), but they won’t internalize the importance of the goal. If people don’t understand what you want them to accomplish, your goal is useless.

Second, goals need to be measurable. If they are not measurable we have a tendency to claim success without making real progress. People don’t do this for Machiavellian reasons, but you would not believe the number of times that folks claim success when in reality the cause came from something else. I call this the “correlation vs. causation” factor. For example, did you cause the improvement in sales or did they simply come naturally from a growing demand in your market?

When I was in grad school, I struggled with my statistics class. I remember our professor saying over and over, “if you only learn one thing from my class, learn that correlation isn’t the same as causation." Well guess what….that, and regression analysis, are the only things I remember. The professor went on to show us a ridiculous story to prove his point. In Toronto, he pointed out, rain causes dogs to go to the bathroom. He then went on to use statistics to show that each day that it rained in Toronto all dogs had to go to the bathroom. The study caused anarchy in the class. Everyone in class found it to be ludicrous—dogs go about their business every day, not just on rainy days. His point again was that correlation does not prove causation. Effective leaders cause the improvement in their results.

I’ve seen this principle in action over and over throughout my career. During my time in Asia, my team and I were reviewing the results of one of our hotels. The proud general manager and his team showed us how well they were doing as their sales grew 20% year on year and their profit grew 25%. He then went on to claim that his effective leadership was making this the best team in Asia. I turned two shades of red. After taking a deep breath, I informed him that his city had the highest increase in demand year on year in Asia. His competitors had grown their sales 30%. It wasn’t his work. He was simply lucky enough to be in one of the “hottest markets” with a very limited supply. This is the reason that we measure market share. His marketshare had dropped year over year. They actually sold worse than anyone else. Then, we use margins to measure how much of the extra sales make it to the profit line. This also had not grown….so essentially, they had done a poor job.

The next month I found myself giving the year-end feedback to a general manager in a city stricken by a military coup and city wide demonstrations. He hung his head and apologized for missing his budget. I could see the shame in his eyes. He told me that they had worked very hard in this difficult environment but were unable to make up for the loss of business. I gave him the highest rating that year. Why? His market share grew. He sold better than his competition in a terrible demand period. They had also guarded every penny and improved their margins in a miserable market. He and his team actually created (or caused) the success in their market.

So, if your goals aren't working, evaluate to see if they are simple, measurable, and allow you to measure whether leaders really had an effect on their results. This will help you avoid false conclusions and encourage true success. Following this principle will keep you and your team honest with yourselves and competitive in your brand's market.