Systems vs Goals

Are goals and systems in competition or are they complimentary? A goal is an objective to get something done. A system is a set of actions that seemingly have the same outcome. Why then does it happen that when we set goals – it requires changes in systems?

When starting to research the theory of goals – it is hard to find a comprehensive theory of how goals work on where they should focus on an organisation. There seems to be a wide consensus that without a goal – an employee is less than likely to even show up for work. The research focus in terms of goal setting comes from Locke and Latham out of the late 60’s. The key points that Locke and Latham made were that motivational goals needed to have the following dimensions: clarity, challenge, commitment, feedback and complexity. Goals need to be clear and measurable. Secondly, goals must be challenging, with achievement as the final payoff. Thirdly, employees must feel part of the goal-setting process to be committed to a clearly relevant goal. There must be a program that involves feedback, recognition and progress reporting to give a sense of moving towards the goal. Lastly, the task must be complex but not overwhelming, with sufficient time and resources available.

From this description, we see that goals are inherently tools to motivate employees and except for point 3 that talks about a clearly relevant goal – does not quite define where we should set our goals to make something.

Now on the systems side we find that a system is defined as an input, process, output loop that has feedback in it and thus creates a self-perpetuating or at least self-re-enforcing loop. Systems can also be defined as a group of parts connected by a web of relationships.

The objective of a system is to perpetuate itself, and arguably will always involve an element of growth, or at least injection of energy – as a system that tends to decrease in entropy – tends to disappear.

This brings us to the crux of the matter.

• Systems are there not to change as much as possible.
• Goals are there to motivate change from a non-active state to an active state.
• These two things are often in conflict.

Even at its best – goals are ineffective and most organisations would tell you in order to achieve a goal, you have to set the goal much higher than is actually intended. The people that are good at achieving goals are rare, often brash an operate at the expense of the system. The people that perpetuate the system are often described as lazy, selfish and bureaucratic and they are seen as playing politics and obstructing others to make a difference.

If we look carefully at someone that understood that there is a different path – we have to consider the work of Deming. Deming realised that there is a balance between improving the system and getting to done.

Putting principle 1 and principle 10 together gives an interesting wakeup to how we set goals.

“Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.”

According to Deming we are purposefully creating conflict with goals.

I think there is a middle ground

1. Create a strong purpose. This defines where the system is going.
2. Define goals on four levels
   1. Things that we need the system to do
   2. Things that we need to do to improve the system
   3. Things that we do to maintain the system
   4. Things that we need to do now

Any system also needs to be seen on multiple levels. There is the physical layout of the system, the data storage in the system, the data movement in the system and the governance of the system. Systems thinkers sometimes reference this as material, energy, information.

I do not believe in SMART goals. I believe in goals with a purpose and I think that the idea of SMART goals confuse the real issue that asks why the system exists in the first place and what we are doing to make it better. SMART usuaylly means SMALL and this is often contrary to a system that typically needs to generate energy to continue to exist. 

As a challenge, I would ask a manager to spend the same time that usually goes into goal setting and to use that time to ask employees how we can strengthen the system, remove inefficiencies and move closer to where we are going as a company. When you start doing this – you naturally build goals that are both there to achieve results and to strengthen the system achieving the results. Many goals I find traditionally are simply set to achieve a result where the underlying system to achieve it is simply not defined, clear or considered when the goal is set.

The second point in terms of goal setting is also that once I have a goal – I need to understand how the system is going to get us to achieving that goal. The goal thus needs to be moving the system forward and must be using the system to achieve its task. The items that constitute the goal must actually be manipulable by managers. I find it fascinating that we can set a goal of e.g. achieve $ 100 million in sales. The reality is that sales from entities that is outside of our system, will never happen and that the only influencable items from a goal is the things that I can ask sales people to do more of which may include more calls, more visits, quality in the way that we present.

I believe that this is why the balance scorecard and the strategy maps became so popular in the mid 1990’s and early 2000’s. They actually for the first time started to establish a relationship between goal sets and variables. I think however that the balance scorecard by Kaplan and Norton represents a generalisation of a much larger question around goals and goal theory.

So, this brings us to a conclusion that states that goals should be set on both an institutional and a functional level. Goals must be clear in terms of what they need the system to achieve and need to focus on the influencable items that are in the organisations’ control.

 

14 Principles of Deming

1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

• Eliminate work standards (quotas) on the factory floor. Substitute leadership.
• Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective .
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.