Building on Justin’s post: Who are you working for?
“No, that is not your problem,” he says.”Your problem is you don’t know what the goal is. And, by the way, there is only one goal, no matter what the company.”
That stumps me for a second. Jonah starts walking toward the gate again. It seems everyone else has now gone on board. Only the two of us are left in the waiting area. I keep after him.
“Wait a minute! What do you mean, I don’t know what the goal is? I know what the goal is,” I tell him.
By now, we’re at the door of the plane. Jonah turns to me. The stewardess inside the cabin is looking at us.
“Really? Then, tell me, what is the goal of your manufacturing organization?” he asks.
“The goal is to produce products as efficiently as we can,” I tell him.
“Wrong,” says Jonah. “That’s not it. What is the real goal?”
….
Wait a minute, I’m thinking. That’s it!
Technology: that’s really what it’s all about. We have to stay on the leading edge of technology. It’s essential to the company. If we don’t keep pace with technology, we’re finished. So that’s the goal.
Well, on second thought . . . that isn’t right.
The Goal, Eliyahu M. Goldratt p32
In life it’s easy to lose sight of the goal. Without acknowledgement of “The Goal” interesting things become important things – important things become critical things.
If you can imagine for a moment – the above conversation taking place but instead of proposing “technology” or “products efficiently” as the goal instead “Six Sigma” or “Brand” or better yet “Employee Morale” might be cited as “The Goal.”
Think about it though – why is it we do the things we do? In life my goal is to make the world better by having lived vs. how it would be had I not existed. The more I make the world “better” the better I’ve achieved “The Goal.”
The saying is raison d’etre it’s not raisons d’etre, and the reason is when it boils down to it there is only one target goal. I’m of the belief that while the goal may not necessarily be the only measure of success, it is most definitely the measure of failure.
How I go about my goal may be through learning, through impacting the business world, and by striving to be a good friend and family member. But in the event I no longer have friends or family (heaven forbid), I can no longer retain new things, or I no longer have the chops for the business world – my goal lives on. Therefore my goal is not to learn – learning is just a core element for how I go about my goal.
When I think about my goal and to continue along with Goldratt’s Theory of Constraints, the process to attain the goal and the barriers/bottlenecks to that goal, I get clarity around the things I should be doing, when and why.
What is your goal?
What is your business goal?
And how do your actions of today drive yourself and business to those goals?
mikalfm 
Also, you still haven’t responded to a point I’ve brought up a couple of times: people balance their personal goal(s) with their employer’s goal(s).
One thing this implies is that reducing to a single corporate goal doesn’t remove the necessity for balancing multiple goals. More positively, though, this is something that people already have plenty of experience with.
Thoughts?
jon
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It’s certainly an interesting discussion.
Like I said above, I totally agree that it’s vital to have a crisp mission and/or vision. With Amazon, their vision is “to be earth’s most customer centric company”; Zappo’s mission is “to provide the best customer service possible” and they’ve thought a lot about how to align the company around this. As you say, it’s part of their DNA. No arguments on that front.
However I don’t see how you get from that to the conclusion that they also believe in a single goal. For Zappo’s, “Hsieh said the company began with two goals for its first 10 years — reach $1 billion in annual sales and to crack the list of best companies to work for.” Goals, plural; and they complement the mission.
With Amazon, even though you might see it as a constraint, Bezos explicitly describes “maximizing long-term free cash flow” as a goal; People I’ve talked to from Amazon have always spoken of company goals, plural.
So it seems to me that in these cases you’re projecting your own world-view onto others who see things differently.
jon
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As always good points and discussion.
You say tomato I say tomato. You see optimizing for multiple goals, I see optimizing for an overall goal within constraints.
And I prioritized customer service over all else because thats the outcome of the DNA of amazon. Their DNA is about customer service within the constraints of free cash flow, if it were cash flow within the constraints of customer service, they wouldn’t take loss leadership positions on products.
I’ll reiterate though – I the examples you cited were company’s that aligned to the wrong overarching goal. Shows the downside of aligning to the wrong goal, not with the methodology. An example of this done right is Disney world and Zappos for example.
I propose that any time more than one person has to align to a goal. As soon as it leaves Mikal’s head and tries to become a “us” goal, people need to know how to prioritize – what they are optimizing for. Without the organization collectively argeeing on what the goal is or the over arching statement. Individuals begin making their own tradeoff decisions when the multiple goals inevitably come into conflict.
So in effect if the organization doesn’t set the goal collectively – they inevitably will do it as individuals as teams, as org charts or as product groups.
Thats my belief. Which is why I think it’s so important to collaboratively and inclusively define what the overarching goal is – as well as the “constraints” or the “how” we’re going to accomplish the over arching goal for example Amazon is going to accomplish their goal by paying attention to cash flow (constraint).
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We seem to be talking past each other. Perhaps we’re using the word “goal” in different ways.
Yes. Consider the example I gave: prioritizing corporate and/or organizational goals with personal goals. Most people I know do that. Don’t you?
More generally, counselors and life coaches explicitly work with people on how to identify and achieve their goals — plural. Here’s an example. And there’s plenty of psychological and behavioral economics research that looks at the interaction between people’s different (explicit and implicit) goals.
Back to the corporate perspective …
When I look at my (partial) list of what Qworky needs to accomplish, I see goals: to raise funding and/or start bringing in revenue; to build a diverse community; etc. etc.
Similarly it seems to me that Amazon has multiple goals, not just one. People I know who work there tell me that keeping costs low and investing for the long term is just as important a goal as customer orientation. And sure enough, their site lists “focus relentlessly on customers” as one of five prongs of their fundamental decision-making approach, also including “make bold investment decisions in light of long-term leadership considerations”, “focus on cash” and “work hard to spend wisely and maintain our lean culture”. In Bezos’ annual shareholder letter, he starts by saying the approach is to “stay heads down, focused on the long term and obsessed over customers” and adds “our primary financial goal remains maximizing long-term free cash flow and doing so with high rates of return on invested capital.” So I’m not sure why you place customer service on a different level than the others.
I’m not assuming that. I presented theoretical arguments for why it leads to sub-optimal decision making, and gave a bunch of examples where it worked out spectacularly badly in a very predictable way.
That’s certainly something I try to do. I tend to think of it as falling under the “live by my values” goal as well as “contribute to progress on human rights”.
Why do you think that? I described in some detail why I think a multi-goal approach is right for me — and this hasn’t come up overnight: I’ve spent years thinking about this and discussing it with friends. Don’t project your world-view on me.
Really? Some of what I’ve done towards this goal includes playing a part in activism efforts that stopped the REAL-ID law and led to a policy change on RFIDs in US passports, being a key part of a group that got front-page coverage of warrantless wiretapping, helping somebody start up a successful civil liberties non-profit, arranging a keynote by LGBTQ and migrant rights activists at CFP, working with others to pressure almost-all-male conferences to include more women, and providing connections to help Iranian protestors who are trying to remain anonymous. That doesn’t seem fuzzy to me.
jon
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I agree on the BHAG – I didn’t seperate these from yearly or quarterly goals very effectively. I don’t think that negates the point though.
I don’t agree with this thesis:
When there are multiple things a corporation (or other organization) needs to do to be successful, privileging just one of them causes people to make the wrong tradeoffs.
In this you state when there are multiple things a corporation needs to do to be successful. You are subordinating actions to the goal of success. In this approach I’m recommending the goal is a crisp definition of what success is.
You say people prioritize multiple goals all the time – do they? Or do they as individuals have a singular goal and do they operate within their constraints to accomplish the goal? Cognitive disonance suggests that people try to operate within their constraints – when they have to do something outside of those constrainsts in order to accomplish their goal – cognitive disonance takes hold.
Its seems your biggest point of contest is that their is an over-riding singular goal. A sigular goal however can be quite inclusive.
I also think its important not to assume that just because there is a singular goal it promotes recklessness. Instead I’d suppose that conflicting goals and lack of an over-riding goal invites employees to prioritize the goals based on how they are incented. Enron examples are merely a definition of th wrong overiding goal.
Lets look at Amazon. I’d suppose their over riding goal is stellar customer service in an e-tailing shopping environment. Profitability is a constraint that they operate within for this goal. So what does this mean? They’ve prioritized opportunities that are right for the customer over EPS – this means Amazon hasn’t generated the ROI, I believe they could.
Does this mean they had the wrong goal?
Probably not, it does however mean their entire organization is aligned culturally with what their priorities are.
Compare this to eBay. What is eBay’s over riding goal? Does it shine through their products, their service? To me it seems like they had multiple competing goals, increase the number of retail spaces they play in, decrease the dependence on auctions, and lastly increase revenue per auction.
What was lacking was the why – what is tyign that all together – why is buy it now the right thing to prioritize.
to your PS. I think “to make the world a more inclusive place by having been in it” is a very applicable goal to define your work. However I’m not going to pretend to subscribe your own personal goal. But I think if you spent time thinking about it – you’d be able to come up with your goal.
Some of your statements like “contributing to progress” are pretty fuzzy goals.
Again the goal is not the only measure of success. But its likely a definitive way to define failure.
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Excellent topic … it’s another interesting example of cognitive diversity.
At the individual level, different people have different styles. For you, defining a goal and optimizing for it (using the theory of constraints and/or other techniques) works works best. By contrast, I find being explicit about multiple goals helps me understand and explain my choices, and makes it easier to identify options that will advance multiple goals simultaneously. Of course, I prefer multiplicity in many other ways, so it’s not surprising that’s how I approach things here as well. Different strokes for different folks.
Organizationally, it’s ideal if you can create an environment where multi-goaled and single-goaled people are both comfortable and effective. This is true no matter whether or not the corporation has a single goal, and there are challenges here no matter which path you choose. Single-goaled management risks ignoring the fact that employees have their own personal goals that they’ll pursue as well as the company’s goals [and large companies add the added complexity of organizational goals that aren’t identical with the company’s goals]. Multi-goaled management risks failing to provide enough structure for employees who want to focus on a single goal.
In terms of corporate goals, I think it’s important to distinguish between 10+-year big hairy audacious goals and short-term goals. For a BHAG, it makes a lot of sense to choose just one. Qworky, the startup I’m currently working on, talks about how we’re going to “revolutionize the way people work together”; that’s well on the way to an overriding BHAG and/or mission statement and/or vision.
When you look at the short-to-medium term, though, I think it’s usually a huge over-simplification to reduce things to a single goal. Sweatshops, Wall Street, WorldCom, Enron, and many other examples illustrate how choosing a corporate goal of “maximizing profits” warps thinking. Focusing on any one of the other goals you list similarly leads to distortions.
When there are multiple things a corporation (or other organization) needs to do to be successful, privileging just one of them causes people to make the wrong tradeoffs. Combining them into a single synthesized goal risks losing a lot: specificity, strategic options based on synergies between the goals, possibilities for “partial success” [sufficient progress on some of the goals that lack of progress on others doesn’t lead to failure], and so on.
Continuing the Qworky example, the things we need to accomplish during the rest of 2009 include getting initial users for our prototype or product, closing funding and/or achieving a revenue stream so that I and others can start getting a paycheck in 2010, building a team, establishing a diverse community with thriving discussions, creating a culture and processes that let us work effectively. A single overall goal like “lay the groundwork for a sustainable business” could incorporate all of these; my initial reaction is that a lot would be lost in the process.
One of the arguments I’ve heard for choosing single short-term corporate goal is that it’s difficult for people to make tradeoffs between multiple goals. I think this ignores the fact that people do this all the time, most obviously by balancing personal and corporate goals. Sure, it requires thought; so you need hire talented people and create a culture where they understand and can influence the goals, strategies, objectives, and priorities. Most of the people I’ve worked with, at small companies and larger ones, are more than capable of doing this. And really the same problem comes up with the single overall goal — which of the many things that goes into “laying the groundwork for a sustainable business” to prioritize?
Of course, if a company’s management team is made up of single-goaled people, it may make sense to focus on a single corporate goal. It’s a tradeoff of course, but the advantages of a corporate culture that reflects the styles of the people involved may outweigh the downsides of over-simplification. A caveat: this is a situation where it’s particularly important to keep an eye out for diversity.
As for the theory of constraints, it certainly seems like an interesting approach to identify and remove barriers. The framing is deficit-based thinking, so I certainly wouldn’t make it the basis of my overally problem-solving strategy. However it seems like a useful technique, and for people who prefer DBT I can see how it could be a valuable core approach.
jon
PS: my personal goals are helping my friends and family; contributing to progress at the societal level on human rights and civil liberties; “world-class” impact in my professional career; living by my values; and being happy. It’s not obvious to me how to incorporate all of these into a single goal, but I’m open for suggestions!
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