The Problem With SMART Goals

1: “It was the late 1980s and GE was the second most valuable company in America,” Charles Duhigg writes in Smarter Faster Better: The Transformative Power of Real Productivity.

“GE manufactured everything from lightbulbs to jet engines, refrigerators to railway cars,” Charles notes.

It was a massive enterprise employing more than 220,000 people.

The company’s leaders thought their formal goal-setting system was one of the keys to their success.

Beginning in the 1960s, every GE employee had to write a letter to their manager outlining their goals for the next year.

“Simply put,” historians at Harvard Business School wrote in 2011, “the manager’s letter required a job holder to write a letter to his or her superior indicating what the goals for the next time frame were, how the goals would be met, and what standards were to be expected. When the superior accepted this letter—usually after editing and discussion—it became the work ‘contract.’” 

By the 1980s, GE required every division and manager to set quarterly SMART goals. These goals had to be specific, measurable, achievable, realistic, and tied to a timeline.

GE CEO Jack Welch said he believed SMART goals were one reason the company’s stock more than tripled in eight years.

“The system worked,” said William Conaty, who retired as GE’s head of human resources in 2007, “because by the time we were done you knew pretty clearly how things were going to unfold.”

Extensive research has shown the power of specific goals. “Goal-setting processes like the SMART system force people to translate vague aspirations into concrete plans,” Charles notes.

As goal-setting expert Gary Latham says: “Making yourself break a goal into its SMART components is the difference between hoping something comes true and figuring out how to do it.”

2: Except there was a problem. Not all of GE’s divisions were succeeding.

“Some divisions,” Charles writes, “despite setting SMART goals, never seemed to excel—or they would flip-flop from profits to losses, or seem to be growing and then suddenly fall apart.”

In the late 1980s, there were two divisions, a nuclear equipment manufacturer in North Carolina and a jet engine plant in Massachusetts, that were once among GE’s top performers but were now just “limping along.”

GE’s leaders responded by doubling down on the system. They pushed the divisions to create even clearer, more detailed SMART goals.

“Their responses were detailed, precise, and realistic,” Charles writes. “They met every SMART criterion. And yet, profits still fell.”

So GE sent a team of internal consultants to the nuclear facility.  They began by having associates walk them through their weekly, monthly, and quarterly goals.

“One plant executive explained that his SMART objective was to prevent antinuclear protesters from harassing workers as they entered the plant,” Charles notes, “because he felt it eroded morale.

“He had come up with a SMART plan to build a fence. The goal was specific and reasonable (the fence would be fifty feet long and nine feet high), it had a timeline (it would be done by February), and it was achievable (they had a contractor ready to go).”

Then, the consultants went to the jet engine plant in Lynn, Massachusetts. There, an administrative assistant told them her SMART goal was to handle the factory’s office supply orders.

“She showed them a SMART chart with specific aims (“order staplers, pens and desk calendars”) that were measurable (“by June”), as well as achievable, realistic, and had a timeline (“Place order on February 1. Request update on March 15.”).”

3: Yes, the goals were detailed. They were also trivial.

They were getting very good at accomplishing things that didn’t matter very much.

“Workers spent hours making sure their objectives satisfied every SMART criterion, but spent much less time making sure the goals were worth pursuing in the first place,” Charles observes.

One example? The security guards at the nuclear facility had created extensive memos on the goal of theft prevention, which “basically consisted of searching everyone’s bags every time they entered or exited the plant, which caused huge delays,” said Brian Butler, one of the consultants.

“It might have stopped thefts, but it also destroyed the factory’s productivity because everyone started leaving earlier each day so they could get home at a decent hour.”

The consultants thought GE employees would complain about the SMART goals and all the paperwork involved.

“Instead, employees said they loved the SMART system,” Charles shares.

“The administrative assistant who ordered office supplies said fulfilling those goals gave her a real sense of accomplishment,” he writes.

“Sometimes, she said, she would write a SMART memo for a task she had already completed and then put it into her ‘Done’ folder. It made her feel so good.”

Researchers who study SMART goals and similar methods say this reaction is common.

“Experiments have shown,” Charles notes, “that people with SMART goals are more likely to seize on the easiest tasks, to become obsessed with finishing projects, and to freeze on priorities once a goal has been set.”

“You get into this mindset where crossing things off your to-do list becomes more important than asking yourself if you’re doing the right things,” says goal-setting expert Gary Latham.

Productivity isn’t about getting more things done. It’s about getting the right things done.

So, which is it? Are SMART goals effective? Or ineffective?

More tomorrow!

______________________

Reflection: Look at the goals you’re working toward right now. Are they important because they will move something meaningful forward, or because they are easy to measure and check off?

Action: Pick one goal on your list and ask yourself: If I accomplish this, will it actually matter?