Businesses as a general rule love goals, people do as well. One of the most stressful moments you’ll ever come across is someone who is behind on a goal, and one of the more euphoric is someone who exceeds their goals. How could anyone ever say anything against setting goals? To do so would be almost absurd, it would be….. well it would be….. the point of this next post.

So what are goals? Usually to be meaningful they’re a set expectation based upon careful planning and forecasting and are easily measurable.

So Why am I Off the Goals Bandwagon?

I’m the type of person, who obsesses over metrics, who analyzes them, can figure out the best possible way to achieve the result, or surpass it with the appropriate amount of effort. I’ve always exceeded goal and been able to exploit success to usually achieve the desired outcome both I and my employer were looking for.

This is why I’m kind of put off by goals. The mindset of the worker is focused in with needle sharp attention on the metrics. You ask a salesperson what their margin quota is and what percent to goal they are currently sitting at and odds are they can give you both numbers at any time of the day during said month. I don’t think this sort of stress is conducive to a worker being in the appropriate state of mind to make decisions, as it creates volatility and unpredictable behavior.

I’ve seen some interesting behaviors around goal maximization which detour directly from what’s best for the business. Some would argue this is just poor goal formulation, I would argue this will always be an inherent flaw in the system, as people will always find some loophole no matter how well designed.

Another issue that’s quite common is myopia; being so focused in on one thing the person being motivated loses out on many different opportunities. This to me is the most damning as its just human nature.

Lets Recap

1. Human psychology gets in the way where goals become a driver of emotion that can create chaos in the marketplace.
2. Exploitation of goals for personal gain will occur no matter how well the system is defined.
3. Putting on blinders, and focusing in on the goal will cause your business to miss terrific opportunities.

What’s the Solution?

It’s extremely easy to call out a problem; it’s exceptionally hard to define a real solution. Out of my own personal experience though I would say relying on a “vision and mission statement” that ties directly back to all work done, and not providing quantitative goals may work best. This does have its own problems however as employee morale could be adversely impacted, given that rewards would be a bit more subjective and tied back to who most closely matches the vision.

In the end though I would argue strongly for this system, as any model even the most regimented has a employee satisfaction issue. Letting your employee base know they are trusted, and are free to explore opportunities that don’t always align to the highest impact area brings in creativity to find new opportunities that would be overlooked otherwise.

Its going to take a little work to get this firing on all cylinders again.

In the ongoing debate over my commentary on Unions and striking an idea was championed that Unionization in some respects was the reason for GM’s fall from grace as a dominate Auto-Manufacturer. This makes perfect sense; other companies can utilize cheaper labor pools, and the auto industry is remarkably lean thereby not offering a lot of opportunities to create a high margin product to offset higher labor costs.

So why am I going to argue the Union is not to blame?

That’s easy, because monopolies are to blame!As absurd as that sounds, its exactly what I think happened and we have the laws of unintended consequences and short term thinking to blame. This idea actually isn’t mine either, go figure I heard it on a conservative talk radio show (not usually the people who champion unions).

Additionally we’ll look at product mix as a contributing factor as well.

Background on Auto Manufacturing

According to a Michigan in Brief a non-profit group dedicated to Michigan state government and public policy, at its height Michigan produced a full 25% of the entire world’s automobiles (the US was a full 75% of world’s production). My guess is that in addition to the 75% world production figure; domestic sales were probably approaching 90-95% (unfortunately I wasn’t able to dig up the number).

In effect if you bought a car in the US before 1980 most likely you bought “American”

Monopolies vs. Unions

When you have as much market power as Ford and GM did the primary concern motivating almost any decision is how do I keep “printing money”. With unions having shown a track record of striking from the late 30′s, keeping them working was the absolute top priority.

This led to a “give them what they want mentality” including fully paid hospitalization, and sick leave benefits, as well as profit sharing. Which has led to autoworkers being compensated on a level that was substantially better than their counterparts.

Without significant compensation in effect US automakers were only competing against themselves, and keeping the assembly lines rolling was the largest obstacle to profitability. With so much money flowing in both sides (employers and union leaders) acted in their short-term best interests.

Enter the Japanese

By the early 80′s Honda and Toyota were off the ground and becoming a legitimate offering stateside. The Japanese offering was cheaper, smaller, more fuel efficient, and had the perception of being more reliable as it aged. With a new competitor coming in concessions made to workers (unions) now had a substantial impact on GM, and Ford’s ability to compete with this new low cost model.

Compounding union wages was the the Japanese auto manufacturer’s mastery of the “Just in Time” manufacturing approach of stocking inventory which reduced costs by maintaining leaner inventory levels.

It didn’t take long for Japan to supplant the United states as the largest producer of vehicles in the world, a distinction they maintained until 1992.

Product Mix

It also almost seems as if US auto manufacturers have been 1 step behind in every trend in the automotive world outside of SUVs since the 80′s. The fuel efficient car has never been a mainstay focus of the US based product lineup the way it has been with Honda and Toyota.

An indifference to the rising price of gasoline by leveraging a product mix with better feul economy has been a glaring issue. One could even argue it was the product mix, as well as the financial crisis that has put all of these companies on death’s door. At the height of Oil costs in 2007-08 SUVs and small trucks were as close to a toxic asset as you could get.

Lack of fuel economy is also one of the significant reasons Japanese cars were able to splash so largely in the US market in the early 80′s.

Take-Away: Its really easy to get away from fundamentals and deep financial analysis of your business model when you are flying high. The idea of putting the brakes on is almost counter-intuitive to a businessman, but sometimes its exactly what you should be doing. You see examples of people paying too much for a deal/merger (Google and YouTube come to mind), or of employers paying through the nose for a resource they need to  continue hitting a high growth rate.

That being said your job in a company is to ask: What is the outlook for this business? Does it make sense long term to make these concessions? Am I being a good steward for the company. In the end these are really hard questions to answer especially since Wall St. and corporate incentive structures tend to support short term growth as the goal instead of longer term sustainability.

In the case of the US car manufacturers when it came to their product mix, and employment decisions I personally have a hard time thinking someone sat down and thought about what impact these decisions would have down the road.

John and Paul are having a fight. Ringo hears the noise and comes over to see what is going on. At this point Paul punches Ringo in the face, unprovoked.

Whose side do you think Ringo is now on? This example is what stakeholders feel like when unions strike.

Throw down those signs people.

Me personally I’m not a fan of unions, I don’t see the value the same way they do. I do comprehend the logic behind collective bargaining and various other aspects of their arguements though, but this post isn’t about my preference for unions or not.  What I’m absolutely opposed to is unions striking, boy do I hate that with a passion.

So on my way to work I see striking teachers (and this is supposed to be the first week of school). I cannot express how absolutely disgusting it is to see teachers on strike, especially given the fact I live in a more disadvantaged area.

I understand their beef they don’t have a contract signed, guess what people neither does almost every other worker in Washington State (it’s an at will employment state). Your grievances seem petty compared to the fact at risk kids are going without the education, those in richer neighborhoods get by default. The idea that you would further jeopardize the future of a segment of population which will already find difficulty achieving success for your own personal gain is disturbing.

I encourage unions everywhere to consider the impact they have on their stakeholders and then consider is their gain really worth the pain of these people? Sure I’m asking you to pull a tool out of your arsenal, but keep in mind in the US you now have many new protections that your forefathers didn’t.

Take-Away: If you want someone on your side of the fight you should stop and consider the impact your actions have on them.

Whether its in relationships, or in business management there’s one falicy that tends to trip people up: Group Think.

One of the most textbook examples of group-think is the Space Shuttle Challenger disaster.

The idea behind group think I believe really stems from a preference that is ingrained into people. We just want to be with people who are similar.

My belief system is to seek out complementary groups of people not necessarily people who are the same. The idea that 2 people who believe different things but can both be right is very important to me (yes I’m a relativist).

I’m amazed at the amount of time that I spend having to defend the idea that I accept someone’s position as plausible without sharing it.

But back to the business impact……

People have a tendency to want to have someone with the same goal-set, someone who believes the same things, and someone whose motivations are alike with there own. This is an unfortunate trait though as diversity in thought is really a huge driver in creativity within an organization.

Take-aways: Challenge yourself. Try and understand differing ideas and embrace the differences rather than fear them. Understand that success may lie on a different path than you would lead, and be willing to change paths if there is more potential for success down a different road.

Poker is a great metaphor for life. There’s a ton of ups and downs, a mixture of luck, and skill, and of course there’s a hell of a lot out of your control. I’ve selected the video below to give you an idea of what a “bad beat” is, and give an indication of how I feel right about now.

Bad beats are just a part of life.

Bad Beat: Playing your cards right, reading the situation right, having the cards in your favor, and at the last minute having the world change with a flip of the last card. Its the appearance of winning when an important piece of missing information would tell you, that you were losing.

Lets set the stage: I’m a successful Product Manager working part time at a respected company. Due to some forces in my life the overwhelming need has become going full-time. This led me to ask my manager for expanding my role within my group. After a discussion this was deemed impossible and I was invited to seek employment elsewhere within the company (a great proposition). However, a few weeks later my manager indicated the need to utilize the position I currently hold for a new candidate (as he was under the impression I’d have no problems seeking out other opportunities within the company). Finding the right position has been somewhat elusive, but I found one major opportunity.

The Opportunity: Work with a group that I have a strong track record with, have 4 people recommending me for, and whom I’ve had the opportunity to have an informal interview with. My manager’s put in a good word to these people as well, and they mentioned they would be starting their interview process in a few short weeks.

Fast forward to today:

9am: Manager wishes to speak with me. Typical good news/bad news conversation.

• Bad news: They’ve put an offer out to the candidate who will take my space
• Good news: He just spoke with the group behind the opportunity and they’re going to be interviewing me

He tells me I better nail the interview because I’m now on the clock.

9:10am: I’m in an operational meeting that is mission critical. I see an email come in from the gentleman who has the opportunity. Given the conversation with my manager, I just can’t resist seeing when my interview is.

9:11am: Yep that bad beat feeling just crept in. They’ve decided to go with another candidate without even giving me an opportunity to interview. The only position that was aligned with where I’m at, the one with all my network trained on this one target, the one I am within spitting distance with given a solid track-record of working with the group.

9:15am: I fire off an email to my manager letting him know of the unfortunate turn of events.

9:30am: I get back an email that my manager needs me to execute on my deliverables while I’m out looking for my next opportunity.

The sad thing is I knew immediately this was a bad beat. I’m analytical enough to know immediately this has nothing to do with my value, what my offer is, or anything I had any control over BUT DAMN IT SUCKS. Now I’m on the clock and I felt pretty bummed when my manager didn’t identify with how I must feel given such a terrible outcome.

How does one deal with a bad beat and keep going?

1. Understand that you played your cards right.
2. Accept its beyond your control.
3. Prove to the world the outcome was wrong, not you.

Unfortunately while these are great steps we’re all still human. So its going to take a little time for me to work through the 3 steps, but hopefully reading this post will get you thinking about your own bad beats in life.

Additionally if you’re ever in the position of having to deal with an employee who is experiencing a bad beat think about the impact it must have on them and comfort them.