Executive Briefings

Management That Sets SMART Goals Acting Kinda Stupid

Worldwide, managers are setting SMART (Specific, Measureable, Achievable, Relevant and Timely) goals, expecting these to make this "the year" to revitalize or transform their businesses. Instead, most of these professionals should retire SMART, or at least rescind its status of standard operating procedure.

We are at this juncture because two broad trends have fundamentally changed the business environment. First, "the boss knows best" paternalism no longer works. Global companies are transforming to free businesses from top-down structures. Respect for expertise, not centralized authority, coordinates open source communities that create great technologies. Innovative companies give employees off-the-clock time and free resources, and benefit from their tinkering. Such environments thrive due to decentralized action. SMART goals cannot add to, and inevitably subtract from, these structures.

Second, companies no longer compete individually but as members of networks: Apple couldn’t create the iPhone, or Airbus the A350 aircraft, without collaborating with outsiders. Complexity, uncertainty and ambiguity are unavoidably present therein since network members are geographically dispersed, and have varying strategies, processes and cultures. These enable problems and opportunities to regularly propagate with blinding speed. By implicitly assuming a staid environment in which immutable goals are appropriate, every constituent element of SMART hinders appropriate action.

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We are at this juncture because two broad trends have fundamentally changed the business environment. First, "the boss knows best" paternalism no longer works. Global companies are transforming to free businesses from top-down structures. Respect for expertise, not centralized authority, coordinates open source communities that create great technologies. Innovative companies give employees off-the-clock time and free resources, and benefit from their tinkering. Such environments thrive due to decentralized action. SMART goals cannot add to, and inevitably subtract from, these structures.

Second, companies no longer compete individually but as members of networks: Apple couldn’t create the iPhone, or Airbus the A350 aircraft, without collaborating with outsiders. Complexity, uncertainty and ambiguity are unavoidably present therein since network members are geographically dispersed, and have varying strategies, processes and cultures. These enable problems and opportunities to regularly propagate with blinding speed. By implicitly assuming a staid environment in which immutable goals are appropriate, every constituent element of SMART hinders appropriate action.

Read Full Article