Home Management Performance Management for Agile Organizations: Overthrowing The Eight Management Myths That Hold Businesses Back
The End Justifies the Means
The goal-driven model assesses performance on the basis of whether the business achieves its goals. From this perspective—which is still very popular in the corporate world—goals are commonly accepted as part of the business’s culture, its design, and the way it’s structured. In simple terms, the organization’s purpose generally revolves around a set of specific goals.
The ultimate purpose of a business may be to generate a profit for its owners and shareholders. Using the goal model to achieve a profit, a business may set several goals, including a quantifiable return on equity, specific growth targets for revenue, increased market share, and a percentage reduction in costs associated with running the business. So organizational performance is evaluated against these goals.
Consider a different kind of organization—a not-for-profit enterprise. The purpose of this organization may be to fulfill a particular community need, such as catering for homeless people. Goals could be set to include the number of people using the service, the efficiency of its services in dealing with homeless people, the positive impact on the local community, and the ability to attract and retain government support through funding. Although a completely different set of goals, both entities— profit and not-for-profit—measure their success on the basis of whether their goals have been met.
The goal model is essentially an output focused approach to organizational performance. The analysis is on the end result, not necessarily the means of how it is—or can be—reached. The activities, behaviors, systems, processes, and procedures to achieve the goal are considered later, if at all. This is the main inadequacy of the model.
We’ve come to appreciate the significance of inputs for successful outputs. The original proponents of the goal-driven model of performance, however, focused attention on the relevance of specific, measurable goals.
Probably the most prominent goal model of performance—still very commonly used today, mainly in the sales focused enterprise—is Peter Drucker’s “Management By Objectives” (MBO) approach. This goal- oriented model is still taught widely in reputable management schools and written about in organization development texts. It considers the primary criterion of performance—and the organization of work—to revolve around the accomplishment of the objectives necessary for success. Performance evaluation is based on whether the objectives have been met.
Although MBO was an early manifestation of the goal model, strategic planning and performance management are two contemporary people management practices based on this school of thought. These and other accepted and entrenched management practices reinforce the relevance of the goal model.
Like all performance models, the goal-driven approach is based on a set of beliefs. The basic assumption of the goal model is that people working in organizations are rational, deliberate, and goal-seeking. Another belief is that goals can be specific, measurable, action-based, realistic, and time-limited (S.M.A.R.T.). Organizational behavior, its policies and pro?cedures, directives, priorities, and decisions, are shaped by S.M.A.R.T. goals.
Agile behavior in a goal-driven work environment is essentially expressed using the old Machiavellian quote: “the end justifies the means.” In other words, whatever it takes to achieve the goal is acceptable practice as long as the goal is attained. In this context, agility is seen as an enabler for goal achievement.
Despite its clarity, straightforwardness, and popularity, the goal model has limitations. The most obvious drawback, as I alluded to earlier, is the model fails to adequately consider the inputs and throughputs needed to achieve the goal. Outputs are evaluated and inputs and throughputs run the risk of being by-passed, or at the very least, not evaluated with the same rigor.
Cutting corners, an absence of transparency, unfair or unethical action can prosper in the passionate pursuit of a goal. Processes, systems, and procedures are considered by whether they help or hinder a certain outcome. With this lack of scrutiny, poor behavior is permissible, can be ignored, or possibly encouraged if it enables the achievement of a certain goal.
Another limitation of the model is the possibility of employees being treated inequitably. Employees who are in a position to contribute directly to a goal, such as sales people chasing a sales goal for instance, can often receive favorable treatment. Preferential action in this case could mean better working conditions, generous financial incentives and perks, or more tolerance for substandard behavior.
On the contrary, employees who have an indirect role to perform in the achievement of business goals, such as those involved in the production of the product, can be undervalued, or devalued. Poorer working conditions, lesser pay, and a stricter code of behavior can result. Yet the contributions that these employees make are vital to business sales, albeit indirectly. As an illustration, producing the product faster with greater quality can translate ultimately to more sales. But the ancillary connection that these employees have to a sale’s goal renders their work as possibly inconsequential. Not valuing the collective contribution to a successful outcome is a significant failing of the goal model.
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