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I’ve been thinking about goal setting recently.  Bazaarvoice is in the process of rolling out a goal process – a variation of Management By Objectives (MBO) and Objectives and Key Results (OKR).

One dilemma that always seems to come up in these systems is whether the goals should be achievable or not.  SMART goal setting says yes.  BHAG goal setting says no.

Audacious goals can scare employees because of the fear of consequences for failing to meet these goals.  But if you unpack that carefully, you’ll see the problem is really one of culture: a lack of trust or communication about how goal achievement relates to employee evaluation.  Employee evaluation shouldn’t be a simple formula: failed to meet goal = does not meet expectations.  That ignores a ton of context that proper leadership takes into account when evaluating employees.

Here’s why achievable goals point the way to mediocrity:

1. In software development you should be doing something newish.  Whether it’s a new product, platform, technology or whatever.  Everyone should be working on something new. 
2. Newish things have unknown unknowns – because it’s new!   
3. If you want to set achievable goals for something new, you have to be conservative. Because you have to be at least a little bit sensitive to the unknown unknowns.
4. Achieving conservative goals puts you on a path to mediocrity.  One of your competitors is going to set audacious goals, and some of those goals are going to be met.

Achievable goals are most dangerous when you’re really trying to do something totally-completely-never-done-before new.  All the uncertainty works against the ambitions of the new endeavor.  I would much rather say “We’re not sure how hard it’s going to be, and our goal is 3x current user engagement” than “We’re not sure how hard it’s going to be, so our goal is 1.5x current user engagement” – or somesuch.

So you need to set audacious goals, and you need to build the right culture of open communication and trust so that employees are comfortable setting, achieving, (and also failing to achieve) big goals.

One way to build trust is to have a clearly defined and communicated method of employee assessment – and how the goals fit in with that.  But that’s a topic for another post.