A couple of shows ago we talked to you about the Secret Sauce of Sales Management which was, as we uncovered in that show, getting your sales people to set goals for themselves on a quarterly, maybe monthly, or annual basis that are very specific towards targets that are above expectations and above where you want them to be which is, for must of us, 100% quota attainment. We talked about setting perfection goals and the importance of setting goals in general.

When you are setting goals, there are a lot of factors to keep in mind that are danger spots and pitfalls of goal setting. As part of the "don’t do this as a sales manager" this is one of the important parts to helping you and your sales people set goals, and to make sure that you keep a very tight leash on those goals. Have control over those goals, and oversee the actions that are being taken to achieve those goals is very important.

Among psychologists, the link between setting goals and achievement is quite clear.

The Harvard example that we talked about a couple of weeks ago, that was used to prove that we as humans, in general, concentrate better, and work harder and longer when we set these SMART goals for ourselves.

The issue is that there is a dark side to goal setting. As a top performing sales manager, as an aspiring sales manager, or the manager of a company, or as owner of an organization, you need to be aware of the downside.

We are going to talk about that in today’s shows.

There is recent evidence that individuals, companies, and governments can actually hurt themselves by setting and following blind goals. Thought they may seem to make sense at their creation, these are goals are out of context, goals that are not as reachable and realistic (The "R" in SMART), that can sabotage the attainment of goals.

It’s not that the goal setting doesn’t work, but it can focus your attention on the wrong things and maybe be lead to behaviors that aren’t healthy and they can be destructive.

Something that we talk about in the academy quite a bit is "prescription strength" goals.

Aristotle believed in goals and said, "First have a definite, clear, practical idea, a goal and an objective." That is the first thing that you need to you.

Where are you heading?

That is why goal setting is so important for your sales people. Where do you want to be 1 month from now, 3 months from now, 6 months from now, 1 year from now?

Abraham Lincoln said, "A goal properly set is halfway reached."

There is no doubt that goals work and the idea is commonly accepted by management gurus as well as the less than guru’s here at the Sales Management Mastery Pod cast as well.

It is well documented that when people are told to "go out and do their best" they more often than not, don’t. And that is why goal setting is so important.

When people have specific goals that energize them, it keeps them engaged far longer.

There have been great companies such as General Electric and Southwest Airlines that have used goals to energize employees around a central purpose and central theme and they have pulled off amazing feats of genius in the process and done very well for themselves as organizations. Some goal setting experts realize that there is a downside and a "dark side" to setting these goals.

One of the experts in this regard is Adam Galinsky, who is a professor at Kellogg at Northwestern University; he cautions that goal setting has been treated like an over-the-counter medication, when it really should be handled with more care like a prescription strength medication.

Although goals brought us great success from companies like GE and Southwest, goals also brought us spectacular failures like Enron and General Motors. Two companies who’s relatively recent in spite of well meaning and ambitious goals.

The problem is that recent data has shown that if people are close to their goals or in fear of missing their goals, they are more likely to lie to make up the difference.

For example, the recent dysfunctional environment at Enron created through its practice of rewarding its top level executives on meeting revenue target goals. These goals have a direct correlation to the criminal activity that led to the downfall of the organization.

Another great example that Galinsky wrote about was from 1990’s, at Sears and Roebucks began setting goals for the service staff, only to realize that the mechanics were overcharging and making unnecessary repairs to customers that didn’t know any better just to reach their numbers.

Sometimes if you set a goal that is too high, the sales person may actually create some devious activity to achieve that goal.

When you are setting goals they have to be realistic and attainable. Attainable is the "A" in SMART goals.

Another thing to look out for and be wary about is the BHAG.

The study at Kellogg found that "stretch" goals were also in jeopardy of losing their luster as well. They found that more often than not, these BHAG goals (big, hairy, audacious goals) often times were pursued by desperate companies who were zig zagging their way through to try and energize their employees any way that they could.

BHAG goals are something that you have to be careful with.

Some companies have used them to a great degree with success. In a couple of books that Jim Collins wrote he specifically mentions BHAG goals, these big, hairy audacious goals, but often times they fell flat on their face because they are too audacious and because they are too large. As a result of them being too large people may result in performing activities that they otherwise would not in the face of more realistic goals.

The third thing that we have to look out for is focus versus tunnel vision.

In a famous study of how well people performed certain tasks by Simons and Chabris.

Participants were asked to count how many times a group of individuals passed the ball between them. I actually did this in training.

They are shown a video of 12 or 13 people and in that video they have a ball and they are passing it back and forth rapidly. You had to count how many times they passed the ball from person to person. 99% of the time, because people are so focused in the counting the passes between individuals, the study participants never see a woman dressed up in a gorilla suit passing in plain view through the middle of the group. No one even noticed it. It was amazing. When I did it, I didn’t even see it.

Because you were so focused on your goal you weren’t aware of your surroundings. This is something that we have to look out for when our sales people are setting their goals.

It is true, a simple goal can lead to intense effort in the short term however the risk to the short terms gains may also undermine the long term interests of the individual.

Monthly goals end up sabotaging their long term, or quarterly or annual goal, then you have to be careful on how they state these goals and you need to be the editor in chief when a sales person comes to you with goals.

The fourth thing that you need to look out for: you need to filter for misalignment.

When your sales consultants come to you with their finalized goals, ask yourself if their goals are in align with what you feel is possible for each individual.

Is the goal a jumble of hyperbole to satisfy you, the boss? Or does the goal have substance? Is the goal able to be reached or will there be fudging along the way to make it seem like it has been achieved?

Filter for this misalignment as editor in chief. Used correctly, goals can be very effective, that’s why we titled it "The Secret Sauce of Sales Management".

The executives at Enron never asked these types of questions. Or maybe they were too busy or maybe too egotistical to even bother to ask them.

As a top performing sales manager, or as an aspiring sales manager, or as an owner of a business or sales trainer the sales managers must understand be careful to safe guard this process. While being mindful that there is a potential downside to overly ambitious or big, hairy, audacious kinds of goals.

If a sales rep comes to you, and they have never made quota and they say, "My goal for the quarter is 147% of quota", then that is an unrealistic extraction, then you’ve got to tone them down, and coral them in. Maybe the first time you make quota, maybe just reaching plan should be your first goal. That is what we advocate at The Sales Management Mastery, if someone has never made 100% of plan, their first goal should be get as close 100% of plan as possible, if not reach it.

Then once they reach it, then you set foals that are "setting the bar higher" that are above quota and above plan. They have to get to baseline first so you have to filter for that type of misalignment.

That is our fourth point on the downside of goals.

Just to summarize what we have talked about.

Goal setting is a very important thing to do, and it is the "Secret Sauce" of sales management but it does come with a price and a cost. You have to be aware of that.

As a sales manager, you need to be the editor in chief of your sales people’s goals. Be very mindful of that when they are setting their goals.

1. Prescription strength goals. You need to have a clear, definite, practical purpose and objective in mind. Don’t underestimate the power of goals.-

2. Beware of the BHAG – big, hairy, audacious goals.

Coral your sales people in from the big, hairy, audacious goals. BHAG have worked at times, but sometimes using BHAG’s is a desperate attempt by a desperate company. Use realistic measurement that we talked about in your SMART goal setting

3. Have focus, but not tunnel vision

We talked about the study with the woman dressed up in the gorilla suit walking through a group of people passing the ball around. It is dangerous to have such tunnel vision that you don’t know what is going on around you.

4. Filter for misalignment.

Make sure that your sales people are setting goals that are in harmony with what you feel is possible and that their goals are realistic for current market conditions.

That is the "don’t do this" as a sales manager when it comes to goal setting.