Why SMART objectives aren’t always smart

SMART

Ever been in a meeting where people are discussing objectives or goals? Someone invariably says, ‘We must make our objectives SMART!’ and everyone else nods sagely in agreement. We often use the same logic with personal goals.

The idea is sound enough. If your goals are Specific, Measurable, Achievable, Relevant and Time-bound, it focusses the mind, allows you to say for certain whether or not something was achieved, and you can keep tabs on whether you’re on track along the way.

But there’s a big and often overlooked problem with this type of goal setting, and that’s our old friend human nature. I’ve written about intrinsic motivation before – it means the inherent satisfaction in working on something, above and beyond any material rewards (or threat of punishment.) Psychologists have discovered that the way we set goals affects our motivation and the extent to which we meet them. So whilst SMART objectives can be useful some of the time, you have to be careful and avoid using them in all situations.

Take learning a language for example. You could set yourself a SMART objective something like ‘Learn French and score an A at the test before the end of the year.’ This is what phychologists call a ‘performance goal.’ Getting the A is the target. The alternative is setting a ‘learning goal’ which would be more along the lines of ‘Improve my French to get more out of my holidays there, make French friends and get absorbed in the culture.’

The learning goal is not SMART. It’s actually pretty vague, but what it promotes is mastery of the topic – that is, continual improvement towards perfection (which of course can never be fully reached.) The big difference is that mastery is one of the factors which really motivates humans. Performance goals less so. In studies with children, it has been shown that they perform better at tasks when the goals are learning, not just performance. For example, when the focus is on a specific measure of performance, it has been shown that people work hard to achieve it, but that they often stop there, short of their potential to do even better. They are also less able to apply the skills to new situations than with a broader learning goal.

So next time you’re setting some goals think carefully about whether a SMART objective or learning goal will actually help to motivate and get you there.

Finally, another plug for Daniel H. Pink’s excellent book, Drive which talks more about goals and motivation and has the citations behind these insights on goal setting.

Becoming a democratic organisation: where to start

Start

When Will and I decided to make NixonMcInnes a democratic company we were lucky in that we hadn’t hired any employees yet. This meant we could be democratic right from the start and didn’t have to go through a large change process.

It’s more difficult for established businesses, particularly large ones, who have a well-established legacy culture, systems and processes and people within the company who may not be compatible with a democracy.

Traci Fenton, the founder of Worldblu has defined 10 dimensions of organisational democracy. These 10 dimensions are inter-related and work together to form a democracy, and to become certified by Worldblu, an organisation much benchmark well across all of the dimensions.

The difficulty is that to change an organisation across all 10 dimensions is probably far too big a change to happen in one go, especially in a large business. So where do you start?

Fortunately there are two excellent case studies for this, both for businesses with turnover in the $100M’s range, but what they did is replicable in much smaller businesses too.

Semco, the Brazilian conglomerate, is perhaps the most famous case study of organisational democracy, described by its CEO Ricardo Semler in his books Maverick and The 7 Day Weekend. More recently, Vineet Nayar wrote about transforming the Indian IT outsourcing company HCL Technologies to a democracy in Employees First, Customers Second. I highly recommend all three of these books.

There is a common theme in both of these transformations which was in order to prepare the company for the large changes that lay ahead, the very first step was to build a culture of trust in the organisation. Only with sufficent trust would the organisation be ready for further change.

At Semco, they removed the clocking-in/out machines and abolished the practice of searching employees for stolen goods. And at both companies they set to work creating a deep level of transparency, opening up company finances, performance information and having public forums for discussion about company issues which are dealt with openly. At NixonMcInnes, we borrowed another idea from Semco which built trust by having two open seats at board meetings so employees could come and participate.

All of this helps to build two-way trust, demonstrating to employees at all levels that they are valued and trusted to have access to the inner workings of the company that would previously be reserved for senior management, and showing that the leaders could be trusted by making their work and information visible for everyone to scrutinise and participate in. This new-found trust changed the businesses from being ‘them and us’ to ‘we.’ Both companies then went on to develop across all of the 10 dimensions of democracy, reaping enormous rewards both in market share and profit and in the happiness of everyone working there.

So if you want to change an existing organisation to a democracy then make sure that building trust is your first step.

A story of hope, culture, and social business in Borneo

I wandered into the village of Batu Puteh on the Kinabatangan River in eastern Malaysian Borneo after a tip-off, but without much of an idea of what I would find there. I had heard that they were looking for volunteers and it was possible to stay with local families which sounded interesting enough to me.

A man at the first house I came to pointed me towards a larger building at the other end of the village, next to the river. When I arrived at the Batu Puteh community centre, the local people there were a bit surprised to see me as most of their volunteers book through international volunteering agencies whereas I had just turned up with a backpack. However within an hour or two I had moved into a room in a house where Majid lived with his wife Judda and their four small children, who seemed to be very comfortable with strangers in their house and took great interest if invetigating all of the strange stuff in my rucksack, especially my iPhone.

I had dinner with the family that evening (chicken, rice and jungle fern all eaten with our hands) and was given some smart local clothes made from silk to wear to a ‘cultural event’ later that night.

I was really excited to see how a small village got together to enjoy itself, but when I arrived back at the community centre my bubble was burst when I realised that it was just a little event put on for tourists and everyone else there was staying at a nearby eco-resort. It was quite interesting seeing some local music and dance, but it felt contrived. At that moment I thought I would probably only stay there a night or two, but it wasn’t until the next day that I realised how wrong my first impressions had been.

At 8:00 the next morning after breakfast I turned up for work. I met couple of other volunteers who had been there for a while and we set to work shifting saplings from a tree nursery in the village, down to a boat on the river where we took them to a site that had been cleared ready for us to plant them. I learned that this area of jungle had been badly damaged by logging and fire, and we were working on a programme to replant it.

The next day a batch of new volunteers arrived together and I joined them for their briefing. This was the first time that I heard the full story of what they had created in the village. Everything changed at that moment and I was deeply moved by what I heard.

Batu Puteh with its position on the Kinabatangan was once a hive of activity as a major crossing point on the river. However most of its income came from the surrounding jungle through activities such as collecting rattan (like the stuff used to make wicker furniture) and honey. Over last few decades things began to change. A road bridge was built right over the village and the traditional activities in the jungle changed as the villagers discovered the money that could be made through logging. Of course, logging is unsustainable because you can’t grow new trees as quickly as they are chopped down. Each year it was becoming more and more difficult to find the things that they needed in the depleted jungle around the village.

At this point someone from WWF began a three year investigation into the idea of eco-tourism to look at whether this could provide a new, sustainable future for the village. The outcome of this research was a working paper put forward by a number of villagers with the help of WWF. The path was not easy and there were many doubters in the village. Many people had lost hope and believed that the only solution was to move to the cities to find work. There were also false accusations of illegal logging leveled at the project founders to try to undermine their efforts. However, with help of some corporate and government grants, the eco-tourism project started and the first visitors came to Batu Puteh. They paid to stay with local familes and helped the villagers to grow and plant new trees to rejuvinate the rainforest.

Disaster struck not long after when a huge fire swept through the already damaged rainforest. Many local people left the village and it was a time of incredible pain. I was told about the tears that were shed. But gradually the people returned and the doubters saw too that the eco-tourism project could offer them a new future.

The project grew into a community-owned co-operative called MESCOT. Familes pay 100 Ringit (about £20) to join and become part owners. This has grown to 400 members which is a large proportion of the entire village. Volunteers pay 110 Ringit per night in a homestay which includes 3 meals per day, so a family usually breaks even on their investment the first time they have someone to stay. The families receive guests on a rotation basis.
The volunteers work mostly on conservation projects like work in the tree nursery (and the never-ending task of filling small seeding bags with earth.) There are also improvised English lessons for the children and I helped them out a bit with marketing and created their Facebook page.

The project is careful to limit the number of volunteers in the village at any one time. It’s healthy for the local people to see and interact with other cultures, but local people should rightly remain the majority so that their own culture is not destroyed. They also encourage local families to not become reliant on the income for the homestays, which can actually exceed what they earn in their main job. It is important that people still work in order to keep everything else in the village running.

One of the things I loved the most about the village is that work stops at 4:00pm and everyone – local people and volunteers – all play sport. There are games of badminton and football going on, but I played volleyball every day. There was a lovely, relaxed atmosphere of fun and fair play. Something I had to adjust to, curbing my competitiveness and explitives when I frequently lost points for my team!

The village is Muslim, but very moderate. All of the women and girls including volunteers kept their shoulders and legs down to their knees covered, but that was the only dress code. Some women wore headscarves but this was not mandatory. I haven’t spent much time in more conservative cultures, but the very slight restrictions seemed to actually make the place more relaxed. There was no pressure on women to ‘look sexy’ and it removed the element of the guys gawping at the girls. Because everyone was dressed casually, you quickly forgot that there were any rules at all. The most senior jobs in the community project were shared between the men and women.

There was no alchohol in the village and so none of the problems that alcohol brings, but you didn’t feel like anyone missed it. When you play sport every night you feel happily occupied. Being a staunch liberal myself I don’t generally like control that limits people’s choice about how they live, but in this village I only saw benefits which gave me a new perspective.

The villagers were all absolutely lovely, and those working in the community project a real inspiration. In particular, a man called Taing who supervised much of the conservation work. There was nothing that he didn’t know about how to re-grow a rainforest, from collecting and plants seeds, nurturing saplings in the nursery then clearing and re-planting areas of deforestation. Taing had difficulties hearing and speaking which I hardly noticed at first, partly because not many people there spoke great English, but mostly because he was one of the most charismatic and expressive people I have ever met. He could explain what we needed to do in improvised sign language and hilarious looks of cheeky, comedy disappointment when we got things wrong. Taing was also my volleyball mentor and his gentle way of making fun out of me had me laughing every day.

I wished I could have stayed longer in Batu Puteh but unfortunately my week there came to an end far too quickly. It was a lesson in hope, culture and how communities in crisis with a bit of outside support to get them started can build happy, sustainable futures for themselves. I hope to be able to return there some day.

Why your efforts at motivating your people are probably destructive

Carrots

Most businesses attempt to motivate their people using the carrot and stick method: Offer rewards for things you want to see more of and punishment for anything you don’t. Why is this so popular? Simple, because it works! If you offer your team a fat bonus if they hit a target, they will probably work like mad through the night to achieve it. So conditional ‘if-then’ rewards are common at work.

But there are several inconvenient holes – gaping holes – in this accepted wisdom which science has conclusively proved, yet businesses largely have not accepted. These are covered in Daniel H. Pink’s excellent book, Drive.

For example, when you offer conditional rewards, the motivational effect is short-term. It will get your team to work harder today but not tomorrow, next month and next year. At worst it becomes like a drug and so more and more of a ‘hit’ is required to sustain performance. Also, it has been proven that people perform WORSE when a carrot is dangled in front of them because it adds pressure and distracts from the task in hand. When you offer if-then rewards, it also takes away what psychologists call ‘intrinsic motivation’ – the pleasure of actually performing the task itself. And this again reduces long-term motivation and the drive to do the absolute best you can at the task rather than just enough to get the reward.

So what actually DOES motivate people? Assuming you have a good base level of rewards (like salary and other benefits in place so that a lack of money doen’t distract from work) then there are three factors:

  1. Autonomy: People are most motivated when they have control over how to do their own work.
  2. Mastery: When people believe in their capability to improve and are able to continually do so.
  3. Connectedness: To be contributing to a higher purpose, together with others.

So the best way to motivate your people is to replace the carrot-and-stick with a culture that builds autonomy, mastery and connectedness. Then you will tap into your people’s natural drive to do great work.
This is a key reason why democratic companies perform much better than their peers. They set their people free to work in their own way to meet a higher purpose, and this brings out the best in them.

I haven’t always got this right myself. When I was managing a sales team, I deliberately avoided having commission payments for the consultants because I worried that this kind of if-then reward would be counter-productive. But with hindsight I don’t think I went far enough. We still had individual sales targets for each team member and I remember the pressure that they felt because of this. I thought it was a necessary evil, but I wonder now if I could have taken a step back, gone through the company finances with the team and allowed them to make up their own mind about how much business we needed to win and allow them to self organise and work together to meet the underlying goal of ensuring we brought in enough business. My role would have been relgated to more of a facilitator and helper, but I think we may have had better results.

If you think your company has a motivation problem or that you need some sort of ‘incentive’ scheme, then it’s possible that you are looking in the wrong place and what you really need to do is work on the culture to allow intrinsic motivation to thrive.

What have your experiences been of trying to motivate people at work or having someone else try to motivate you?

Event: Social Business Sessions London

Will McInnes, my old friend and business partner at NixonMcInnes, is at it again! He has launched a regular meet-up for people interested in how organisations can become more social. This is an important evolution from ‘social media marketing/PR’ to looking at how the whole organisation can become more social. A far bigger task, with bigger challenges, and rewards for those that succeed.

This event is definitely one to watch and I will be there with bells on when I’m back in the UK. Last time Will started something like this, MeasurementCamp, it became an important and valued regular event for the fledgling social media industry. I think this is set to be even bigger.

From the event meet-up page:

Purpose

To provide a regular forum where we can share ideas, experiences and models for helping organisations become more social. And, in doing so, create new connections that lead to community.

**Really important**

This is not a social media marketing event. We will not be talking about Facebook, Twitter etc. This is about organisational culture, structure, and internal technologies and approaches.

Participants

We welcome people from a diverse range of backgrounds: academics, consultants, researchers, do-ers.

Principles

  1. Open, because we each have a piece of the answer
  2. Diversity FTW
  3. You create the value
  4. No spam

Goals

Learning, connecting, making change happen. And in doing so, building the UK social business community.

You can read Ross’ take-away nuggets from the first event here.

Good luck with the event Will :)

Does organisational democracy scale?

Looking up the Shard

The first objection I hear when I talk to people about organisational democracy, is ‘Well yes that was all well and good for your little company in Brighton, but it would never work at a large organisation.’

Well there are now many examples of large companies making democracy work and reaping the rewards. This excellent article in Fortune Magazine talks about Whole Foods, Morning Star and W.L.Gore (makers of Gore-Tex.) Each turn over hundreds of millions or billions of dollars and have not only scaled up democratic principles, but have proven that it’s actually more successful than traditional command-and-control hierarchies. It’s actually a much more difficult to control a huge enterprise with standard processes, job descriptions and multiple layers of management when it turns out that if you trust, empower and set people free to do a great job, they will do just that.

There are some great examples of democratic practices in the article. Here are some nuggets.

1. Hiring:

Whole Foods (WFM) offers the right to vote to local teams when it comes to hiring. New hires serve for a period of one to three months on a team, after which the team approves (or rejects) the candidate as a permanent team member by two-thirds vote. It turns out that peers are much better at predicting who will be a great teammate or leader than any executive committee.

2. Job descriptions and managing performance:

At the center of [Morning Star's] design for work is a mechanism that produces a sort of order. It’s called the “Colleague Letter of Understanding”  (or CLOU, pronounced “clew”), a contract in which each individual defines his or her personal mission (and how it relates to the organizational mission), work commitments, key activities, and success metrics — all negotiated with 10 or 12 core colleagues (called CLOU colleagues). The CLOUs are available online to everyone in the company, they can be updated at will, and are embedded in a social network that includes a real-time feed of performance data, CLOU colleague activities, and peer feedback.

Instead of hewing uncomfortably to a rigid, top-down hierarchy, the CLOU system allows Morning Star’s colleagues to operate in a “natural” hierarchy based on expertise, achievements, and accountability. People don’t move “up” at Morning Star, they grow in respect and responsibility (and compensation) based on their contribution.

3. Scaling up:

Gore famously caps the population of any given facility at around 200 people — the size where, founder Bill Gore observed, “we decided” becomes “they decided.” The emphasis at every turn is on direct, personal communication. The negotiation of roles is often laborious and time-consuming but it pays dividends.

 

Inspiring use of tourism for good in Bolivia

Randall Howlett set up Condor Trekkers with his own cash three years ago with the idea of doing REAL eco-tourism (not just green-washed puff) to help the poor rural communities outside the beautiful city of Sucre in Bolivia. I had an incredible few weeks working with Condor which I’ll never forget.

Here’s how it works:

  • Local Bolivian guides have paid work taking tourists on treks out in the Andes, mostly centred around the magnificent Crater of Maragua.
  • Unpaid volunteers (mostly North American, Aussie and European) help prepare for the trek (shopping, cooking, packing) and one goes out on each trek to help the guide and translate for guests who don’t speak Spanish.
  • Other than the small office premises, a paid Bolivian office manager (the lovely Lidia) and a modest marketing budget, the company has very low overheads.
  • Randall himself doesn’t take a cent back and leaves Bolivia for 3 months per year to work elsewhere in the world to save money to cover his costs for the rest of the year. More on this in a moment.
  • Proceeds after costs are available to fund community projects in the rural communities where Condor takes people trekking.
  • The Bolivian guides are key in talking to local people, identifying needs and making projects happen.
  • Projects have included building ecologically friendly toilets; laying pipelines to supply water; buying materials for rural schools and running teeth cleaning workshops for the kids.
  • Generally money is provided to the local people so that they can complete the projects themselves. They are usually able to help themselves but simply don’t have the money to pay for materials.
  • Tourists don’t pick Condor just because it’s a not-for-profit. It has to be priced competitively, especially for the budget concious backpacker market and provide a fantastic experience.
  • Their relationships with the local communities and community projects provide a strong unique selling point which adds to the customer experience.
  • In just two years Condor have come to completely dominate the market for trekking in Sucre, putting money back into the community, and not lining the pockets of the rich ‘gringos’ who own most of the other operators.
  • They’re currently in the process of opening a cafe as a sister company to the trekking business. I’ll cover this in a separate blog post but you can follow their progress though the quagmire of setting up a business in Bolivia on Facebook.

Here’s my take on Condor Trekkers:

  • It is an incredible way to direct money to provide help where it’s needed. It would take a far larger charity operation to generate in donations the money that Condor Trekkers raises.
  • The trekking itself allows Condor to stay extremely close to the communities that it helps, for example seeing first hand how the late coming of the rainy season is affecting farmers, and identify needs that Condor can later fund.
  • The Bolivian guides who speak Quecha, the local indigenous language, are an important link between the communities and Condor Trekkers – better than the whole thing being operated by foreigners.
  • Randall’s approach of starting up with his own money and not taking a cent back is generous to almost super-human levels. We debated this one and I really think he needs and deserves to be paid although I have a huge respect for his decision to not take anything back. My argument is that by paying yourself at least a fair living wage allows you to focus on the business without worrying about your own living needs. Also, the business might be stronger if he was able to be there all year, but you’ve got to take into account that Bolivia is a tough place to run a business so I think he needs the annual break for his sanity as much as anything else!
  • I love the unique advantages that Condor Trekkers has by being a social business that’s about something higher than just making money: There can be up to 10 or more volunteers helping out; customers get a better experience and it all helps word of mouth marketing.

Randall, you are an inspiration and a hero! I wish you the best of luck with Condor Trekkers. And to anyone travelling so South America, make sure you stop in Sucre when you get to Bolivia and go trekking with Condor.

You can follow Condor Trekkers on Facebook.