Maximising, optimising and compromising

We talk a lot in our sessions about the risks or overuse of goal setting, and the over prescription of KPIs, milestones and OKRs.

These are simple sounding measures but the science of them, especially the psychology can be relatively complex.

One small example of these risks is the way in which goals can interact with each other, and the assumption that more is more.

A great example of this is sales. We tend to assume that setting a goal to increase sales (or better, to increase profitable sales) is a given good, but we’ve supported a number of businesses this year, and in many previous years, who came seriously close to disaster by not recognising the risk that increased sales can present to future cash flow.

Of course you can mediate this risk in lots of ways, and generally, if you are looking to grow, more sales is a great start, however, I’d characterise this as a measure which should be optimised, not maximised, and this is a much trickier message to communicate, and is much harder to measure.

 

If setting goals is important to you remember to limit them (we’d suggest 5 as an absolute upper end) and be very considered about whether you need to maximise, optimise, or even compromise to make the best possible choices for you organisation.

 

Blog by Isla…

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