Goals or Own Goals?

In the late 1960s, the Ford was losing market share to overseas competitors that were selling small, fuel-efficient cars. CEO Lee Iacocca announced the specific, "stretch target" goal of producing a new car that would be “under 2000 pounds and under $2,000” and available for purchase in 1970.

This goal and tight deadline meant that many levels of management signed off on unperformed safety checks to expedite the development of the car called the Pinto.

One omitted safety check was in relation to the fuel tank which was located behind the real axle where it had less than 10” of crush space which meant that if the car was involved in a rear impacting collision it had a high likelihood of ignition.

After lawsuits resulting from 53 deaths and a large number of injuries, investigations discovered that when Ford initially discovered the hazard the leadership remained committed to delivering the stretch goal. Instead of repairing the faulty design with a 1lb, $1 piece of plastic they calculated that the costs of lawsuits associated with Pinto fires would be less than the cost of fixing the design.

In this case unspecified “self evident” company objectives like customer safety, ethics or even just company reputation were sacrificed in order to deliver on the specific business goals.

Goal setting is a proven approach to improving performance in specific areas. In times of pressure organisations have to make many difficult decisions in order to remain viable and goals are essential to ensure focus on specific areas where a change in delivery or performance is required. However, when setting these goals to deal with difficult times they have to ensure that they do not unintentionally and irreparably undermine their core values and long term health.