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21 Jun 2019

When Good Goals Go Bad


Jon Dario

Executive at Edison Properties

Are you sure the goals you set for your self storage team are driving the behaviors you expected? Years ago, I learned a good lesson about the power that goals can have to undermine your business objectives.

I had just started working as the new head of a retail company. The leadership team told me excitedly about the new incentive program they had recently installed. Incentive payouts to front line salespeople were based on exceeding average transaction value (ATV) targets. They showed me statistics that demonstrated a clear increase in ATV across the company from the date the new incentive program started. I was very impressed with the obvious improvement, but I couldn’t figure out why overall sales were not also increasing. In fact, some of the locations with the highest increases in ATV were actually experiencing declines in overall sales volume.

The answer soon emerged when I was on a store visit. I was visiting one of the locations with the highest ATV growth. While I was congratulating the manager, I overheard a salesperson behind us telling a customer he could not perform the customer’s transaction because it fell below their “minimum transaction value.” In other words, he was turning away a transaction. The location had adopted a “creative” way to bring their ATV up; they had stopped taking small transactions.

After I got over my anger with the manager for having made such a terrible decision, I realized the company had put him into the position of making a bad policy. The company had pushed too hard for him to deliver higher ATV and had created an incentive plan that motivated him and his team to cut corners to do so. While it didn’t excuse the manager’s decision, the company had enabled the bad behavior with a seemingly good goal.

While this is an extreme example, take care to ensure the goals you set are indeed driving the behaviors you wish.

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