Over my career, I have witnessed a surprising number of situations in which other senior managers and leaders have said things to their bosses, boards, investors, owners, etc. that were simply not defensible and almost certainly unlikely to actually happen. This can occur in just about any context, but the most common examples in my experience have been related to financial performance. I have personally been swept up in such a dynamic myself.
So, what’s going on here? At the most simple level, those same bosses, boards, investors, owners, etc. often make unrealistic demands, often as a result of commitments they have made. I’ve seen senior executives in publicly traded companies make growth commitments to shareholders, for example, that roll down hill in the organization, resulting in layers of commitments, none of which have any basis in reality, and at worst, incentivize poor or even ethically questionable operational decisions. I’ve seen similar dynamics in private equity owned organizations as well. Although less common in not-for-profit entities, it absolutely happens in those organizations as well.
At another level, organizations often reward managers who are perceived to be “aggressive” operators, who will commit to high levels of performance. They are seen as “winners” with the right attitude who are willing to really stretch themselves and their teams to achieve extremely aggressive goals. This is complicated stuff because these kinds of managers often do deliver outsized results (even if they don’t hit the super-sized targets). This behavior often comes with a host of potential problems, however, such as short-term thinking, team burnout, susceptibility to less-than-stellar practices, etc.
In the worst cases, managers often make commitments that they simply know are not achievable under any normal set of circumstances. I’ve seen otherwise smart, competent people load budgets with revenue generating activities that don’t actually exist in reality or pump up promised bottom lines with expense reductions or flow-through margins that they know are not operationally possible. Sometimes folks are banking on a miracle, but generally, otherwise decent people do these things because they believe they will pay a price for being more realistic and/or more honest—that they will be seen as having a poor attitude or not willing to take the risk of stretching their goals. To be clear, there is a difference between accepting the challenge of achieving high goals within the realm of reality (which can be motivating and rewarding) vs. making commitments to goals that are unachievable within the context of existing operational and market realities, ethical considerations, etc.
Over time, my observation is that these kinds of dilemmas are much more likely in organizations in which the most senior executives/owners/investors have profit or ROI expectations that are in excess of “normal” or “reasonable.” I have seen organizations actually break, and ultimately destroy, incredibly robust, profitable businesses in search of an additional 100 basis points (one percent) of profitability when the business was already returning nearly 35% margins. One might call this greed, or it may just be driven by expectations that were sold to others, but regardless of the source of the motivation, the most damaging outcomes tend to be at the expense of sustainability, quality, and social responsibility over the long term. Another negative outcome tends to be employee/manager turnover, both voluntary, since most folks cannot or choose not to perform under the conditions related to the drive for unachievable sales/revenue/growth/profits year in and year out, and involuntary, because people get terminated for ultimately failing to meet unrealistic expectations!
In the end, an organization’s approach to growth or profitability tends to be deep in the DNA. Some are very short-term oriented with relentless focus on profitability or near term equity. Others are more focused on longer-term sustainability with more stable growth and profitability over time. I mention this because for managers and leaders who find themselves in organizations where their own motivations and beliefs do not align well with those to whom they are accountable, the organization is frankly not likely to change. If one finds him or her self in a situation in which he or she feels compelled to make commitments, for example, that do not feel “honest,” the solution is more likely to be found in another organization with better aligned values. This is not unequivocally true, but likely. And in the end, if you consistently say things that you believe others want to hear rather than what you actually believe, there are two outcomes over time that are both bad options. One is that you endure growing internal dissonance. The second is that you are ultimately penalized for failing to meet expectations that you did not believe were possible to begin with. Life is pretty short to endure either of those outcomes for very long!
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