On Goal Setting

John was a goal setter.

John Jack's fascination with goal setting began with his personal experiences of setting and achieving remarkably challenging goals. It's easy to imagine that a high-performer would attribute goal setting only to other high-performers. But that wasn't the case for John. He saw goals as the universal ticket for all salespeople to become superstars – in relative terms.

Most sales contests in the 1990's only rewarded top-performing reps. However, John saw untapped potential in those who gave up as soon as they saw the contest rules. He combined that with the observation that too many reps don't have SMART (Specific, Measurable, Attainable, Relevant and Time-Sensitive) goals in their weekly or monthly vocabulary.

He noted, “You can manage to goals, but you can’t help people get where they want to go if they don’t have a destination.” Personally selected goals, rather than shooting for a quota, allowed more reps to become successful reps.

He first tested goal setting with The Marathon System while he was at Maritz. But by 2000, John wanted to combine personally selected goals (personal commitment) with risk (loss aversion) and generous rewards (to stimulate high levels of emotion and motivation). 

About the same time as John discovered the Cab Drivers study, he found a paper by Ed Locke and Gary Latham[1] on how participation in goal creation positively impacted results. John’s fascination with goals had stretched across his personal and professional life for years and he wanted to create a tool that would enable reps to be rewarded for exceeding their regular run rates.

As it was with other products, several unsuccessful iterations were conceived, developed and deployed before a model for GoalQuest® was brought to market in 2001. John connected the academic principle that goals are more effective when they are self-selected with a real-world means of addressing the risk inherent in striving to achieve the goal.

GoalQuest relies on a simple concept: perceived achievability on the part of the rep. This happens because historical data on the rep’s performance is used to predict a future run rate (baseline), absent of any incentive. Then three levels of higher-than-baseline performance are established with corresponding rewards. The rewards ramp up exponentially, so the lowest level of performance garners a 1X reward, the second level of effort is a 3X reward and the third (highest) level of effort is a 6X reward.

The exponential rewards are combined with a commitment device: the rep must choose their target level of performance (their goal). Failing to reach their goal results in no award – not even a diminished reward. The chosen goal is all-or-nothing, creating a potential loss if the goal is not achieved. Nor is over-goal achievement rewarded with a higher larger reward. Loss aversion is combined with a commitment to render this methodology a highly effective tool to drive motivation among a very high percentage of the sales force.

Typically, close to 50% of all reps exceed their baseline and roughly 30% achieve – that’s a larger percentage than almost any contest and that performance is spread across the entire sales organization. That spread equates to tremendous incremental gains for the sponsor. It’s a remarkable incentive and is highlighted in a peer-reviewed paper published by Raghuram Bommaraju, PhD[2].

The result was GoalQuest was trademarked in the United States, the EU and Australia, but was thoroughly unique in how it combines self-selection with non-monetary rewards.

GoalQuest was a tough sell at first, but then came General Motors with the largest GoalQuest ever.

GM’s use of GoalQuest created a radiance for the product and propelled BIW sales reps to promote it incessantly. The result was that before John retired, GoalQuest amassed more than $100 million in revenues and it’s still being used successfully today.

After a 7-year exchange with the US Department of Commerce, John’s GoalQuest was awarded patent[3] protection.  (The seven-year battle for a patent is as long and boring as one might guess, so we’ll skip it.

[1] Locke, E.A., & Latham, G.P.  (1985). The application of goal setting to sports.  Journal of Sports Psychology, 7, 205-222. https://psycnet.apa.org/record/1986-23150-001

[2] Raghuram Bommaraju and Sebastian Hoenberg, “Self-Selected Sales Incentives: Evidence of their Effectiveness, Persistence, Durability, and Underlying Mechanisms” Journal of Marketing, September 2018, vol 82. 

[3] USPTO # WO2001013306A2: https://patents.google.com/patent/WO2001013306A2/en?q=goal;&inventor=%22john+m.+jack%22&oq=goal;+%22john+m.+jack%22