The Executive's Dilemma

None of us is as smart as all of us — Ken Blanchard

Imagine a boardroom, dimly lit except for the glow of a PowerPoint slide. The CEO of a mid-sized tech firm stands at the head of the table, declaring ambitious targets for the upcoming quarter. His voice is confident, his posture commanding. But as he scans the room, the polite nods from his team mask a deeper unease.

Why, some wonder silently, weren’t we consulted about these goals? Wouldn’t our insights have made these targets more realistic—or even more innovative?

This scenario is far from fictional. Many executives wrestle with the classic dilemma: Should goal-setting be a top-down directive, or should it involve the input of employees? Both approaches have their merits and pitfalls, and the choice often defines not only a company’s culture but its performance.

The Top-Down Approach

One prominent example of top-down goal-setting is Elon Musk's approach at Tesla. Known for setting risky objectives—like producing half a million vehicles annually long before it seemed feasible—Musk’s unilateral decisions have propelled Tesla to unprecedented heights. His vision is clear, uncompromising, and inspiring. However, it’s not without its downsides. Employees have reported feeling burned out by unrealistic timelines and alienated by the lack of consultation.

This approach works best in situations where time is critical, or where the leader’s expertise and vision are indisputable. But it also risks creating a gap between leadership and the workforce, potentially encouraging resentment or disengagement.

The Inclusive Approach

Contrast this with a different story: When Satya Nadella took the helm at Microsoft, he inherited a culture known for its internal silos and top-down management style. Nadella prioritized inclusivity, inviting employees to help shape the company’s goals. This shift not only reinvigorated Microsoft’s innovation pipeline but also redefined its culture as collaborative and forward-thinking. Products like Microsoft Teams and Azure thrived under this new ethos of shared ownership.

Involving employees in goal-setting often leads to more innovative solutions and stronger buy-in. People are naturally more committed to the objectives they’ve helped create. However, it can also slow down decision-making, especially in large organizations, and risks diluting the clarity of the goals if too many perspectives are considered.

The Middle Ground

The most effective leaders often blend these approaches, leveraging their authority to set a clear vision while involving employees in the details. This "guided collaboration" ensures alignment between leadership’s strategic intent and employees' practical insights.

Consider the story of Howard Schultz at Starbucks. When Schultz returned as CEO during a period of declining performance, he initially set non-negotiable goals to stabilize the company. But once Starbucks was back on track, he actively sought input from store managers and baristas to refine strategies, such as improving customer experience. This balance of directive leadership and employee collaboration helped Starbucks regain its footing while fostering a culture of shared responsibility.

How to Decide?

Executives facing this dilemma should consider several factors:

1. Urgency: In crisis situations, top-down goal-setting may be necessary. Clear, decisive action can be more effective than prolonged discussions.

2. Expertise: If employees possess deep insights into customer behavior or operational challenges, their input can significantly enhance the goals’ relevance and feasibility.

3. Culture: In collaborative environments, excluding employees can backfire, whereas in hierarchical cultures, involving employees too deeply may seem unnatural or inefficient.

A Personal Reflection

Years ago, I consulted a manufacturing firm struggling with poor morale and missed production targets. The executive team had always set goals unilaterally, assuming their technical expertise was sufficient. After some persuasion, we piloted a program involving line workers in setting process improvement targets. The results? Not only did output increase, but so did employee satisfaction. Workers felt their voices mattered, and they took pride in meeting—and often exceeding—their shared goals.

This experience taught me a valuable lesson: Involving employees isn’t just about achieving better results—it’s about building a stronger, more cohesive team.

To Sum Up…

The question of whether to set goals alone or involve employees has no one-size-fits-all answer. It’s a balancing act, requiring leaders to gauge the situation, their team, and the organizational context. What’s clear, though, is that the process of goal-setting is as much about people as it is about performance. Whether through solitary vision or collective collaboration, the ultimate aim should always be to inspire and empower.