The Story of the Ford Pinto and the Risks of Goal Setting

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

This aggressive goal, combined with a tight deadline, placed immense pressure on the Ford development team. It 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 concerned the fuel tank, which was located behind the rear axle, where it had less than 10 inches of crush space which meant that, if the car was involved in a rear-impacting collision, it had a high likelihood of ignition.

Tragically, this oversight led to a series of rear-impact fires that caused at least 53 fatalities and numerous injuries. Investigations revealed that Ford was aware of the hazard during development but chose not to address it rather remaining committed to delivering on its 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.

Lessons for Goal Setting

While the Pinto case appears, in hindsight, as a clear cautionary tale, it underscores a recurrent issue in goal setting practices. Goals are powerful tools for improving performance in specific areas, particularly during challenging times when organisations must make difficult decisions to remain competitive or viable.

Goal setting is a proven approach to improving performance in specific areas. However, the Ford Pinto disaster highlights the dangers of focusing solely on achieving specific targets at the expense of broader, fundamental principles. When setting goals under pressure, organisations must be mindful to ensure that these objectives do not inadvertently undermine their core values or long-term health. Goals must be balanced with the organisation’s commitment to safety, ethics, and reputation to avoid unintended and potentially catastrophic consequences.

This balance is essential to sustainable success, as short-term wins achieved by compromising critical values can lead to irreversible damage. The Pinto case illustrates the necessity for goals to serve as guides—not blind mandates—and that leadership must remain vigilant in aligning targets with the broader mission and integrity of the organisation.

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