Lesson 11: Off Target

The problem with targetsIf there is one topic that is likely to end in a management fight it is the subject of targets and incentives.  Opinions vary wildly; there are at least two sides to the argument and a whole host of shades of gray.  Even the rich and famous can’t agree.

Nothing can add more power to your life than concentrating all your energies on a limited set of targets ~ Nido Qubein

Whenever there is fear, you will get wrong figures ~ W. Edwards Deming

I don’t care how much power, brilliance or energy you have, if you don’t harness it and focus it on a specific target, and hold it there you’re never going to accomplish as much as your ability warrants.  ~Zig Ziglar

A thing worth having is a thing worth cheating for ~ W.C. Fields

So, should you mange your employees with targets and incentives or not?  What is the best thing to do?

The Case for Targets:

The arguments in favour of target setting are many:

  • The process of target setting forces us to think through what is important, and makes us define the direction we want to go in.
  • We prioritise the use of our resources to make sure we hit our targets.
  • Having a target that we are actively striving towards, and that we can see progress against, makes us happy.
  • It is possible to apply incentives, rewards and punishments to motivate people to hit their targets.

To put it in a nut shell, well thought through targets motivate us and cause us to strive towards greater levels of performance.

All of that sounds abundantly sensible; we should have more targets because they drive performance. There are, however, a number of dissenters…

The Case Against Targets:

There are many who think that target setting is unhelpful:

  • Targets are not always realistic or set from a position of knowledge.  Too high and they will be stressful, too low and people become complacent.
  • Linked to this is the way the target was derived.  Was it imposed or negotiated? Those of you who own a budget will have felt both the glee of a soft target and the frustration of being lumped with an unachievable “stretch”.  Neither of these does much for performance improvement.
  • Targets may be outside people’s capability to deliver.  Try as I might I can’t run a 4 minute mile, and it is only getting harder as I get older.
  • Where incentives are high, trying to reach a target can lead to a whole host of dysfunctional activities, from excuse finding to backstabbing.
  • Just setting a target doesn’t mean that anybody has the faintest idea how to reach it.

A goal without a method is cruel ~ W. Edwards Deming

Here is the killer issue.  If I have a target that I can’t achieve and an incentive to hit it (either a carrot or a stick) I will cheat.  Maybe it is because I have low morale fibre, and maybe I shouldn’t, but I am not alone.

How to Cheat

There are many ways that you can meet a target; here are a couple of examples:

Stop the clock!

A bin man arrived at my house last week to pick up an old television.  Unfortunately he had got the wrong address; it was my neighbour’s house he wanted.  He could have popped next door but he didn’t. He jumped back in his very large lorry and drove off. His instructions were that if the address was wrong he was to return to the depot. Apparently not doing so would have affected his performance incentive.  By coming back empty-handed he could reset the clock on his “time to collect” target. It wasn’t his fault he was sent to the wrong place, why should he be penalised?

Not picking up the rubbish you are supposed to collect is fine, provided you can blame somebody else.  Incidentally, I saw him pull up next door the following day.

Clean up your figures

Instead of resolving customer issues, prioritise them and ignore or close the small ones.

Here is an e-mail that I received whilst I was working for local government:

From: Gary *****

Sent: 21 May 2010 09:35

To: James Lawther

Subject: Fault Call [Scanned]

Hi James

We are currently changing our helpdesk system and I am going through any old outstanding faults. You logged call ref 323214, regarding a memory problem when copying a chart. Could you let me know if this is still a problem?

Thanks

Gary *****

IT Support Analyst

Ext *****

Gary was a lovely man, but he was busy closing cases so his performance looked good.  Nobody ever came to fix my PC’s memory.  They were too busy worrying about their target.

Create a smoke screen

It isn’t just employees that cheat, managers are just as guilty, however, they do it in more subtle ways.  This makes it much more difficult to spot.

Large organisations employ analysts to create management information.  First they “mine” the data, then they slice and dice it in a myriad of ways. They can change reports on a daily basis, creating pages and pages of beautiful graphs, comment and analysis, showing what a great job their managers are doing.

How many managers have you seen creating analytical smoke screens?  Why do they do it?  Because they are scared that they won’t hit their target, they are busy looking for excuses.  Unfortunately this behaviour doesn’t drive performance.

Kill your children

Some targets are the law.  Since 1978 China has had a One Child Policy.  The aim of the policy is to reduce population growth in the country.  The theory is that this will curtail demand for natural resources and help economic development.  Adherence to the target is managed by stringent financial penalties for those parents who have more than one child.  This target setting has, in some ways, been successful.  China’s population is thought to be some 300 to 400 million lower than it would have been without the policy (a circa 25% reduction). But there have been some unintended consequences:

  • Little Emperor Syndrome: spoilt children who lack social skills
  • Adopted and orphaned children
  • Worst of all… infanticide

The official ratio of male to female children born in China in the year 2000 was 117:100. The ratio across rest of the world was 101:100.  There are approximately 30 million Chinese men looking for a wife.  Accusing somebody of killing their daughter is extreme, and I have no evidence to back it up, other than the numbers. But how else do you meet a one child policy if you desperately want a son?

So What is the Solution?

Use measures not targets

Measuring performance is great, but it isn’t the same as targeting it.  The minute you add an incentive or berate somebody for poor performance is the minute that the behavioural problems start:

  • Targets get talked down
  • Performance gets talked up
  • Figures get fiddled

When a measure becomes a target, it ceases to be a good measure ~ Charles Goodhart

Reduce the number of measures

There is a section in a government manual; it states that:

it is unlikely that any one manager … would be able to focus on 6 – 10 targets at any one time.  However that may still mean that there are hundreds of targets at different levels of any one organisation

Hundreds of targets!  I support Norwich City, they have 11 players and between them they struggle with one goal.  Less is most definitely more.

Worry about relative measures not absolute numbers

One of the measures I am interested in is traffic volume to this website.  There are a whole host of things I could do to improve it:

  • I could write a set of articles
  • I could get some more Twitter followers
  • I could set up some links to other web sites
  • I could contribute to some internet forums

I will never reach the traffic volume that some sites get, but I can double my own, if I just focus on getting better every day.

But I’d give up if I had a target to get as many hits as Google?  Wouldn’t you?

Striving for excellence motivates you; striving for perfection is demoralising.  ~ Harriet Braiker

Provide a method

If you set a target for somebody coach them and guide them.  If you show them what to do, make it easy for them and keep them on track, then they may hit the goal.  If you walk off and leave them to fret about it, that is what they will do.

Fretting isn’t the same as achieving.  To repeat a quote I used earlier:

A goal without a method is cruel ~ W. Edwards Deming

If you must use an incentive change it

If there is a big cash incentive people will cheat, and anybody who gets in their way is… well… getting in their way.  It may not be right but it is human nature, if you don’t believe me just remember Enron or the ##insert latest banking scandal here##.  If however the incentive is smaller, then it becomes about achievement not about the incentive.

What would happen if you set the incentive for the team not the individual?

The question is not “do incentives motivate people?” The question is “what do they motivate people to do?”

Homework

  • Write a list of all the targets that exist in your organisation.
  • Sit with some of the people who are targeted, watch what they do, do their targets reinforce the correct behaviour?
  • Next to each target write an honest assessment of how that target is being met.
  • Think through how people’s behaviour could be changed if you modified the way the target was set, by:
    • Measuring and discussing performance, not targeting
    • Coaching
    • Streamlining the number of targets
    • Focusing on relative performance
    • Changing the incentive
  • Finally change to one of your targets.  Test it and see what happens.

In the next lesson we will discuss how GE use the “Work Out” methodology to improve their business.

Thank you for reading.

 

Post Script

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