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Christmas Measures

28 December, 2014 by James Lawther 4 Comments

Father Christmas had a problem…

His planning elves had confirmed it. It was mid October and it was looking increasingly unlikely that he would get all the presents wrapped by Christmas. His management information team endorsed their view. His key measure – Presents Wrapped per Elf per Hour (PWEH) was well awry.

There were reasons why:

It had been unseasonably warm, the polar bears had ventured further north, hungry polar bears in your wrapping room do little for productivity.

They had also spent all year testing delivery droids.  Droids needed far less protective wrapping than the old sack method, promising a significant reduction in wrapping time. But what doesn’t work for Jeff Bezos certainly wasn’t going to work in sub-zero temperatures and stopping the pilot had resulted in a significant backlog.

So what was he going to do?

Fortunately an enterprising consultant elf came to the obvious conclusion… incentivisation. Instead of just measuring PWEH change it to a target.

Work out how many presents needed wrapping, then set every elf a daily quota, — pay for performance. That was bound to create some action.

Father Christmas was not entirely sold on the idea. It all sounded a little commercial and here he was busy running a not for profit. But after a while he came around to the idea, after all, setting targets is much easier than removing obstacles that prevent the wrapping getting done — especially if the obstacle is a polar bear.

So targets and bonuses were set

Like all good change programmes first they had to go through the elf council for ratification and agreement.

  • The director elves disputed the benchmark, this was the North Pole, not Silicon Valley.  The targets were talked down.
  • Next the senior elves agreed to the targets, but insisted that they were only achievable if they had significant investment in new systems.  The targets were talked down some more.
  • Then the management elves set about modifying the measure: PWEH included adjustments for rework (a present that had to be wrapped twice was recorded as two presents) and working time (time spent searching for gift tags and sellotape was excluded).  The targets were fudged
  • 200 (already busy) elves were reassigned to the stop watch and clipboard department. The targets were enforced.
  • Finally the shop floor elves were set off to earn their keep. They quickly realised that it was far easier to wrap kindles and iPads than roller skates and scooters and it was perfectly legitimate to pass back bicycles as incorrectly prepared (but only after a first “test wrap” had been recorded). The targets were ducked.

How did they do?

You tell me.  Did you get exactly what you wanted for Christmas?

According to the North Pole you should have done. Every department was “green” against its quota. Records show that 98% of all presents were wrapped within 5 working days of receipt.

Though the auditors are looking into some minor delays associated with bicycles and lawn mowers.

It is just a shame the consultant elves had never heard about Goodhart’s law

When a measure becomes a target, it ceases to be a good measure

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Christmas Bicycle

Read another opinion

Image by Geoffrey Franklin

Filed Under: Blog, Operations Analysis Tagged With: employee performance measures, Goodhart's law, targets

About the Author

James Lawther
James Lawther

James Lawther is a middle-aged, middle manager.

To reach this highly elevated position he has worked in numerous industries, from supermarket retailing to tax collecting.  He has had several operational roles, including running the night shift in a frozen pea packing factory and carrying out operational research for a credit card company.

As you can see from his C.V. he has either a wealth of experience or is incapable of holding down a job.  If the latter is true this post isn’t worth a minute of your attention.

Unfortunately, the only way to find out is to read it and decide for yourself.

www.squawkpoint.com/

Comments

  1. Bernie Smith says

    31 December, 2014 at 9:40 am

    Funny and True

    Reply
    • James Lawther says

      25 January, 2015 at 7:58 pm

      Glad you enjoyed it

      Reply
  2. maz iqbal says

    31 December, 2014 at 12:03 pm

    Hello James,
    Love the way that you have shared that which you have shared. Particularly love this piece of insight/wisdome:

    “setting targets is much easier than removing obstacles that prevent the wrapping getting done — especially if the obstacle is a polar bear.”

    It occurs to me that all significant-substantial-meaningful change requires dealing with ‘obstacles that occur about as welcome as a polar bear in a middle class English home on a winter’s day’.

    all the best
    maz

    Reply
    • James Lawther says

      25 January, 2015 at 7:59 pm

      Polar bears are probably best not tackled straight on Maz, but I suspect it is unwise to ignore them as well.

      Reply

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