Drop Targets, Institute Measures Derived from Work!!!

Lately, I have been writing lot about goals and targets. Today, I want to start this blog with John Seddon’s sentence :The whole notion of targets is flawed. Their use in a hierarchical system engages people’s ingenuity in managing the numbers instead of improving their methods. Daniel Pink in his book: “Drive” goes even further, he states that quantitive targets narrow people creativity decreasing the quality of the outcome. With this approach, employees tend to focus on the outcome, not really caring how the process works nor the way to improve it. This will result in poor performance, poor customer service and worst of all poor morale.

Below I am going to present an example that John used in his book. In order to be easier for you to understand I directly quote John´s words:

In administrative (‘back-office’) service centres, agents are often measured by the work they do. Work is sorted into different electronic queues and each work queue has standard times. The standard times are translated into points, which cumulate to determine an agent’s bonus. Two inevitable phenomena—the ‘errors’ introduced in sorting and the variation in the work—mean agents are effectively taking part in a lottery. Agents do everything in their power to maximize their points. They avoid or pass on difficult work, pass work back to customers or describe it as closed when it is not (from the customers’ point of view). Equally, when redundant work comes in, they won’t point out to management that it’s pointless to put these items through handling, scanning, sorting and so on—why should they, when it wins them ‘easy’ points?

And it gets worse. When managing work held in queues, managers set targets for turnaround times. These are usually expressed as percentages of work to be completed in days (e.g. 80 percent in three days). Aside from the other problems I have just discussed, this leads managers to ‘tamper.’24 When volumes in queues become high, they move resource (people) to those queues. It seems logical from their point of view. But when you create capability charts of the true end-to-end time for all cases, you see that management’s action has actually increased variation. In an effort to speed things up, they have slowed things down, increased variation and made the system more vulnerable to failure demand and other forms of waste.

So what is the alternative?

First, leaders must understand that organizations are systems and they must understand the nature of their dynamics. As John Seddon’s refers in his book, the best way to do this is to gather data about demand and flow. This will tell you the systems capacity to respond to demand. These kind of measures will shift the attention from the person into the end-to-end process. Obtaining these measures enables people to understand how the company works as a whole, instead of being focusing on their sub pieces.

Second, managers need to use operation and financial measures. The capacity is increased changing the characteristics of demand and improving the way how work is designed, they will never know exactly how much will things improve, but working with both sets of information, they are able to help the organization to improve.

Like I stated in the beginning of this blog, the whole notion of targets is flawed and we need to do something to improve our companies.

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