In a recent interview, Tom Peters, the guru of modern management said: ‘Your performance measurement system should include how many times a week someone took your breath away by recommending or doing something unheard of.’
You can imagine some stupid central departments setting up a measurement system. To what avail? People would ‘cheat’ – if you don’t have your requisite number of ideas suggestions, innovations or ‘breath-aways’ you might get paid attention to.
What he doesn’t talk about are the conditions in which people might innovate (or not). The problem in most of our organisations is that innovation is stifled by the management system. Targets, standards, functional and activity measures are the stuff of ‘modern’ management but they cause enormous amounts of waste. People cannot take anyone’s breath away if the system won’t let them.
Of course Peters comes from the USA – the land of the ‘free’. I have been struck by how ‘un free’ managers in the US tend to be. They are more reluctant than any managers I have worked with to question the status quo, to question the way they think about the design and management of their organisations.
Questioning the status quo begins with seeing the organisation from a different point of view – as a system instead of a functional hierarchy. It exposes the fallacy of the current design. When you change the method – the way the work works – you liberate the people and they solve problems their bosses don’t even know about. Something Vanguard clients know and value – you don’t change a culture by exhortation, you change a culture by changing the system.
Why doesn’t Tom talk about this?
I was to be presenting evidence to the Public Administration Select Committee’s inquiry into public sector performance targets on Jan 10, but I got bumped in favour of James Strachan, the new Chairman of the UK’s Audit Commission. This is the man who remarked that amongst EU countries the UK has the largest inspection regime but not the best record of public sector performance improvement. Does he recognise that the two are related? Let’s hope so.
Instead of an hour presenting evidence, I have to appear on a panel (at the end of January). Sitting on a panel is not the best way to tell them what I have to tell them. So I shall be sending in written evidence. I am preparing notes on why the concept of a target is flawed and I would like your help. Here I describe the arguments I hear in favour of targets and my response. I am interested in whether you hear other arguments in favour or indeed if you would argue that there is a way to ‘do them right’.
In favour of targets people say:
Targets motivate people.
They do; they motivate people to do anything to be seen to achieve the target. Hence all the cheating we have seen. And to vilify the ‘cheats’, as Ministers do, is to blame the wrong people, the fish rots from the head. It may be OK to have personal targets like lose weight, run faster etc, but as soon as you introduce targets in a hierarchical system you run into trouble.
Targets set direction.
That’s OK provided there is no numerical expectation. It is relevant to note that Ministers use this argument when they are blamed for having failed to meet their targets. However, if you want to improve, it is more important to know the ‘what and why’ of current performance as a system. ‘What’ tells you about achievement of purpose and ‘why’, self-evidently, tells you about the things that help or hinder achievement of purpose. Knowing about the ‘what and why’ of performance puts you in a position to act on the basis of knowledge for improvement. The best statements of direction would be clear about the need to get down to just doing the value work – that which the customer pays for.
Knowing that targets have their problems, people argue they are OK if you do them right. In support of this argument they say:
Targets should be based on what is reasonable (‘smart’ etc)
But how can people know? It reminds me of Deming’s dictum: don’t rely on experience; it is no substitute for knowledge. When you learn about the ‘what and why’ of performance you discover how much sub-optimisation or waste there is in the system. The job in hand is to take it out. Should we have waste reduction targets? No, it is sufficient to know less waste is better and get on with the job. Measures against purpose can be used to track improvement.
People should be involved is setting their targets.
But how would they know? How could they base their judgement? If both parties do not have a reliable means for questioning performance their assessments would, by definition, be arbitrary. In such a dynamic the weaker party in the hierarchy would seek to minimise their risk and the stronger would seek to push the boundaries. How could either know they are doing the right thing? In a recent change in the public sector using systems thinking, the productivity of a service unit was increased by a factor of six. A management target might have been for an ambitious 15%, local managers might have sought to reduce that to 5%. Neither would have known what could have been done.
As I have said in previous Newsletters, Government Ministers know targets are not working so they do two things: Have less of them (not logical) and employ specifications instead. To employ specifications without knowledge of how the work works is disastrous. I shall cite the example of Benefit payments in Local Authorities where the specification is making the work worse – increasing costs – and compare this with the systems solution being employed by our Local Authority clients to incredible effect.
And finally, targets do not pass the test of a good measure: Does this help us understand and improve performance? Capability measures (measures that relate to purpose and show variation) do. I shall illustrate how. When my paper is completed I shall post it on the web site.
The Committee will take written evidence from anybody – if you feel the urge to tell them what you think about targets, you can send by e-mail to the committee secretary: Philip Aylet, firstname.lastname@example.org
If you only send a mail to express support for what I have to say it will help. All the evidence they have had so far is along the lines of targets are OK if you do them right. I, naturally, am only interested in responding to question 31 of their brief: ‘If you believe the use of targets is a bad or flawed idea, what alternative approach would you advocate which would help bring about real and lasting public service improvements?’
The organisers of Q2002 produced a transcript of my presentation ‘Changing Management Thinking’. I was unaware of this until a number of people contacted me saying how mush they enjoyed reading it – apparently it is being passed around on the Internet. I got hold of a copy and, I have to say, it made me smile – I must have been in fine fettle that morning. It was a little disconcerting to note that the transcribers couldn’t spell Deming or Ohno, perhaps something we should expect from the Institute for Quality Assurance??
So I edited the text and if you would like to read it you can download it from: https://www.vanguard-method.com/v1_lib.php?current=948. It will be posted in the next few working days. I hope it makes you smile too!