Objectives, measures, basketball and management - The Cultivated Management Newsletter
Hi,
I hope you're having a great week and all set for the weekend.
The newsletter is normally on a Friday, but this week started badly with a monster cold and the cold has dragged on all week, hence this newsletter is arriving today!
This week I've been thinking a lot about the measures we use as managers and how we then build teams and systems around them.
Management by Objectives
Management by Objectives (MBO) is a popular mechanism for rolling objectives through the business. There are many books on MBO and how to implement them - I won't bore you with that here, but if you're in the throes of creating, setting and rolling out MBO I have some solid advice for you in today's newsletter.
Be careful with them!
MBO can be good. But they can, and often do, drive the wrong behaviour. Here's why.
Most objectives are created based on fictional numbers. These numbers could be made up, dreamed up or scaled up based on past performance. For example, this year we'll hit X number. This year we will be X% more efficient than last year. This year we will ship x times more product. No doubt well intentioned but often not based on whether or not the numbers are even possible. Often these numbers are often set with little increase in headcount, if any at all.
If the numbers are made up then the objectives become difficult to achieve. The purpose of the team is then mashed towards meeting these numbers. And if they are unachievable then people will likely cheat. The strategies that people put in place to meet the objectives may also take them miles away from what they should be doing for the customer. They may also lock in place strategies with little room for experiment.
There is always a better way but with a purpose now set against the measures and a strategy in place that can't flex much, it becomes a case of delivering against the plan no matter what - even if there is plenty of evidence to say it's having a bad effect on the customers.
It's like a gantt chart. Useful for planning and forecasting, mostly out of date as action takes place, requires lots of evolving, yet often just becomes the deliverable. Delivery against the plan no matter whether it still makes sense.
This is especially so if a bonus is tied to the objectives.
So here's some ideas on how to get it right, if you really must use them :)
Make sure your team's purpose is aligned with what the customer expects. Make sure you're doing what you should do.
Find suitable measures that measure the purpose. And put these measures forward as the measures for the objectives. If you don't do this don't be surprised if the leadership teams give you the measures instead - and they may not be right.
Challenge any made up numbers. Ask questions about how they were derived and where the evidence is.
Ensure you include, or ask for, information on how the business is going to change to meet these new objectives. Objectives are great, but often people go back in to a broken set of processes and can't deliver on them. The business (system) needs to change. If you're planning on being more efficient this year - why weren't you more efficient last year?
Go big. If they ask for x% more than last year - ask why not three times that? It will force you to think about where the numbers came from and why they may be tricky to achieve.
Take on the challenge. If the purpose is sound and the measures are relevant and you think it's possible - you've hit a sweet spot. Go forth. But allow for serendipity and change.
Ensure you can experiment with strategies and implementations. Be cautious of having MBOs against specific implementations. It's not the implementation that is the purpose.The purpose is the underlying reason why you are implementing something. For example, an objective is often set about rolling out X tool. The purpose is not the roll out of the tool. If the tool is not right, it's not right. A different tool may be better. If you've done the research and due dillengence then maybe you have selected the right tool - or maybe you haven't and now rolling out X tool becomes the objective - even though it doesn't solve the problem it was expected to solve.
Don't get me wrong MBOs can be good - but only if they are based on the purpose of the team and business, and the numbers reflect that purpose. The targets being set can be useful as just that, a target, but be cautious about tying bonus etc to them. People will meet targets, but they may exhibit the wrong behaviours.
And consider the biggest challenge with MBO - the fact that they rarely work well for deliverables by teams. I'm not a fan of MBOs. I like to set goals and objectives for the team/department, and then iterate and process improve along the way. The measures give you the feedback - they should never be the target. Business is too complex to boil things down to single numbers.
The best approach is to hire the right people, give them a strong purpose, measure the business against that customer focussed purpose, put in place continous improvement and then leave people alone to do their jobs. The best people produce good work by default - no need to hit them with sticks or dangle carrots of MBO.
Book of the week
This week I would heartily recommend a book by legenedary basketbal coach John Wooden. This guy was a legend. A proper legend in the world of basketball. Not only did he win lots, but he also had a legendary coaching style that maps perfectly in to the world of business.
The book is called John Wooden on Leadership and is a great read.
If you want to be a good manager then follow his Pyramid of Success as a great start. He was a principled and ethical man who saw his job as getting the best out of people, not winning championships. The winning is a side effect of good strategy and the right people. It's the same in business. Good strategy and the right people will deliver profit and world domination as side effects.
I love his definition of success too:
"Success is peace of mind which is a direct result of self-satisfaction in knowing you did your best to become the best you are capable of becoming."
John Wooden on Leadership
Until next time. Enjoy your weekend.
Rob..