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The Pros and Cons of Business Targets

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Today’s post is by James Lawther, head of Operational Excellence for a FTSE 100 insurance company. As a veteran in the manufacturing, retail and service industry, he has learned quite a bit about operational improvement. Today, he tackles the idea of targets and what to watch out for when utilizing them in the workplace.

If there is one topic that consultants know is likely to end in a management fight, it is the subject of targets.  Opinions vary wildly. There are at least two sides to the argument and a whole host of shades of gray.

The case for targets:

“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

The arguments in favor of target setting are numerous:

  • The process of target setting forces us to think through what is important.
  • We prioritize the use of our resources to make sure we hit our targets.
  • Having a target that we can see progress against makes us happy.

The case against targets:

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

There are as many voices decrying target setting:

  • Targets are not always set realistically.  Too high and they will be stressful, too low and people become complacent.
  • 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 dysfunctional activity: from lack of team work via excuse finding to good old fashioned cheating.

The last point is the real rub. If you give me a target that I can’t achieve and give me an incentive to meet it I will cheat. Maybe I have low moral standards, maybe I shouldn’t, but I don’t think I am alone.

consulting on hitting targets

© Flickr user Highways Agency

What is the Solution?

The target isn’t really the problem; it is the behaviors that surround the target that cause the issues.  Here are some ideas to change those behaviors.

  • Use measures not targets:  I avidly watch the number of hits I get on my web site, and dream up ways of getting more.  If you like we can spend all day talking about that measure.  Would I be so keen if I was targeted with getting the same number of hits as Facebook?  Would you?
  • Provide a business improvement solution: if you walk off and leave me to worry about a target without showing me how to achieve it, worrying is what I will do.  Worrying isn’t the same as achieving. Show me what to do.
  • Less is more: there is a quote from a UK government manual “it is unlikely that any one manager… would be able to focus on more than 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! That kind of kills the prioritization argument.
  • Look at the incentives: big cash incentives lead to cheating.  Sales agents massage their figures, sports men take drugs, and mangers pad out their budgets, it is human nature.  Human nature is a very difficult thing to change.

The Golden Rule

If you must provide cash incentives, our business consultants only remind you that the way you set your incentives motivates people.  It is just a question of what it entices them to do.

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

James Lawther gets upset by business operations that don’t work and apoplectic about poor customer service.  Visit his web site “The Squawk Point” to find out more about service improvement.

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