Making targets work and their impact on the Euro and Greek economy

Previously I have written on the dangers and short comings of targets. Reading commentaries on the fate of Greece suggests part of problem may have arisen from targets.

In the past I have explained how targets can encourage otherwise honest people to cheat. Such can be the pressure to meet a target that we will find any excuse to hit the target. For example we will change or at least ‘bend’ the criteria and find another way of ‘getting the numbers’. In call centres agents failing to meet objectives have been known to cut off calls as soon as the phone rings so as to increase their call volumes and reduce their average call duration.

So where’s the Greek connection?

Well commentators have suggested that there was a degree of manipulation of ‘actuals’ to allow Greece to meet the entry requirements for the Euro. The implication being they would not have been granted entry to the Euro club. At the time, interested parties must have been keen for their admission.

The implications of this ‘cheating’ are now on display for all to see.

Unconsciously competent

tightropewalkerDo we accept that to grow as an individual or a business we need to develop new skills?

Understanding our need to grow as a concept is relatively easy but connecting with it can be more challenging. Accepting the need at an intellectual level is simple but accepting at the heart level is very different.

The fear of failure can be daunting. The prospect of wasted money and effort may make it seem not worth the risk.

Let’s consider how we become good at something.

Initially we are unconsciously incompetent. At this stage we are totally unaware that we are not performing well or that we could improve. We need a trigger to enable us to see this. The trigger might be a dissatisfied customer, the failure to achieve a sale, or even a poor performance review.

At this point we have become consciously incompetent. We begin to realise we need to improve and are aware of our weaknesses. We may get a slightly uneasy feeling. We begin to improve. Gradually we become consciously competent. Now we’re able to work to a standard we feel satisfied with and want to maintain. However, if we don’t continue to really focus on the task we lose our effectiveness. Concentration is key.

True success occurs when we are unconsciously competent. This is when we don’t have to put major effort into the task we can relax and enjoy it. In organisational terms the change has become normal. Minimal effort is required to maintain it. Output is high and so is satisfaction.

Rule bound – progress limiting

Last year I needed to obtain a lasting power of attorney on behalf of an ageing relative.

The online process on the government website for creating the appropriate documentation could only be described as excellent.  It led me through the various steps, helping me select the options appropriate to the relative’s situation and telling me who should sign and witness the power of attorney. Straight forward.  Easy.  I printed out the forms and soon had all my tasks completed.

What happened next can only be described as awkward and frustrating.

A rapid change in circumstances determined that the Power of Attorney became active immediately.

Enter stage right: rigid progress defeating procedures.

The correctly completed documents sat in the Office of the Public Guardian for 5 weeks: no acknowledgment, no progress: zip all.  Oops, sorry my mistake; someone had stamped it with the date of receipt.

I phoned to investigate.  I was told there was a back log and the case would be worked the following week. So when will I receive the sanctioned copies I asked.  It takes 20 days from when we start working it, was the response.  From the way the form had been completed I knew there was no one to be contacted or notified. I explained this.  You still have to wait 20 days from when we start working it.  It’s the rules I was told.  But you’ve had it 25 days already, it says that on the file, you date stamped it, remember. No, rules are rules, that’s it.

What do we conclude?

Ineffective, inflexible procedures had been created, adding unnecessary delays. These definitely didn’t meet the customer’s purpose.  There was no benefit to the delay except possibly to protect the Office of the Public Guardian (Is it out-sourced I wonder?).  So the process was designed to meet their purpose. I suspect it’s likely to speed up the case would have distorted a service level agreement. It would be a fair bet no one reports on the backlog but only on the percentage of cases worked within 20 days of the start of their process.

First Class Service

On Thursday last week my beloved Samsung Galaxy Note 10.1 died. It refused to turn on. I called Samsung who offered to send a prepaid packet for me to return the device to them for repair under warranty as it is slightly less than two years old. Alternatively I could take the tablet to their Bradford Experience Centre where they may be able to repair it whilst I wait. This would be subject to their volume of work so I opted for the postal option. The packet contained a letter quoting a tracking reference.

On Saturday the prepaid packet arrived. The packet contained a letter quoting a tracking reference. I popped the tablet in the packaging and left it with the Post Office. It was after 12 noon so I wasn’t too hopeful that it would leave that day.

To my surprise and delight on Wednesday when I checked the on-line progress tracker confirmed that my tablet had been repaired. Even more impressive, I received a text and an email from the courier (Anova/DPD) allowing me to track the package. So rather than having to wait in all day I could plan my day knowing the tablet would arrive in a one hour time slot. And it did arrive, 7 minutes into the allotted hour.

Well done Samsung, and Anova/DPD. Treating the customer as a customer.

Using averages is likely to give average results

Averages are used in lots of situations: batting averages in cricket, wages and salaries, road speed (er sorry, safety) cameras. They’re taught in school as basic maths. Take several measurements, add them up and divide by the number of measurements.  Mathematicians call it the mean.  For example, take a sweet manufacturer who sells boxes of chocolates.  Each box is marked ‘average contents 10’.  The manufacturer checks 10 boxes and records the contents.

Sweets per box
             11
             10
             10
             10
             10
             10
             10
             10
             10
               9
Total 100
Mean 10

The advantage of using the mean is its simplicity. The drawback is that this simplicity can hide knowledge from us. Take this example:

Sweets per box
            25
            16
              9
            23
            10
            10
              2
              2
              2
              1
Total 100
Mean 10

Here the data has the same mean, but the data points are spread very differently.  Compare the maximum and minimum values in each of the examples. Note the number of 10s in the first example and how few there are in the second.

So, in these very simple examples would you prefer to buy a box of chocolates from example 1 or 2.  In the first you will get 9, more likely 10, but may be eleven. But in example 2 you might be lucky and get more than 20 or unlucky and get only 2.  If you only got 2 sweets I suspect you wouldn’t be very happy.

Averages only tell part of the story and can hide the bigger picture.

This is the danger of using averages.

How are we doing? Shall we continue?

In many situations we need to make decisions which affect our future.  Are we doing the right thing?  Is what we are doing effective, really effective or do we just want to believe it is?  Believing it is would be good for our ego, wouldn’t it?  But would it be truly beneficial?

We all have to make decisions.  Snap decisions are rarely good decisions, especially if they have major consequences.

One way to reduce the ‘knee-jerk’ stuff is to think ahead carefully.  If we’re trying a new venture it’s useful at the beginning to think what ‘good’ might look like.  Equally important is to know what ‘bad’ might look like.  Don’t think of these as targets.  Think in terms of a safety net.

Knowing in advance what bad might look like means that we can easily spot if we are failing.  If we have to decide what our tolerance to bad is when we’re under pressure to give an answer immediately it can be difficult as no-one likes to admit they got it wrong.  If you’re deciding on the spot and it’s your pet project it’s easy to attempt justification by describing a bad outcome as acceptable.

Where groups of people are involved agreeing at the outset on the criteria means that everyone knows what good and bad look like.  Everyone can see whether the experience is a success and should be continued, or a failure and stopped.

What are they?

Each criterion is usually expressed as one or two sentences, followed by an indication of size.  Each then needs to be classified for its importance.  So for example some may be critical whilst others are merely desirable.  The failure of a critical criterion may trigger certain actions, such as stopping the experiment completely.

Why success criteria?

  • Helps prevent irrational decisions being made in the heat of the moment
  • Helps provide rigour in the decision making process
  • Helps gain consensus
  • Avoids the dangers of anecdotal evidence
  • Helps go/no go decision making

 

Example

David, an engineer is made redundant and decides he’ll take the opportunity to follow his dream and passion to own a golf shop.  David enjoys golf but for the last 8 years has only played about 5 times per year.  David recognises that whilst he is enthusiastic about having his own business he has several short comings including a lack of retail experience and his golfing knowledge could be stronger. He realises there is a risk because he has to provide an income for his family, however he reasons that he could survive on a modest income and his savings for a couple of years.  It’s a now or never decision.

David finds suitable premises and plans to launch his shop.  A friend suggests that he should track his progress to determine whether his dream is working or if at some stage he needs to sell the shop and attempt to return to regular employment.  He and his friend prepare a list of things to monitor and how to use these to decide whether to continue.

Here’s an extract from the list:

Income

David really hopes his shop provides him with an income of £20kpa. However the economy has been tough and because it will be a new shop and his lack of business knowledge it may take a long time to get to this level.  He reasons that he must make at least £5k in the first year, any less and he would need to close the shop.

Marketing

The shop needs customers.  Ideally he needs a steady flow of new customers and for these same customers to return, giving him repeat business and a solid customer base.  Ideally he needs golfers to come from the local club.  He plans to monitor this.  Over the first 6 months if 100 club members visit the shop he’ll think this is satisfactory, more would be great, but less would indicate he needs to change the way he markets his business

Credibility and Knowledge

David is concerned that he may have difficulty convincing seasoned golfers when they ask for advice on purchases.  He decides to keep a check on the ratio of experienced golfers who ask for product advice and whether or not the make a purchase from him.  David thinks a one in six ratio be OK but any less would indicate a lack of credibility

.

Measure Success Criteria Relevance
Income £5k pa or more Essential – Close the shop if less and get a job
Marketing 100 club members in first 6 months  Desirable
Credibility and Knowledge 1 in 6 sales ratio Essential  – Close the shop if less

After a year David assesses his performance against the list and determines he has fulfilled all the criteria and continues living his dream.

Legally right – morally wrong?

So at last we all know.  The High Court has not accepted a bid from school leaders, teachers’ unions and councils to change grade boundaries in last summer’s GCSE English exams.

Apparently all is well because the standards of our examination system have been preserved. That must be good. A legal decision has been made.

Well that might be the single loop view (as systems thinkers might say)  But take a look at the double loop…..    ….We now have teenagers who are stepping out for the relative cocoon of secondary school, having tried their best, having endured all the motivational techniques their teachers knew only to be punished by the system.  Although I’ve seen no admission I think its reasonable to assume that all English students even those with A, B and C grades have been affected. I deeply suspect English is not the only subject.

Without doubt those who failed to achieve have been dealt a harsh blow by the leaders of our education system.  Those who were awarded D grades are by definition students who are less able than many of their peers. Recovering confidence from one poor grade amongst several A’s. B’s and C’s may be relatively easy, but rising to peak performance when you’re not academically strong and maybe you’re not hard-wired to classroom learning is a much tougher ask.  My heart goes out to the latter group.

Let’s remember the teaching staff too.  They’ve tried hard for these youngsters.

So perhaps there are other loops in play here.  One for teenagers on-going drive and motivation to succeed in their chosen careers; another for the educators who have to be motivated to re-inspire them. Both knowing that statistical fixes can change their path so easily.

So maybe legally right, but definitely morally wrong.

Targets – We’ll hit them if you insist

The thing about staff is that they want to please you.  Yes, I suggest all of them, well at least they want to do everything they can to prevent you telling them they’re not performing well enough.

The reality is increased pressure to meet targets increases the ingenuity applied in response.  Or to look at it from the perspective of an economist, the relationship between ingenuity and pressure is elastic.

In other words people, even ‘honest’ people have a tendency to twist the story to hit the target. In short people will cheat (to a degree).  Parameters are bent to make sure goals are met. 

Take a certain parcel delivery organisation where the objective is (I assume) to deliver packages within a specified timescale and where a house is unoccupied leave a card advising of the attempted delivery.  The pressure to meet the objective creates a situation where the van driver rings the door bell and immediately puts a card through the letter box, driving away before the householder gets to the door.

The pressure to hit the target of delivering all the parcels on the van has motivated the driver to spend as little time as possible at each drop-off point. 

And the impact?

Firstly, the inconvenience to the addressee.  They have to either arrange re-delivery or go to the depot to collect the item.  In either event this has created extra work; the addressee may have phoned the depot, requiring someone there to answer it; finding the parcel at the depot and potentially redelivering it.

The key point here is that a target, probably imposed to increase the productivity of the delivery staff and reduce operating costs has caused inconvenience to the customer, and increased the service centre and delivery costs.

To find out more about the impact of rewards read this article from Freakonomics. http://tinyurl.com/c7qak5t

Targets – a rod for beating people?

Are you burdened by seemingly impossible targets?  You want to achieve, do a good job but struggle to hit the numbers.

Consider where that target came from.  The outcome of many targets is not within the control of the worker.  They are affected by external factors over which the individual has no control.

Take an ice cream vendor in kiosk at a British seaside resort.  Sales are likely to be heavily influenced by the weather. If it’s a cool wet summer, less people are likely to be around.  Hence less sales.  Yes if the kiosk is on a good pitch this can increase sales, and so will a clean and tidy kiosk.  But if it’s a wet and windy day sales will remain poor.

It’s easy for management to set targets where the results are primarily governed by factors over which the worker has no control.  They cannot change the outcome.

The impact of such targets is to de-motivate.  Gradual spirals of despondency set in with the workers and output falls further.  The result is increased sickness, increased staff turnover.  Performance decreases.

Targets can be dangerous.  That’s all targets, not just sales.

Who’s leaving at 3pm?

Sir Michael Wilshaw, England’s chief inspector of schools doesn’t want teachers to leave at 3pm. (BBC,  22/9/12)  This suggests that he thinks they don’t work hard enough and long enough.  He concludes that hitting them in the pocket will produce better results – either by limiting the pay of ‘under performers’ or by (allegedly) increasing the pay of the apparently dedicated.

I suggest Sir Michael needs to think again.

If staff leave at 3pm why is this?  Is it that they are naturally idle?  Is it that they don’t like teaching?  Or some other reason?

May be it is the impact of the endless targets, imposed ‘best’ ways of doing things which I suspect in many cases are invented by ‘those who don’t teach’.

Imagine this.  A school, an education system where teachers are allowed to determine the way they teach, where they can apply methods which they know work.  They know they work because they see the results in the children.

Managers and so called leaders dictating to professionals is de-motivating them, reducing their performance and any desire to excel. That is why they (apparently) leave at 3pm.  They have no control in what they do because they are constantly adhering to the latest edict, filling in plans and forms.

They are blaming the people instead of the system.

If those in charge gave freedom back to teachers, they would be inspired to improve the quality of education and not want to leave at 3pm.  Teacher need to feel that they own teaching

The challenge is getting those in-charge to understand that some things are counter-intuitive.