Big change lesson – Wayward targets and metrics

Many a transformational target is informed by hope, not science.  Executives pluck numbers out of the air or backwards engineer ‘gap closure’ targets uninformed by reality.  Assumptions are made, left untested and – in time – come to be adopted as irrevocable truths against which others are judged. 

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What may be intended as aspirational targets become unowned burdens upon those tasked with delivery.  Or – in the reverse – delivery against artificially derived ‘soft’ targets give the impression of continuous improvement while leaving unrealised opportunity on the table.

And even when well-founded change targets exist, they risk either being lost is the noise of overloaded business improvement agendas or being cannibalized by legacy metrics.

“You can’t keep doing the same things and expect a different outcome” is a maxim all too readily overlooked when effecting change.  Executives expect different business outcomes and publicly call for new behaviours while leaving in place legacy metrics which reinforce the old at the expense of the new.

We say we want collaboration yet continue to measure and reward individual contributions.  We say we need people to take risks but only reward success and pillory failure.  We say we accept the inherent uncertainties of developing new products and markets while unflinchingly holding people to revenue growth budgets based on wholly untested assumptions and punishing projects that can’t guarantee required performance hurdles.  We want the organisation to be outward and forward looking yet propagate KPIs that measure lag performance of internal processes.

Goal setting, performance measurement and review are critical elements of building an execution culture.  However, many legacy metrics are of limited current relevance, conflict with each other and run counter to being responsive to external changes.  KPIs tend to be heavily baked in, driving not only budgets and business performance reporting but also financial rewards and career opportunities.  And even more perverse, once measures are reduced to targets, they risk cutting across the learning that underpins improvement and innovation.