I just read a story of a plant manager, let’s call him John, who met or exceeded all the annual goals set by top management but the performance of his plant lagged behind that of another plant. John was instructed to fi nd out why that plant was excelling even though both managers met the same goal set. What he found out was that although the other plant manager measures the same set of metrics as John, the goals were not the driver. The philosophy was that goals inhibit behavior. If a stretch goal is not reached your appraisal was
downgraded and if you reached your stretch goal, the goal was too easily obtainable. This is a no-win situation. Instead of trying to meet an arbitrary goal, the concentration was on the plant’s rate of improvement — not a number but just improvement over time. If a goal is not reached, it tends to have you seek an inward solution or an external cause, which reinforces the silo eff ect. If you look at the plant’s rate of improvement, a negative rate is typically caused by a restriction in the process and you seek a more universal solution. (There are more details to the story than this but you get the point.) Top managements goals are still being measured so they are getting the data they want, but operationally the plant is run as a unit and not as a set of individual components trying to meet individual goals. The problem I see in looking at the rate is defi ning a metric for performance and if that metric is too broad it will lose data sensitivity. A rate is a lagging indicator and if there is a large loss in data sensitivity, a negative turn will not be detected quickly enough. This necessitates a larger eff ort to make corrections.
The misuse of MBO is not relegated to just sales and
manufacturing but has spilled over to other sectors. I worked for one airline that awarded the midnight shift aircraft maintenance supervisor who cleared the most deferred items and publically humiliated the supervisor who had the least deferred items cleared. You had a dual motivation set up but behaviorally we are more prone to avoid pain than seek adulation. If you know the rudiments of statistics, you know that for any group, unless they are completely homogenous, will take the shape of a bell curve (a small group at the ends and the majority in the middle). In this scenario there will always be a loser and always a winner, no matter how well or poorly the group as a whole does, but that didn’t matter. This also encouraged hoarding of resources and even resource theft. If you couldn’t be the best, making someone else last at least saved your bacon from the fi re.
MIDDLE GROUND FEEDING FRENZY However, this middle ground, the safety zone, quickly deteriorated to where everyone except the top performer was partially admonished at the morning briefi ng. This soon turned into everyone getting a tongue lashing in the morn-
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