Can any target be useful?

1. Can any target be useful? Deming Alliance 3rd June 2013

2. Todays targets: • New people to the group to learn at least three new and useful ideas! • Longer term attendees to positively reflect on at least two different concepts for them! • For all to contribute positively at least once each today!

3. Baselining the meeting • Who thinks alltargets are: Good? … Bad? • Who thinks sometargets are: Good …. Bad? • Who thinks Arbitrarytargets are Good …. Bad? • WT Pay for achieving Arbtargets are Good .. Bad? • Who thinks Facts of life targets are Good ….. Bad? • Who has no idea at all?

4. Performance measures • If todays targets as agreed are potentially going to fail to be achieved: • Fudge the process to make it look OK, or, • Do something to make it happen, such as • Change your mind twice, that is accept the new idea at first, then, • Go back to your original idea, so you have considered two new ideas • Alter the measures, such that outcomes and targets are separated and failure gets forgotten

5. Useful targets!

6. Targets • For those who said all targets are bad, have any of you changed your mind?

7. Useful targets • Deming Facts of life targets: • To achieve more income than expenditure…. i.e. Long term profit…. • “…management by numerical goal is an attempt to manage without knowledge of what to do, and in fact is usually management by fear.”“Out of the Crisis” 1982 – Ch.2 -Principles for Transformation-, page 76 • To achieve enough income to survive …. Food, clothes, home? Maslow’s basics • Others?

8. Some other Deming quotes “Certainly we want good results, but management by results is not the way to get good results…work on the causes of results”“The New Economics” 1994 – Ch. 2 -The Heavy Losses-, page 33 “But he that would run his company on visible figures alone will in time have neither company nor figures”“Out of the Crisis” 1982 – Ch. 3 -Diseases and Obstacles-, page 121 “the most important figures that one needs for management are unknown or unknowable”“Out of the Crisis” 1982 – Ch. 3 -Diseases and Obstacles-, page 121 “It is wrong to suppose that if you can’t measure it, you can’t manage it – a costly myth”The New Economics” 1994 – Ch. 2 -The Heavy Losses-, page 35

9. Reversing target thinking • Our target for next year is to reduce reportable and serious accidents by 15% • Current rate = 331 • Rewording: • We intend to injure 281 employees either seriously or to such an extent that it becomes a reportable incident!

10. Fire Brigade Target • We still have the same amount of employees as when 700 people used to die from fires each year, now only 180 die from fires, so we will reduce employment! • Rewording? • Our aim from a review is to reduce the service cost, if there is an increase of fire deaths, after a new trend confirms that has happened, we will increase budgets to employ more staff.

11. Unhelpful lack of target • Having increased pot-hole fixing by a factor of eight per day …. • “To fix all potholes!” • Why is this unhelpful ? • “Meet the customers demands!” • Why is this a problem?

12. Scenario one • A real life target in 1993 • Background • A developing CI department in a traditional council • All departments had to have business plans • All people had performance plans, with linked performance pay and an unaffordable sprint to unaffordability (anyone heard of Hays?) • Targets MUST be set • HMMMM!!

13. A really useful Arbitrary Target? • The plan had to include: What we did, who we did it for, how often and for how much… • The system required ‘stretch targets’ • YIPPEE! • Soooo… • After some thought we agreed on: • To achieve at least 200 improvements a year. • THOUGHTS?

14. Positivity? How? • Well… first of all our current numeric of improvements was over 200 a year, so it should be possible … and • Every quarter we had to publish our performance against the target, with illustrations of what they included … and • That gave us the opportunity to show-case the positive outcomes on a continuous basis

15. Positivity? How? • We logged all the improvements, ascribing what, where, who involved… the whole department became aware of the art of the possible… we had a record of positive change! • Work expanded, security improved (did I mention Compulsory Competitive Tendering?) • Costs reduced, productivity improved, customers liked us .. far more than contractors

16. Positivity? • A conservative council expanded its Direct Labour organisation … “What would Maggie say?” • Costs reduced, profits reduced, value to the council improved …. Why?? • Client reports became positive, “85% of emergency work was completed before we could raise the works order” • The department cemented as a team …

17. Gameplay • Two linked government targets: • To reduce all highway accidents leading to death or serious injury by 60% by 2008 • To increase the speed of travel in urban areas by 5% by 2008 • What happens? What is the gameplay?

18. Scenario two

19. Utility spending -1 Situation • A nationalised industry in 1980’s • Profitability assured –> disregard efficiency • Unwritten rule: End FY spend 95 - 102% • ‘Or Else!’ penalties a cultural norm • ‘Spend it or lose it’ (swept to CFO) • No surprise that section heads met de facto target; very few risked disgrace.

20. Utility spending -2 How did business respond? • Belts tight Qtrs 1-3…mad rush in Q4 • £ profile ignored seasonality of need • Contract spans set to FY; = less effective • Stifled innovation (except in Q4!).

21. Utility spending -3 Effect on business sustainability • Unreal budgets; grew less practical, flexible • Investment planning was strangled, except at board level • Little care for Voice of Customer or VoProcess • Bids for £ outside budget generally rejected • Workforce planning was not adopted

22. Motivating sales -1 Situation • ‘Sales’ = influencing, not tangible products • Uniform activity & volume targets imposed • Opportunity sometimes far short of target • Any shortfall guaranteed –ve consequences: • - loss of patronage, privilege and pride.

23. Motivating sales -2 How did business respond? • Tension record-keeping and bull***t, outright lies, bullying • Fear at all levels, so little trust • Hiding spare or windfall capacity • Inter-team cooperation was rare • Jealousy, sneaky tricks including poaching • Only backing ‘sure bets’.

24. Motivating sales -3 Effect on business sustainability • A substantial empire built on false figures • Leaders unable to distinguish fact from fiction • Poor business intelligence = opportunities • Nil forecasting ability = avoid shocks • Whole of sales may have been a net loss • How would they have known?

25. Other examples of Targets? • Five minute presentations from the floor? • Learning points today • Use of English…. Some targets are useful? • All …. Is a very powerful word! • Baseline check?

26. Baselining the meeting • Who thinks alltargets are: Good? … Bad? • Who thinks sometargets are: Good …. Bad? • Who thinks Arbitrarytargets are Good …. Bad? • WT Pay for achieving Arbtargets are Good .. Bad? • Who thinks Facts of life targets are Good ….. Bad? • Who has no idea at all?

27. Todays targets: Were they met? • New people to the group to learn at least three new and useful ideas! • Longer term attendees to positively reflect on at least two different concepts for them! • For all to contribute positively at least once each today!

28. Next steps • Sound-bites for the web-site and LinkedIn? • Paper for the web-site or LinkedIn? • Restart A5 booklets? • Go to Lunch?