Performance management continuously invades my personal life, whether it’s on airplanes, during mentoring, or at Thanksgiving dinner. Here’s another example:
Not long after I moved into my previous house, a friendly neighbor came over to welcome me to the block. Amid advice on local stores and restaurants, he pointed out that my front lawn wasn’t up to the neighborhood standards. In fact, it was mostly brown and barren. I needed green grass.
Wanting to keep up with the Joneses, I hired a landscaper who produced incredibly detailed designs, brought in a wide variety of equipment, and kept my front yard in shambles for weeks. When he was done, I had lawn, hedges, flowers and a bill much higher than I had expected. But I had a yard to make the neighbors proud.
Unfortunately, this extreme makeover took place in the summer heat of California and, despite frequent watering, within two months my front yard was well on the way to becoming brown and barren again. I summoned the landscaper who discovered some of the sprinklers had very little water pressure. He proceeded to blame 1” PVC tubing, long runs of pipe with sediment buildup, and an aggressive ground hog. I didn’t understand or care. I just wanted green grass.
The landscaper tore up my lawn again, replaced some pipes, and installed a trap. Water pressure was restored but the lawn didn’t recover. Another return trip, another diagnostic, and another detailed explanation — this time of the acidic clay in my soil. Apparently my yard wasn’t the ideal environment for fescue grass. I still didn’t care.
Frustrated and with more money out of pocket than I care to admit, I called a yard specialist recommended by a co-worker. While I don’t remember the exact conversation, my interview with Mr. Yamagushi went something like this:
Me: Can you install a lawn that will last longer than 6 months?
Yamagushi: Why?
Me: Because the one I have keeps dying.
Yamagushi: No, why do you want a lawn?
Me: Because my neighbors are embarrassed by my front yard.
Yamagushi: OK, I’ll give you a non-embarrassing yard.
At which point he wrote up an estimate that said “Yard to be proud of” with a price much lower than the original landscaper. I tried to get him to explain what that meant but he kept saying that he would worry about the details. If I wasn’t happy, I didn’t have to pay.
The next day I got home from work to find my lawn ripped out, replaced by a Zen rock garden, some drought resistant plants, and a few areas filled with bark mulch. It was beautiful. And it lasted with very little maintenance for the remaining years I lived in that house.
So what does this story have to do with performance management? The original landscaper peppered his stakeholder (me) with activity metrics that described largely meaningless activities. Mr. Yamagushi instead emphasized an outcome KPI with an easily articulated impact (lack of embarrassment). Yard outcome beats lawn activities.
We should all examine the dashboards and scorecards we publish to our stakeholders. Are they filled with activity metrics that showcase our hard work but that are potentially uninteresting to our stakeholders? Or do they contain a small number of outcome KPIs that clearly show impact?
Let’s prioritize outcomes over activities.
outcomes or activities? an age old question with a very easy answer. it’s much easier to dress up activities than outcomes so weaker players will naturally choose to promote activity kpi’s over outcomes.
the more important question is why we accept activity kpi’s in the first place. i think it’s more of a leadership issue. if you know the outcomes you want (un-embarrassing lawn) then you should be uncompromising about holding landscapers to that standard.
leaders should demand commitments to outcomes. people will push back and try to sneak activities in but you need to stand firm and relentlessly push back. over and over again. as with everything else in life, you get only what you insist on.
What I like about this story is that is took the right question to bring about that outcome. By asking ‘why?’ twice, the second gardener was able to get to the real need.
It is very easy to get caught making wrong decisions. We try to jump directly to the solution without thinking what it is we are trying to accomplish. Once we have begun down a path, the investment of time and resources makes it difficult to change course, even when it plainly isn’t working.
Asking the right questions doesn’t come easily. That’s why we welcome it and remember it when it occurs.
Regarding a 1964 court case on pornography, US Supreme Court Justice Potter Stewart famously wrote, “I shall not today attempt further to define the kinds of material I understand to be embraced . . . [b]ut I know it when I see it . . .”
In “Blink,” Malcolm Gladwell’s convincingly argues that one’s first instinct usually delivers the best outcome.
Albert Einstein’s philosophy on metrics: “Everything that is measurable is not important. Everything that is important is not measurable.”
My point is that we should use metrics to judge performance. No question. And I fully agree with the comments regarding measuring outcomes, not activities. For some marketing roles, measurements are straight forward: how mnay leads, how much pipeline, how much revenue? But for many roles, clean measurements to reflect performance are not obvious. For those roles, don’t we know – at a basic level – who was effective? who was not? who is a top performer? who is not? Do we always need metrics and KPIs to inform us? To paraphrase Justice Stewart, I can’t always define what it takes to get a top rating from me, but I know a top performer when I see them.
Of course, there is no easy answer. Many executives reap the rewards of a general business uptick without any particular effort or activity of their own. Others work hard and as a result are able to obtain average results despite less than average products to market.
I vote for using common sense to evaluate contribution. That means giving fair consideration to both activity and outcome. One without the other should not earn top rewards.
So, I love this example because I have been preaching this type of a philosophy to senior levels for number years; but I would have to say its much easier said than done unless your organization can fit in your front lawn. There is some weight to the saying “size adds complexity”, specially in the form of political capital. One of the key things about measuring activities is “risk management”; essentially you want to get to your exposures before the risk becomes an issue. This is specially true for large multi-national Financial Services organization (much like the one that I am involved in). These organizations hire at the 55th percentile when it comes to talent, hence having large amount of human capital barely capable of hitting average results. So, the question is how do you ensure the “outcome” KPI’s are going to hit your “above average” target without measuring activities when you are hiring at the “mean” capability level?
I’m not actually suggesting that you don’t measure activity metrics. You do need to do this to understand efficiency. I’m suggesting that rewards should be based on outcome KPIs. If you use leading measures, you should be able to “project” outcomes based on progress on the activities. The Logic Model explains this well: http://JonathanBecher.com/2008/09/28/logic-model
Again, I agree with you totally, I have seen different variations of the logic model you have posted. Now I just have to get my business partners and clients to come to the same conclusion and its happening slowly; but then again its a bank, everything happens slowly. The bigger challenge really for most of the Canadian Financial Institution is to ensure that the “outcomes” measured accurately reflects their performance. As you know, most banks (at least in Canada) are large organizations that have grown overtime through acquisitions; hence, this model is the root cause for disparate data and legacy systems. The challenge to measuring outcome is this; they need to overhaul their entire data platforms and remap their data structures. This is not an easy or an inexpensive task given the manpower needed to do this. Therefore, measuring anything becomes a challenge.
Love it! Sounds like the lawn’s decay=lagging indicator and the neighbors’ satisfaction=leading indicator. Let’s get rid of some unnecessary lagging indicators and focus on the right leading ones. Yamagushi is a wise man.