Bernard Marr must be a believer in my theory that catchy headlines promote increased readership. How else to explain that the long-time performance management guru resorted to the titillating title “Performance Anxiety” for an otherwise solid article on the potential perils of poorly implemented performance systems?
Bernard observes that “performance management initiatives were often so mechanistic and number-focused that it prevented organisations from achieving the desired improvements. It could even lead to unintended behaviour.” Indeed. Remember the story of the hospital that kept patients in ambulances outside the emergency room so that they could improve their ‘waiting time limit’ KPI?
As I’ve frequently observed, the problem with the phrase “what gets measures, gets done” is that people invariably measure the wrong thing. They measure what’s easy to collect or mandated by others. Bernard’s survey finds that 92% of the respondents admitted that many of their KPIs were neither relevant nor meaningful. Cue my favorite line: “not everything that can be counted, counts, and not everything that counts can be counted.”
It gets worse. The survey also reports that more than 70% participants admitted that people in their organizations occasionally fabricated their performance data. Talk about a lack of trusted information! I suppose I should feel better that they only occasionally fabricated data but I have a sneaky suspicion that they weren’t turning green KPIs to red.
Bernard does cite some organizations who are using performance management properly and even suggests some best practices. I’ve seen similar exemplary deployments but, sadly, they seem to be the exception, rather than the rule.
That really does give me anxiety.
It seems like organizations often struggle with measurements because there are so many stakeholders with different, often conflicting interests. It would seem that no level of an organization is immune from the temptation to fabricate results.
* Carl Icahn and some shareholders view Yahoo’s strategy different than management. How does Yahoo convince enough other stakeholders of strength of their strategy?
* Do we have any idea if what happened at Enron and with Arthur Anderson was unique? Is it okay to manipulate numbers yourself, though not okay if you are provided with faulty data?
How does an executive weave through the minefields of expectations and demands from these different stakeholders, especially external? Communicating a corporate strategy that gets people motivated to acheive results, instead of hedge on numbers is hard enough without the pressures and expectations of external sources that may not share your vision.
Robert-
I’m not sure that Yahoo’s Board and Carl Icahn have a different view of the correct strategy. They certainly believe that different tactics to get there. They are also motivated differently.
Information has to be trusted, but rarely is. I think we need a greater focus on data lineage so that we can track every manipulation of data back to its source system, including who/what/when/why. Then we could expand it from just the data to the decisions as well.
Jonathan