Showing posts with label KPIs. Show all posts
Showing posts with label KPIs. Show all posts

Monday, 7 June 2010

In step with Management.

Left, right, left, right, left. Is good management Left or Right?

Neither ‘of course’. Management is apolitical! Right? Management objectively, dispassionately maximises value for shareholders.

In a recently broadcast video clip from a few years back, BP’s CEO, addressing what looks like an MBA seminar, says “BP has spent too much time saving the world and it’s time to get back to maximising value to shareholders.” 

A super lucky survivor of the BP’s recent deep-sea rig explosion and fire (he jumped 100’ from the rig into the oil covered burning sea because the life boats had already gone) reported that despite clear evidence that the rubber blow-out seal had been seriously damaged, with consequent serious risk of blow-out and fire, Management decided not to stop and fix it. There was pressure to  be ready for BP officials due to visit  the rig to celebrate the success and recognise the project’s safety record! It’s like a re-run of the Challenger disaster but massively more destructive.

The survivor reported  officials were on the rig when it blew up. Maybe it was the officials who broke strict protocol and abandoned ship (and many crew including the captain) before accounting for everyone.

Managers are in charge, right? They have authority to hire and fire right? Who’s anatomy’s on the line if things go wrong? The manager’s, right? Who makes the decisions? Managers, right? Who’s job is it to know and be right? Managers’, right? If you’re wrong or you don’t know you’re not fit to be a manager right? Right! Yeah, right.

These assumptions are endemic in many (perhaps most) organisations despite espousals and ‘systems’ to the contrary. They are made by both managers and managed alike. These assumptions persist despite overwhelming evidence that they are not only unproductive but are destructive except perhaps in large scale replication where people are  no more than substitute machine parts. 

Are these characteristics and attributes of capital “M” for Management hallmarks of  the (political) Right? Are the critics of Management lackeys of the Left?

For instance, those who question the wisdom of Management are typically assumed to be questioning established authority; to be ‘bolshie’ – politically Left.

Management tends to favour maintaining established values and hierarchy:  characteristics typically regarded as politically Right.

Those who advocate and live collaboration, sharing, and collective responsibility are typically regarded as  politically Left.

Management practice generally  promotes individual responsibility and reward; characteristics typically regarded as politically Right.

Even Christianity seems somehow to be identified with the political Right even though Christianity questions authority and promotes sharing community, at the same time as it promotes traditional values and individual responsibility.

It seems to me that good management and Christianity are neither Left nor Right and may actually have a lot in common.

Much of contemporary popular management literature effectively plagiarises Biblical wisdom. Take for instance vision and purpose led business; discovering and playing to individuals’ strengths; discovering the engaging, innovating power of doing good things together; selling goods and services and optimising supply chains through genuine, mutually serving relationships and collaboration; individuals’ responsibility to maximise the value of their talents.

The sooner we remove the blinkers of political stereotyping and get seriously down to the work of turning the Word or words into living reality, the better.

How many environmental and economic catastrophes does it take for interrelational behaviour-change to be explicit in every organisation’s top five strategic priorities? When will specific interpersonal behaviour-change figure in everyone’s KPIs?

Pretty damn soon I hope.

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Friday, 31 July 2009

Mindful simplification

Today on Radio New Zealand National Sir Howard Davies, Director of the London School of Economics was asked “How do we recover from the recession?” Especially interesting to me was that he pointed to the blindness (astounding in hindsight) of banks and government advisors that got us into it. They were blind because they didn’t see the signals of impending “brutal audit”. Their KPIs effectively blinkered their vision.

I see this happening to one degree or another in pretty much every organisation I’ve owned, worked for or worked with.

I’m very critical of many KPI/performance measurement systems because they frequently erode collaboration, promote and perpetuate bad management behaviour, and blinker perception. On the other hand I’m also an enthusiast for intimacy with valid, relevant data.

I’m am enthusiast for simplification for focused action. On the other hand I’m also very critical of mindless compliance and groupthink that’s frequently the consequence of simplistic analysis, rules, procedures, and expectations.

Not surprisingly perhaps, some find it hard to figure “whose side I’m on”.

I’m an Edwards-Deming fan (kind of like being a member of a dead poets’ society). Deming’s lifelong passion was collaboration to achieve quality. Not in a fuzzy, feel-good sense but in a logical, objective sense: informed by valid, relevant data. A statistician, he understood how quality is determined by systems of thought, practice and organisation. Not individuals. He was very successful in Japan. His countrymen in USA have been very slow learners.

KPI systems are inevitably simplistic and biased: a selective abstract of reality based on a particular set of assumptions. So they inevitably distort or leave out potentially crucial aspects of complex reality.

The problem is how to collectively commit to a set of goals and performance measures yet remain mindful that that very commitment will blinker us to potentially crucial information.

This may not matter much in a predictable environment. But in an uncertain, fast-changing environment its a big issue. That’s because fast adaptation and innovation are triggered and driven by information from outside our normal frame of reference – our established KPIs.

Nimble organisations maintain clear purpose and operate simple strategies to achieve that, continually reviewing their KPIs for validity and relevance to that purpose. Statistically significant exceptions and failures are seized as opportunities for learning. Mindful, collaborative experimentation is a valued source of innovation.