In the comment thread of a recent post reflecting on Alfie Kohn's book Punished by Rewards, Frank Giancola and I touched on W. Edward Deming and his call to eliminate numerical goals and quotas. In our exchange, we conceded that neither of us has a deep enough understanding of Deming's work and philosophy to know precisely what this call means.
A post today on the Curious Cat Management Improvement blog provides helpful clarity on this point, using a story about Google to illustrate the difference between "managing for what is best for the business" and "managing to hit a target." It quotes a recent explanation from Google about quarterly earnings performance:
The company hired more people than expected last quarter, Chief Executive Officer Eric Schmidt said on a conference call. Google added 1,548 jobs, mostly in sales, marketing and engineering, bringing its total to 13,786. "We overspent against our own plan on headcount," he said. "We decided it was not a mistake. The kind of people we brought in were so good that we're glad we did this."
Curious Cat's take?
Great statement. And if more people could manage that way, one of the problems with numerical goals would be eliminated. But with so many organizations tying huge bonuses to meeting arbitrary numerical targets you will have a great deal of difficulty getting managers to hire 3 extra people this quarter, who will help the business, but will ruin their chance at a bonus. Or even if they just take a hit on their performance appraisal compared to other managers that meet the headcount target - even if it meant turning away talent the organization could have benefited from greatly - and then the manager that missed their target loses out in the next promotion opportunity.
I believe the point here - and its an important one - is not to eliminate all goals and objectives, but rather to set and use them judiciously. Notice that Google clearly does have a plan that features quantitative goals, but rather than adhering blindly to them, Google leaders are applying managerial judgment and wisdom.
Rather than leadership in lieu of goals and objectives, perhaps what is really called for here is leadership applied to the use of goals and objectives.
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