Business Spotlight

Executive Eye

Ziele zu setzen, ist einfach. Schwierige­r ist es, sie auch zu erreichen. Und was ist, wenn einem das gelingt, das aber mit nachteilig­en Konsequenz­en verbunden ist?

- ADRIAN FURNHAM is a professor in the Department of Leadership and Organizati­onal Psychology at the BI Norwegian Business School, and author of 92 books.

Adrian Furnham on setting targets

It’s not difficult to set targets for staff. It is much harder, however, to understand their negative consequenc­es. Most work-related behaviours have multiple components. Emphasize one and the others become distorted. Travel on a London bus and you’ll quickly see how this works with drivers. Watch people get on and show their tickets. Are they carefully inspected? Never. Do people get on without paying? Of course! Are there inspectors to check that people have paid? Possibly, but very few.

And people who run for the bus? They are ignored. Safety and security for the old, the sick, the disabled? No time for that. And how about jumping lights? Buses do so almost as frequently as cyclists.

Why? Because the target is punctualit­y. People complained that buses were late and infrequent. So, the number of buses and bus lanes were increased, and drivers were rewarded or punished according to the time they took. And drivers hit their targets. But they also hit cyclists. People are hurt on buses and by buses.

If the target was changed to revenue, you would have more inspectors and more sensitive pricing. If the criterion changed to safety, you would get more cautious drivers who obeyed traffic laws. But both these criteria would be at the expense of time.

There is another problem: people become immensely inventive in hitting targets. Have you noticed that you can leave on a flight an hour late but still arrive on

time? Tailwinds? Of course not! Airlines have simply changed the time a trip is meant to take. A one-hour flight is now billed as a two-hour flight. It’s the same with rail journeys. They now take twice as long as they did 20 or even 40 years ago.

The moral of the story is simple. Most jobs are multidimen­sional, with multiple criteria. Choose one criterion or even two and you may well sacrifice others. Everything (well almost everything) can be done faster and made cheaper, but there is a cost. Setting targets can and does have unforeseen negative consequenc­es.

This is not an argument against target-setting or, as it is sometimes called, “management by objectives” with the use of “key performanc­e indicators” (KPI). But it is an argument for exploring consequenc­es first. All good targets should have multiple criteria relating to critical factors such as time, money, quality and customer feedback. The trick is not to specify just one or even two dimensions of the objective, but also to understand how to help people better achieve the objective.

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