A Systems Perspective of Targets

Came across an interesting perspective on targets in "The Systems Thinking Review" (web archive link). While most management thinking stresses the importance of setting goals and targets to motivate performance, in "a tool too far: a systems perspective of targets" (web archive link), the authors highlight some of the problems of target-driven cultures. There are numerous example:

• NHS targets 'may have led to 1,200 deaths' in Mid-Staffordshire
• Hospital chairman quits over dangerous targets

These life and death situations present some real callenges to mainstream thinking about performance management. The authors highlight that many of these problems are caused by centrally set targets, which have little connection with the business action at the front line. The further the centre from the operation, the worse the problem seems to be, particularly when data is aggregated and averaged to produce management reports that drive new targets. This statistical process smooths out all the variations in performance and operational difficulties that make targets difficult or impossible to achieve.

The authors highlight the challenge that then arises for managers under this measurement regime - the options are (a) cheat, (b) tell the truth or (c) chase the target but do the wrong thing. Option (a) may deliver what the customer wants, but only works for as long as the manager doesn't get caught. Money and reputation are linked to target attainment, so option (b) is eventually career-limiting. Which leaves (c), so organisations are driven to do the wrong thing in order to meet an irrelevent target set externally.

So, can this be changed? It can be quite difficult to move an organisation away from a target-driven culture, as targets give the illusion of control. If a specific target is set out as a performance improvement, and subsequently achieved, this appears to be strong management, leading the organisational improvement. However, the deleterious impact on other services is skipped over in focusing on this single target.

So the change may be difficult, but it is possible. Locally set targets appear to motivate performance improvements, particularly when there is a connection between a target, an individual's behaviour in attaining the taget and the connection with some organisational or personal value. This simply needs a re-establishment of trust between local managers and the organisational centre - the centre sets direction and local managers set targets to motivate local performance.

This suggests loss of control from the centre, but local empowerment may achieve the required performance where central targets often fail. This requires a brave decision for the executive at the centre, but ultimately leads to greater achievement.

Update (Dec-2014): The Systems Thinking Review website seems to have disappeared - links moved to point to a snapshot archived by the web archive project.