May 21 2013

I wrote a few weeks ago about Alex Ferguson’s retirement and how he had focused on building an institution rather than just winning the game or the season. In most sports, managers & coaches do not set targets of a specific figure or headline score in each match. I would guess that few set targets of how many games they will win, lose & draw each season. What they do focus on, the targets that they set for their teams, are ones that the players can relate to, that they can influence & that they can create the link in their minds between their actions & the results against each target.

In Better Thinking, Better Results, Bob Emiliani et al make the same point about focusing on results, the scoreboard as opposed to focusing on what they termed the “box score”. Sports coaches & managers do not tell their teams they need to win a game by a particular score (2-1 or 27-24), they focus on things the team can actually relate to, measures that make sense to the players; things such as time of possession, passes, penalties, turnovers, etc…

Arguably, these things are not completely in the control of the players, but if they can relate to them, they can influence them much more which in turn influences the actual final score. Most sports fans know that if they look at the statistics, the box score, they can usually tell who won the game without ever seeing the final score.

The same is true in business. Giving an end result target in terms unrelated to the daily tasks of the team means they are usually unsure of how they can influence the outcome. Rather than giving them gross, net or operating profit targets, gross margin or cash flow targets, try something like pieces per day, turnaround time, minutes for changeover, breakdowns, etc… They can understand these targets & how their actions affect them.

Financial targets are lagging indicators, they tell you what has happened. Leading indicators, targets & metrics that indicate what the results will be if nothing different is done are closer to the “coal face” in terms that people who do the work actually can understand. If they can understand the links to what they do, they are much more likely to understand and be able to influence the outcomes than if the target has no meaning to them.

Are you asking your people to deliver targets that they don’t understand? Targets that they may influence, but they don’t understand how they influence them? Why not make it simple for them? Why not translate your targets into something your team can influence directly, and see the results directly – daily…

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