Building targets, constructing behaviour

Recently, the press reported that UK construction company Bovis Homes Group PLC have run into trouble for encouraging new homeowners to move into unfinished homes and have therefore faced a barrage of complaints about construction defects. It turns out that these practices were motivated by a desire to hit ambitious growth targets. Yet it has all had a substantial impact on trading position and mark downs for Bovis shares.1

I have blogged about targets before. It is worth repeating what I said there about the thoughts of John Pullinger, head of the UK Statistics Authority. He gave a trenchant warning about the “unsophisticated” use of targets. He cautioned:2

Anywhere we have had targets, there is a danger that they become an end in themselves and people lose sight of what they’re trying to achieve. We have numbers everywhere but haven’t been well enough schooled on how to use them and that’s where problems occur.

He went on.

The whole point of all these things is to change behaviour. The trick is to have a sophisticated understanding of what will happen when you put these things out.

That message was clearly one that Bovis didn’t get. They legitimately adopted an ambitious growth target but they forgot a couple of things. They forgot that targets, if not properly risk assessed, can create perverse incentives to distort the system. They forgot to think about how manager behaviour might be influenced. Leaders need to be able to harness insights from behavioural economics. Further, a mature system of goal deployment imposes a range of metrics across a business, each of which has to contribute to the global organisational plan. It is no use only measuring sales if measures of customer satisfaction and input measures about quality are neglected or even deliberately subverted. An organisation needs a rich dashboard and needs to know how to use it.

Critically, it is a matter of discipline. Employees must be left in no doubt that lack of care in maintaining the integrity of the organisational system and pursuing customer excellence will not be excused by mere adherence to a target, no matter how heroic. Bovis was clearly a culture where attention to customer requirements was not thought important by the staff. That is inevitably a failure of leadership.

Compare and contrast

Bovis are an interesting contrast with supermarket chain Sainsbury’s who featured in a law report in the same issue of The Times.3 Bovis and Sainsbury’s clearly have very different approaches as to how they communicate to their managers what is important.

Sainsbury’s operated a rigorous system of surveying staff engagement which aimed to embrace all employees. It was “deeply engrained in Sainsbury’s culture and was a critical part of Sainsbury’s strategy”. An HR manager sent an email to five store managers suggesting that the rigour could be relaxed. Not all employees needed to be engaged, he said, and participation could be restricted to the most enthusiastic. That would have been a clear distortion of the process.

Mr Colin Adesokan was a senior manager who subsequently learned of the email. He asked the HR manager to explain what he had meant but received no response and the email was recirculated. Adesokan did nothing. When his inaction came to the attention of the chief executive, Adesokan was dismissed summarily for gross misconduct.

He sued his employer and the matter ended up in the Court of Appeal, Adesokan arguing that such mere inaction over a colleague’s behaviour was incapable of constituting gross misconduct. The Court of Appeal did not agree. They found that, given the significance placed by Sainsbury’s on the engagement process, the trial judge had been entitled to find that Adesokan had been seriously in dereliction of his duty. That failing constituted gross misconduct because it had the effect of undermining the trust and confidence in the employment relationship. Adesokan seemed to have been indifferent to what, in Sainsbury’s eyes, was a very serious breach of an important procedure. Sainsbury’s had been entitled to dismiss him summarily for gross misconduct.

That is process discipline. That is how to manage it.

Display constancy of purpose in communicating what is important. Do not turn a blind eye to breaches. Do not tolerate those who would turn the blind eye. When you combine that with mature goal deployment and sophistication as to how to interpret variation in metrics then you are beginning to master, at least some parts of, how to run a business.

References

  1. “Share price plunges as Bovis tries to rebuild customers’ trust” (paywall), The Times (London), 20 February 2017
  2. “Targets could be skewing the truth, statistics chief warns” (paywall), The Times (London), 26 May 2014
  3. Adesokan v Sainsbury’s Supermarkets Ltd [2017] EWCA Civ 22, The Times, 21 February 2017 (paywall)
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Deconstructing Deming XI B – Eliminate numerical goals for management

11. Part B. Eliminate numerical goals for management.

W. Edwards Deming.jpgA supposed corollary to the elimination of numerical quotas for the workforce.

This topic seems to form a very large part of what passes for exploration and development of Deming’s ideas in the present day. It gets tied in to criticisms of remuneration practices and annual appraisal, and target-setting in general (management by objectives). It seems to me that interest flows principally from a community who have some passionately held emotional attitudes to these issues. Advocates are enthusiastic to advance the views of theorists like Alfie Kohn who deny, in terms, the effectiveness of traditional incentives. It is sad that those attitudes stifle analytical debate. I fear that the problem started with Deming himself.

Deming’s detailed arguments are set out in Out of the Crisis (at pp75-76). There are two principle reasoned objections.

  1. Managers will seek empty justification from the most convenient executive time series to hand.
  2. Surely, if we can improve now, we would have done so previously, so managers will fall back on (1).

The executive time series

I’ve used the time series below in some other blogs (here in 2013 and here in 2012). It represents the anual number of suicides on UK railways. This is just the data up to 2013.
RailwaySuicides2

The process behaviour chart shows a stable system of trouble. There is variation from year to year but no significant (sic) pattern. There is noise but no signal. There is an average of just over 200 fatalities, varying irregularly between around 175 and 250. Sadly, as I have discussed in earlier blogs, simply selecting a pair of observations enables a polemicist to advance any theory they choose.

In Railway Suicides in the UK: risk factors and prevention strategies, Kamaldeep Bhui and Jason Chalangary of the Wolfson Institute of Preventive Medicine, and Edgar Jones of the Institute of Psychiatry, King’s College, London quoted the Rail Safety and Standards Board (RSSB) in the following two assertions.

  • Suicides rose from 192 in 2001-02 to a peak 233 in 2009-10; and
  • The total fell from 233 to 208 in 2010-11 because of actions taken.

Each of these points is what Don Wheeler calls an executive time series. Selective attention, or inattention, on just two numbers from a sequence of irregular variation can be used to justify any theory. Deming feared such behaviour could be perverted to justify satisfaction of any goal. Of course, the process behaviour chart, nowhere more strongly advocated than by Deming himself in Out of the Crisis, is the robust defence against such deceptions. Diligent criticism of historical data by means of process behaviour charts is exactly what is needed to improve the business and exactly what guards against success-oriented interpretations.

Wishful thinking, and the more subtle cognitive biases studied by Daniel Kahneman and others, will always assist us in finding support for our position somewhere in the data. Process behaviour charts keep us objective.

If not now, when?

If I am not for myself, then who will be for me?
And when I am for myself, then what am “I”?
And if not now, when?

Hillel the Elder

Deming criticises managerial targets on the grounds that, were the means of achieving the target known, it would already have been achieved and, further, that without having the means efforts are futile at best. It’s important to remember that Deming is not here, I think, talking about efforts to stabilise a business process. Deming is talking about working to improve an already stable, but incapable, process.

There are trite reasons why a target might legitimately be mandated where it has not been historically realised. External market conditions change. A manager might unremarkably be instructed to “Make 20% more of product X and 40% less of product Y“. That plays in to the broader picture of targets’ role in co-ordinating the parts of a system, internal to the organisation of more widely. It may be a straightforward matter to change the output of a well-understood, stable system by an adjustment of the inputs.

Deming says:

If you have a stable system, then there is no use to specify a goal. You will get whatever the system will deliver.

But it is the manager’s job to work on a stable system to improve its capability (Out of the Crisis at pp321-322). That requires capital and a plan. It involves a target because the target captures the consensus of the whole system as to what is required, how much to spend, what the new system looks like to its customer. Simply settling for the existing process, being managed through systematic productivity to do its best, is exactly what Deming criticises at his Point 1 (Constancy of purpose for improvement).

Numerical goals are essential

… a manager is an information channel of decidedly limited capacity.

Kenneth Arrow
Essays in the Theory of Risk-Bearing

Deming’s followers have, to some extent, conceded those criticisms. They say that it is only arbitrary targets that are deprecated and not the legitimate Voice of the Customer/ Voice of the Business. But I think they make a distinction without a difference through the weasel words “arbitrary” and “legitimate”. Deming himself was content to allow managerial targets relating to two categories of existential risk.

However, those two examples are not of any qualitatively different type from the “Increase sales by 10%” that he condemns. Certainly back when Deming was writing Out of the Crisis most OELs were based on LD50 studies, a methodology that I am sure Deming would have been the first to criticise.

Properly defined targets are essential to business survival as they are one of the principal means by which the integrated function of the whole system is communicated. If my factory is producing more than I can sell, I will not work on increasing capacity until somebody promises me that there is a plan to improve sales. And I need to know the target of the sales plan to know where to aim with plant capacity. It is no good just to say “Make as much as you can. Sell as much as you can.” That is to guarantee discoordination and inefficiency. It is unsurprising that Deming’s thinking has found so little real world implementation when he seeks to deprive managers of one of the principle tools of managing.

Targets are dangerous

I have previously blogged about what is needed to implement effective targets. An ill judged target can induce perverse incentives. These can be catastrophic for an organisation, particularly one where the rigorous criticism of historical data is absent.

Deconstructing Deming XI A – Eliminate numerical quotas for the workforce

11. Part A. Eliminate numerical quotas for the workforce.

W Edwards DemingI find this probably the most confused part of Deming’s thinking. Carefully reading Out of the Crisis (at pp70-75) Deming’s attack is not on standardised work, that is advocated as central to his message, but against specifications for the volume of work: calls answered per hour, finished parts per day.

Deming recognises management’s need to predict costs and revenues but condemns quotas as destructive of achieving productivity.

Deming also deprecates such quotas as corroding workplace pride. I shall return to that in Point 12.

Deming’s criticism of work quotas goes as follows.

  • Some individuals may achieve them easily and their productive capacity will then stand idle.
  • Some individuals may struggle and suffer poor moral.
  • Some individuals may compromise quality so as to make a quota or so as to make it sooner.
  • Achievement of quotas may be frustrated by faults in “the system” which are outside the individual worker’s control.

Deming gives the following example of how he would advise financial planning in a call centre of 500 people (at pp73-74).

  1. Set a preliminary budget.
  2. Make it clear to every one of the 500 that their aim is to give satisfaction to the customer, to take pride in their work.
  3. Everybody will keep a record of calls made.
  4. Customers with special problems will be referred to the supervisor.
  5. At the end of each week, sample 100 individuals’ record and summarise the data.
  6. Repeat steps 2 to 5 for several weeks.
  7. Analyse the data.
  8. Establish a continuing study following the above steps but on a reducing basis.
  9. Use the data to predict costs.

Now there is much merit in forecasting costs based on actual data. Further, improving performance based on the relentless criticism of historical data is essential. However, I think Deming’s prescription naïve and idealistic. The trick is to extract the ideals and industrialise them.

Planning

The simple matter is that any new enterprise has to be established on the basis of a robust business plan. There is competition for resources: people, capital, infrastructure … and everyone has to make their case. It is impossible to do that without judgment. No matter how much historical data or even qualitative experience is to hand we cannot simply project it into the future without establishing further conditions (RearView). It is unlikely this can ever be done exactly in a new establishment.

That competition for resources then prevents us from taking an overly conservative view of what can be achieved. Setting the bar too low for call centre operators starts off from an uncompetitive position. Further, the modest answering rate in the plan has to be resourced with infrastructure. Intentions to improve the answering rate post-launch are all very well but what will happen to the personnel and materiel that we bought in to accommodate the unambitious start-up?

Sometimes work needs to be set at a rate that is recognised by a team of co-workers and other parts of the organisation. Excess production is as contrary to the philosophy of lean operations as is shortage. The idea of takt time allows production lines to be balanced, receipts and deliveries co-ordinated, stock turns to be minimised and cash flows improved. In many situations that is sufficient to answer Deming’s fears about individuals distorting production to bank an accomplished target.

Stretch

What is now proved was once but imagined.

William Blake

Is it so wrong to set a target that nobody involved has seen achieved before? Deming would say that it was fine so long as there was a plan defining the means by which this could be achieved. There are many compelling stories from sports science telling how records have been broken by incremental improvement (e.g. Dave Brailsford and the GB cycling team).

But what about setting an ambitious stretch target without a plan for achieving it? That would be brave indeed. It would be based on no more than an exhortation to the call centre operators to work more furiously, more furiously than anyone had ever done before. I cannot say that would never work. In my athletics days I ran some of my best times when team mates were urging me on from the sidelines. However, as a business strategy it faces the social realities of employees’ collective ability to resist quietly that to which they do not assent. With a carefully recruited and motivated team it could work. It would certainly require a high degree of collective problem solving and improvement by the operators. But of all strategies for operational excellence it looks the most limited and the most risky. There is no obvious Plan B.

The Ringelmann effect

There is a tension between unrealistic stretch targets and a further problem that Deming ignores entirely, the Ringelmann effect. It may sadden the hearts of those who believe in the inherent fulfilling joy of work and best intentions of workers to do a good job but evidence is overwhelming that there are situations where individuals exert less effort in a group environment than they would if acting individually.

In 1913, Max Ringelmann conducted experiments that showed that individuals pulled less strenuously on a rope when pulling in a group than when pulling alone.

A realistically set and communicated takt time can assist in concentrating effort and communicating common work standards and the expectations of peers.

The poor supervisor

If Deming was so pessimistic as to believe that workers would sacrifice quality to hit targets then they would surely be more than happy to shunt enquiries off to their supervisor in order to post commendable performance. All that Deming’s proposal does is to divert the whole problem of difficult calls to the supervisor who, presumably, is either beset with his own performance problems or operates outside business measurement.

Deconstructing Deming X – Eliminate slogans!

10. Eliminate slogans, exhortations and targets for the workforce.

W Edwards Deming

Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.

Inscription on the James Farley Post Office, New York City, New York, USA
William Mitchell Kendall pace Herodotus

Now, that’s what I call a slogan. Is this what Point 10 of Deming’s 14 Points was condemning? There are three heads here, all making quite distinct criticisms of modern management. The important dimension of this criticism is the way in which managers use data in communicating with the wider organisation, in setting imperatives and priorities and in determining what individual workers will consider important when they are free from immediate supervision.

Eliminate slogans!

The US postal inscription at the head of this blog certainly falls within the category of slogans. Apparently the root of the word “slogan” is the Scottish Gaelic sluagh-ghairm meaning a battle cry. It seeks to articulate a solidarity and commitment to purpose that transcends individual doubts or rationalisation. That is what the US postal inscription seeks to do. Beyond the data on customer satisfaction, the demands of the business to protect and promote its reputation, the service levels in place for individual value streams, the tension between current performance and aspiration, the disappointment of missed objectives, it seeks to draw together the whole of the organisation around an ideal.

Slogans are part of the broader oral culture of an organisation. In the words of Lawrence Freedman (Strategy: A History, Oxford, 2013, p564) stories, and I think by extension slogans:

[make] it possible to avoid abstractions, reduce complexity, and make vital points indirectly, stressing the importance of being alert to serendipitous opportunities, discontented staff, or the one small point that might ruin an otherwise brilliant campaign.

But Freedman was quick to point out the use of stories by consultants and in organisations frequently confused anecdote with data. They were commonly used selectively and often contrived. Freedman sought to extract some residual value from the culture of business stories, in particular drawing on the work of psychologist Jerome Bruner along with Daniel Kahneman’s System 1 and System 2 thinking. The purpose of the narrative of an organisation, including its slogans and shared stories, is not to predict events but to define a context for action when reality is inevitably overtaken by a special cause.

In building such a rich narrative, slogans alone are an inert and lifeless tactic unless woven with the continual, rigorous criticism of historical data. In fact, it is the process behaviour chart that acts as the armature around which the narrative can be wound. Building the narrative will be critical to how individuals respond to the messages of the chart.

Deming himself coined plenty of slogans: “Drive out fear”, “Create joy in work”, … . They are not forbidden. But to be effective they must form a verisimilar commentary on, and motivation for, the hard numbers and ineluctable signals of the process behaviour chart.

Eliminate exhortations!

I had thought I would dismiss this in a single clause. It is, though, a little more complicated. The sports team captain who urges her teammates onwards to take the last gasp scoring opportunity doesn’t necessarily urge in vain. There is no analysis of this scenario. It is only muscle, nerve, sweat and emotion.

The English team just suffered a humiliating exit from the Cricket World Cup. The head coach’s response was “We’ll have to look at the data.” Andrew Miller in The Times (London) (10 March 2015) reflected most cricket fans’ view when he observed that “a team of meticulously prepared cricketers suffered a collective loss of nerve and confidence.” Exhortations might not have gone amiss.

It is not, though, a management strategy. If your principal means of managing risk, achieving compelling objectives, creating value and consistently delivering customer excellence, day in, day out is to yell “one more heave!” then you had better not lose your voice. In the long run, I am on the side of the analysts.

Slogans and exhortations will prove a brittle veneer on a stable system of trouble (RearView). It is there that they will inevitably corrode engagement, breed cynicism, foster distrust, and mask decline. Only the process behaviour chart can guard against the risk.

Eliminate targets for the workforce!

This one is more complicated. How do I communicate to the rest of the organisation what I need from them? What are the consequences when they don’t deliver? How do the rest of the organisation communicate with me? This really breaks down into two separate topics and they happen to be the two halves of Deming’s Point 11.

I shall return to those in my next two posts in the Deconstructing Deming series.

 

Deconstructing Deming VIII – Drive out fear

8. Drive out fear.

W Edwards Deming Point 8 of Deming’s 14 Points and quite my least favourite of all his slogans. As Harry Lime averred in the motion picture The Third Man:

Like the fella says, in Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love – they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.

It’s a wisecrack and not analysis but I quote Lime to remind myself that fear isn’t inevitably the debilitating sentiment that Deming made it out to be. Inspirational writer Helen Keller vividly captured an alternative reality.

Security is mostly a superstition. It does not exist in nature, nor do the children of humankind as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or it is nothing at all.

In Out of the Crisis, Deming recounts several anecdotes of corrosive fear in the workplace. He directs his criticism at managers who threaten their subordinates with dire consequences for future outcomes that are, in fact, beyond the control of the workers. There is a recurring theme in Deming’s writing, and it is a good one, that many of the factors that determine an outcome are often outside the control of the person superficially held answerable. Any business process is influenced by diverse sources of variation. The aggregate of those sources determines the capability of the process and provides a fundamental bound on its future performance. An incapable process will never meet the aspirations of the business. Berating the person who works within it will never improve it because intervention is needed to re-engineer the process. Blind attempts to coax more out of an incapable process generally lead to over adjustment and even worse outcomes.

However, there have to be some people in an organisation for whom it wasn’t my fault isn’t available as an analysis of unsatisfactory outcomes. Some people willingly and enthusiastically own the goal of re-engineering the business process, of achieving higher and higher degrees of capability, of influencing the organisation’s environment, desensitising the system to external variation, of (following Eliyahu Goldratt) bringing the constraint back inside the system, fostering radical thinking, of managing unknown and unknowable risks.

Brian Joiner used to argue that it was wishful thinking to expect a prescribed outcome next year when the responsible manager had been incapable of achieving it last. Yet business is always a matter of resources and priorities. Typically, people do not energetically pursue objectives whose importance has not been urged upon them. They already have plenty to do. It is simply disingenuous to suggest that telling somebody that something is critical, and that they will be rewarded only for achieving it, is ultimately inexpedient.

Some people must manage and take responsibility for outcomes. They are responsible for the business system. They can change it.

There is nothing wrong in holding those who have the power to effect change responsible for outcomes.

Alternatively, some employees are responsible principally for operating a process in a disciplined and repeatable way. They are not responsible if that process is ultimately incapable but they are answerable for any lack of discipline. Their managers expect them to operate in a disciplined way, so do their co-workers. They should have no comfort that safety and security will be the consequence of failure to do their job.

Those workers will though, I fear, not be able to rest easily just because they turn up and do their job conscientiously. If management fail to take on the goal of the continual improvement of the alignment between the voice of the process and the voice of the customer then their diligence will be in vain. As business leader Ian MacGregor observed:

Management is a calling and people ought to be dedicated to it. British managers have far too much security. A poor manager should be dumped. What’s at stake is the happiness of society, not the comfort of managers.

The dark side of discipline

W Edwards Deming was very impressed with Japanese railways. In Out of the Crisis (1986) he wrote this.

The economy of a single plan that will work is obvious. As an example, may I cite a proposed itinerary in Japan:

          1725 h Leave Taku City.
          1923 h Arrive Hakata.
Change trains.
          1924 h Leave Hakata [for Osaka, at 210 km/hr]

Only one minute to change trains? You don’t need a whole minute. You will have 30 seconds left over. No alternate plan was necessary.

My friend Bob King … while in Japan in November 1983 received these instructions to reach by train a company that he was to visit.

          0903 h Board the train. Pay no attention to trains at 0858, 0901.
          0957 h Off.

No further instruction was needed.

Deming seemed to assume that these outcomes were delivered by a capable and, moreover, stable system. That may well have been the case in 1983. However, by 2005 matters had drifted.

Aftermath of the Amagasaki rail crashThe other night I watched, recorded from the BBC, the documentary Brakeless: Why Trains Crash about the Amagasaki rail crash on 25 April 2005. I fear that it is no longer available in BBC iPlayer. However, most of the documentaries in this BBC Storyville strand are independently produced and usually have some limited theatrical release or are available elsewhere. I now see that the documentary is available here on Dailymotion.

The documentary painted a system of “discipline” on the railway where drivers were held directly responsible for outcomes, overridingly punctuality. This was not a documentary aimed at engineers but the first thing missing for me was any risk assessment of the way the railway was run. Perhaps it was there but it is difficult to see what thought process would lead to a failure to mitigate the risks of production pressures.

However, beyond that, for me the documentary raised some important issues of process discipline. We must be very careful when we make anyone working within a process responsible for its outputs. That sounds a strange thing to say but Paul Jennings at Rolls-Royce always used to remind me You can’t work on outcomes.

The difficulty that the Amagasaki train drivers had was that the railway was inherently subject to sources of variation over which the drivers had no control. In the face of those sources of variation, they were pressured to maintain the discipline of a punctual timetable. They way they did that was to transgress other dimensions of process discipline, in the Amagasaki case, speed limits.

Anybody at work must diligently follow the process given to them. But if that process does not deliver the intended outcome then that is the responsibility of the manager who owns the process, not the worker. When a worker, with the best of intentions, seeks independently to modify the process, they are in a poor position, constrained as they are by their own bounded rationality. They will inevitably by trapped by System 1 thinking.

Of course, it is great when workers can get involved with the manager’s efforts to align the voice of the process with the voice of the customer. However, the experimentation stops when they start operating the process live.

Fundamentally, it is a moral certainty that purblind pursuit of a target will lead to over-adjustment by the worker, what Deming called “tampering”. That in turn leads to increased costs, aggravated risk and vitiated consumer satisfaction.

Target and the Targeteers

This blog appeared on the Royal Statistical Society website Statslife on 29 May 2014

DartboardJohn Pullinger, newly appointed head of the UK Statistics Authority, has given a trenchant warning about the “unsophisticated” use of targets. As reported in The Times (London) (“Targets could be skewing the truth, statistics chief warns”, 26 May 2014 – paywall) he cautions:

Anywhere we have had targets, there is a danger that they become an end in themselves and people lose sight of what they’re trying to achieve. We have numbers everywhere but haven’t been well enough schooled on how to use them and that’s where problems occur.

He goes on.

The whole point of all these things is to change behaviour. The trick is to have a sophisticated understanding of what will happen when you put these things out.

Pullinger makes it clear that he is no opponent of targets, but that in the hands of the unskilled they can create perverse incentives, encouraging behaviour that distorts the system they sought to control and frustrating the very improvement they were implemented to achieve.

For example, two train companies are being assessed by the regulator for punctuality. A train is defined as “on-time” if it arrives within 5 minutes of schedule. The target is 95% punctuality.
TrainTargets
Evidently, simple management by target fails to reveal that Company 1 is doing better than Company 2 in offering a punctual service to its passengers. A simple statement of “95% punctuality (punctuality defined as arriving within 5 minutes of timetable)” discards much of the information in the data.

Further, when presented with a train that has slipped outside the 5 minute tolerance, a manager held solely to the target of 95% has no incentive to stop the late train from slipping even further behind. Certainly, if it puts further trains at risk of lateness, there will always be a temptation to strip it of all priority. Here, the target is not only a barrier to effective measurement and improvement, it is a threat to the proper operation of the railway. That is the point that Pullinger was seeking to make about the behaviour induced by the target.

And again, targets often provide only a “snapshot” rather than the “video” that discloses the information in the data that can be used for planning and managing an enterprise.

I am glad that Pullinger was not hesitant to remind users that proper deployment of system measurement requires an appreciation of psychology. Nobel Laureate psychologist Daniel Kahneman warns of the inherent human trait of thinking that What you see is all there is (WYSIATI). On their own, targets do little to guard against such bounded rationality.

In support of a corporate programme of improvement and integrated in a culture of rigorous data criticism, targets have manifest benefits. They communicate improvement priorities. They build confidence between interfacing processes. They provide constraints and parameters that prevent the system causing harm. Harm to others or harm to itself. What is important is that the targets do not become a shield to weak managers who wish to hide their lack of understanding of their own processes behind the defence that “all targets were met”.

However, all that requires some sophistication in approach. I think the following points provide a basis for auditing how an organisation is using targets.

Risk assessment

Targets should be risk assessed, anticipating realistic psychology and envisaging the range of behaviours the targets are likely to catalyse.

Customer focus

Anyone tasked with operating to a target should be periodically challenged with a review of the Voice of the Customer and how their own role contributes to the organisational system. The target is only an aid to the continual improvement of the alignment between the Voice of the Process and the Voice of the Customer. That is the only game in town.

Borrowed validation

Any organisation of any size will usually have independent data of sufficient borrowing strength to support mutual validation. There was a very good recent example of this in the UK where falling crime statistics, about which the public were rightly cynical and incredulous, were effectively validated by data collection from hospital emergency departments (Violent crime in England and Wales falls again, A&E data shows).

Over-adjustment

Mechanisms must be in place to deter over-adjustment, what W Edwards Deming called “tampering”, where naïve pursuit of a target adds variation and degrades performance.

Discipline

Employees must be left in no doubt that lack of care in maintaining the integrity of the organisational system and pursuing customer excellence will not be excused by mere adherence to a target, no matter how heroic.

Targets are for the guidance of the wise. To regard them as anything else is to ask them to do too much.