We’ve been rapidly moving into an era that reminds me of Jerry Maguire’s…”show me the money!” We are hyper-focused on the outcome. We are judging people only on results. We are often compensating only on output.
At first blush, this seems great! But great for whom? This aggressive swing of the pendulum can have some unintended (and negative) impacts.
Fear of Failure
Along with this rise of results over all else has also been a rise in the “failing” culture. Companies are encouraging and even demanding employees take risks and accept failure all for the greater good of innovation. Again, a valid and worthy cause. But when married to this new, hyper-focus on results, how do employees strike a balance between being judged on outputs vs the demands that they try new things and accept failure?
Employees are faced with a difficult decision. Pursue riskier ideas; ideas that could have great results (or great failure) or…stick to safer bets that virtually guarantee they can show results. Here’s the thought process: If I have KPIs to hit why would I ever jeopardize that to pursue something risky? Something where I may miss my KPI and be forced to explain it (or worse…lose my job)?
Risk taking is part of innovation. Innovation should follow the Scientific Method, methodology that must allow for failure. But if employees are afraid to fail (because, outcomes!)…where will our next innovation come from?
Shifting The Risk (and The Blame)
This new focus on outcomes also shifts the blame away from the collective and onto the individual. Again, this isn’t necessarily a bad thing in that we’re creating an environment of accountability, but it runs the risk of placing too much blame on the wrong individuals.
Here’s an example: the product team puts together a new feature set. They rush the features (because we’re hyper-focused on outputs) and release a buggy product. Sales goes into the field and are unable to create conversions.
Product, on paper, created outputs. We can, again on paper, measure that the product team did their job. Sales? Well, on paper, they failed. The measures in place show that the sales team did not have the right level of output and therefore are to blame for our failure.
Numbers require narratives. If I were to offer you $10,000 to jump out of a plane…would you do it? My guess is most of you just thought “no.” What if I were to tell you the plane was on the ground? It’s a different story, a different narrative and a different answer. Looking at raw numbers without context is going to cause enormous friction within our organizations.
I’m not a conspiracy theorist by nature, but the other insidious risk to this new approach is the ability for leadership to also shift blame. It used to be that we lived by the Harry Truman rule of “the buck stops here.” However, with our newfound ability to assign and measure the individual, leadership can now step back and say “the buck stops over there.”
We have separated strategy and tactics for the purpose of measurement. Accountability now seems to live at the tactical level while those that build strategy remain relatively free from judgement.
If employees have no say in the strategy, we are abusing our power as leaders by holding those same employees solely accountable for the outcome. Let me say that again for those in the back: We leaders are cowards if we are placing all the fault on employees for not being able to deliver on our shitty strategy.
Take the mess at Wells Fargo as an example: extremely aggressive goals were set, leading many employees to begin opening ‘fake’ accounts to hit numbers. When the news of this scandal first broke, senior management started pointing to mid-level managers and below…tossing those folks under the proverbial bus; because, “the buck stops over there.” They shifted the blame even though they were the ones to set unattainable goals and created a culture of fear. It took Congress getting involved before Wells Fargo senior leadership (begrudgingly) accepted blame.
Bad organizations are using data to shift blame away from those in power to protect them. This is not a “data is bad” argument. We do need measures. We need to understand performance and we need accountability. We mus, however, create a shared-risk model.
How we go about executing an accountability model will either put our organization on the path to continuous innovation or we will become a culture ruled by fear and blame. Data sets are just a tool, neither good or bad…how we use it will define the culture and our overall ability to succeed in the marketplace.
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