Measure or Manage

The fixation with running organisations by results and targets (MBR) has been taken for granted in business for years, and is increasingly used to ‘manage’ the education and health services. It needs to be and is being challenged.

The purpose of this paper is to encourage questioning about the pitfalls in using results – usually financial – as the method of managing. I believe that, despite good intentions, to focus primarily on results can get a business out of balance and do more harm than good – and results measures do not help much with improving performance.

Let’s dig a bit deeper behind this issue to understand how and why it might be helpful to challenge and expand our thinking. I believe there are three fundamental and linked issues:

  1. The conventional idea of a good manager as being one who is ‘in control’;
  2. The preference for judging, rather than understanding;
  3. Quantification as the dominant means of evaluating performance.

There is a distinct tendency to think of others and ourselves as being effective when we are ‘in control’ of predictable outcomes. Planning, Organising and Controlling are seen as the core of the management task. This leads to a belief that being ‘in control’ is good and being ‘not in control’ is bad.

When we reflect on our own experience we know that:

  1. a) There are many things that are necessarily outside of our control, e.g. competitor activity, the weather, colleagues’ beliefs and feelings, how an idea is heard.
  2. b) In reality, what happens in organisations is always a combination of the intended and the unintended, and is often in spite of rather than because of the formal plan or process.

Many recent writers have captured this ‘messiness’ as the reality in stark contrast to the belief that stability and order is the ideal.

Mainstream thinking about management has approached uncertainty by trying to eliminate it. Structures and systems are created to reduce unknowns and quantify risks. This leads to more and more detailed ‘control’ of individual parts, and less and less focus on the relationships between the parts. The upshot of this is that there is a paradox of control –which means that whilst we strive for control we know that it is not the whole story. We must not fall into the trap of only doing things that appear controllable – and can have the courage to be ‘not in control’.

“So how will you know if it has been successful?” “How can we measure it?” These seem common sense questions to ask when considering a plan of action. You will hear these taken-for- granted words without noticing their real meaning. They are quite natural to a managing by results mindset. And, they are not wrong– unless they are the only questions.

I believe that judging results has become a substitute for understanding performance. It undermines performance improvement when it is the prime focus of accountability applied over short time periods. A better balance can be achieved if we were to be more demanding of managers in explaining how results will be achieved. Budgets or targets can only be promises if they are grounded in commitment, rather than fear.

In a machine the parts have a purpose and exist for each other. In a natural system, the parts exist for and also by means of each other.

The fact that quantification is useful, indeed necessary, in accounting for the utilisation of financial resources, and as a way of communicating the key outcomes in terms of viability, does not mean that it is equally useful as a basis for performance improvement.

For a football manager, results are everything. Yet he knows that the only control he has is over how he helps his players to develop the means of winning, i.e. skill, fitness, motivation, belief and working together.

There is no easy way to make this point– as managers we have substituted a crude and simplistic results focus for a deep understanding of the work of the organisation.

Management by numerical goals is an attempt to manage without knowledge of what to do and in fact is usually management by fear” (Deming).