• The 60 Second Leader
  • Seven Secrets of Inspired Leaders
  • The Little Book of Leadership
  • Leadership Hub for Corporates
  • Learning to Live with Huntington's Disease
 

Phil's blog

Goodhart’s Law : why targets don’t work

USEFUL CONCEPT TO EXPLAIN MY RANT ABOUT TARGETS, BELOW: Goodhart’s Law. Named after a chief economist at the Bank of England. Goodhart’s Law states that if a measure becomes a target it loses its value and ceases to be a measure. Controlling an indicator of a problem will not cure the problem. Goodhart himself phrased it like this: `Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes’.

SOURCE: Central Banking, Monetary Theory and Practice: Essays in honour of Charles Goodhart, page 96. Systems thinking, as practised by Toyota and other high-performing organizations, stresses that target-based systems distort behaviour and make your organization inflexible. John Seddon’s book Freedom From Command & Control is helpful in understanding systems thinking and how you can lead more effectively by using it. Peter Senge’s work is also instructive on systems thinking and how it can help you avoid falling into the trap of target-based attempts to lead change.

More on the misuse of targets in attempts at leading change – which is obviously a bug-bear of mine – in The 60 Second Leader, my book, due out April in the UK and June in North America. Damn, I plugged. But, I’m angry about this target nonsense, so researched it and put it in the book. So that plug was based on passion, not self-promotion. Honest.


Another example of why targets don’t work

This is relevant to leadership and customer issues, so I’ll post this in both blogs.

From BBC News today comes another example of how people cheat when they have to work in a target-based performance management system – even with the best intentions and even the most senior people (what, you only expect call centre agents to cheat their targets? Target-based systems distort everything and most people’s behaviour).

Again, this one is from the National Health Service, and follows on from sporadic stories of ambulances having to wait outside hospitals with patients in the back (because the Accident and Emergency ‘waiting time limit’ for patients, imposed by central government, is measured from when they come in through the door, and the hospital would have broken its limit and been penalised if the patients waited inside the hospital for treatment, so they were kept in ambulances).

This isn’t evidence of pernicious people. It’s brilliant, dedicated people pushed into ludicrous behaviour by top-down target-setting. Top-down targets distort. Check out any of the lean service analysts and consultants to see how flawed the whole thing is. Anyway, here’s the latest example of what bad targets do to good people – and the terrible damage it does to the reputation of a much-loved institution:

FROM THE BBC

Patient waiting lists ‘manipulated’
Last Updated: Saturday, 07 April 2007, 12:28 GMT

A senior cancer specialist has admitted giving patients unnecessary treatments to manipulate hospital waiting lists.

Chris Hamilton, consultant clinical oncologist at Hull’s Princess Royal Hospital, told the BBC the problem was a government requirement that all treatment began within 31 days of diagnosis.

He says it means some low-risk patients are being treated before more urgent cases.

Mr Hamilton told the BBC he had given some prostate cancer patients hormone therapy to move them down the waiting list.

He said: “You’re caught in a bind. Either you give them unnecessary treatment with hormones and reclassify them or you put them to the front of the queue where they shouldn’t really be.”

He added that he knew other hospitals were carrying out a similar practice and he had informed national cancer director Mike Richards.

The Prostate Cancer Charity condemned Mr Hamilton’s claims saying it was “deeply unethical” to give patients treatment they did not need.

Dr Chris Hiley, head of policy and research, said: “It would be totally unacceptable if hormone treatment were being prescribed for men with prostate cancer simply in order to meet treatment target times – when it is not required to treat their cancer.

“It has nothing to do with patient centred care or good medicine.

“When men are diagnosed with prostate cancer, they need personal support and timely treatment. Providing the wrong treatment to meet NHS targets shows no regard for what patients need – the right treatment given at the right time with care and respect.”


Goodhart’s Law: Why targets don’t work, according to an economist

USEFUL CONCEPT TO EXPLAIN MY RANT ABOUT TARGETS, BELOW: Goodhart’s Law. Named after a chief economist at the Bank of England. Goodhart’s Law states that if a measure becomes a target it loses its value and ceases to be a measure. Controlling an indicator of a problem will not cure the problem. Goodhart himself phrased it like this: `Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes’.

SOURCE: Central Banking, Monetary Theory and Practice: Essays in honour of Charles Goodhart, page 96. Systems thinking, as practised by Toyota and other high-performing organizations, stresses that target-based systems distort behaviour and make your organization inflexible. John Seddon’s book Freedom From Command & Control is helpful in understanding systems thinking and how you can lead more effectively by using it. Peter Senge’s work is also instructive on systems thinking and how it can help you avoid falling into the trap of target-based attempts to lead change.

More on the misuse of targets in attempts at leading change – which is obviously a bug-bear of mine – in The 60 Second Leader, my book, due out April in the UK and June in North America. Damn, I plugged. But, I’m angry about this target nonsense, so researched it and put it in the book. So that plug was based on passion, not self-promotion. Honest.


Improvisation in mental healthcare: good customer service practice

There’s a nice example from Marion Janner in her latest post over on the Bright Blog of how a bit of imagination and improvisation can improve the customer experience no end – in this case by overcoming boredom and lethargy, a constant problem in any institutional setting, with the spontaneous help of a paper plate adapted as an indoor Frisbee to lift the spirits of a group of patients in an acute mental health ward.

Here’s what Marion wrote:

“Two of the things that impressed me most were improvisations. One of the dynamic HCAs who is an activity co-ordinator…described how there was a rather lethargic atmosphere on the ward one day. Spontaneously she found a paper plate and suddenly there was an animated game of indoor Frisbee!

And a ward with a kitchen which has no oven (excessively risk averse planning, presumably) hasn’t stopped the creative ward manager from regular cooking sessions for patients. They use a bread-making machine, make microwave and freezer cakes and harness the relaxed sociable potential of communal meals there.”

This use of improvisation and initiative isn’t trivial: it’s vital. And it’s often cost-free. Read Marion’s latest post to see how the culture of improvisation she describes is an integral part of the overall culture of extremely good customer care the hospital she was visiting operates, and how it centres on allowing frontline people to take the initiative to enrich people’s lives.

Leaving customers sitting around bored is probably one of the worst things you can do. It’s exactly what Easyjet did to me a couple of weeks ago: crammed all of us into a small departure lounge with stairs leading to no plane (we could all see there was no plane, but they crammed us into the tiny departure gate area nonetheless), many people having to stand because there weren’t enough seats, and the gate staff walking backwards and forwards among us doing important things with tickets, doors, phones, and other procedures without for a moment thinking their job might include talking to the customers and giving us a clue as to what was going on – or even a clue that they noticed we were there. We just sat – or stood – there for half an hour till the plane arrived and we were told to board, with no explanation or apology.

At Southwest Airlines the gate attendants have a stock of pipe cleaners under the desk. If a plane is delayed for any reason, rather than keeping people waiting with no messages or interaction from the gate staff whatsoever, they take out the pipe cleaners, hand them around and offer a prize for the best pipe cleaner figure customers can come up with. Maybe you don’t want to play: but it’s better than being ignored.


Learning to be creative

I’ve never been happy with the phrase ‘War for Talent’. I thought it was just because I don’t like elitism. But, it’s actually because it’s short-term and, like all solutions, it’s the short-term obvious ones that get picked up and become the general rule and the long-term ones that get ignored.

Everyone (almost) has extraordinary abilities. Most people live and die without realizing them, without having them acknowledged, recognised, nurtured; without putting them into practice; without having a clue what they could do. Or could have done, more accurately.

Organizations encounter the problem of of increasingly sophisticated markets – I think they mean people – who yearn for imaginative, engaging, creative, connected, warm, fun, slick, professional-but-human, flexible organizations to cosy up to, ignoring the same-a-like rest.

It’s a marriage made in heaven: most everyone, as they charmingly say in the US, can be extraordinary but isn’t allowed to be or even believes they can; while post-consumers are crying out for extraordinary customer experiences that make them feel, er, extraordinary rather than just another punter.

Yet organizations have somehow morphed this enormous opportunity for organizations to evolve into a powerful force for unleashing human potential on a scale not seen in history, into…a recruitment and retention problem.

‘War for Talent’ half-identifies the problem then fully identifies an old-fashioned, ill-fitting, recruitment-led, pay ‘n’ perks solution. It becomes all about headhunters and pay inflation.

Real leaders get ordinary people to realise they can do extraordinary things then allow them to work in a trust-based, open environment to achieve those things.

Real leaders identify and REALIZE talent. They don’t go to war over it. They cultivate it. They don’t have to hunt it out. They know they’ve already got it; it just needs releasing.

As Javier Bajer puts it in Ken Robinson’s book:

“Fighting the talent war with the outside world is covering up our own failure in terms of people development.”


What does your business sound like?

Organizations spend millions on visual identity. But almost nothing on aural identity – what you sound like to customers. Yet sound has a massive impact on your customer experience. Apparently two sounds that put customers’ teeth on edge are espresso machines and diesel engines, according to this book. The latter is not surprising but the former gives you pause for thought if you are a Starbucks-a-like and think your proposition is a relaxing place for a quiet cup of coffee…but your espresso machines are the equivalent to finger nails on a blackboard to your customers.

I am interested in this book for the same reason Martin Lindstrom’s Brand Sense and Shaun Smith’s See, Feel, Think, Do books are interesting: they help us think more clearly about designing a customer experience based on all the senses with which the customer experiences your brand. Treasure is one of the few experts in the neglected area of sound design. Even the word ‘design’ has visual origins, so excludes sound.

Treasure includes a CD with his book that lets you listen to turn-ons and turn-offs that will keep your customers relaxed and happy or tense and running for the door (often without realising why).

At Glasgow airport they play natural, ambient sounds (birds singing, plus soothing chillout music underneath it) over the loudspeakers to relax travellers. Sales in the airport shops went up 10%. Supermarkets have always been good at this manipulation of the senses and I don’t like the underhand aspects of that. But the rest of Treasure’s proposition is, er, sound.


Leaders? We don’t need no stinking leaders

I’m usually wary of books that change their name – this one used to be called ‘Got Game’ when it was published as a hardback in 2004 – but in this incarnation, it was recommended by Euan Semple and Johnnie Moore, so I thought it worth another look.

And it is.

Beck and Wade’s research findings and views on how to lead and be led by the gaming generation in the workplace are illuminating. I particularly like the section heading “Leaders? We don’t need no stinking leaders” and the explanation that “For starters, in the world in which gamers grow up, leaders are basically useless…”.

True. But there again, even for the non-gamer generation, leaders are basically useless. Some research I was involved with a while back showed that nine out of ten managers find their own line manager or organizational leader ‘uninspiring’. In my book that makes ninety per cent of supposed ‘leaders’ in organizations useless.

I’m not convinced by some of the arguments in The kids are alright, such as differing attitudes to risk when you have a reset button to push lead to the need to help younger employees manage risk more effectively.

But, there are useful explanations to ease culture clash in the workplace, for example, in pointing out that a manager approaching a gamer generation employee who has one ear piece in their ear, listening to their iPod, an IM window open on their desktop, two documents and a U Tube window open, and may not even stop using the keyboard as the manager is talking to them, may indeed be listening. Just not the way you and I listen.

It’s not that the gamer generation can multi-task, say Beck and Wade. Technically, there is no such thing as multi-tasking. Their brains are just more adept at leaping from task to task and back again in ways that disorientate non-gamers. They don’t have the timelag.


Are we there yet?

I was in Berlin over the weekend and was struck by how unimaginative and boring most of the graffitti is there (and there is graffitti EVERYWHERE) till I came across this.


When is a hotel not a hotel?

When it’s a work of art. I stayed at the Propellor Island City Lodge in Berlin this weekend. Its creator says it gives you the chance to ‘live in a work of art’.

This is the Glass House Room, which I was in. There is also the Flying Bed room and many others.

As hotels become increasingly boring, there is a growing niche market for themed boutique hotels like this, bringing some playfulness and innovation to staying away.

This room was immersive, by the way. The artist who created it and the hotel is also a musician and the room’s stereo bathes the room in his ethereal music.

The challenge for big hotel brands, I guess, is to build in a personality in the way that small, wacky, creative brands like this one can. Repeatably meeting expectatione – which is what branding is about: offering reassurance based on knowing what you will find inside in advance – inevitably has a downside: lack of surprise is a weakness as well as a strength. Surprise is what delights customers, not meeting or exceeding expectations.


Michael Jordan on Failure

I’m researching the links between leadership, mistakes, failure and innovation – traditional attitudes to success and failure severely inhibit innovation, yet leaders tend to reinforce these traditional attitudes – and came across this old Nike commercial from Michael Jordan. Despite the recent legal moves against YouTube from broadcasters who don’t get it, I’m sure Nike won’t mind this appearing here, as they do get it…