Clarity First: How Smart Leaders and Organizations Achieve Outstanding Performance by Karen Martin

Author:Karen Martin
Language: eng
Format: epub
Publisher: McGraw-Hill Education LLC
Published: 2018-03-18T04:00:00+00:00

Consider Whether Your Measurement Drives the Behavior You Seek

Many years ago, a former CEO turned in-demand management consultant told me: “I know everything I need to know about a company by learning what it tracks and how it incentivizes its employees.” His point: make sure that what you measure does not move leaders and teams to take actions that work against the broader interests of the organization.

We see this problem all the time. In one case, a medical device manufacturer changed its incentive program to what it believed was more objective and quantifiable across the organization. A new CEO felt the company lacked discipline and wanted to “hold people more accountable.” One of the new criteria this CEO introduced was “meet deadlines.” Guess what happened? Everyone met his or her deadlines . . . and the business began to fall apart in the face of repeated recalls and customer complaints. The mandate to meet deadlines caused people to rush product through development and into production, not leaving enough time to surface problems, let alone address them.

In another example of metrics driving the wrong behaviors, one of the “core measures” required of emergency departments by the Centers for Medicare and Medicaid Services is “door-to-doctor time,” meaning the median amount of time between when a patient arrives and when that patient is seen by a physician. This measurement emerged from the hypothesis that clinical care is improved and patient satisfaction increased when patients see doctors quickly.

We don’t see those positive outcomes from faster door-to-doctor times, however. Instead we see ED departments concocting silly ways to meet the requirements, such as by placing a physician in the waiting room when she could otherwise treat patients who need care in an exam room. We also see hospitals improve this up-front piece and ignore the rest of the patient experience, including overall throughput time. Patients are not any happier to see a physician quickly if their total visit still lasts 12 hours. The adage “be careful what you measure” is especially true in healthcare.

More serious problems occur when improper measurement and incentives lead to unethical or even criminal behavior. Wells Fargo offers a notable example of this phenomenon. In 2016, bank employees were exposed for opening unauthorized accounts and credit cards in the names of existing customers. An investigation revealed that bank executives had set unreasonable targets for new accounts and employees began opening unauthorized accounts as a way to meet the quotas.4 As a former branch manager told me, “People believe that integrity will hold up at all cost. But when an organization places employees in a position where they have to do unethical things to maintain their pay at the level they earned the previous year; and when leadership relies on groupthink so that staff who see peers doing unethical things will conclude that it’s OK—in that situation many, many people will succumb. It was a truly awful situation to place employees in.”

Data and how the organization uses it shapes behavior, so be clear about the kind of behavior your organization wants to see.

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