PM Quote of the Day — Harold Geneen

It is much more difficult to measure nonperformance than performance

Hat tip: Jonathan Becher at Manage By Walking Around.

What to do with MBOs?

After a round of performance reviews with my team, I’m so with Jonathan Becher about the pitfalls of management by objectives (here).  It is easy to fall into the vicious cycle he describes, where

MBOs that measure outputs, rather than impact, [which then] cause outputs to decrease. Which encourages more bad management by bad objectives.

Poor MBO procesess also tend to encourage Pareto suboptimal solutions to business problems, especially when coupled with an out-of-whack incentive structure.  Like where the incentives for individual objectives — oh, let’s say bonus payments for objective achievement — outweigh those for more organization-wide objectives (e.g., firm margin, revenue growth, market share).

Not that I’ve seen that anywhere…


Strategy Management at Tesco

One of my regular alignment exercises is to tie planned investments to SAP’s strategy (see Jonathan Becher‘s Strategy vs. Planning post here).  As he notes: “[T]he budget isn’t really the plan; instead it’s how you intend to invest to achieve your objectives.”

As I look forward to 2009 planning next week, I was inspired and challenged by this Harvard Business Online post (here) by Robert Kaplan on Tesco’s approach to strategy management.  The specifics of Tesco’s balanced scorecard approach were interesting enough.  However, there were two points and a set of questions that stood out beyond the mechanics of the scorecard:

How can you keep distributed frontline employees–regardless of industry–engaged with and acting on the company’s central strategy?  [Tesco CEO Sir Terry] Leahy explained his approach: “Tesco doesn’t want one leader. We want thousands of leaders who take initiative to execute the strategy.”  

[B]ecause… all employees are aware of and can act on the strategy… Tesco filled 3,500 management positions, 27 directors, 200 store managers, and 8,000 department heads by promoting from within….

Note the connection drawn between the vision of distributed leadership and a concrete demonstration of how such leadership benefits both Tesco and its associates.  If I want the benefits of that vision, I better be ready with answers to the two questions I mentioned:

Is your company’s strategy being adequately communicated to and acted upon by all employees?  Can each employee explain the business unit strategy and how he or she contributes each day to implementing the strategy?

Measuring effectiveness of virtual events

My group is about to embark on a social media journey, so Jonathan’s strong post on the effectiveness of virtual events (here) was timely grist for our KPI mill.  I’m not sure I have anything more than half-baked yet — heck, the dough hasn’t even risen — but it got me thinking about the questions I need to ask. 

I’ll share some of what I’m asking once we get something in the oven…

Q2 Inbound Links and Comments — Thanks and Kudos

Links and comments are the about the only way for me to know if I’m writing something interesting, useful, or at least provocative.  I appreciate each and every one.

Thanks to the following folks for linking to Crossderry this past quarter…

  • The folks over at relentless PR, especially Leo Bottary (here and here)
  • Bas at Project Shrink (here)
  • Scott Middleton (here)
  • Mary Adams at Hybrid Vigor (here)
  • Rafael at Better Projects (here)
  • Miguel at eme ka eme (here)

Also, thank you to those who commented… (many of the folks above commented as well, but I won’t duplicate)

  • Vinnie Mirchandani at Deal Architect (here)
  • Charles Green at Trusted Advisor (here)
  • Jonathan Becher at Manage by Walking Around (here)
  • Michael Krigsman at IT Project Failures (here)
  • Patti Choby (here)
  • Rich Maltzman at Scope Crepe (here)
  • Markus at Leadership Briefing (here)
  • One of the gang at PM Think (here)
  • Craig Brown at Better Projects (here)
  • Bill at Projects Possible (here)
  • lazymale at lap31 (here)

Apologies if I missed anyone…  Thanks again, Paul

Keep the focus on outcomes

I’m not sure how I missed this one, but Jonathan at Manage by Walking Around conveys a great story about keeping desired outcomes and performing organizations aligned (here).  Per a number of earlier posts on the triple constraint and scope (here, here, and Bas’s post here), project managers need to get better attuned to the outcomes and benefits of their projects’ deliverables and whether all are aligned.

The [Sarasota, FL] Parks and Rec department struggled with recruiting and retaining lifeguards for the public pools…  Rather than treating this as budget issue, try to optimize processes, or streamline headcount, management went back to first principles to determine what outcome they were trying to achieve. Lifeguards are there to protect citizens… prevent emergencies and quickly provide medical assistance if they do happen.

This step is simple, but it isn’t easy.  Because once you start to look at first principles, it is a short jump to the realization that perhaps one shouldn’t be performing a function (or that the current deliverable won’t generate the desired outcome).  And that’s exactly what happened here…

Once they focused on these outcomes, it didn’t take the Parks and Rec department long to realize that protection, prevention and assistance weren’t their core strengths…  As a result, they transferred responsibility for safeguarding pools to Public Services, giving lifeguards a career path as emergency medical technicians (EMT) or as firemen.  Guess what?  Job satisfaction and retention skyrocketed. 

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