Do you consider yourself an effective data-driven manager? To be one, you need to wrestle with targets and goals.

I’m not just talking about personal targets and goals (which are challenging enough), I’m talking about the use of them in your manufacturing workplace. An environment of people, processes, machines and surprising complexity.

Until recently, I only thought there was one approach. Call it the outcome-based approach. In this article, I’d like to discuss a different approach, one that might suit you better. There is no right answer as to which is better. But don’t blindly adopt option 1 without considering option 2.

Let’s look at both in more detail

Outcome-based targets and goals

The outcome-based approach goes something like this:

  1. Imagine where you'd like to be in 12 months’ time
  2. Make it specific and outcome focused
  3. Write the targets and goals down
  4. Create a plan to get you from where you are now, to that new point
  5. Write down the plan
  6. Start immediately

While there is nothing inherently wrong with this approach, there are some issues to consider before you jump in.

Firstly, do you have the resources (time, motivation, team) to tackle continuous improvement. If just keeping things running feels chaotic, you may need to spend time creating some head-room and baseline control before you can even start thinking about outcome-based targets.

Secondly, is your team in a good place to use this approach? A business with a history of ineffective outcome-based goal setting will likely have people who have hardened to them. You don’t want your enthusiastic words to be met with rolled eyes and snide comments of “here we go again”.

Thirdly, be wary of creating a single outcome focus. They often have significant dark sides. Edward Deming warned about the use of production quotas. Goodhart’s Law (yes, I have moved it from its original context) warns that once a measure becomes a target, it ceases to be a good measure.

A useful illustration from a row boat

I came across a useful illustration recently on a (blog by James Clear). He asks us to imagine a row boat. The boat has a rudder and oars. The rudder is the goal or target. The oars are the systems that will move you along. Setting direction, or moving the rudder takes very little effort, just like the act of setting a goal doesn't take much effort. But moving the boat forward requires work. Hard work. A business that is not ready for the work of getting better ends up drifting. The rudder is set but there’s little or no rowing.

An alternative approach

So, let’s look at an alternative. Rather than using outcome-based targets and goals, consider setting them around systems and habits. To make the difference clear compare the two goals below.

  • Outcome goal: “In Q1 2019, we will reduce downtimes by 15%”
  • System goal: “In Q1 2019, we will hold weekly 20-minute meetings to discuss that week’s top 2 downtimes”

Here are some benefits of the system-habit approach.

  1. Good systems and habits, once in motion will pay dividends over the long term. If the 20-minute meeting is going well (very likely if the meeting is data-driven) it will likely keep going well beyond Q1 2019.
  2. Setting good review habits for the team will train good review habits for individuals and other teams.
  3. It’s very likely that you’ll go in the right direction for outcomes anyway.
  4. You’ll be in a better place to set future outcome-based targets and goals. “Here we go again” becomes “we actually made progress”.
  5. Opportunities for effective delegation will present themselves. Be ready and move tasks from your plate to others who will be keen for the extra responsibility. Win-win.

Summary

Overall, the habit-system based approach is much less likely to fail, especially when starting out with goal setting. As a result, you’ll be associated with management success and progress, not failure or irrelevance.

Next Steps

Consider this post part 1 of a two-part series. Part 2 will devote some space for practical tips to setting good systems and habits. In that post, well see that good data systems and habits have the same simple pattern.

  1. Review the data
  2. Talk to the right people
  3. Act on the biggest issues
  4. Repeat

Links

Measure What Matters. A great read about doing outcome-based targets and goals well (you’ll also discover why YouTube is so addictive).

Atomic Habits. A book which pushes the habit-system approach over outcome-based targets and goals, albeit for personal development.

The Data-Pyramid. My article about the hierarchy you need to have in place to use data in manufacturing. Setting targets and goals fits squarely into the management layer of the pyramid.

Deming Against Management by Objectives

Goodhart’s Law. I changed the context of this a bit, but it’s an interesting thought.

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