Episode 36

Why individual targets do not drive accountability

Category :  Leadership Paradigms

It is important for effective control of organisational activities to establish clear accountability for desired outcomes. Hence, there is a practice of using KPIs or KRAs or a related term to define individual targets. But what if we claim that these individual targets do not achieve their intended purpose. In fact, they might often result in an organisation being fraught with friction between teams, blame games, poor agility and rampant system tampering behaviour. Can any sense of control ostensibly brought in by assigning individual targets be a mere mirage?

Let's hear what Satyashri Mohanty has to say on this topic and lets also ask him if he can suggest a better solution to drive outcomes in companies.

Read about a radically new approach to align people to the organisational goals here - https://www.vectorconsulting.in/blog/toc-leadership-paradigms/management-by-tactics/

Transcript
Shubham Agarwal : Hello, and welcome to the counterpoint Podcast. I’m Shubham Agarwal. In this episode on the counterpoint podcast, we’re going to talk about two very important topics, individual targets and accountability. We are also going to answer the question why individual targets do not drive accountability? Yeah, you heard that right. Accountability is a pet topic for almost every organisation. The Accountability paradox is in fact experienced by many senior managers. On the one hand, when we pinpoint an individual for a specific outcome in a complex system of interdependent working, we lose out on effective collaboration. Remember, when people say that’s not my work, and seniors don’t like hearing it. We want people to go out of the formal ways and collaborate with others more so when variabilities and uncertainties hit the system. But when we leave things vague at an individual level, and try to drive accountability at a group level, we lose out on the fact that whom to hold account to when outcomes are not achieved. And we do not want each guy pointing at others. So what is the way out of this paradox? Let us discuss this and find answers to it, with Satya Shri Mohanty who’s the director at the vector Consulting Group? Hi Satya. So Satya what’s your view on accountability? I want to start by that. And is it still a problem with the organization’s of this day? Where is this need for setting up targets originating from
Satyashri Mohanty : As top managers, how many of you feel that your subordinates are not doing things that you intend them to do, and you have this irritating feeling of having to remind them over and over again? Now, let’s call this a feeling of lack of control. I’m sure many of you agree to this. The interesting part is we did this survey across 1000s of companies. And the results are very intriguing. And I’m speaking of results across various types of organisations from MNCs, from large corporates to small corporates, proprietary managed companies, listed companies across a variety of organisations. And there is only one conclusion that we draw from this survey, the higher up you are in the organisation more intense is this feeling, this feeling of lack of control.
Shubham Agarwal : But the intent is to drive accountability, isn’t it? Aren’t we achieving that we’re setting up targets.
Satyashri Mohanty : So people think this is actually a problem of weak accountability. Now, if you see the problem of weak accountability has been dealt in the theory of management. And the way out is to set targets, individual targets. Now, if you have individual targets don’t achieve those numbers, you can trace down the blame to an individual after the fact has happened. And if he crosses the numbers, you can give the rewards. Now, this seems on the face of it as a very nice way of ensuring accountability. The fact that we are getting these kinds of survey results today shows that this clearly is not working.
Shubham Agarwal : So just out of curiosity, when did this all target system start though? How long back did it start?
Satyashri Mohanty : The theory that we can control managers by imposing targets on them was actually invented way back in 50s and it was called management by objectives. Management by Objectives or management by targets is clearly not working.
Shubham Agarwal : Oh wow. So what’s the real problem then, with individual targets?
Shubham Agarwal : Yes, I think I agree when there are a multitude of targets on many measures, we don’t get focus. And an individual can select which metric to really focus on based on their interpretation of their boss’s likings and dislikings right, which also leads to weak accountability. But then the problem still exists, the problem of accountability still stays, how can we start to solve that problem?
Satyashri Mohanty : We believe there is a total radical approach towards this problem and this is what we call management by tactics.
Shubham Agarwal : Interesting, can you help us explain this management by tactics approach and also give some examples around it?
Satyashri Mohanty : Management by tactics is a ruthless focus on the tactical how, rather than what number you want to achieve, so managers are actually accountable for rapid implementation of agreed tactical steps, the improvement projects, rather than just focusing on the numbers. So let’s look at an example. One of the targets that people are given usually is reduction of inventory. So you can ask somebody to reduce inventory by 30%. Now just asking somebody to reduce inventory by 30% can lead to lot of system tampering behaviour, people can stop buying things which are selling because they are not able to deal with the non moving inventory. So how do we approach this problem of inventories using the management by tactic approach? So the first question that we need to ask is why the inventory is high? Now, depending on our environment, it could be a function of long lead times. Now how do you get the lead times down? Now that opens a lot of other topics, it could open topics of standardisation of parts, it could open topics of why the queuing is high in the shop floor. Now, each of these topics would trigger a lot of projects which across functional team can be assigned to, and then we ensure that this project is done in the topmost speed. This is the management by tactic approach.
Shubham Agarwal : Ah, wonderful. I think this sounds really interesting. And it seems to really work as well. I think we have a way out of the accountability paradox. Individuals can be focused on the tactical how, while accountability for outcomes is at a group level. Great. Thank you so much for your time Satya. For all the listeners if you have any questions or concerns, like always, you can keep writing to us on our social media handles or our website. Thank you. Until next time, bye bye
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