Dip into “The Vital Edge”

Fancy a taster of what you can expect from my recently released book, “The Vital Edge”? Have a look through the attached presentation to see what topics are covered and which sports people feature. If you have already purchased the book, many thanks for doing so. I’d love to hear your thoughts and comments on the subjects raised in “The Vital Edge”, either by leaving a review or rating on the Lulu.com site or here in the comments section of this blog.

We’re rewarding the wrong behaviours

The subject of bankers and their bonuses has raised its ugly head again this week. Yes, it is getting kind of boring.  If only because nothing new ever comes out of these media-driven examinations.  All we really get is a platform for the ‘public’ (or sections of the public) to express their disgust. What is there new to say?  Well, one or two thoughts spring to my mind (albeit not necessarily new).

First, the mass demonization of everyone who works in the banking industry is unhelpful and unfair. Indeed, a sizeable majority of those who work for the bank in the news this week, operate a long way (both physically and financially) from the lofty heights of the “City Bonuses” often quoted by the press. The people who work at the front desks of the provincial banks up and down the high streets, or in the call centres around the world, or in the admin departments at HQ, are not earning big bucks, and in the main, will never see a bonus no matter how good a job they do.

Second, the bonus system (not just in banking), one of the key incentivisation tools at the very heart of capitalism, is profoundly broken.

Let’s assume for a moment that monetary bonuses do have some merit as a means of incentivising staff to do a better job than they otherwise would do.  At the very least, one would expect that the measure of success used to decide whether the bonus should be paid, would be one that resulted in a direct improvement for the customer. That may be in the form of better value (financially), better quality or better service, but it should be something that is tangible and agreed (externally) as having resulted in that improvement.  

What has become all too prevalent in the crazy ‘bonus-driven culture’ of our businesses and organisations, is an industry of internally-driven, inward-looking, process improvement measures, which have little or no relevance to the end customer, or recipient of the service. Internal departments, in order to prove their value and viability, concoct complicated measures, based on process efficiency, productivity enhancements, employee engagement and so on. All worthwhile activities, no doubt, but irrelevant if the end customer experience is not impacted and does not improve. Despite this, great effort is expended in agreeing annual goals and targets, and even greater effort in gathering evidence to prove they have been achieved, regardless of whether the end customer is receiving improved service, value or product innovation.  The system has lost its way, and lost touch with its original purpose.  

Ah, original purpose. What was that anyway?   Continue reading

Stretch Goals dull our thinking

I was prompted to write this post after reading Daniel Markovitz’s recent article in HBR in which he makes a really good case for challenging the value of Stretch Goals.  To summarize he makes 3 key statements:

  • Stretch goals can be terribly demotivating.
  • Stretch goals have a dangerous tendency to foster unethical behavior.
  • Stretch goals can also — tragically — lead to excessive risk taking.

The way in which goals, targets and objectives are applied in many of our companies and organisations is now open to question and review. The principles and methods by which they are applied has changed little from the industrial days of their birth.

Within a factory-based model of production, when tasks were well-defined and output easily measured, targets, and especially stretch targets, were useful ways to drive up productivity.  After all, if you wanted to increase widget production by 10%, you worked  people harder, increased the speed of the conveyor, offered bonus targets (or overtime payment), and measured the success of your intervention immediately and directly.

However, most problems and challenges we face today are not of this order. Companies, organisations and governments are looking for creative, innovative solutions to intangible and intellectual problems. We don’t even know the right question in many cases yet, let alone reward people for achieving stretch goals that produce answers that may not even be correct or appropriate. Despite this, we appear reluctant to break away from the traditional factory model of reward and motivation.

The evidence, however, is clear.  Stretch goals and offering people bigger rewards to solve intellectual problems actually has the effect of lowering performance. It is in fact a disincentive.  They work in the case of clear, well-defined and narrowly focused tasks, but with complex, intellectual problems they actually dull thinking and cause people to have too narrow a focus.

This is addressed excellently by Dan Pink in a TED talk on “the surprising science of motivation”. If you haven’t watched this, I thoroughly recommend it to you.

The entire concept is flawed.  The incentives system is allegedly “designed to sharpen thinking and accelerate creativity, and it does just the opposite. It dulls thinking and blocks creativity.” (Dan Pink)

But, let’s be clear. I am not saying that Continue reading