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On Expectations and Metrics

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Martin Klubeck is a Strategy and Planning Consultant in the Office of Information Technologies at the University of Notre Dame.

Key Takeaways

  • The concept of "expectations" as a replacement for traditionally used "targets" and "stretch goals" will not be universally accepted.
  • The frequent misuse of targets/stretch goals makes them a poor motivator for people's behavior and performance, while expectations shift the focus to processes.
  • Customers, not managers, set expectations for an organization's performance.
  • Metrics, when used to inform, become a means for continuous improvement, and using expectations to frame the use of metrics allows them to achieve their full potential.

Using "targets" and "stretch goals" for analyzing your performance metrics is not only outdated, it's a bad idea.

Not everyone agrees with me, though. For the past five years, in numerous online discussion groups I have offered the concept of "expectations" as a replacement for the more traditional (some would say "time-tested") targets and stretch goals. I have also presented the concept in seminars and presentations on metrics, and it has met with decidedly mixed reviews. When I propose the use of expectations to performance measurement and performance management experts, I generally receive cautious rebuttal. The idea of not driving behavior through the careful collection, analysis, and reporting of data goes against the accepted paradigm. In contrast, many others support the concept of expectations and are ready to drop targets and stretch goals. The make-up of these two groups is telling: those who believe metrics should be used to manage behavior, and those who believe they should be used to provide insights to improvement.

Perhaps I should start at the beginning. What are "stretch goals," "targets," and "expectations" and what impact do they have on applying metrics in your organization?

Stretch Goals and Targets

Goals are a great tool for improvement, on the personal or organizational level. Well-defined goals can give direction and purpose. They can be used to motivate and recognize exceptional effort and performance. Goals are the basis for any strategic plan and the foundation for almost every significant improvement.

Stretch goals are a little different. Stretch goals, when used properly, are simply goals that require us to push ourselves beyond our comfort zones. Stretch goals can be used to encourage greater and greater effort. When stretch goals are misused, the goal setter does very little to reward those who achieve the goals, believing that the goals must not have been challenging enough. If the worker achieves the goal, then the goal setter picks a tougher, more challenging goal next time. Instead of building a healthy leader/follower (manager/worker) relationship, the abuser uses stretch goals to manipulate the worker. Even with proper recognition (a rarity in cases of misuse), the worker quickly figures out that with each achievement, the difficulty level for the goals is raised. There isn't an overarching vision to which the goals lead — instead, the stretch goals are the only thing visible.

Targets, like stretch goals, can be a good thing, especially if set with the worker's input and realistically determined to be what the organization should achieve. The performance management experts rightly argue that targets are a great tool for managing performance and effort. When misused, however, targets become a tool for manipulating the workforce instead of communicating the desired level of performance. As a target is reached, the target-setter moves the target a little further along the continuum. This "moving" target creates an environment of distrust because the workers quickly realize that the target is arbitrary and will move upon successful completion. Rarely is meeting the target rewarded.

Imagine the perception of the worker who, when given a target or stretch goal, decides to earn her boss's recognition by achieving the mark as fast as possible. She works extra hours, neglects her own concerns, and perhaps even improves some processes to achieve the mark months before the "deadline." Instead of the accolades she anticipated, her boss seems a bit disappointed in his own inability to adequately challenge her. Obviously he set the bar too low. Instead of the reward she hoped for, she receives a tougher set of targets and stretch goals for the next cycle. How long will it take her to become disenchanted with this work environment?

Expectations

Expectations reflect what the customer expects from your organization. The customer in this case can be an internal or end user. Expectations are set by the customer, often in service level agreements. They work best when they represent a range.

Rather than being something to achieve, expectations are measures of what is. You meet, exceed, or fail to meet expectations. Of course you could argue that you can achieve, fail to achieve, or exceed the target (or stretch goals), and you'd be correct. But, most targets and stretch goals are a single point — either you reach it or you don't — while expectations use a range. Expectations are also harder to misuse. They are not a tool for manipulation or encouragement; instead, they tell an organization how well it is doing. Conceptually this moves managers from trying to push workers to continuously produce more, produce faster, or produce for less to pushing them to meet customer expectations.

Expectations and Norms

Expectations have a strong relationship with "norms." Service norms can help establish customer expectations. The best example I've found is my own expectation for how fast "fast food" really is. My town has two well-known hamburger fast-food restaurants. One is considerably slower than the other. My expectations for each differ. If the slower one was so slow that it was "unacceptable" to me, I would stop buying from them. As it stands, I go to the one which has what I crave at the time (their menus are slightly different, of course).  But if I'm in a rush, I go to the faster one. My expectations for each are built on my experience of their norms. The same will be true of your customers' view of your services. Their expectations will be influenced by their experience with you, but if you fall well below what they accept as normal, chances are you will lose their business.

The usual argument I hear against expectations is that customers will say they expect perfection or immediate service, or 100 percent uptime. In practice I've never found this to be true. Customers, for the most part, are very understanding and realistic.

The performance management/measurement experts who champion targets and stretch goals posit that when used properly (and with the full and honest collaboration of workers), they are excellent tools for improvement. I don't disagree. But, they can be — and frequently are — misused. They also tend to miss valuable insights about the health of the service provided. You can achieve targets and stretch goals and not know if you are satisfying your customers' needs. Expectations provide direct insight into that and share that insight with your workers (building self-worth and pride in the work), management (providing insight into how well the work is being performed), and customers (demonstrating the value of the organization).

Another way expectations are different from targets or stretch goals is in their use over the long-term.   

Expectations as a Long-Term Tool

Expectations are first and foremost a means for tracking and communicating how well the organization is performing — from the (internal or external) customers' point of view. Expectations also reveal how improvement efforts affect the organization's performance. Unlike a target or stretch goal, expectations reflect long-term improvements.

Expectations are not modified unless there is a change:

  1. To processes or environment that makes performance consistently different. This avoids changes based on "working harder" and reflects "working smarter."
  2. In resources, whether more resources (new hires) or better resources (new tools, upgraded equipment, or more skilled workers).
  3. In a customer's expectations; this occurs only if performance has changed or if a competitor's norm is way out of sync with yours. This will be evident in feedback, direct (surveys or comments made) or indirect (customers will switch to your competitor).

Anomalies

These changes are long-term rather than event-driven. If you find that you've exceeded expectations, you don't raise the expectations for the next cycle. Exceeding expectations is not in itself a good thing, any more than failing to meet expectations is inherently a bad thing. So, if they are not good or bad, what are they?

When you do not meet expectations — either by exceeding or failing to meet expectations — you have "anomalies," which are focus points for further investigation. If you have metrics for each of the services you offer, how do you know which ones to spend time on? How do you use the metrics and your limited resources (especially your time) wisely?

Expectations tell you where to focus your time and energy. Not in "fixing" a below expectations or celebrating an above expectations, but instead by investigating to determine causes. The true goal of a service organization is not to exceed expectations, but to consistently meet expectations. The idea is to institutionalize processes that lead to healthy services.

The idea of continuous improvement is a good one, but not when it is defined as the continuous raising of the bar or constantly moving the target. Continuous improvement only works when you have repeatable, stable, and controlled processes. These improvements might be reflected in higher quality deliverables, faster speeds, or greater functionality, but they can also result in efficiencies the customer does not see and that give the organization a "rebate" on the resources required to provide the services.

Recap

Goals: something to achieve.

Stretch goals: by nature, something to achieve with extra effort. This extra effort can be super-human or result from improving underlying processes. Like targets, usually used as motivators.

Targets: something you aim for. Depending on how close you get to hitting it (or exceeding it), you can react differently. Best when set with the person involved. They are a tool for motivating improvement.

Expectations: used to inform and identify when there may be catalysts (internal or external to the processes) that are creating anomalies. This information indicates things needing investigation.

If you fail to meet, meet, or exceed a target or goal, you might investigate, but chances are you'll only chastise (fail to meet) or celebrate (meet or exceeds). Since they are seen as more of a motivational tool, reactions to them are distinctly different from the reactions to expectations. Expectations reveal the health of your services/products and therefore your processes. This is especially useful when the expectations reflect the customers' viewpoint.

Bottom Line

Expectations are heavily tied to how the process performs under normal circumstances. Unless the norm differs significantly from a competitor's the norm will strongly influence what the customer expects. Norms are not based on preference but on historical, measurable performance. Using expectations separates the reality of the processes' expected performance levels from an organization's hopes, dreams, or demands. This objective view allows the organization to look at the processes for delivering your services/products and determine:

  1. If you want to improve or modify it
  2. The presence of indicators that the process is not performing as well as expected
  3. The presence of indicators that the process is performing better than expected
  4. A baseline for measuring how changes affect the process (positively or negatively)

Perhaps the most important difference expectations bring to the party is putting the focus on the process and not on the people.

The concept of using metrics to drive behavior and motivate increased performance is a time-honored, management-preferred, and totally bad idea. Metrics should not be used to push, shove, pull, motivate, or manipulate. Metrics are best when used to inform. Used wisely, metrics become a means for improvement. Using expectations to frame the use of your metrics allows them to achieve their full potential as a tool.

For more information see my recent book Metrics: How to Improve Key Business Results (New York: Apress, December 2011).

Martin Klubeck

Martin Klubeck is a Strategy and Planning Consultant at the University of Notre Dame, where he plays a significant role in strategic planning, metrics, and organizational improvement efforts within the Office of Information Technologies and across campus. Recent endeavors include speaking at the 2005 Leadership Conference hosted by Notre Dame, teaching courses on strategic planning and metrics at the University, and performing personal coaching. He holds degrees in Instructional Systems Technology, Computer Science, and Human Resources Development. He is currently working on a Doctor of Philosophy (PhD) in Organization and Management. He has presented at numerous conferences and seminars, and taught courses on organization development throughout the United States. His first book, "Why Organizations Struggle So Hard To Improve So Little: Overcoming Organizational Immaturity" is now available from ABC-CLIO publishers and his new title, "Metrics: How To Improve Key Business Results" is available from Apress Publishers, Dec 2011 in both paperback and Kindle versions.

 

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