Management theater

Management Theater

Here’s what I observed with a company I recently engaged with. 

The General Manager displayed a dashboard of their Metrics (Key Performance Indicators) on the screen during a monthly metrics review meeting. Unfortunately, many of the scores on the KPI dashboard were colored “red,” and the graphs were trending in the wrong direction. 

The manager pulled a face and expressed words of disappointment. “This is not good enough. We need to do better team,” and quickly tabbed forward to the next metric.

I call it “management theater.” The manager is just pretending to manage. The team has an unspoken agreement. The manager pretends that the metrics matter, and the team pretends to agree. But no one is held accountable for below-standard performance. 

The KPI dashboard becomes worthless as a management tool. Nobody takes it seriously. People still show up and do their work, but when metrics are “in the red” (below standard) and there are no consequences, people stop paying attention to the red scores. 

I was one of the founders of a company that made software dashboards when I lived in the USA, and I’ve had the privilege of looking at thousands of company dashboards. 

Here are 3 key lessons I learned about using KPI dashboards to drive accountability for performance…

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The Monthly Metrics Review.

I facilitate a monthly 2-hour “strategy execution check-in” meeting for my clients in between each quarterly strategic planning session. During this monthly check-in, we review progress on their Big Rocks and conduct a Monthly Metrics Review. The agenda is as follows: 

Strategic Projects (Big Rocks).
Review the scope document & implementation plan for each project. 
– Key achievements since the last check-in?
– Any roadblocks? 
– Are we on track to achieve the agreed milestone by the end of the quarter? 
– Project status = Green (on track), Yellow (at risk), or Red (definitely off track)? 
– What are the next steps?

Metrics Review (Key Performance Indicators).
Review the dashboard graphs of the top 3 metrics for each business function
– Did we achieve the target this month? 
– Metric status = Green (achieved target), Yellow (at risk), or Red (unacceptable performance)?
– What do the trend lines tell us? (Monthly, rolling 90-day average, rolling 12-month average) 
– What remedial action is required? (if the metric is below the agreed standard)

For this article, I focus solely on the Monthly Metrics Review and share 3 lessons to make the most of this agenda item.

1. Review & renegotiate metrics every quarter

Every quarter, review and clarify the top 3 performance metrics for each function. Keep what is relevant. Discard metrics that are no longer relevant to your strategy.

Then, for the metrics that are worth keeping, renegotiate performance targets for each of the next 3 months.

Many companies set their metric (KPI) targets for the next 12 months in parallel with their financial forecasting process, and then leave the targets “as is” for the entire year. This is a mistake.

Adjust the monthly targets up (or down) every quarter to ensure they remain achievable and relevant (as per the SMART goal acronym). Targets need to take into account seasonal factors, changes in your operating environment, or changes in your strategy. 

Get the goal owner’s firm commitment to achieve these re-negotiated targets over the coming quarter. Adopt the mindset that metric targets are “commits,” not “hopes.” 

2. Set performance targets in the “Goldilocks zone” 

My observation is that most managers set metric targets too high. They set aggressive “stretch targets” with the assumption that it motivates people to work harder, but in my experience, after looking at thousands of dashboards, it tends to have the opposite effect.

Shame is not a motivator. A dashboard full of unachievable metrics demotivates people. They become apathetic and think, “This is impossible. I’ll just do my job, keep my head down, and hope nobody confronts me.” 

Metric targets should not be so hard that we are setting A-Players up for failure. If being “in the red” becomes normal for your A-Players, the entire team will ignore red scores, and your KPI dashboard becomes worthless as a management tool.

Conversely, metric targets should not be so soft that B-Players can achieve the “green” target score just by showing up and doing the bare minimum. If B-Players can achieve the target without expending discretionary effort, your dashboard provides no external motivation. 

Metric targets should be set in the “Goldilocks zone”, which I define as follows.  

“An A-Player (not a slacker, a true A-Player) with the right tools, training, and support, putting in an honest week’s work, should be able to achieve the “green” target 90% of the time.”

3. Confront metrics “in the red” and assign remedial action

Assuming you have correctly addressed points 1 and 2 above, any metric that is “in the red” indicates an unacceptable level of performance. It must be confronted, and something needs to change. 

The first step is for the manager to challenge the goal owner directly by asking, “What’s happening here?” 

Listen to what they have to say. Discuss and agree on the root cause of the performance deficit.

Is the person working hard enough? Are they working hard, but the process is flawed? Is there an obstacle that needs to be addressed? Does the manager need to provide additional training and coaching? etc.  

“What 1 thing can we do this month to improve this?”

Agree on a specific action that is within the person’s control to implement in the coming month, and assign a task to the goal owner (or the manager).

Finish up by asking, “What support do you need?” Make it clear that you want to help the goal owner succeed. 

Follow up at the next Metrics Review Meeting to make sure the agreed task got done, and assess the impact on metric performance. Rinse and repeat.

In summary.

To avoid the charade of “management theater” in your monthly metrics review:

  1. Review and renegotiate metrics every quarter
  2. Set performance targets in the “Goldilocks zone”
  3. Confront metrics “in the red” and assign remedial action

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Until next time…
Stephen