Stretch targets – managing expectations

Setting stretch targets is a classic way of energizing a team, challenging them to think differently, to innovate and pull together.

The key thing to realize as a leader is that stretch targets are sometimes missed because they are impossible under the circumstances.

When that stretch target is externally imposed and genuinely immovable, people almost invariably respond to the best of their ability, and perform to their limit (and sometimes beyond).

When the stretch target is set internally, there are 2 scenarios:

  1. Firstly, that hitting the target is realistically achievable – in this situation, people tend to react as well as the externally set target, working hard together to deliver the result.
  2. The second scenario is that the target is NOT realistically achievable! This is frequently not obvious at first, so everyone sets off full of good intentions, aiming for the target. After a while, as the situation becomes progressively clearer, the uncertainties around the plan start to resolve, and timelines start to stretch out as the true scope of the work required is revealed.

When it becomes a probability that the stretch target will not be hit, what follows is usually very close to the “five stages of grief” described by Elisabeth Kübler-Ross in her book “On Death and Dying”, from working with terminally ill patients.

When a person is faced with the reality of their impending death, he/she will experience a series of emotional “stages”: denial; anger; bargaining; depression and acceptance (in no specific sequence).

We see these in leaders when their stretch targets will not be met.

The denial, anger and depression responses are destructive to the organization – for a leader to display these for more than a few moments is unprofessional.

  • Denial – this undermines the confidence of the team as their professional views are rejected and disparaged. It creates a break between the leader and the team members and is strongly demotivating
  • Anger – If the leader was genuinely involved, there would be no surprise and no anger, so it is proof of a hands-off management style
  • Depression – powerfully demotivating for the team, causing delays before contingency planning can start

Bargaining, if it drives the consideration of wider options and flexing the target, is laudable, but bargaining is not just the dogmatic repetition that the target must be hit.

Acceptance is vital – this allows full-hearted focussing on contingency planning and making the best of the situation as early as possible, rather than steaming full-tilt into the iceberg.

I always approach stretch targets through putting risk management as the primary management tool, with the project plan very much in second place. The project plan (in Gantt format) makes it look as though timescales and the scope of work is known, when often it isn’t – until enough work has been done to create a baseline plan, presenting a Gantt chart gives a false sense of security about the stretch target being hit.

Managing by risk foremost makes these uncertainties explicit. Some people don’t like this, but when they buy into it, it delivers much better results.

The “Wormtongue” Effect

A few things have happened over the last week that have led me to think hard about a  phenomenon I’ll refer to as the “Wormtongue Effect” after the character in J R R Tolkien’s Lord of the Rings trilogy.

Wormtongue is the trusted lieutenant of King Theoden of Rohan, and his influence on the King is to disconnect him from informed decision making, allowing Wormtongue to become a de facto Regent – a position of unlimited and abused power for Wormtongue. Colin Gautry in his article on Seven Things your Opposition Hopes You’ll Never Learn talks about the challenges of working with such a character.

I’ve run into a few such untrustworthy “trusted lieutenants” in my career, and they have a lot to lose, and they can fight dirty.

There are 2 extremes of executive management style:

  1. Fully informed, fully transparent, active monitoring of options and decisions, even though the executive manager has delegated the decision-making
  2. Focussed reporting from a trusted lieutenant

Option 1 is hard work, and requires a degree of humility of the executive manager.

By comparison, when times are good, option 2. seems great – the executive manager can reap the credit for success without any of the hard work of keeping his finger on the pulse – he just has to think deep strategic thoughts and give direction. The lieutenant is rewarded for reporting good news, while having great delegated power and responsibility, an addictive situation.

It’s when the going gets really tough that option 2. starts to fall apart.

The trusted lieutenant doesn’t want to admit that he can’t deliver the goods, and conceals problems as they develop, sliding down the slippery slope from honesty, through concealment, into dishonesty, while spreading the responsibility for problems onto anyone but himself. Meanwhile the executive manager is left fat, dumb and happy, being told all is well until the Titanic hits the iceberg. Nick Leeson demonstrated to great effect the destructive power of concealing the truth by bringing down Barings Bank single-handedly.

But it’s never that simple – no manager is so isolated that no rumours and even direct escalations of problems reach them, yet often he doesn’t react until too late – why?

After a conversation only today, I suspect it’s a combination of factors:

  • Wanting to believe it will all be alright
  • Unwillingness to recognize that their trust was misplaced – a key skill of these trusted lieutenants is to ingratiate themselves and come across as virtuous and capable
  • Character assassination by the trusted lieutenant of the “doom mongers”, and blaming others for their failure (in the nicest possible way)

It’s worth reading and musing on Colin’s article and thinking how such insights about opponents can help avoid the icebergs!

Management Styles – Hands-off

This is the fourth quadrant, where the leader feels low need to control the situation and low interest in the team members.

This is a very dangerous region for leadership behaviours, as there isn’t any coming from the supposed leader, and there is no active encouragement or development of it from subordinates.

There is a high risk of anarchy in such a situation unless individuals are tightly constrained in what they can do.  Process and rules replace leadership, turning staff from human beings into robots. Contact centres, especially in Financial Services, display only too awfully the result.

At best, a Delegative leader:

  • defines the targets, processes, rules and the responsibilities,
  • initially plans and sets up the team’s activities,
  • delegates responsibilities and sets targets,
  • sets up performance monitoring, such as KPIs and BI reporting, and tracks performance,

then steps in only when required.

This can foster mutual respect through expertise, though this is not guaranteed as it’s a cultural thing. Lack of the personal touch can be seen as being elitist, and being unapproachable.

Team respect can only come from the professional competency of this type of leader. This profile is in many cases less able to inspire his teams, to share a vision, so this style is unsuitable for a team with low morale.

It is also unsuitable for dynamic situations, with changing requirements, risks and objectives, as this leadership style requires substantial lead-time to plan and set up a working situation.

A delegative leader with high expectations can work well with experienced and motivated employees, but will fail with less experienced staff who start doubting their own  abilities to perform the job.

More likely is the worst case, the Abdicative leader, who:

  • isolates himself from his teams, with poor communication of background information vital to team spirit (the “Mushroom treatment”), communicating principally by email dictats,
  • focuses on the KPIs, and has no idea how they are being achieved or what to do if they are not,
  • is rigid in his definition of roles and functions, doesn’t have his finger on how his “team” is working, who is delivering what, and who is providing essential leadership in the other quadrants,
  • confuses activity and result, favouring those who seem busy (“hard workers”) over those who are quietly efficient (“clock watchers”),
  • manages activities rather than employees,
  • does not question the existing organization, from which their status is derived.

When turning abdicative, the manager will apply the old adage “First class people promote first class people, second class people promote third class people” to secure his position and avoid competition. He will promote staff with low-ambition and shed employees with high energy and drive, damaging the future of the organization.