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Managing Consequence

Ramesh Jude Thomas
President & CKO, EQUiTOR Consulting

Some time in March, I was in the middle of some performance management workshops around India. The introductory session is always about how to capture progress and performance. And to bring home the point about measuring how we are doing, we choose the ubiquitous fitness program as a classical model. How do we know its working? “Simple", they say. "I check my weight …inches … muscle mass on a regular basis”

A quieter HR type once perked up and suddenly asked “Does it have to be only in physical change? “Explain please”, I ask.

She quips “I go to the gym regularly, but I measure my progress in the number of compliments I receive.”

Think about it. The funniest thing I find about management as a practicing science is the widely held belief that many things cannot be measured and better still, that some things should not be measured. Things happen because of instinctive managerial talent that abounds. “She will do it. She is a brilliant manger”

Usually it’s only the standard measures like sales and profits that finally get captured, because that’s the stuff that goes into the books, determines increments, promotion and bonuses. Not very different from the stock market, what?

But how do we manage the bits that get us results? E.g. How do we know people might come into our shops? How do we know whether they will buy? How do we know that they are willing to spend on us?

It’s worth reminding ourselves that any shareholder commits capital to a business for an appreciation in its value. And real changes in shareholder value can only happen through performance that can be sustained. Sure there are earthquakes and meltdowns. But those are exceptional.

We keep wondering how the behemoths meet their massive targets. They don’t actually see big targets. They break it down into smaller bits, smaller geographies, smaller time-frames and smaller customer groups. And we have an interesting dinnertime phrase for it: “manageable portions” implying, that consequence happens when we can predict and manage causes and effects.

Simple enough. Then why don't most of us? Because we are usually managing a boss or an expectation or a budget sheet, rather than a consequence.


John david Lazaro said...

This topic is (really interesting), (apparently complex) and yet when you walk away from it, it's (really simple). I'm going to follow Godel's theorem here, which states that no part of a system can comprehend the system as long as it is an integrated part of the system.

Therefore when we distance our selves from the issue - Managing Consequence - it becomes clear and (really interesting) - that from a brand steward's perspective we should first formulate the strategy in its entirety (apparently complex), and in doing so we will be managing consequence - a (really simple) principle of (planned cause) and (fairly predictable effect).

To add further insight it's interesting to look at the various nuances of the word "consequence"

The meaning of the word Consequence :
1 - something that is the effect or result of of an earlier occurrence.
2 - the conclusion reached by a line of reasoning ; inference.
3 - importance or significance ; a matter of significance.
4 - importance in rank or position, distinction ; a man of consequence.
In consequence : 5 - consequently; as a result; hence.

In the final analysis managing consequence is all about the competence of the manager or brand steward in predicting the viable consequence ( within a framework of possible achievements ) of his strategy being executed. In fact " managing consequence" cannot be a strange phrase to a competent business /brand strategist.

John D Lazaro
Lazaro Advertising & DCAM productions

moochhi said...

I have been dealing a lot with performance management systems in my work. A common thing i notice in many companies is that they work with KPIs/KRAs which cascade down from the top (who get theirs from the strategy of the co). Unfortunately, many orgns treat this bit as peripheral and lose sight of this as they work through the year. It tends to surface end of the year when appraisals need to be done and increments given. Better companies break this down half yearly/quarterly/monthly and measure it every 3 months or 6 months, which allows people to course correct or know they are on they right path. while measuring performance is very critical, we must remember that we also need to measure behaviours, because we know that systematic application of specific behaviours leads to better outcomes (ex: customer service people need to be patient and good listeners, because they know that it will really pay off in the long run, not because it gives them instant results). Companies which do this seriously get seen even by their own employees as 'professional' or 'systematic' etc.
The key to having a good outcome from a performance management system is following it rigorously and basing rewards on what comes out of it.

Suji's World said...

Right... the rational thinking 'on the present' satisfaction or happiness will help one to achieve more than the year-end account book or whatever.

A machine might show us the reduced weight and it might give us happiness, but when we share the news with others, the happiness mutiplies.

Likewise, a short term goal achieved, a small success in the present, a little goodness done now are very important to keep the work going as well as satisfying oneself and help in living a happy life.

Antony said...

There is a commonly used phrase which says something about missing things right under our noses.

most often we are guilty of not learning enough from the mundane, routine and taken for granted things around us.

A simple example is the erstwhile 'tape recorder', which most of us writing and reading this blog have grown up with.

I remember how someone used the tape recorder as the example to illustrate teamwork, equating it with its many parts working in tandem.

While reading this post the same humble recorder comes back to my memory citing a certain relevance. If we can remember the times when it failed to faithfully play music we took it to the service center so that it can play music again! That is all we knew about it, something like today's many managers who are only familiar with the final set of products like the 'profits' or 'sales' unlike the service guy who opens it up to check its many tiny parts, of which even if one got sulking the music goes missing!

Few people such as RJT have been sensitizing critical measurement parameters in the realm of business performance. I hope managers (myself included!)wake up to the manageable portions and the tiny parts.

To conclude, sometimes all the wisdom one may ever need might just be hidden in plain sight in the room we are sitting right now! where once the humble tape recorder sat!


MandeepK said...

For any industry there are two types of KPIs.
(I) The hard ones which work as measuring scale of direct output values. For contact centre it is like- %age of customers serviced within certain duration, Qualitative rating of contact against standards.
(II) The softer ones. These help us evaluate the impact of Primary KPIs over desired objective/implied need of customer .e.g. again from service industry- Customer Satisfaction index/rating. The secondary KPIs are more important as they also guide us whether we are focusing in the right direction and our efforts are addressing the customers' need/requirement.
We manage both ...we manage consequences..:-)