Another Look at Objectives (for the Cove).doc

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Another Look at Objectives Copyright 2004 Craig Cochran

[email protected]

Objectives are some of your most powerful improvement tools available. Most

quality practitioners already know the obvious caveats related to objectives: they must be

measurable, they must be clearly defined, they must be documented. In the November,

2000, issue of Quality Digest, I wrote an article entitled, Using Quality Objectives to

Drive Strategic Performance Improvement (available here). That was just before the

official publication of ISO 9001:2000. Now, nearly four years later, what else have we

learned about objectives? What kind of wisdom has emerged about the use of these

continual improvement tools? Lets take an inventory of some key principles related to

objectives:

Set objectives, and then plan to change your processes

Objectives, in and of themselves, are really nothing more than communications

tools. They communicate, Here is what we believe to be important for our future

success. Lets try to focus on these issues. Objectives are bright spotlights, nothing

more. The mere presence of objectives does not make anything happen. A good analogy

is the farmer who purchases a bag of seeds in early spring. He may think to himself,

Soon Ill be eating corn, but theres a lot of work that will happen between buying the

seeds and eating the corn. Your objectives are just like those seeds. Theyre a good start,

but it will take a lot of effort to make them take root, grow, and produce positive results.

Copyright 2004 Craig Cochran
http://www.qualitydigest.com/nov00/html/objectives.htmlhttp://www.qualitydigest.com/nov00/html/objectives.html


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Once the organization sets objectives, it must inevitably re-examine its processes.

If we want revenue to increase, then how do we expect this to happen? More aggressive

marketing? More reliable products? Acquisition of our competitors? Exactly how do we

hope to increase revenue? Just saying what you want to do it is not enough. You must

have a plan, and the plan must address the underlying processes of the organization.

When you embrace objectives, change is not far behind. If your way of operating does

not change, then youre fooling yourself to think youll achieve your objectives.

Each objective must be matched to an improvement plan. The plan should address

each of the following points:

Means : You must state specific how you are going to achieve your objectives.

Trying harder is not a good enough. What processes are going to be changed?

How are they going to be changed? What intermediate steps will be taken? Lay

out the means in a logical manner so they can be implemented.

Resources : Change will require resources. The resources may include funds, time,

people, facilities, equipment, and information. State the necessary resources, then

make sure they are available before trying to implement the plan.

Responsibilities : Who is responsible for each step of the plan? Clearly designate

and communicate responsibilities, and then hold people accountable. Dont leave

anything to chance.

Timeframes : The plans for improving objectives will take time to implement.

How much time to do we think well need? The timeframes need to be explicitly

written into the plans, especially when multiple steps are linked in a dependent

manner.



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Contingencies : Sometimes progress on our plan is contingent on other variables

not directly related to our plan. Examples include actions of competitors,

suppliers, regulators, lawmakers, community, and the economy, to name just a

few. State the external issues that could possibly affect the success of our plan,

then define what we will do to help manage the contingencies.

Disciples of W. Edwards Deming are quick to reject the use of objectives in

absolute terms. This is silly, though. Objectives are concise ways to communicate the

variables of future success. When Deming demonized the philosophy of Management by

Objectives, he was really criticizing the use of objectives without a plan to achieve them.

Deming himself said quite elegantly, Internal goals set in the management of a

company, without a method, are a burlesque (Out of the Crisis, 1986, p. 75). Of course

you must have a method for achieving objectives, and the method must drive real change.

Strap on your seat belts when you establish objectives, because the scenery will

quickly evolve within your organization. Your processes, procedures, methods,

equipment, and overall philosophies may all change. Youll need a plan to drive and

manage this change. Status quo will guarantee failure.

Make objectives measurable and clearly defined

This point is almost a no-brainer, but it bears repeating. Objectives must be

measurable, and the organization must define exactly how they are measured. General

themes, philosophies, and aspirations rarely constitute measurable objectives. These



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guidelines have been repeated countless times in the past few years, and yet I still see

objectives like these:

Incorporate excellence into all that we do;

Offer a challenging and rewarding environment for our employees;

Earn the respect of our neighbors in the community;

Create an unmatched service experience for all our customers;

Make associates proud they joined our team.

These are all admirable concepts, but theyre not measurable objectives. They

could possibly be the first step toward measurable objectives, though. The trick is to look

at high-level aspirations like the ones shown above and ask yourself, What indicates

whether weve done that or not? Keep asking that question until you uncover a metric

that gets to the heart of success or failure. Get specific about what youre trying to

achieve. Platitudes such as Incorporate excellence into all that we do are so vague that

they serve no purpose whatsoever.

The best reason for setting measurable objectives has nothing to do with ISO

9001, and everything to do with becoming more successful: people have trouble

contributing to fuzzy, undefined objectives. Nobody knows whether their efforts are

making a difference because the objective cant be gauged. The organization begins to

drift like a rudderless boat. On the other hand, measurable objectives focus everybodys

energies and creative powers. Combined with leadership and an empowered workforce,

measurable objectives pave the way to success.

Use a scorecard to communicate progress against objectives



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When you tell someone that an objective is important, she is bound be curious

how the organization is doing with regard to it. Curiosity of this sort is human nature.

Employees want to know if the organization is moving forward or moving backwards.

The clearest way to communicate progress is through the use of an objectives scorecard

(also referred to as a dashboard). The organizations performance against objectives

should be reflected in colorful, simple graphics: Run charts, bar charts, pie charts, and

other simple diagrams. If you cant fit your objectives onto a single scorecard the size of

a piece of paper, then you may have too many objectives.

Heres a revealing story about scorecards told to me by Lauren Kelly of the

CVS/Pharmacy Distribution Center in Woonsocket, Rhode Island. Lauren Kelly and

Keith Kirby (of the CVS/Pharmacy Distribution Center in Bessemer, Alabama)

developed an eye-catching scorecard to reflect progress against their facilities key

measures. Proud of her work, Lauren showed the scorecard to her father, who happens to

be an Industrial Engineer with twenty-five years of experience. He looked at the

scorecard and said that it wasnt clear to him which trends were good and which trends

were bad. After all, a downward trend was good in the case of one measure and bad in the

case of another. If an engineer had trouble interpreting the scorecard, do you think that

production employees would have trouble? Of course. Lauren decided that the easiest

way to communicate the good trends versus the bad ones was to affix a face next to each

chart: A yellow smiley face (circa 1972) for the positive trends and an ugly frown face

for the negative trends. Lauren took the simple concept of the scorecard and made it even

simpler. A child can now review the facilitys scorecard and understand how things are



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going. The scorecard, by the way, is updated on a regular basis and distributed

throughout two distribution centers with a total workforce of over 900 employees. A lot

of work? Yes, but this is type of communication is worth the trouble.

Its important to remember that simply posting progress on objectives will not

directly lead to their achievement. The communication of progress is simply a method of

driving awareness. The awareness must then lead to other things, like improvement. This

provides a logical segue to our next topic, which is taking action on objectives.

Provide specific examples of how employees can contribute to objectives

The best objectives are often broad and strategic. They lead to systematic

improvement of the organizations processes. Thats a good fact. The only problem is

that most employees are not focused on strategic issues. They are focused on the tactical

aspects of their jobs, which may be a far cry from the issues addressed by objectives.

When you start talking about throughput, cash flow, employee retention, and other topics,

peoples eyes begin to glaze over. Thats why the organization must provide specific

examples of how individuals can contribute to objectives in their day-to-day activities.

The CVS/Pharmacy Distribution Center that I mentioned earlier developed a

simple card that lists their key measures on one side, and the actions employees can take

to help achieve objectives on the other. This drives a hands-on understanding of

objectives. In talking to the employees about objectives, I noticed an intriguing trend:

many employees told me the means of them contributing to objectives, and the means

were not the ones listed on their pocket card. The employees had extrapolated and



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expanded on the guidance provided them. They provided all kinds of interesting

examples that I had never even considered. This means the subject of objectives is in the

forefront of their minds as they perform their work. Interestingly, a number of the

examples provided by employees were broader than their own jobs. They required

facility-wide processes and methods to be changed. Should management embrace these

ideas for impacting objectives? Absolutely. The CVS/Pharmacy distribution center even

has a suggestion system of sorts for capturing ideas and problems: Express Yourself.

Employees are encouraged to think about ways to change and improve their processes so

that the facility can more successful. The best ideas are then addressed by management

through action plans and followed-though to completion.

Can employees really affect broad objectives through their day-to-day actions?

Not typically. The only thing they can do is work within the established processes that

exist in the organization, and these processes produce a very predictable range of outputs.

Employees can propose changes to the organizations processes, though. This is where

real improvement can be generated. Start by giving employees some ideas on how their

jobs are related to objectives. They will then expand on this knowledge. You will be

surprised by the kinds of ideas that people generate. If you harness and act upon this

creativity, you will find your objectives moving in the right direction.

Let employees benefit from achieving objectives

You cant pick up a newspaper or turn on the television these days without

hearing about the exploding compensation of top executives. Three million, four million,



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five million dollars per year, and much more. It would be easy to get the idea that the

purpose of working toward objectives is to fatten the pocketbooks of top executives.

Smart organizations compensate all employees based on the contribution they make to

the organization, and they also let everyone know how achievement of objectives benefits

them. Dont assume that employees will understand excess inventory ties up cash that

could otherwise be used for a conveyer system that would reduce employee injuries,

improve service speed, and increase net income. Give them the facts, and draw a clear

line to their personal successes and livelihoods.

The most progressive and wisest organizations realize that if you want everyone

to be truly engaged on strategic objectives, then compensation should be linked to their

achievement. Theres only so much enthusiasm that can be generated by charts, graphs,

and explanations of how activities are linked to objectives. When you start to put money

into everyones pocket as a result of meeting organizational goals, then they really get

engaged. Just make sure that everyone gets thesame additional compensation. No

function can be claimed to have contributed more than another, so no function or person

should get more benefit.

Revisit the validity of objectives on a regular basis

Nothing remains static in business. The competitive landscape is constantly

changing, sometimes on a daily basis. Objectives will obviously need to change over time

to reflect new realities in the business. For instance, revenue growth may have been

critical two years ago, but now its more important for our organization to generate a



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profit. Two very different objectives with different means that lead to their achievement.

Dont let your objectives become static measures that cant be changed. The use of

objectives must become an institution, but the objectives themselves must be adaptable.

They will evolve to reflect changes in strategy, the environment, and your customers

needs.

Provide examples of how objectives are used

At the end of the day, objectives can seem like some sort of clever mind-control

for managing hourly employees. Sure, the objectives keep employees focused on critical

aspects of their jobs, but management has a whole other set of priorities, right? Wrong.

These objectives will be used by everyone, from one side of the organization to the other.

They are strategic tools of the most usable sort. The organization should provide details

of how it has analyzed progress against objectives and taken real action as a result.

The action plans I mentioned at the beginning of the article are one of the best

ways to communicate how objectives are used. When plans are shared with employees, a

funny thing happens: they get involved with making them a success. Oftentimes,

employees detect weaknesses or blind-spots that planners had not considered. Few

managers are so smart that their plans couldnt stand a little additional scrutiny. The best

criticism can come from surprising places. Put the improvement plans out there, and be

prepared to re-examine the plans based on feedback you receive.

In summary



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Objectives are a logical start to realizing continual improvement. By themselves,

however, they are nothing. Each measurable objective embraced by the organization must

be matched to an action plan than drives changes to the organizations core processes.

Good intentions, pretty charts, and begging everyone to work harder do not achieve

anything. Change is the only path to making objectives work. And change has to be lead

by management and carefully controlled. Sure, get employees involved in thinking about

change, too. The more minds you can apply to the problem of achieving objectives, the

more likely you are to realize success.

Deming,W. Edwards. Out of the Crisis. Cambridge: Massachusetts Institute of

Technology, Center for Advanced Engineering Study, 1986.

Special thanks to Lauren Kelly, Keith Kirby, Norm Lamoureux, Ben Cote, Dave LaCroix,

and Bill Corbeille of the CVS/Pharmacy Distribution Centers in Woonsocket and North

Smithfield, Rhode Island, and Bessemer, Alabama, for their assistance with this article.

About the author

Craig Cochran is a project manager with the Center for International Standards &

Quality, part of Georgia Techs Economic Development Institute. Hes an RAB-certified

QMS lead auditor and the author of Customer Satisfaction: Tools, Techniques and

Formulas for Success and The Continual Improvement Process: From Strategy to the



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Bottom Line, both available from Paton Press (www.patonpress.com). CISQ can be

reached at (404) 894-0968 or on the Web at www.cisq.gatech.edu.

http://www.patonpress.com/http://www.patonpress.com/

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