Be realistic
According to Dysert the foundation you have to build off of is having the right measurements in place that will give you objective data.
“If you have a good measurement system in your business, then that should drive the conversations in whatever planning sessions or review sessions you are doing,” he says.
“If you don’t have a really good measurement system, you can have sort of a parade of interesting factoids that kind of go through a meeting and you really don’t accomplish anything.”
Dysert tries to align his measurement systems as close to financials as possible. Even if it’s not a financial measure, he tries to get it as close to a financial source as possible, so managers or supervisors aren’t adjusting numbers to make themselves look good.
“The closer your measurement system is to financials the better, because a pure financial measurement typically has a higher standard than any other measurement in the company because it’s audited,” he says.
“The closer it is to an auditable financial result, the more likely it is to be objective. What I find is even the most honest, forthright manager, if they are left to develop a measurement system to evaluate themselves or their department, over time, they’ll tweak that measurement system in a way that under the guise of fairness, they are taking out things that don’t count and they’ll just adjust it until it looks good.”
You should also look at the difference to the company a measurement would make if you completed it at its highest level. If you measure something and it’s really good but doesn’t move the bottom line much, then it should be lower on your priority list.
For example, you have measurements that revolve around the absentee rate for your company. If 100 percent of your workers are at work every day and the direct results on the bottom line are insignificant, you might not want to pay as much attention to that measurement.
“When you are talking with the team, you say, ‘What would this do if we got this to world-class numbers? What would it do to the bottom line?’ You realize, not a whole lot,” he says.
In addition, when setting plans and goals, you have to be careful not to set the bar too high. While you want your employees to aim high, you don’t want to set unrealistic goals.
“There should be some sort of a relative component to goal setting — relative to other parts of your company, other plants, other product lines … relative to last year,” he says. “There should be a component of your thinking where you can explain the logic, ‘On a relative basis, we did X last year; we’re going to do X plus whatever this year.’”
For example, if the economy has gotten worse since last year, you may want to scale back your financial goals based on the market conditions.
“If you try to stretch your people too much, you demoralize them because they realize that’s just an arbitrary goal,” he says. “It’s beyond aspirational. It’s delusional and you lose credibility.”
