Father Christmas had a problem…
His planning elves had confirmed it. It was mid October and it was looking increasingly unlikely that he would get all the presents wrapped by Christmas. His management information team endorsed their view. His key measure – Presents Wrapped per Elf per Hour (PWEH) was well awry.
There were reasons why:
It had been unseasonably warm, the polar bears had ventured further north, hungry polar bears in your wrapping room do little for productivity.
They had also spent all year testing delivery droids. Droids needed far less protective wrapping than the old sack method, promising a significant reduction in wrapping time. But what doesn’t work for Jeff Bezos certainly wasn’t going to work in sub-zero temperatures and stopping the pilot had resulted in a significant backlog.
So what was he going to do?
Fortunately an enterprising consultant elf came to the obvious conclusion… incentivisation. Instead of just measuring PWEH change it to a target.
Work out how many presents needed wrapping, then set every elf a daily quota, — pay for performance. That was bound to create some action.
Father Christmas was not entirely sold on the idea. It all sounded a little commercial and here he was busy running a not for profit. But after a while he came around to the idea, after all, setting targets is much easier than removing obstacles that prevent the wrapping getting done — especially if the obstacle is a polar bear.
So targets and bonuses were set
Like all good change programmes first they had to go through the elf council for ratification and agreement.
- The director elves disputed the benchmark, this was the North Pole, not Silicon Valley. The targets were talked down.
- Next the senior elves agreed to the targets, but insisted that they were only achievable if they had significant investment in new systems. The targets were talked down some more.
- Then the management elves set about modifying the measure: PWEH included adjustments for rework (a present that had to be wrapped twice was recorded as two presents) and working time (time spent searching for gift tags and sellotape was excluded). The targets were fudged
- 200 (already busy) elves were reassigned to the stop watch and clipboard department. The targets were enforced.
- Finally the shop floor elves were set off to earn their keep. They quickly realised that it was far easier to wrap kindles and iPads than roller skates and scooters and it was perfectly legitimate to pass back bicycles as incorrectly prepared (but only after an first “test wrap” had been recorded). The targets were ducked.
How did they do?
You tell me. Did you get exactly what you wanted for Christmas?
According to the North Pole you should have done. Every department was “green” against its quota. Records show that 98% of all presents were wrapped within 5 working days of receipt.
Though the auditors are looking into some minor delays associated with bicycles and lawn mowers.
It is just a shame the consultant elves had never heard about Goodhart’s law
When a measure becomes a target, it ceases to be a good measure
