Consider what the great 20th Century management thinker W. Edwards Deming has to say about the use of targets: “Eliminate work standards (quotas) on the factory floor” and “eliminate management by numbers, numerical goals.”
This would seem in opposition to the way most people practice Lean, where numerical targets are the apparent sine qua non, atits very heart and soul. Whether you call it kaizen, PDCA/PDSA, A3 problem solving, the Improvement Kata, or simply continuous improvement, setting a clear numerical target condition, and, as a consequence, a clear gap from the current condition, is essential to any kind of Lean problem solving. This target condition can have behavioral qualifiers (e.g. no overtime, no additional risks, no new technology), but it has to be quantitative. As Tracy and Ernie Richardson, the former Toyota leaders turned Lean consultants, used to tell me and my colleagues repeatedly: “No measure, no do.”
So are the Deming and Lean philosophies at odds with one another on the subject of targets?
I don’t believe they are. Numerical targets, in and of themselves, are neither good nor bad. They are just another tool and, like with all tools, it all depends on how we use them.
I believe that Deming was a bit hyperbolic in his pronouncements against targets, but I also believe what he truly opposed was the pervasive practice of managers setting numerical goals and then “motivating” their employees by doing nothing more than attaching positive and negative consequences to them. This both weaponized the numbers (“make your numbers…or else!”) and reinforced a paternalistic culture (“if you make your numbers, I’ll reward you with a nice bonus”). Deming rightly recognized this a lose-lose proposition.
Lean leaders, in contrast, eschew both the fear and condescension that Deming disliked so much by being dedicated problem-solving coaches to their direct reports. Far from being paternalistic, Lean leaders believe that the vast majority of employees can and want to accept personal responsibility (rather than reliance on “parents”) for achieving their given targets.
Think about how you felt when you set out to achieve a personal goal (e.g. run a marathon, earn a degree, learn to sew, etc.) and then took responsibility for achieving it (with or without a coach to help you). It is exactly the same in business: achieving personally challenging, meaningful targets is rewarding in itself. If the business targets need to be coerced out of employees through bribes and threats, usually the target is wrong (e.g. too challenging, not meaningful enough), or the employee is not being adequately supported. One of the hardest jobs of leadership then is to align the long-term goals of the company (profitability, customer loyalty) to the personally motivating goals of the individual employee (increased mastery of one’s interpersonal and technical abilities). Another of the hardest jobs of leadership is to find the time, energy and patience to really coach one’s employees on a regular basis.
Targets, applied without coercion, create a dynamic gap between what is and what should (or could) be. This gap should motivate the problem solver to close the gap, in the same way that we feel compelled to complete an almost complete diagram of a circle. It also allows the problem solver to know if they’ve won the game (closed the gap) or not. If you have no numerical target, how can you enjoy the thrill of knowing you have improved something?
The trick is for leadership to: 1. Devise her direct reports’ targets to be in alignment with company goals; 2. Set challenging enough targets so that the employee has to stretch (and has some doubts about his ability to achieve them); and 3. Provide all the coaching support required so that success, despite the employee’s self-doubt, is almost guaranteed. Achieving more than what one thought one was personally capable of builds confidence, pride and a sense of accomplishment in one’s work—intrinsic motivators, rather than external ones like money or fear. Accomplishing a series of smaller challenging goals adds up, over time, to big breakthroughs. And that is ultimately good for the company, the customer and the employee. Win-win-win.
So, yes, targets are absolutely necessary for the practice of Lean problem solving and people development. You can visit a lot of companies who measure virtually nothing outside of their financial statements, sales quotas, and individual performance evaluations, and you can safely assume they are not a very Lean company.
Yet the presence of measures and targets is not sufficient evidence of Lean either. Deming rightly pointed out that what was needed was not more targets (which he equated with management), but more leadership (and less management). Many companies say they are “doing” Lean and they will show you all sorts of measures, graphs and numbers as “proof” of this. But is the company’s leadership using numerical targets to develop its employees through coaching them to successfully solve problems that are aligned with the company’s strategic objectives, or are they merely using them as the old carrots and sticks that Deming so despised?