On the folly of results

October 7, 2011

It’s common knowledge in the business community that effective leaders focus on results not on activity. But people once thought the earth was flat. Now we know better. I think there will come a time when we will see the focus on results for the silly simple-minded nonsense that it is.

Think about it. Imagine you hire me to build you a house. (Well, first imagine that I actually know something about building a house.) You give me 6 months to finish the house. And then you go out of town. I work on this house day and night. No corners are cut, everything is top notch. I come in under budget. And the house is done in 5 months. The house is amazing – guaranteed to knock your socks off.

But then, a freak storm comes and totally destroys the house. I know what you’re thinking – I should have built it to withstand storms. But nope, I not only followed code, I exceeded the code – the house I built was 100 times stronger than any expert ever thought it needed to be. And the storm? Well, this was like a 1000 year storm. No scientist, no model predicted that such a storm could ever come to the area.

When the 6 months are up, you come home as planned. And there’s no house. I have no results to show for my efforts or your money. Lots of activity but no results.

Now let’s say somebody else in town needed a house. Somebody who had seen me working on the house for the 5 months and who actually saw the finished house. Do you think they would hire me? Of course they would! Everyone would want to hire me to build their house. I clearly do it better, faster and cheaper than anyone else.

But wait – no results! Why would anyone ever hire someone who doesn’t deliver?

The answer, my friends, is obvious. The house I built was great. But there was no way to predict the freak storm. If I built another house, you should not expect another storm to interfere with the homeowner actually moving into the house. But you should expect my work ethic, my skill and my creative genius to manifest themselves in my work. Basically, you have every reason to expect a great house from me even though I haven’t delivered any results yet.

Of course we all want results. I’m not suggesting results don’t matter. But we aren’t going to perform better through simplistic childish thinking that assumes a univariate world with a perfect positive correlation between activity and results.

The fact is that there isn’t a perfect correlation between effort and results. There are random factors that influence the result which have nothing to do with the person doing the work. Freak storms wipe out houses. Unpredictable market occurrences destroy new product launches. Ex-Presidents die the week when you’re planning a major PR launch (this happened to me early in my career). If you want sustainable performance, then what you really want is a workforce that engages in the right behaviors, not a group of people that get lucky.

Fools evaluate people based only on their results – rewarding or punishing people for events they cannot control. Wise people understand cause and effect and want to evaluate and reward people based on their characteristics – those that can reasonably be expected to endure – not based on randomness that will, by definition, not persist.

And here is the kicker: When you evaluate and reward for results, you encourage people (actually, you train them) to do all sorts of unwise, unprofessional, wacky, illegal things to game the system and get the result. They find loopholes, they get “clever” and they destroy you and your business.

The focus on results sounds mature. It sounds like the no-nonsense attitude of the serious businessman. But actually, it reflects primitive childish thinking – which is more likely to lead to disaster than to good results.

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