This weekend I attended a leadership event where teams were asked to participate in a case scenario. Each of the four groups had to make business decisions (Invest or Sell) that would earn their division and overall company money. Who “Sold” and who “Invested” would determine which group would earn money (if anyone) and who would lose money (if anyone). The overall company’s revenue would be determined by adding up the four units’ profits/losses. To add a twist, in the first couple of rounds, the teams could not speak with one another. In later rounds, they were able to speak for a limited period of time.
The metrics for success were laid out for the teams. For example, in Round One, if each group “Sold”, each group earned $1000, thus the overall company would profit $4000. If three “Sold” and one group “Invested”, the group that invested earned $3000, the three sellers each lost $1000, resulting in the company breaking even. If all four groups “Invested”, each group lost $1000 resulting in a total net loss of $4000. Every combination of Sell/Invest was covered. From the start, questions arose within the groups; do we all “Sell” and do the best for the overall company or do we try to make the best decisions for our division? Do we trust the other groups to think and act in a similar way?
Trust among the players were immediately called into question when, inevitably, one group broke from the “Sellers” in round one and earned their division a tidy profit while allowing the other three groups to take a loss. The following rounds saw some groups stay true their initial focus of doing what is best for the overall company whereas more groups were willing to put their individual department needs ahead of the common good. When the groups were allowed to speak with one another, there were some heated conversations as to the actions that had been taken and promises that had been broken.
What this game boiled down to is an example of how competing metrics for success can doom an organization. If the measurements of success are not in alignment with one another, then individuals/units will revert to acting on their best interest. An example of I witnessed is a fundraising unit for a large nonprofit. While the overall goal is to bring in the most amount of dollars for the organization, individuals are measured on what they personally raise from donors. What this created was a culture of secure the best donation/gift one could secure in the near term as opposed to trying to develop the donor to make a larger gift later on that may involve multiple groups within the nonprofit. The metrics for success were not aligned.
For anyone who is currently supervising or will be in the near future, remember that you must set clear guidelines for on what criteria your employees will be rated. And for anyone who is being supervised and who do not know what the metrics are for success from one’s boss – it is time to sit down and have a conversation. One needs to know what is valued by the boss and overall company in order to know where to best prioritize time and energies.