Satisfy customer needs and meet production efficiencies, usually generating internal conflicts in organizations. The indicators and their consequences, is a reality that most people who have had work experience know very well.
Profitable companies Vs Soccer team
Let me explain this phenomenon with an example of a different environment, a competitive soccer team. The objective of a competitive team, that is, to be part of competitions or tournaments, is to win. Regardless of the internal conditions or the team you face, the goal will always be to win. Because of this, all actions, training, plays and laboratories, aim to have a specific function to win the game, and gradually approach the final and of course win it. In high-performance teams, such as professional teams and national teams, it is common to find people specialized in each function of the team, such as the technician of the defensive zone, the technician of the attack zone, the coach of archers and many more, They are always under the direction of the technical director.
Regardless of the complexity or number of moves that may occur in a match, the final result is what matters. As in the companies. Now let's make an analogy of what would happen in a football team if we follow the Local indicators so common in companies. Think for a second, what could be a local indicator? Meters covered by playing per game? Goals scored per game? I will take the first, meters traveled per game. If the goalkeeper is measured by this indicator, very surely his performance will not be that of the best in the team, but we all know how vital it is to have a reliable goalkeeper. However, if the goalkeeper is rewarded for this indicator, despite having kept the goalless goal, his remuneration will not be the best and therefore his motivation may be at negative levels.
Then we look for another indicator that can "motivate" you to do a good job. Maybe, covered balls per minute. If the team is sufficiently solid and cohesive, it is possible that the opposing team does not attack too much and, therefore, does not make many shots, so that indicator will not be very useful or at least, not for the archer's management. You can keep thinking and looking for the best indicator, moreover, you can make cuts during the game and reward each player in fractions of 22.5 or 30 minutes to partially assess with 3 or 4 periods, the progress of their management.
It sounds complex and a bit absurd just writing it. But in profit organizations, the indicators work very similar to what has been described. The cuts every quarter or every four months, people demotivated by the indicators, conflicts between areas that fulfill their function and blame others for not doing their part.
I'm going to mention just one example: think of a company that produces something; After a month the production efficiencies are met, independent of the demand, but the liquidity of the company is reduced, why ?. Production works based on projections, consumes raw materials, energy from machines, labor of direct people and produces a good. In the event that sales do not occur as expected in the initial projections, it is possible that a large number of products are ready in the warehouse without being able to ship and the expenses incurred must be paid.
In this case, production met its indicator, but not sales and logistics, because of the costs of inventory does not achieve its indicator, but, above all, the company does not achieve the expected benefits.
conclusion
What most worries, in most cases, is the local indicator, since it is usually linked to a payment, leaving aside the overall results. In other words, the final result is diluted by pursuing indicators by function or also called local indicators. Organizations must rethink their indicators to stop generating internal conflicts and align staff to achieve the overall objective. This is a very challenging task and involves changing the most entrenched paradigms of organizations (local efficiencies, unit costs, etc.). If management encourages officials to change their paradigms and innovate, their example is fundamental, which is visible in corporate indicators, since these are the elements that determine people's behavior. In conclusion, if local indicators are not changed, the results of the companies and their organizational culture will not be changed.
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