The key to consistently hitting your numbers
“Requirements” not goals
This maxim reflects one of the most important principles in our methodology for implementing changes in organizations. People manage against “requirements” much more effectively than they do against “goals.”
Over ten years ago we changed all of the management reports and tools we built from saying goal, plan, objective or target to something we called R2. R2 was an abbreviation for “required results.” The reason we did this was that we noticed that there was a very different psychological trigger when you called something a requirement rather than a target. A requirement implied an absolute objective, something that was actually required. Goals, targets and plans mean something different to most managers. They are something that they strive for, but there is not the same finite and absolute objective that “requirement” implies.
When people have a goal of 85% and they achieve 83%, they tend to mentally turn off their problem solving focus because they are close to their goal; therefore they never investigate and learn what happened to cause that 2% loss. When 85% is deemed a “requirement,” it carries a very different meaning. 83% does not achieve the requirement and therefore the manager is more likely to problem solve the variance.
This becomes all the more important when you consider that the original target of 85% is often not really 85% at all. In truth it is often much less in real terms. 85% may be built on loose standards that are already buffered with various “loss factors.” Most standards we come across build in existing operating problems, which effectively hide them from management. To achieve predictable results and drive continuous improvement you need a way to get managers to problem solve any time you don’t achieve the business plan. The best way we have found to do this is to change the language, and the result is a change in the associated management behaviors.