The origin of “R2”

Observation #17

carpedia-observation-17“Required Results” — or “R2”, as it’s more commonly called by our clients — is the tag name we use for objectives or goals or targets. It came about as a result of an observation we made in the first few years of the company. When we studied organizations and how management reacted to off-schedule conditions or variances from their plan, we noticed that results that came relatively close to an objective were generally considered “good enough.” Coming in “pretty close” to the original goal meant they did not dwell on why they didn’t actually hit it.

Jim Collins, the celebrated business author, was addressing this phenomenon when he wrote, “Good is the enemy of great.”

The problem with rationalizing or even accepting results that are “good enough” is that it stops problem solving dead in its tracks and, over time, gradually erodes the performance of an organization. Companies have a way of embedding last year’s results in this year’s plan, so if you accept “good enough” when you are close to plan, you can end up quietly lowering the bar every year. That is why we came up with the term “Required Results”: it has a different meaning. Targets and goals tend to become ideals to strive for, whereas a requirement is a requirement. Managers respond better to the term and quickly come to understand that any result below the requirement is not OK. This helps to reinforce the discipline of problem solving for any and all variances — a critical skill needed if organizations want to manage and drive their performance levels.