On the morning of January 5th, Tom Parks, director of application development, filed into the company auditorium with the rest of his co-workers to hear the president give his “state of the company” speech. It was a routine Tom knew well. The president gave this presentation annually during the first week of the year. He spoke at length about Morrison Manufacturing’s performance over the past year. He thanked all of the employees for their hard work and talked about how bright the future looked. This opened the door for him to present his audience with the company’s top objectives for the coming year.
The president proudly announced that in the year ahead, Morrison Manufacturing will:
- Increase revenues by 15%
- Add new customers to account for half of all new revenue
- Reduce operating costs by 10% through improved efficiencies
The following day, Tom met for his annual performance evaluation with his boss Julie, the company’s Chief Information Officer. Julie gave him an excellent evaluation. Although the company hadn’t met all of its goals last year, Tom had a good year. He met or exceeded all of his objectives. Julie thanked Tom for his hard work and showed her gratitude even further with a significant pay raise and a larger bonus than he received the previous year.
Toward the end of the meeting, Julie presented Tom with his personal objectives for the coming year. They were essentially the same as his objectives for the previous year:
- All projects under his control should be completed on time and within budget.
- Tom’s team must receive a satisfaction assessment from internal customers of 3 or higher.
- All software defects with a severity of “Critical” should be addressed within one hour of being reported.
Tom’s team had already implemented software that would electronically send an email to anyone submitting a critical defect, which achieved the final objective automatically. He knew he just had to focus on the first two.
A challenging project
On February 3rd, Tom received a request from Chris Tompkins, the vice president of sales. Chris proposed purchasing and implementing a sales force automation package that would allow his team to gather information on more prospects and increase their sales potential. Chris believed this would easily allow them to meet, and likely exceed, the corporate objectives to increase revenues and expand their customer base.
Tom had misgivings about Chris’ proposal. This would be a large and complex project involving many groups of external consultants. It would be very challenging to bring this project in on time and under budget. Tom knew that if that happened, it would be hard to get a high satisfaction rating from the sales group. Both occurrences would hurt his evaluation.
Tom already had several projects in progress, the largest of which was the implementation of a distribution system. The project was going well and Tom knew it was ahead of schedule, but he hadn’t told the distribution team they were ahead. He didn’t want them getting too overconfident.
The next day Tom held his weekly status meeting for the distribution project. When the meeting ended, he pulled Jay, the director of distribution aside. Jay also served on the governance committee, which was the final authority determining which projects the company would implement. Tom explained to Jay that the sales force project would spread his resources thin, seriously jeopardizing Jay’s distribution project.
Jay’s objectives were designed around the successful implementation of his distribution system. He didn’t want anything to get in the way of his project. He talked with some of his peers on the governance committee, traded in some favors, and obtained enough votes to kill the sales force project.
I’ll scratch your back…
On July 12th, Tom received a call from Margaret Perkins, the director of manufacturing. “Tom, our SharePoint project seems to be going well and your team is going a great job. But we just uncovered some functionality that we need that was never part of the original scope of the project.”
“Normally when that happens,” Tom replied, “We add it on after the project is over. There’s usually a second phase to cover any new requirements.”
“I would normally be okay with that Tom,” Margaret said. “But this is critical stuff. We really need this by the due date.”
Tom thought about her need. She was in a tough spot and he was in a position of power. “I’ll tell you what Margaret,” he said. “If you’ll promise to give our team a satisfaction rating of “4”, I’ll make sure the extra functionality is in by the due date.”
Margaret was hesitant. She knew she didn’t have very much leverage and she needed the favor from Tom. She reluctantly agreed.
More results. More conflicting objectives
In January of the next year, the president reported the company’s disappointing results. Morrison Manufacturing did not achieve any of its objectives. Their sales had actually decreased and no new customers were added. The following day Tom sat down with Julie for another annual performance review. Once again, he met or exceeded every one of his objectives. He received a stellar review and a large pay raise and bonus.
Another successful year, he thought to himself as he walked out of Julie’s office.
Have you ever had conflicting objectives with the company?
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