Peter Drucker Forum 2014 – Interlocking goals, practices and metrics (Systems!)

Steve Denning summarizes it neatly:

It also came out that the goals, practices and metrics of this traditional way of running organizations fitted together as a kind of perfect marriage. That was because when you have a goal of making money for the shareholders and the executives, you cannot inspire people to pursue that goal with any commitment or passion. So you have no choice but to run the organizations with command-and-control. You had to have hierarchical bureaucracy to force the employees to pursue a goal that they didn’t really believe in. So shareholder value and hierarchical bureaucracy fit together in a perfect interlocking relationship, like a hand in a glove If you try to change one aspect, such as better team practices, the other aspects—the goals and metrics—undermine the change. So these organizations are stuck in a state of suboptimal equilibrium. When you throw in the phenomenon of exorbitant executive compensation that is linked to keeping up the stock price, it was hard to see how real change could be possible.

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