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by Esophagus4 243 days ago
A bit rambling and meandering, but some decent points in there I guess. Lost me on the elephants.

Setting goals on estimated value vs measured value is the difference between a process goal and an outcome goal.

I guess the idea is you can’t control outcomes, but you can control your process inputs.

In baseball, for example, if you want to be a good hitter, don’t set a goal to hit .300, set a goal to do the things that will make you a .300 hitter. “I want to take 50 swings in batting practice per day. I want to workout once per day. I want to spend 30 minutes watching films of the next pitcher I’ll face…” etc.

In reality, it’s probably a little of both. For example, Sales teams are often compensated on revenue generated (outcome), but what if you did a good job (process) but didn’t hit your numbers because the market was just really bad in your vertical? A good leader will recognize this and still compensate you (i.e. hold you accountable) appropriately rather than punishing you for the outcome.

If one leader hits their targets in an easy environment, and another misses but comes close in a really challenging environment by being really creative and scrappy and clever, the second leader should be the one with the big reward.

You should be judged on how well you play your hands, not solely whether you win the game.

2 comments

>For example, Sales teams are often compensated on revenue generated (outcome), but what if you did a good job (process) but didn’t hit your numbers because the market was just really bad in your vertical? A good leader will recognize this and still compensate you (i.e. hold you accountable) appropriately rather than punishing you for the outcome.

A good leader might try to keep you on the team, if they like you and you miss your numbers for a couple of quarters. From what I've seen, Sales is pretty brutal. It's quite common for Sales folks to lose their jobs, even if there are circumstances outside of their control. If they do keep you on and you don't meet your OTE, you will get paid less. In many ways their job is harder and has more risk than software engineers trying to deliver a software project on time. Which also very hard to do!

This just pushes the responsibility for outcomes farther from the people doing the work. The CEO is going to answer to the board based on outcomes. If the sales leader knows they can't penetrate a market or engineering leader knows the feature will flop and they don't change the company's strategy then they are failing.
That’s… a strange dismissal of my point, and not based in reality. And despite yourself, you’re agreeing with me. The smart sales leader will find creative ways to pivot. And even if they don’t hit their numbers for factors outside their control, if they played their hand well, that’s what you reward.

If you’re solely graded on outcomes, you end up with very bizarre behavior as people game the system.

See: surgeons avoiding high risk patients because they don’t want to ding their outcome scores. And see Wells Fargo employees fraudulently creating accounts for people to boost their numbers.

You want to have an org that encourages (calculated) risk taking and rewards those who persevere though difficult situations.