Gaming the system

Humans are very imaginative and innovative. We generally like to find the easiest way to get a result with the least amount of effort. In many cases this leads to great technological advancement as we ask the question whether we could make our day to day lives easier.

It is this human ingenuity that brought us useful things like the wheel, the steam train and the smartphone. I do find, however, that sometimes people get caught in an unrighteous cycle where the means becomes the end and where the shortcut becomes an end in itself.

I see this everywhere although today I am primarily focusing on the corporate world. Do you find that tasks are completed in order of importance to the individual’s own career rather than importance to the organisation? Or how some cultures have become so toxic that the gaming the system has become the full-time job.

There is a story that many economists like to recount when discussing the impact of having the wrong incentives. It is the story of the cobra effect where a bounty was offered to an Indian community for each cobra that was captured and killed. The community started farming cobras so they could collect the reward and so the cobra problem became worse. For more reading on this click this Link.

I worked in an organisation once where sales staff were rewarded for “rescuing” the monthly sales target. They did this by receiving orders in the last week of the month, then working with order management to have them captured before midnight. We literally had staff with beds set up in the warehouse so they could work through the night!

The game at play here? Demand was faltering but rather than admit to this we would capture as many orders as we could in the current month, that would otherwise have fallen into the new month. Magically, creating an additional few days of demand that got us over the target. In fact the system was gamed so badly that customers were in on the game too and would deliberately hold back orders till the last minute. For helping us achieve the target so late we compensated these customers with better discounts.

Of course like all times we lie to ourselves, this game fell apart when after many annual cycles of doing this there just were not enough orders to pull forward and just not enough discounts to pass on to customers.

A new game I have noticed is what I refer to as action dodgeball. I see people engage in meetings with the sole desire of leaving the meetings with no assigned actions. Some of the suggested actions would be very good for the business, but are potentially risky and resource intensive. Rather than be held accountable for the success of this new initiative, everyone in the meeting makes it their goal to make sure that none of the accountability sits with them.

As a result new activities take longer than they should and some positive ideas just never make it to market. The game being played here is called no actions at all costs. A good meeting being one where none of the work generated by the meetings sits with you.

Then there are my favourite cross functional KPI war games. Marketing wants the Rolls Royce of widgets because they are convinced that is what the consumer wants. Sales want the shortest route to the sales target and it may not be marketing’s widget. The production team want a widget that is easy to make and won’t impact their ability to produce other widgets while finance want a very profitable widget that will make explaining the business case to the board very easy.

What emerges is a product so misaligned with the needs of the customer and the company that the business case is looks like an MBA case study threw up on the paper. Yet, each functional representative leaves the meeting with the comfort that they have done the best thing for their own KPIs. Nobody is ever going to buy the Quasimodo widget but the middle ground agreed satisfies each of the functional heads.

I heard a rumour once of a business in South America which had figured out an easy way to get to the turnover numbers. As sales were recorded only when a delivery vehicle was dispatched from the depot, they lined up a whole lot of vehicles before midnight of the financial year and drove them round the block. Thereby creating fictitious demand. After midnight the stock was returned but their bonuses for the previous year were secured. What a joke!

Now let’s talk about the perception game which was the inspiration of this blog. As an executive it is important to deliver good results as well as be seen to be delivering good results. I have seen some companies swing so far to the latter that creating perceptions of competence has become more important than actually being competent. There are loads of examples in this space but I will share one I was shamelessly involved in (I’m not perfect).

We had just launched a new product that was going to give us a significant competitive advantage in the market due to its packaging. It was due for release, however, we had a big shot from the global head office visiting soon. It looked likely that we would not be able to get the product to market before the big global executive arrived. In all honesty the project had been managed well and we were comfortable with the market release timings. However, key leaders in our business really wanted it in the market before the global people arrived so they could show it off. They were worried about the perception of competence.

So what did we do? We basically sent free sample stock of the product to the retail outlets that we knew our global people would visit. We merchandised it on the shelf to look like it was a day to day product, including making our own pricing cards as some of the retailers were not ready with them. The global people were highly impressed. We had gamed them! But almost as soon as these people got onto their plane to London, I had the unpleasant job of explaining to different retailers why only a few of them got access to this new product. There were numerous consumer complaints because the sample stock was not exactly the same as the final productions stock too. But who cares, my global bosses loved it!

So where does this leave us? Without the corporate games work would be boring. I guess it is also very difficult to control human behaviour totally. I do worry, however, that we may be creating a culture of gaming each other and gaming our work systems that is very negative. I am convinced that organisations are better off when people engage honestly and tell it like it is. It is up to us as leaders to recognise when the system we have created to generate value, is now merely generating virtual points in a game that doesn’t really matter anyway.