by Rene T. Domingo (email comments to rtd@aim.edu)

In the proverbial race between the turtle and the hare, it was not a triumph of perseverance over arrogance. The turtle won because he had a better management philosophy. The agile competitor was result-oriented while the sluggish victor was process-oriented. The hare was so sure of winning because of his natural swiftness that he dismissed with glee and contempt the challenger's threat. He thought that he would reach the finish line first in any way he so desires, thus frittering away time and pandering to all sorts of distractions along the way. The turtle decided that to reach his destination, he had to go in the right direction without stopping while maintaining constant "full speed". It was the selection and execution of the right process that determined the final result, and not the possession of ability and confidence.

HELPING THE HUNGRY MAN

We have been told and convinced that to help a hungry man, it better to teach him how to fish (process) than to give him fish (result). Better yet, why not teach him how to find and earn a living just in case the lake dries out or runs out of fish. When one goes to the temple to learn the martial arts from the master, the novice does not start with sword wielding lessons or kicking techniques. For years, he is asked to sweep the floor, clean the dishes, meditate and pray -- activities or processes which to the impatient does not seem to have anything to do with the objective of subduing one's enemy or defending oneself. The master starts with the process of developing and strengthening one's character and attitudes - perseverance, humility, concentration, consistency - that would be crucial when he starts handling the sword and confronting the enemy. Those who are just good at techniques and smashing bricks never become true masters of the art.

If process-orientation is clearly the better approach, why is it that business in general is so preoccupied with producing and chasing results - sales targets, ROI's, bottom lines, quotas, budgets - to the extent of neglecting process development and process improvement. The result manager would tell his subordinate: "I don't care how you do it, just do it! I don't even want to hear how you'd do it!" The poor creature is rewarded if he succeeds, or chastised if he fails to meet the objective. More often than not, he would fail and he and his boss would not know why, because he "doesn't want to hear excuses and explanations". Thus the subordinate never grows up, never learns, and would repeat the same mistakes. The ultimate victim of this vicious cycle is of course the company.

BORROWING FROM THE MILITARY

Just like many other management techniques, PERT and Strategic Planning to name some, the practice of managing by results or objective was borrowed by business from the military. But the military situation is totally different from that of business. War is a project that has a beginning and an end; the ultimate goal is victory. There is no time to learn from mistakes; there is no second chance. You are either the victor or the vanquished. The end justifies the means - any means. In business, however, there is no finish line; if you fail to meet your targets, it is not normally the end of the world. There is time to reflect, recover, reassess, learn, adjust, improve your aim, catch up and make up for lost time. There are no permanent victors and vanquished in business. You are fighting battles; the name of the game is batting average - or those with less mistakes win. In war, just one mistake can mean total and irreversible defeat. In business you can still come out a winner even with a lot of mistakes, as long as the competitor makes more of them.

THE COACH AND THE JUDGE

Process management does not aim to make mistakes; it aims to learn from them fast so they would never be repeated in the future. A process manager aims for perfection, and he does this by continuously improving all processes so that 1) nothing goes wrong and 2) nothing can go wrong. Mistakes are not anticipated but are forgiven when they do occur as long as one learns from them. The result manager is also after perfection; but he managers by remote control and refuses to check if the process can attain its goals. His main task is to evaluate the process and not to improve it; the only time he changes the process is when results are consistently bad - when it is too late to do anything. The result manager is a judge, a process manager is a coach. The former aims for fairness - reward the good and punish the bad. The latter aims for victory - encourage the good, and help the bad.

Companies managed by results tend to have short memories. What is important is present accomplishments versus targets; past performance, no matter how glorious and how recent, has no bearing on one's present evaluation. In the military, you can receive honors and medals for gallantry one day, and get hanged for insubordination the following week. This principle in desirable in war, but disastrous in business. Companies wagged by results find themselves alternating unpredictably between celebration and crisis, between parties and panic. Senior managers and executives who have built the company for decades are fired for non-performance or failure to meet the quarterly or annual targets. Demoralization is officially systematized. Organizational instability is traded off for short term results, for pleasing and awarding the few who bring in results.

DECISIONS AND RESULTS

Let us look at one very important process - the decision making process - and see the dangers of result-oriented management. The decision tree below shows that a good decision can bring good and bad results, so does a badly made decision.

Note that a decision is theoretically judged by its result, i.e., a good decision is good because it brings in good results. But in practice, we do not know the result of a decision once it is made; it make take some time before we know the consequences. But at the time the decision was made, we can already evaluate how well or badly the decision was made, whether it was cautiously or hastily done, whether it was well-informed or ill-informed, whether it was scientifically done or pure guesswork using the flip of the coin or crystal ball. There are many decision-making processes that aim to help us select the better decision or alternative before the actual results are known.

Note that a well-made decision does not guarantee that one will not commit a mistake, nor does a badly made one guarantee disastrous results always. So what is the point of improving one's decision-making process when the consequences seem to be the same? The difference is that a good decision has a higher chance of yielding good results than a bad decision; conversely, a bad decision has a higher probability of coming out with bad results than a well made decision. In effect, by improving our decision making process, we are improving our chances of success, but not completely preventing failure. We are just trying to be better decision makers than others, committing less mistakes. Good decision makers are still human and imperfect, but end up as the winners in the long run.

Let us now convert the tree into a grid below and examine the four scenarios.

"A" means you worked hard and you deserve the successful outcomes. "B" means you worked hard, but were not lucky; some external force beyond your control, the weather perhaps, got into your way. "C" means you did not try hard but got lucky. "D" means you did not do anything and you deserve all the dire consequences of your actions.

JUDGING BY RESULTS

In a result-oriented company, people - management and employees, superiors and subordinates - are judged according to results, regardless of the process that generated the results. Results are in the form of market shares, profit targets, ROI, sales volume, cost per unit, defects per million, production quota, meeting budgets, etc. Let us see how result evaluation affects the behavior of the person being evaluated. If the situation is "A" or "D", there should be no problem. If "A", you get awarded, praised, or promoted for the fine results, so you just continue or repeat what you have done in the past -i.e. good decisions - expecting the same fine results would happen again. If "D", you get scolded, warned, or penalized for the disastrous outcome, so you change you old ways and hopefully you would improve your decision making process, do the opposite of what you have done and change it from "bad decision" to "good decision".

The problem occurs with "B" or "C". If "B", after being evaluated poorly for the results, you wrongly conclude that your decision making process was at fault, so you just do the opposite - bad decision - expecting the result to be better next time. Of course, in reality, more bad results will happen because of this unnecessary change in process, and you deteriorate very fast. Nobody knows why because nobody cares.

If "C", the company congratulates you for your shining achievements, not knowing nor caring that you were just lucky and careless. Because of this pat in the back, you wrongly conclude that what you did in the past, flipped the coin perhaps, was right and accurate - so you repeat the same ritual expecting the same good things to happen again. Chances are, the next time you flip that coin, the result would be a disaster, and you would get hanged for it. So from hero, you become a villain, because of the result evaluation system. You, your boss and the company become the losers in the final analysis.

The Japanese management system is the epitome of process-oriented management, while the Western management system, the result-oriented management. The difference in management philosophies are evident in top management decision-making, corporate strategy, human resource development, and manufacturing systems. The difference may also explain excellence and mediocrity, market dominance and low growth, innovation and stagnation among many Japanese and Western companies respectively.