Professor Chris Styles

If you can’t measure it, you can’t manage it.

Therefore, managers need a formal, cascading set of KPIs (key performance indicators), KPTs (key performance targets), and annual performance reviews to keep staff accountable. It’s hard to argue with that. And with quarterly reporting, the need to meet market expectations, and bonuses up for grabs, it’s no surprise that this is management’s default mode of operation.

But what motivates our top talent? How do we get the most of out of our high performers? What gets them out of bed every day and late to bed every night? Making budget? Meeting KPIs? And do we really want to “manage” them?

I’m not so sure.

Curiosity, experimentation, achieving the unachievable, and pushing boundaries tend to be the things that turn top talent on. Sure, they have to make their numbers: if we don’t have cash flow today, there is no tomorrow. But that’s not what really drives them.

The traditional corporate mindset drives the need to find answers – tackling the known knowns, and solving the known unknowns, to coin a phrase. But the real challenge – and the challenge top performers love – is to go beyond this. What are the interesting and challenging questions? What don’t we know? How do we discover what we don’t know?

Managers have learnt over the past decade that the world is far less linear and predictable than it ever was – if that ever was the case. Perhaps the true skill of the leader is not to know the right answers, but rather to know the right questions to ask, before creating the organisational environment conducive to experimentation and finding pathways through these challenging questions.

This means getting things wrong is OK. Failing often but failing fast is the catch-cry. Knowing what doesn’t work means at least we know something. If we know it before the competition, we have an advantage.

For many organisations, this requires a change in mindset. A tight style of management through KPTs is comforting and probably an element of that is necessary. But perhaps it is not always conducive to real innovation.

One interesting example is what is happening at AMP. Senior management has recognised that there is a significant level of staff passion for making changes at AMP. They have introduced an innovation program, where one component of it is based on the “wisdom of the crowd” – its staff. This means that everybody can post an idea on a platform that is visible and accessible to all employees. Employees who do not have their own idea can collaborate with their colleagues’ ideas and earn points together, which they then redeem for something tangible. AMP acknowledges every idea that is implemented by recording a short video of the idea owner and announcing it through the organisation. They believe that peer recognition is very important for people who dedicate their time to advocating change.

In addition, AMP has recently established an Innovation Board, but in quite an unusual way. Senior leaders have invited all staff to apply for nine seats on the board and have asked them to submit one page or short video to demonstrate how they are going to make difference at AMP. Two key objectives are set for them: a) to shape an innovation program which will help to reinvent AMP and b) embed a creatively restless culture in everyday activities across AMP. After accomplishing a set of agreed activities, the board members will get funding for their personal leadership development with the leading innovation institutions.

By establishing the Innovation Board, AMP has created innovation ambassadors, who have significant influence among their peers and the capacity to stimulate the crowd to collaborate on making changes for AMP. These ambassadors are the key to exploring the unknown.

Letting go, knowing you won’t know, and creating the conditions in which the unknown unknowns can be explored, is perhaps a big part of the answer.

Professor Chris Styles is Deputy Dean and Director Australian Graduate School of Management (AGSM).

This article first appeared on The Conversation, 13th April 2012.