Food for Thought

• DOI: http://doi.org/10.1002/bl.30085
• Published date: 01 September 2017
• Date: 01 September 2017

SEPT.–OCT. 2017 3

Table 2: Pitfalls in Outcomes Measurement

Issue Impact

Lack of clarity about legitimacy

of outcomes choices

Unless they are accepted as legitimate

across the organization, the board’s

outcomes may not carry sufcient

weight for effective implementation.

Perverse incentives It is very easy to encourage negative

behaviors by failing to think through

the potential consequences of the

outcomes you set. Such results may

include executives bullying staff, “gam-

ing” their reported numbers, or indulg-

ing in other forms of cheating. They

may also take the form of the discovery

that achieving the chosen outcome

involves sacricing another equally or

more benecial outcome.

Failure to deal differently

with ends and means outcomes

Organizational plans and goals cover

many different kinds of issues. Acquir-

ing a new building and more staff are

certainly legitimate goals that need

to be planned for, but they do not

constitute reasons for the organiza-

tion’s existence. In other words, they

are means, not ends. If ends outcomes

are not given clear precedence over

means outcomes, it is very possible

to nd that the organization is unwit-

tingly defeating its own ends in the

pursuit of its means outcomes. For

example, a hospital board might set an

outcome that no patient should wait in

the emergency department for more

than four hours. However, if that means

that patients simply end up waiting the

extra time at the site of the accident or

in the ambulance, the hospital’s overall

ends pertaining to optimizing health

may have been defeated.

“In the most robust states, a

common moral foundation

underpins both the public

and private realms. What

is wrong in the private

sphere is also wrong in the

public sphere. In contrast,

in highly corrupt places

there is a sharp dichotomy

between public and private

morality. What is wrong in

the private sphere may be

right in the public sphere.

The net result is that people

do not feel obligated to

act ethically when it comes

to anything involving the

state or public affairs, with

severe consequences for

the quality of governance.

The real mechanism for

corporate governance is the

active involvement of the

owners.”

Seth D. Kaplan, Professorial Lecturer in

the Paul H. Nitze School of Advanced

International Studies (SAIS) at Johns

Hopkins University, Senior Adviser for

the Institute for Integrated Transitions

(IFIT), and consultant to organizations

such as the World Bank, United

Nations, African Development Bank,

and USAID, writing in: The Moral

Foundations of Good Governance,

http://www.fragilestates

.org/2012/06/27/the-moral-

foundations-of-good-governance/

FOOD FOR THOUGHT

its ends if the organization has done

so by means that its legal and moral

owners would regard as unethical or

imprudent. So, when it comes to gov-

erning the work of its organization,

the board must develop and measure

outcomes in two areas:

1. Are we achieving the right things

for the right people at the right

worth?

2. Are we avoiding the use of

unacceptable means along the

way?

Table 3 lists the steps followed by

boards using the Policy Governance

system.

I hope you have gathered from the

above that outcomes measurement

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