Workplace By
Design
Excerpt
- The Measurement
Trap
Excerpted from Workplace By Design by Franklin
Becker, Order from Jossey-Bass
Publishers, San Francisco, CA
Managers in today's organizations would be derelict
in their duty if they were not deeply concerned about cost containment
and reduction. Five years ago IBM sales divisions were measured
by the amount of revenue they generated. No one actually knew
or cared much about the actual costs of producing the products
or delivering the services. But the days when a company like IBM
could worry about revenue without respect to costs have passed.
IBM now knows precisely how much what it is selling costs, and
targets are set not for revenue but for profitability. That makes
sense. Trying to justify every cost in relation to revenue is,
however, not always easy or necessarily the wisest thing to do.
Demanding hard evidence for guaranteed productivity gains before
doing anything new can stop innovation in its tracks.
Trying to understand what some activity or event
or design feature can contribute to organizational effectiveness
is perfectly legitimate. But defining the bottom line primarily
in financial terms, and then using it as the basis for justifying
innovation, can be counterproductive.
Faced with the bottom-line challenge, people react
in fascinating ways. Some seek divine deliverance: "Please,
God, deliver to me convincing evidence that new furniture will
save the company $1.3 million through increased productivity so
I can demonstrate a two-year payback." If the case can be
made for a direct cost savings, so much the better. But if it
cannot, it makes more sense to reframe the debate.
It takes a lot of confidence to challenge "the
way we do things here," but we have seen it work, and work
well. It requires evidence, but this evidence can take many different
forms. If the real goal is innovation, and in many organizations
today survival dictates that it must be, then the definition of
the bottom line needs to be drawn more broadly. In the context
of innovation, focusing excusively on hard evidence like return
on investment or keeping to a tight project schedule even when
it precludes creative experiments makes a virtue out of tilting
at windmills. What's needed is a collaborative redefining of the
relevant measures, perhaps within a larger set of corporate values
than the ones being articulated by those invoking the (cost and
schedule) bottom line. If nothing else, the process itself provides
the invaluable service of forcing senior management to understand
the choices they are actually making, and it gives them the opportunity
to make a genuinely informed decision about the allocation of
resources.
