Modern Measurements | AccountingWEB

Modern Measurements

Hat tip to Marc Grubb at fusion IT for passing along an article by David Boyle, a fellow of the New Economics Foundation.

A little background. David Boyle wrote a book called The Sum of Our Discontent, which I read in July of 2001, based upon a stellar recommendation from Paul Dunn.

Paul reads a lot of books, so when he tells you a book is a must-read, you're wise to listen.

I'm so glad I did, because Boyle's book inspired me to write Measure What Matters to Customers, which was published in 2006.

It took me about five years to coalesce my thoughts, but Boyle's book led to knowledge creep: It changed Key Performance Indicators to Key Predictive Indicators and inspired us to question the McKinsey Maxim: "What you can measure you can manage." This is hokum, but it's entrenched in our thinking.

In his book, Boyle posited the McKinsey Fallacy: "What is really important cannot be measured." He presents a compelling argument.

Boyle also inspired my Seven Moral Hazards of Measuring with his 10 Paradoxes of Counting (I will post separately on the Seven Moral Hazards in the future).

In the article Marc sent along--The Perils of Obsessive Measurement--Boyle's Law is posited:

When you use numbers as the basis for payment, they become irrelevant to the broader objectives of the service.

How true is this? An article in the Wall Street Journal, "Stores Count Seconds to Trim Labor Costs," illustrates how perilous measuring the wrong thing can be, not to mention how a relentless focus on efficiency inhibits effectiveness in customer service, verifying Boyle's Law.

The WSJ article explains how 185-store chain Meijer Inc. has installed a labor-waste elimination system that tracks how long it takes a checkout clerk to scan a customer's purchases.

The system was developed by the efficiency experts at Accenture in the "Operations Workforce Optimization Unit." Sounds inspiring doesn't it?

If a checker falls below 95 percent of a baseline score too many times, it could lead to lower pay, or even termination.

Put a measurement system in place, and people will game it.

Oh, they'll deliver what you measure, even if it means ruining your organization in the process. You can see the effect this measurement has on customer service.

Compare it to Ritz-Carlton. If you ask any employee where the conference room is, they will escort you there, not just give you directions, or pull out a map too small to read.

It's not very efficient to the folks at Accenture, but it's incredibly effective in terms of providing a world-class customer experience (and pricing at a premium).

I remember reading about Great Britain's National Health Service creating a measure of how long people have to wait in emergency rooms before being seen by a doctor.

The clock starting ticking as soon as they were brought in to the hospital by the ambulance. The result? The drivers were told to keep the patients in the vans so the clock wouldn't start.

This is one of the problems with any measurement system. People will game it. People are scamps, which is what makes us humans, not machines.

It's also why any measure has to be leavened with judgment.

Bad measurements crowd out good judgments, and there is a plethora of examples in Boyle's book.

As my colleague Ed Kless profoundly points out (call it Kless' Law): All measurements are judgments.

What we measure is determined by our theories, so if we are more concerned with efficiency than effectiveness, we are doing a disservice to our customers and team members.

People are not the sum of any measurement. Sure, you can count people and their actions, but whether or not that measure means anything that's tied to results is another issue altogether.

Boyle's Law exactly describes the perils of the timesheet, which has absolutely nothing to do with the objectives of the services professionals provide.

We seem to confuse measuring activities with producing results. The Scottish have a proverb: You don’t make sheep any fatter by weighing them.

It’s reminiscent of Charlie Chaplin's protest film against the Scientific Management Revolution, Modern Times.

How many areas of professional knowledge firms does Boyle's Law hinder the purpose of professionals?

It's a judgment worth pondering.

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VeraSage Institute is the most revolutionary think tank for professional knowledge firms-we challenge the professions to break free of practice methods that hurt the professions, undermine their purposes, and fail their clients. Among our quests: burying the billable hour and archaic timesheets; pricing on purpose; recognizing that professionals are knowledge workers, not machines; and improving the professions for posterity.

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