Saturday, August 16, 2008

Measuring or Judging

As an accountant by training, my tendency is to attempt to measure everything in business and make decisions based on those measurements. Measurements… like how many calls came in, how many were converted to customers, how much did each customer spend, how long did you work, and how many widgets did you produce, etc…you know…counting things!

In fact, we have been known to say, “What you can measure, you can manage”. In the world of repetitive tasks, such as an assembly line process, this perspective may be very successful. But the business world of today has many fewer repetitive, factory worker type, tasks and many more unique selling and production opportunities. The environment has changed to a knowledge worker dominated work force as opposed to a factory worker dominated work force. In an environment such as this, measurement in and of itself can be difficult at its best and yield worthless information at its worst. Managers should take note, as managing a knowledge worker is much different than managing a factory worker.

Measuring how long a knowledge worker, someone who thinks for a living, sits at his or her desk, though relatively easy to do, will not necessarily assist a manager in assessing the productivity and value of this type worker. Sure the workers are there, but are they productive? You then may think, “Let’s measure the knowledge worker’s output.” Again, on the surface, this sounds pretty good... and easy…but what if the output is of great quantity but poor quality? Will the customer be happy?

I hope you are beginning to get the picture that judgment in the world of business management is beginning to take the place of pure measurement. A rather silly example is that measuring the efficiency (how many operations performed) of a brain surgeon is not nearly as relevant as judging his effectiveness (how successful were the ones that he did perform). I don’t know about you …but give me effective in this case every time!

Because our firm is totally comprised of knowledge workers, I have given up all together on certain measurements as a management tool. In fact, we have adopted, what we call, a Results Only Work Environment (a ROWE). We do not complete time sheets, we do not have set office hours, we do not have set holidays, we do not have “overtime”, and we do not measure our value by how long we are at the office. But what we do track is how effective are we in completing a task in a timely manner and in the highest quality fashion. We judge how happy our customers are with our deliverables and services. We also hire quality people who are very well capable of knowing the tasks they need to accomplish, the associated timetables, and the quality expected. We treat them like adults (though sometimes we play like children) and judge the quality and effectiveness of their output.

In the business world today…judgment trumps measurement every time!

4 comments:

Anonymous said...

Great post! I work with Cali and Jody, the two HR pros who created and implemented ROWE at Best Buy. Love your post and love the approach. Please feel free to shoot me an email as we'd love to feature you on our website: www.caliandjody.com

All best,

John

Anonymous said...

PS - you can send comments via the links on Cali and Jody's website. THX!

Brenda Richter, CPA said...

WOW!

What a great way to run a CPA firm, or any business for that matter.

Just imagine how great our profession would be if all CPA firms were run this way.

PS -
I also read Cali & Jody, but your post is very industry specific.

KAREN said...

I blogged tonight...check it out.
karen-haynes@blogspot.com