To launch our two day conference on assessment, Bill discussed nine
frustrations. Here are my notes (approximate quotes) of Bill's remarks:
1. Too much fog in seeing business performance against the ebbs and tides
of the business cycle. It's hard to tell whether a business is doing well
or borrowing from the future. The accounting profession, with all their
pressure for billable hours, is not much help.
2. We need better lighting to see the lag times between cause and effect.
Important things have long gestation periods. What's the gestation period
for wealth building? Energy is lost on unrealistic expectations. It's like
pulling up the radishes every few hours to make sure they are growing.
3. It's a war between short-term and long-term. You will show +20% or
-20% on earnings depending on how conservative or liberal you are in
accounting. We have a self-scorekeeping system in business! Suppose the
NBA let each team self-score? Some CEO's say "I know there's a long-term
payoff in such and such action, but I don't know how to communicate this to
my Board so they can see it." How can we make the argument for long-term
programs so good that the pension fund managers will listen? At Hanover,
the things we were able to do in '81 flowed from what we started doing in
'73.
4. Is it a lack of knowledge? Or inadequate practice of virtue? I think
it's 75% a virtue problem, not a knowledge problem. We need moral
formation.
5. Self-scoring is more temptation than management can handle. The
management has a lot of influence on the auditors. There is latitude in
the quality of earnings. To break this, we have to free people from the
subservience to billable hours.
6. Corporate "leanness" is very difficult. When the company is growing,
when there are $ around, it's amazing how every group needs more people!
The leanness principle would say, for every dollar spent, make sure you
are getting a healthy return. Companies are able to lay off thousands of
workers at a time, but they cannot lay off one worker at a time. You have
to weed out the ones who aren't capable, just like regularly weeding a
garden.
7. Everyone wants to quantify everything. But, the danger is in using
proxies for things that are hard to quantify. One of our values at Hanover
was openness. Can you measure openness? I believe I can walk into an
office, talk to 10-15 people, and get a reading on whether it's working.
There are things you can know but can't quantify.
8. One of the most important things I did was avoid fads. I avoided the
temptation to do the fashionable, trendy things. For this, the CEO never
gets rewarded.
9. We need to encourage a "legacy mentality" at the top. Executives tend
to keep working on their personal performance score... When I chop
firewood, I tend to like to see a bigger woodpile and keep building the
woodpile. There must be a maturing process for executives in which they
shift from watching their performance score and pay more attention to what
they are leaving for the next generation. In what shape are they leaving
the organization for the next generation?
After Bill's talk, Tom Johnson related a Deming story... "In any
organization, 97% cannot be measured, 3% is measured. But, people are
spending 97% of their time on the things that are measured." Measurement
is putting our attention on what doesn't matter.
Comments? Follow-ups to any of these points? What does all this have to do
with assessment of organizational learning?
-- Rick
--
Richard Karash ("Rick") | <http://world.std.com/~rkarash>
Speaker, Facilitator, Trainer | email: rkarash@karash.com
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