An organization at one time had an internal repair group responsible for facility maintenance. When light switches failed to work, or the employee parking lot developed potholes, they were called and quickly fixed the problem. Much of the time they did not have a lot to do, the site was new and most things were in good shape.

Over time, it was decided to contract out the facility maintenance to cut costs. The plant manager was proud to be able to show savings in his budget, by only spending for the exact repairs needed. And to save even more money, the repairs were bundled and put out for bid. The lowest bidder got the job. Problem was, it took many weeks for the process between reporting a problem and getting it repaired.

External maintenance costs were tracked very carefully. The organizational impact of the problems while they were waiting to be fixed was not measured, however. While management was very proud of the cost savings, the staff gradually came to believe that management just didn't care. Problems mounted as people found workarounds to the things that were waiting to be fixed. Eventually, some staff left to other companies. Those that remained developed the attitude that they just did their job, if blocked by a problem, they waited -- it was all they could do.

Productivity declined over time both from the loss of key staff and frustration from accumulated workarounds. While management was very sharp to evaluate maintenance costs, what was missed was assessing the impact of the problem and cost of extended downtime. So there was no organizational way to tell how expensive the cost reduction strategy was -- if what was saved in maintenance was lost in hobbled operations. In retrospect, not that anyone cares anymore, they should have measured both.

The example is fictitious, but composed of elements that have been observed in the conduct of organizations all around us.  But the message that should be drawn from this is 'be careful when developing metrics that measures of satisfaction are chosen at the right level." Defining the problem too narrowly can lead to choosing ultimately destructive directions.  Or in other words, be careful of what you ask for, you might get it.

Further information on this and related topics may be found on our website http://www.tekstrat.com

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Gregory Latiak

Technology Strategists, Inc.

http://www.tekstrat.com/

Tel: (416)540-7384