Issue 37, Sunday 25 March, 2001
Made in New Zealand - twice winners of the America's Cup
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"Strategy is about making choices, trade-offs; about deliberately choosing to be different."

Michael Porter, Harvard Business School


Award is a free fortnightly email magazine featuring the tools, techniques and best-practices that deliver high performance in the new economy
In this issue
WarmUp – Just Turned Down A Great Job?
Ten Minute MasterClass® – performance indicators for non-profits
Quick Study® – Best practice or bad practice?
Quick Study® – Measuring quality in human services
ToolBox – Statistics and measurement best practice
STOP PRESS – President's Quality Award ditched

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WarmUp® – Just Turned Down A Great Job?
Our favourite pop ethicist – Emerson College (Boston) teacher Jeffrey L Seglin, has hit the big time. Well, a column in Fortune is pretty big (Fortune, by the way, for those not already drowning in the written word, is essential reading for new-economy and business watchers).

Keep It Quiet! Jeffrey wrote. Several years and many jobs ago – when job offers were more plentiful than layoffs – Microsoft wanted him to help start a website. Thanks, but no thanks (we're, as always, severely abbreviating), our Jeffrey said – but when it came to the 'should I tell my boss that I'd considered the offer enough to have flown cross-country for an interview' time, he dropped the ball. Yep. Told the boss.
"I put myself in a precarious position," he wrote, "I wasn't asking for more money or a new position. But I signalled that perhaps my boss should worry about my departure. Sure enough, within weeks, he announced he was recruiting a candidate who would come in above me and relieve me of some of my responsibilities."
Ethically, you're under no obligation to make such disclosures. Too often we confuse ethics with guilt. Just because your firm feels like family, doesn't mean that looking after number one is the same as cheating on a spouse. There are two lessons to be learned here:

(1) Not every difficult decision is an ethical one. In her essay "On Morality," Joan Didion writes, "When we start deceiving ourselves into thinking not that we want or need something ... but that it is a moral imperative that we have it, then is when we join the fashionable madmen … and then is when we are in bad trouble."
Sure, that's a bit over the top, but the point is well taken. When we chalk every discomfort up to an ethical conundrum, we slowly devolve into justifying every action as having moral undertones, and we soon fail to recognize that there's some stuff in business that's simply unpleasant.

(2) There are times when disclosing the full truth and all the truth is just plain stupid. "There's great room for discretion, for knowing when not to speak," says Sissela Bok, the author of Lying: Moral Choice in Public and Private Life. "Had I recognized that at the time, I would have kept my mouth shut – and my career options open," Seglin concluded.

JEFFREY L SEGLIN is the author of The Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart (Wiley, 2000). He teaches at Emerson College in Boston, jseglin@post.harvard.edu.
Ten Minute MasterClass® – performance indicators for non-profits Around the world large numbers of non-commercial organizations apply Baldrige (and derivative award scheme) criteria in search of improved performance.
Schools, units of central and local government, service organizations (ambulance services for example), hospitals and other caring organizations, NGOs like the Red Cross.
All have to confront the question of 'indicators of performance.'
What are the measures and indicators that provide meaningful information, both for internal and external (assessment and audit) use?

Here's some examples:
Financial measures – every organization has revenue and 'use of money' (expenditure) data.
Examples of operationally-useful indicators might be total revenue per year, revenue per revenue-gathering employee, revenue compared to a whole-economy measure (but not the NASDAQ. Although ... why not!?), revenue per individual contributor, revenue compared to costs of gathering revenue, revenue from partnership and other strategic relationships, and so on. Just don't get carried away. Choose the vital few, live or die by them.
'Use of money' measures might be number of interventions (ambulance call-outs, say) per unit cost, expenditure per client, clients served per unit cost, and so on.
Other financial measures might be employee cost as a percentage of total cost (a measure of the efficient use of staff), or aggregate measures of efficiency (cost per bed-day in a hospital, staff numbers per bed-day, in-patient compared to day-patient numbers).

Non-financial measures – customer satisfaction and dissatisfaction are widely employed, especially by service organizations like local government (city councils, counties, state governments). It's also common to measure satisfaction/dissatisfaction with specific services (water supply, library services, waste disposal, animal control, service response times).

Human resource measurements – include sick leave (sometimes a useful proxy for staff dissatisfaction) and outstanding annual leave (a measure of effective use of time, and a contingent liability). Number of reported accidents, costs of employee disability insurance or claims on accident insurance schemes, expenditure on training (and comparisons between training hours or costs and improvements in operational performance), and staff turnover and recruitment costs are all commonly tracked and reported. Supplier and partner measures – might be costs of security services, after-hours answering and emergency management services, telecom provider costs, and the cost of third-party technology services.

Organizational effectiveness measures – in local government for example – might include broad measures of customer value such as nature of contact with staff (telephone, in person, fix-o-gram, email, visits to web pages), call efficiency (number of abandoned service calls), service wait times, use of core facilities (community pools, museums, libraries – measures by cost per swim, cost per visitor or user, user numbers compared to staff costs), emergency management effectiveness, legal and enforcement and appeal costs and so on.

For an up-to-date impression of 'measurement' capability in human services, see the Quick Study article below.
Quick Study® I – Best practice or bad practice?
13 March 2001
Well-known anti-standards campaigner John Seddon has attacked the Call Centre Association's Best Practice Standard, saying it's damaging and a backward step.
“The proposed Standard is full of precisely the thinking that has turned call centres into sweatshops”, says Seddon. “To adopt this Standard would be to take a step backwards rather than forwards. Not only that, but it will demoralise the people working in the call centres, and as a result there will be poor customer service, rising costs and a high turnover of staff.”
John has written an open letter to Anne-Marie Forsyth, Executive Director of the Call Centre Association, setting out the 'bad practice' of the Standard. Drop it! he urges. “In the last ten years we have seen an increase in the costs of service without an improvement in customer satisfaction. The problem is the design and management of work – and this will not be addressed by the proposed Standard”.

His letter can be downloaded from www.lean-service.com. For further information contact Maryanne Henchy at Vanguard Education, email: info@lean-service.com

As well as being the scourge of the ISO standard and a celebrated ISO-Buster, John Seddon is an occupational psychologist, researcher, management thinker and leading authority on change in organisations, his PR says. He is author of I Want You to Cheat: the unreasonable guide to service and quality in organisations and The Case Against ISO 9000.
Quick Study® – Measuring quality in human services
You don't need to be a 'numbers' person to be interested in this – its a key strategic issue. Human resources are often just about all that differentiates one enterprise from it's competitors. The art of human resource management is increasingly THE key strategic issue in the knowledge economy that we're all, one way or another, members of. Getting a grip on what's 'good' is less optional every day.
The source has disappeared during the cut-and-paste, but we were struck recently by some discussion list comments by Loren Bawn, who is Executive Officer for Community Systems at the Iowa Department of Human Services.
“We have two requests regarding measures of quality in human services,” Loren wrote, “To my knowledge, work in this area is in its infancy.”
We'll summarize, some, but Loren went on to say that “many of the measures I see taking hold have to do with administrative efficiency (time to process an application, error rate, number of rings to answer the phone). The other large area is customer satisfaction, which we generally don't do very well – mostly poorly designed surveys that are done once (with no comparability from year to year).”
In the mental health realm, there are a number of 'functional assessment' tools that attempt to measure quality of life, based on what the developers define as normalcy. These tend to be not-so-subtly laden with value judgements concerning work, interpersonal relationships and public behavior, so generally end up measuring outcomes valued by the funder (or in some cases, the treatment community) rather than those valued by the customer. I am not aware of human services organizations that have made huge strides in moving to a customer focus, although the work of the Robert Wood Johnson Foundation regarding customer-designed services is encouraging.
Currently, Loren wrote, the buzzword is outcomes. The argument seems to be that if the outcome of service delivery is measured, rather than just how much was spent on what, quality will miraculously improve. It's ironic that management by outcome (MBO) could come to stand for the whole sub-optimizing, just-make-the-numbers-who-cares-how that business went through when MBO stood for "management by objective".
Loren believes that there is potential in identifying the outcomes customers find important, and determining if the system is capable of producing them consistently.
For example, one outcome being bandied about in the mental health realm is community tenure or the number of days an individual with a serious, persistent mental illness is able to remain outside an inpatient institution. Now, this outcome is likely more highly valued by the funder (inpatient services being generally significantly more costly than outpatient) than the individual experiencing the symptoms, but just suppose that the customer highly values community tenure.
There are a number of services government funds to treat mental illness. It would be feasible to run the numbers on various service providers in an attempt to discover whether and where stable systems existed to consistently achieve these outcomes. It may then be possible to attempt to answer the by what method question, and to disseminate the information so that other service providers could adjust their systems and determine if they can achieve similar results.
That's possible, Loren says “and I try to move my little slice of heaven in that direction as much as possible. My concern is, that as an 'industry' we will wind up merely publishing the measures, and punishing those service providers who don't make the numbers, thus effectively removing from them the resources they need to improve. Frustrating? Yes. Work worth doing? Definitely!”
ToolBOX – Statistics and measurement best practice
Steve Prevette, an ASQ certified quality engineer at ESH Radiological Compliance, Fluor Hanford, (a Fluor Global Services Company), and past correspondent on statistical and measurement issues in this magazine, posted the following note to the Deming Electronic Network (aka as the DEN) recently: “After a few years of inactivity, I have updated the statistical materials my company places on the internet.”
They're at http://www.hanford.gov/safety/vpp/trend.htm. There's a conference paper by Steve at http://www.hanford.gov/safety/vpp/intro.htm)
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We'd like, as always, to remind you about EDGE FIRST, our companion eZine dedicated to leaders and leadership - a fortnightly serving of provocative thinking about what it means to be a leader, and the tools, techniques and best-practices that drive leadership improvement. If you haven't seen it, click here for a complimentary issue.

In recent issues
Competing for the future - Hamel is THE MAN, embrace innovation!
Women and leadership - for real progress ... give men the nappies
Quick case study/Jennifer White - on picking winning teams
tompeters! - new economy DNA. Flaky? Irresistable! The survival kit
Snapshots of the new economy - from Seybold to Subramanian
eStrategy - best, first, fastest, lastest ... just watch out for Wal-Mart
A better way - but don't try this at home
Gen II - who wants to be a CEO
STOP PRESS
President's Quality Award ditched by incoming admin
A number of readers have emailed the apparently bad news that the President's Quality Award, a version of the Baldrige (same criteria, similar processes) just for US federal government organizations, is to be ditched by the new Bush Administration.
Betty Calhoun, who is Director, Special Projects at DynCorp IMSD, wrote to say “The PQA was started by the Reagan administration; originally under the Federal Quality Institute. The Institute disappeared with the last change in administration, and the PQA was placed under the Office of Personnel Management (OPM – I think they got the short straw or they threw darts or something when the new administration was looking for a place to put the program). I've always wondered why it wasn't in the Office of Management and Budget (OMB).
"So now, here's President George W Bush, doing away with a program his father – both as VP and President – supported! And, he – and the new head of OMB – keep waxing lyrical about performance results and a customer-focused government. What am I missing?”

What indeed. So far there isn't a threat to Baldrige – run as it is out of the National Institute for Standards and Technology (NIST). The word from NIST is that dubbya is a strong supporter of the Baldrige Program. And other sources tell me that the OPM has been trying to get out from under the President's Award for years.
”For those of us who have worked with the President's Quality Award program and seen the results in agencies who have gotten the message,” Betty wrote, “we'd hate to see ... those groups that have still not adopted the framework for performance excellence just keep doing business as usual.”
The PQA have been reprieved to finish the 2000 Award process and conference. Given that George W Bush says he wants to improve government performance, reduce costs and get better results, this doesn't make much sense. The office and the program cost less than $1m per year, and the award write-ups document hundreds of times that (each year) in savings.
>> Next issue April 6/7 (ish), 2001 - reader contributions warmly received
>> Copyright © 2001, Macpherson Publishing
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