From Where I Sit: Measure What You Manage

Springer wonders if it makes sense to measure performance based on cost psf instead of results.
Springer wonders if it makes sense to measure performance based on cost psf instead of results.

From Where I Sit: Measure What You Manage

From Where I Sit: Measure What You Manage

By Tim Springer, Ph.D.
Published in the August 2008 issue of Today’s Facility Manager

There’s a management maxim that states, “You can’t manage what you don’t measure.” This gives rise to the notion that management success is defined solely by quantifiable results. How realistic is this idea? Most organizations establish measures of results and hold managers accountable. But—and I can’t believe I’m actually saying this—metrics aren’t everything. Especially if they are either the wrong metrics or the only thing to which managers are held accountable.

The aforementioned maxim is often incorrectly attributed to Dr. W. Edwards Deming, statistician, educator, consultant, and “Father of the Quality Revolution.” Make no mistake; Deming loved data. He was fond of saying: “In God we trust, all others bring data.”

Since people often fail to take advantage of available data, Deming wished to encourage them to use data to improve decisions and outcomes. But to reflect the views of Deming accurately, it’s important to recognize what he actually believed: “The most important figures that one needs for management are unknown or unknowable, but successful management must nevertheless take account of them.”

If measures are perceived to be useful tools for managers to assess accomplishment and performance, then what are the best and proper measures of facility management (FM)? Let’s start with the fundamental question—what is FM? Most definitions include:

  • The application of knowledge and skills from multiple disciplines;
  • Attention to functionality and performance; and
  • Supporting people, processes, places, and technologies.

If FM encompasses these elements, then what data should you collect? What measures do you manage?

Unfortunately, most FM and corporate real estate (CRE) professionals are held accountable for measures associated with—or derived from—cost per square foot. But does this reflect the value and impact of FM (and CRE) decisions and actions on the organization? Are these the most meaningful measures? Is this what should be managed?.

These aren’t easy questions. Being held accountable for performance as defined by specific, simple, cost based measures seems inadequate, given the complexity and multidimensional nature of most FM activities. Sadly, in most instances, emphasis on cost per square foot seems to render moot discussion of any other alternative expressions.

A similar situation applies to the traditional approach to measuring productivity—output per hour. Is this the best possible way to measure performance and productivity? In the 1997 book, Competing In The Third Wave, Jeremy and Tony Hope write, “Output per hour as a productivity measure has little relevance when it is innovation, service quality, and customer loyalty that need to be encouraged.”

The same could be said for cost per square foot as a measure of effective FM.

Unfortunately, accountants—and specifically the General Accounting Principles (GAP)—dictate facilities be treated as fixed or “sunk” costs (an unfortunate phrase). Consequently, most business managers view facilities and workplaces as costs to be managed, reduced, or eliminated—unless they happen to experience some discomfort attributable to facilities.

Business managers shouldn’t be pilloried for focusing on cost containment. It is common practice in business schools both in the U.S. and most industrialized countries to teach “denominator management.” The traditional equation for productivity is output over input. Denominator managers seek to improve performance and productivity by shrinking the denominator (costs) in the productivity equation.

This is classic results focused management. The underlying belief is that business is a mechanistic system where results can be improved by adjusting the sights (controlling costs) and aiming better. In other words, the ends justify the means.

Deming realized this management approach was neither advisable nor sustainable. He argued that narrowly focusing on quantifiable goals and driving employees and suppliers to meet bottom line financial targets only produces unseen and unnecessary inefficiencies and instability.

Supporting evidence for his point is found in the seemingly endless cycle of cost cutting, layoffs, and business losses among many larger companies. Deming understood businesses are complex systems that are not mechanistic and “managing by results only makes things worse.” Instead, he proposed focusing on the means by which results are achieved. In other words, the proper means lead to the desired ends.

Those who understand and follow Deming’s philosophy include some of the most successful and profitable companies on the planet. Two of these (Toyota and Scania) are profiled in Profit Beyond Measure, a noteworthy book by H. Thomas Johnson and Anders Bršms. The authors show that paying attention to the people and the work they do yields stable, sustained, profitable outcomes.

Space does not allow a full exploration of this philosophy, but for purposes of this discussion, one important point should be mentioned. As my graduate statistics professor used to say, “Numbers don’t care where they come from—so we have to.”

Too often, we as managers (and as citizens and consumers) place too much credence in numbers. Managers today often talk about the “hard stuff”—namely numbers and that which can be measured and quantified; as opposed to the “soft stuff”—ambiguous factors associated with people, their thoughts, emotions, skills, and motivation. But as Johnson and Brõms ask, “How hard is the hard stuff?” Can managers actually put their hands on profits or productivity?

At best, these are abstractions based on conventions. To use one more hoary maxim, “there are lies, damn lies, and statistics.” Change the measurement conventions, and the numbers (i.e., profits) change. Where do profits come from? They come from people, work processes, and workplaces (i.e., the means).

The alternative to treating business as a mechanistic system and using a results focused management approach is to look at it as a living system where interactions among the parts form harmonious relationships that yield satisfying results. Unfortunately, this is antithetical to what most businesses practice every day.

Symbiotic relationships are not a new idea; they are often found in nature (see From Where I Sit: How Does Your Garden Grow? for more). But for some reason, business has trouble with nature and natural systems. Perhaps this idea of focusing on business as a living system and emphasizing the importance of means to achieve desirable ends will gain support and credence as more environmentally conscious and eco-friendly systems and practices are accepted and applied.

The physical environment is one of the most critical elements of a living system. Consequently, fms have an important and valuable role to play in defining the measures, managing the parts, and harmonizing the relationships to ensure a focus on the means that will yield the most significant ends.

That’s the way I see it from where I sit, but then again, I could be wrong.

Springer is president and founder of Geneva, IL-based HERO, inc. and frequently writes and speaks on a wide variety of issues affecting organizations, work, and workplaces. For past columns from Springer, visit his Web site.


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