Do you ever wonder how people get so locked in to doing something that they end up doing the wrong thing? Do you think they are all bad people? My experience has shown me that rarely do people do things because they have no internal moral compass. Rather, it’s the systems we use to Lock-In behavior which causes behavior to end up creating negative "unintended consequences."
Take for example compensation for attorneys. As everyone knows, attorneys charge by the hour. As do plumbers, electricians, retail store clerks and a raft of other occupations. On the face of it, this makes complete sense. But, as the Chicago Tribune recently reported (see article here), when you couple this simple billing process directly to compensation, you can get some pretty bad outcomes. By "promoting" what is seen by top management as a key success factor, your Lock-in can lead well-meaning people to do things which are less than…… shall we say….. positively correlated with customer success?
As the Tibune reported, by Locking-in on the metric, billable hours, what starts to happen in law firms is people "fudge" their billing. What appears to be a good thing, tieing compensation to a key firm growth metric, leads everyone up and down the firm to do unnecessary work, take longer time to do work than is necessary, utilize resources on projects that are hard to justify, and even outright exagerate the time spent on client efforts. As a result, some clients are finding they need to challenge their attorney’s bills – not an activity you want to spend time doing with someone who is supposedly your advocate, hopefully looking out for your best interest. And some judges have been considering attorney’s bills too high, and refusing to force the payment of those bills.
I don’t mean just to pick on attorneys here. More than a dozen years ago I took a leading position with the consulting firm of Coopers & Lybrand (later merged with Price Waterhouse and then later acquired by IBM.) I had worked at the firm only 6 months when I was in a meeting with the top officers of the firm to discuss "firm direction." As the meeting droned on, talking about nothing but billable hours per type of project, I finally said "you know, I’m getting the sense that no one here cares what kind of work we do. I could have armies of MBAs operating jack hammers and no one would care as long as it generated thousands of billable hours at market hourly rates." One of the top 5 firm officers turned to me and said "you know Adam, now you’re starting to get it."
What we all have to be careful about is Locking-in on metrics which can lead to behavior that does not serve our customers well. This Lock-in, often a key sign of good implementation of strategy or quality (locking-in metrics is a cornerstone of Six Sigma), can become deadly when disassociated from market conditions and customer needs. Yes, billable hours are good – but only when those hours are serving the client’s best interest.
That’s the problem with Lock-in, at first it seems like a really good idea. You use a metric to help drive repetition of behavior which has proven to lead to success. Locking in on the metric improves results. It clearly is beneficial, and a good thing. But these same locked-in metrics can prove problematic, even disastrous, if we don’t regularly Challenge them in the face of market requirements. We need to alter our metrics in order to keep ourselves aligned with customer needs. Metrics must be seen as guideposts, not ends into themselves. And all of them need to be viewed as flexible and alterable – before they lock us in to a tour of the Swamp and eventually failure.