Management: means do not meet ends

October 18, 2006 12:05 PM

I'm looking for a term for (and famous/interesting examples of) the crisis situation that occurs in an organization when the standards to which employees are held for "success" become separated (by management policies) from the ends that the organization is actually trying to achieve. In other words: Employee X "succeeds" when completing Y task, even though Y does not contribute to the effectiveness of the overall mission. For instance, Enron. Is there a term for this? Something dissonance? Other famous examples?
posted by greggish to Work & Money (12 answers total)

"Bloat" and "bureaucracy" are two words I've heard used to describe this.

Charlie Munger described it this way:

The great defect of scale, of course, which makes the game interesting—so that the big people don't always win—is that as you get big, you get the bureaucracy. And with the bureaucracy comes the territoriality—which is again grounded in human nature.

And the incentives are perverse. For example, if you worked for AT&T in my day, it was a great bureaucracy. Who in the hell was really thinking about the shareholder or anything else? And in a bureaucracy, you think the work is done when it goes out of your in-basket into somebody else's in-basket. But, of course, it isn't. It's not done until AT&T delivers what it's supposed to deliver. So you get big, fat, dumb, unmotivated bureaucracies.

They also tend to become somewhat corrupt. In other words, if I've got a department and you've got a department and we kind of share power running this thing, there's sort of an unwritten rule: "If you won't bother me, I won't bother you and we're both happy." So you get layers of management and associated costs that nobody needs. Then, while people are justifying all these layers, it takes forever to get anything done.

posted by ikkyu2 at 12:26 PM on October 18, 2006 [1 favorite]

Other famous examples?

School tests? Especially standardized ones.

Politics? What does winning an election have to do with being a good politician? (Ok, some, but not enough.)

Naive forms of welfare? Where poor people "win" by having more kids or being unemployed?
posted by callmejay at 12:31 PM on October 18, 2006

Refco?
posted by JohnnyGunn at 12:32 PM on October 18, 2006

Response by poster: Say a consultant goes into a large bureacracy-heavy organization and wanted to minimize all the distance between the employee's measures of approval by management and the measures of their actual productivity. (Maybe I'm phrasing that wrong...) Is there a term for that dissonance?
posted by greggish at 12:42 PM on October 18, 2006

Within the field of public administration, this is known as mission drift.

Best (contemporary) example I can think of: The US Intelligence Community, pre-9/11. They failed to adapt to the fact that the biggest threats to the US were no longer enemy states. ikkyu2 has it right that this is commonly associated with bureaucracy.
posted by jtfowl0 at 1:10 PM on October 18, 2006

With regards to your second question, the distinction you are getting at is the difference between outputs and outcomes. Outputs are simply the product produced by a person. Outcomes are the measurement of how effective outputs are at dealing with the mission of the organization. callmejay has the good example here: standardize testing. An output measure is how well students do on standardized tests. An outcome measurement is how well students are educated to become productive and competent citizens. As you might imagine, outcomes are much more difficult to quantify, which is why often they aren't.
posted by jtfowl0 at 1:19 PM on October 18, 2006

In economics this is called a perverse incentive. It's a big problem in setting performance standards. For instance, if you pay programmers per line of code you get bloated code. If you pay them per bug fixed they focus on fixing easy bugs, not on the software overall.
posted by Joe in Australia at 1:23 PM on October 18, 2006

This sounds as if it's related to the "Principal-Agent problem".
posted by Steven C. Den Beste at 2:03 PM on October 18, 2006

To add to jtfowl0's outputs/outcomes discussion: I've heard it divided into four things rather than two. There are outcomes, outputs, activities and inputs. Inputs are things like money and employee time (which all comes back to money anyway). Activities are what the workers do with their time, like (say) working at a checkout. The associated output would be selling things. The outcome would be profit for the company and its shareholders (there's plenty of room for argument over where exactly the lines are drawn, though).

There was an episode of Yes, Minister on this. The Government had built a hospital and hired all of the administrative staff, then found that they didn't have enough money to hire any medical staff. They couldn't sack or transfer any of the administrative staff without having to fight the unions. So there were plenty of inputs (money) and activity (the admin staff were still filing reports etc), but then there was a disconnect between the activity and the outputs (the jobs that doctors and nurses do). The outcome (healthier patients and better public health) was ignored. I can't remember how it was resolved in the end, but it was funny.

Anyway, that's the language that public sector management consultants are using at the moment (yes, I just did a training course on this stuff).
posted by A Thousand Baited Hooks at 2:55 PM on October 18, 2006

Something dissonance?

Cognitive dissonance?

Groupthink?

Herd behavior?

Attentional bias?

Projectiona bias?
posted by frogan at 8:26 PM on October 18, 2006

Check with Dilbert.
posted by brent at 8:43 PM on October 18, 2006

creeping professionalism?
posted by mediaddict at 2:26 PM on May 13, 2007