When Secondary Issues Dominate

Most organizations have missions and visions for how best to pursue missions, regardless of whether these value statements are formalized or not.  Organizational performance metrics indicate how well the organization is performing in terms of revenues, profits, lives saved or students educated.  Successful organizations excel in terms of organizational performance.  Most organizations try to improve these metrics.

Peter Drucker famously said, “There is only one purpose of a business: to create a customer.”  People become customers – or constituencies — of an organization when the organization provides something they value.  Understanding, enhancing, and providing value should be the driving issue in an organization.  If one does not create a compelling value proposition, organizational success will be limited and likely fleeting.

Are there tradeoffs between organizational performance and other aspects of the organization?  For example, might one tradeoff organizational performance versus compliance with policies, procedures and regulations?  One certainly would not want the quest for performance to undermine workforce safety or contribute to environmental degradation – although this happens with great regularity.

What about organizational performance versus diversity, equity and inclusion?  My sense is that everyone agrees that a diverse, equitable, and inclusive workforce benefits every type of organization.  But how do we get there?  At one extreme, we simply stop hiring any white, male candidates.  That will quickly get the numbers right.  More reasonably, we focus on making sure that female and minority candidates are competitive.

That works too, albeit much more slowly.  However, we need to put this in context.  I have recently participated in two National Academy workshops on advancement of faculty members, i.e., promotion and tenure.  We learned that 90% of faculty members hired nationwide over the past decade have been adjuncts and part-time faculty, with much lower compensation, no benefits and no job security.

The implications for diversity, equity and inclusion is that everybody will be treated equally poorly.  Unwilling to trim administrative costs, universities will focus on cutting faculty costs and continue to mercilessly exploit everyone with low wages, no benefits, and no job security.  My sense is that this was not the intent of the diversity, equity and inclusion advocates.  Should we really try to argue for sustaining the benefits of positions that will steadily disappear?

It seems to me that we need to embrace the future value proposition and the metrics of organizational performance that are sustainable.  Is promotion and tenure why a university exists?  That is very faculty-centric.  Are graduation rates the primary metrics?  That is very student-centric.  Another possibility is that universities should prepare graduates to enable innovations that transform society and the economy.  Then, of course, we should determine which administrative functions enable such outcomes. 

Consider compliance functions.  A colleague at Georgia Tech once commented to me that his worst nightmare was a call from the university’s Chief Compliance Officer.  My experience has been that the worst environment in which to work is a culture of compliance laced with administrative incompetence.  The enforcers take everything completely literally.

An experience at Waffle House illustrates this.  I had taken two guests from industry to breakfast at the Waffle House around the corner from my office.  We ate lightly and the whole bill was around $12.  Waffle House does not provide itemized receipts, so the receipt did not indicate what each person had eaten.  The university refused to reimburse this expense because I could not prove that no alcohol was consumed.  Waffle House does not serve alcohol.  I paid the bill personally.

Another university with which I was affiliated decided that faculty and staff had to prove they had actually taken trips for which they reported expenses.  They required either a picture of the traveler at the venue visited or a letter from the person visited attesting to the fact that one had actually met with them.  This became extremely controversial when a Dean refused to ask the Secretary of Defense to provide such a letter.  This requirement was eventually rescinded.

I was in a workshop when a senior Air Force executive proclaimed, “I would be comfortable with the government spending $10 to assure that every $1 is appropriately spent.”  This immediately led to suggestions that the whole government budget be spent on compliance rather than defense, education or health.  The Air Force executive, the most senior person in the workshop, was not amused.

At another university, it was discovered that a faculty member was being reimbursed for travel by the university and another organization – for the same trips.  He was reprimanded and his credit card cancelled.  To be absolutely safe, the university cancelled the credit cards of all 6,000 employees.  People were now required to use personal credit cards and submit expenses for reimbursement.

To ease this process, the university arranged for one credit card company to issue cards to everyone.  The university soon discovered that people were using these cards for personal purchases, for which they did not request reimbursement.  This seemed reasonable to many people as the cards were in their names.  However, in negotiating with the credit card company, the university had obtained a $10 reduction in the annual fee, which they claimed was effectively income to the employee.  Playing it safe, the university again cancelled the credit cards of all 6,000 employees.

The university installed a new travel management system so that filing of travel expenses was automated.  The user interface to this system was absolutely terrible, prompting a raft of complaints.  At a university-wide meeting where this was addressed, a manager in finance commented that installing this system had enabled reducing staffing by one person.  Someone quickly reacted with, “So, now you have 6,000 people spending time doing this job!”

A large aerospace company, with whom I worked, installed an automated timesheet system.  Every ten minutes, it prompted each of many thousands of employees to enter the charge code for what they had worked on for the past ten minutes.  I asked colleagues how they felt about this.  One reaction was, “It’s irritating as hell, but you sort of get used to it.”

All of these example illustrate how people adapt to and cope with organizations’ proclivities to formulate and implement policies, procedures, and regulations that slowly but surely undermine organizational performance.  This is in part due to people wasting time on non-value-added activities.  It is also due to the employee cynicism that emerges and festers.  The primary purpose of the organization slowly fades into the background.

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