Implementing Value Pricing: A Radical Business Model for Professional Firms

CHAPTER 24

Knowledge Worker Key Predictive Indicators

For the “knowledge workers” the question is less how much they produce than whether they direct their attentions to the right “product.” It is effectiveness rather than efficiency that characterizes their economic contribution. And efficiency itself in the knowledge worker is much less a matter of the individual doing more, as it is a matter of the group doing better. These are new things. So far none of us, whether we be Americans or Russians or Europeans or Japanese, know how to do this.

—Peter Drucker, People and Performance, 2007

Engage in this gedanken: You want to build the world’s finest automobile. You decide to use individual parts with a reputation for excellence from various cars around the world—the engine from a Ferrari, brakes of a Porsche, suspension of a BMW, and so on. What you would end up with is not the world’s greatest automobile, but rather a really expensive piece of junk.

This, in a nutshell, is the problem with the way we attempt to measure the “efficiency” of knowledge workers—we measure each task in six-minute units in the false belief that maximizing the efficiency of each one will maximize the efficiency of the entire firm. This metric is redolent of the days of Frederick Taylor, no longer applicable to the product of the intellect. Knowledge work is not repetitive; it is iterative and reiterative. That is, it is a process of the mind, a difficult place for metrics to have any meaning. Not many people ...