Strategies for Organization Design

7Measurement

“People with targets and jobs dependent upon meeting them will probably meet the targets even if they have to destroy the enterprise to do it.”

—W. Edwards Deming, The New Economics for Industry, Government, Education (1993)

At a Fortune 500 company, our point of contact was one of a few business unit presidents with the organization. What that really meant was that, in the eyes of the rest of the organization and his superiors in particular, he was responsible for a multibillion‐dollar profit‐and‐loss (P&L) statement. Our mission at that moment was to convince him that we needed to get more enterprise services embedded into his business and figure out how we could repurpose some key resources in his business unit to participate in cross‐functional, agile teams that served all the business unit presidents.

Needless to say, he was far from excited about that concept. To be blunt, he was downright grumpy.

“Why should I give you any of my people for this effort?” he asked sullenly. “When our CEO looks at my performance, he only looks at my P&L results, not how well we played in the sandbox with the rest of the businesses. And let's not forget 60% of my salary is based on achieving my businesses’ profitability targets.” This amount, as you can imagine, was not insignificant. “Whatever you are trying to do here better not jeopardize my bonus.”

Sadly, he was not wrong. Despite everyone agreeing that working in a more integrated fashion was the only way the enterprise ...