Section Seven
KEYNOTE ADDRESS
92    WHAT GETS MEASURED GETS DONE-THE
CRIMINALIZATION OF TECHNICAL DECISION
MAKING
Kenneth S. Price, President
Heritage Environmental Services, Inc.
Indianapolis, Indiana 46231
What gets measured gets done. It's a common axiom of business. All of the fans of Tom Peters
(count me among them), author of "In Search of Excellence," "Thriving on Chaos," and other books
and articles advising business managers on methods of improving their results, are very familiar with
this phrase. What gets measured gets done. In a nutshell, it simply means that if you set up a system to
monitor or measure a certain aspect of your business —then the mere act of measuring will help
achieve that result.
It helps an organization to focus its efforts on a particular result if that desired result is regularly
monitored and reported. Once focused, a group can develop definite strategies to maximize the
desired result. The "power of positive thinking" as espoused by Norman Vincent Peale, normally sets
in as a result of early successes, and the group, fed by success, continues to measure and get things
done. But what happens when the parameter selected for measurement is not the desired result1*.
Measuring the wrong parameter simply means that the truths embodied in the axiom "what gets
measured gets done" will be applied to the wrong parameter. This "wrong parameter" will probably
move toward maximization —this will happen again because the group is focused on the goal (right or
wrong). Maximization strategies will still be honed, and positive results will reinforce and energize
further efforts within the group to maximize the selected parameter.
In business, the fact that we're measuring the wrong thing often takes a long time to uncover. For
example, our company once had a sales program that paid bonuses based on new customers. Obviously, as part of the program we focused on new customer sales volumes. After a year or more, we
began to discover that our older customers were being basically neglected. Old friends never learned
about new services. Old friends went to other vendors because customer service through our sales
force suffered. We ultimately changed the system to reward new wastestream sales —regardless of
whether the business was from a new customer or an old one. All sales people know the best customer
you can get is one you already have. Our focus on new customers had caused an unintended result.
Many companies have erroneously concentrated on measuring sales —only to learn that without
margin, or that dirty word profit, they weren't long for the business world.
Let's take a look at what happens when our government measures the wrong parameter. A few
examples will help demonstrate my point. Our taxing system is full of luscious misadventures. In
monitoring the sources of tax revenue at the federal level, it was observed that a large amount of
income was avoiding taxation through the capital gains "loophole." Not only that, the loophole was
continuing to grow at a substantial rate. It was growing particularly fast in the middle 1980s. During
the same period, our economy was highly expansive (even our auto companies were profitable) and
there were R&D as well as investment tax credits. But the focus became measuring the capital gains
loophole —viewed as both a loss of government revenue (whatever that means; maybe it's an oxymoron) and an undeserved benefit for the wealthy under the extant tax structure. Thus ultimately, as you
know, the Congress and President moved to a "compromised" tax structure in which capital gains and
regular income are treated in the same manner under the tax code. It should be no surprise that this
tax structure caused people to begin to think of short-term gains —buy out this company —sell off its
assets; rifle its pension plan funds —don't invest for long-term growth —there is no longer a tax
advantage in long-term thinking. Revenues from capital gains taxes went up as the Congress desired.
47th Purdue Industrial Waste Conference Proceedings, 1992 Lewis Publishers, Inc., Chelsea, Michigan 48118.
Printed in U.S.A.
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