Meeting on measuring effort versus results

Just came back from our Wednesday Ideas Cafe meeting and I have to say this is another experience.

I obviously did not frame the issue properly and as Mike mentioned, the topic did not resonate.

Shula also was not sure of the choice of the word "achievement" used in the talk title of "should we measure our achievement by effort or results".

Mano sees the issue as multifaceted, that effort is one of the many things that we use to measure, not just results, effort, either or, or together.  There are repercussions of the work on others, the setting that it was done in, etc, etc.

I tried to illustrate the point by using the example that we buy items and services very often without looking at the effort but use the price and quality as the main criteria.

Mike summarized it by saying that as an accountant, he always thought value of his accounting work was related to the time and effort spent.  However, if he needed a lawyer to defend him in legal battles, that he would choose one base on what results this lawyer can create, not how hard the lawyer is going to work.

This showed the completely opposite perspective of the service provider versus the user of the service.

Shula said that sports like figure skating and diving are judged by the level of difficulty which is proportion to the effort required to perfect those routines.  To me, it is the rarity of the routines that involved high levels of difficulty (and therefore, more effort) that make them more valued.

Rafi and Mano both mentioned that we need smart people as well as hard working people as there are majority of tasks in our society that just require effort with no way of getting around it.  Therefore valuing hard work as a virtue serves the purpose of motivating the majority of our population to do the majority of tasks that are highly dependent on effort and not innovation.

We then got into a discussion of work by the hour, for mechanic services to fix our cars, for lawyers and engineers.  Most seem to think that mechanics are arbitrary in their hours charged and seems to have no relationship to actual time worked.  My understanding is that they are based on "standard hours" for the tasks involved and not necessarily relate to the actual time. However, this seemed to be the basis for a lot of skepticism for work charged on an hourly basis.

I mentioned that in my engineering practice experience, we never altered the hours reported by our employees on their timesheets.  We may mark them down for thinking that it is unreasonable to charge the client for the results but never mark them up as it will destroy the basis of credibility for all our other billings.  My feeling is that not everyone believes that this can be trusted.

I now realize the amount of trust that I enjoyed with my engineering clients.  In truth, they do not have many options in checking us but on our side, the cost of losing our credibility on billing is too great to even think about doing anything but the right thing.  I also realize that there is a much higher level of skepticism and mistrust among the public at large and particularly towards business. 

My theory is that trust takes a long time and many positive experiences to build but can be destroyed quickly and by a few examples.  This asymmetry in the acquisition and destruction of trust is very vulnerable to mass media which depend on spreading bad news to promote their popularity.

Market competition also promote the race to the bottom among competitors to lower their trust relationship with their customers to come up with a lower product presentation price.

In the end, what was revealing is that in fixed price contracts where customers see us deliver the results for less than the agreed price and make a profit, there is a feeling that they have somehow missed something.  Should they not be glad that they have the result that they contracted for?

On the other hand, if the contract was on a cost plus basis,  it is based on effort expanded and subject to overruns.  Most customers would prefer a fixed price project to protect them from the risk of overruns but not comfortable with the profit taken if there is no overrun.

It depends on whether one is a user or provider of the service.

We are also reminded of the perils of focusing too much on results alone. A lot of results can be manipulated and externalities may be unintentionally sacrificed on the way to those results.  The same innovators that innovate to faster and more efficient results also tends to innovate to their own benefit and sometimes to the detriment of others.

My conclusion?  We need innovators that we can trust and enough definitions on externalities to keep innovators within the bounds of our expectations. Maybe tough to do but is the way to break new ground and keep improving.