The Simplest Way to Improve Performance – Possibly

An interesting story:

Courtesy of Donella Meadows:

Near Amsterdam, there is a suburb of single-family houses all built at the same time, all alike. Well, nearly alike. For unknown reasons it happened that some of the houses were built with the electric meter down in the basement. In other houses, the electric meter was installed in the front hall.

These were the sort of electric meters that have a glass bubble with a small horizontal metal wheel inside. As the household uses more electricity, the wheel turns faster and a dial adds up the accumulated kilowatt-hours.

During the oil embargo and energy crisis of the early 1970s, the Dutch began to pay close attention to their energy use. It was discovered that some of the houses in this subdivision used one-third less electricity than the other houses. No one could explain this. All houses were charged the same price for electricity, all contained similar families.

The difference, it turned out, was in the position of the electric meter. The families with high electricity use were the ones with the meter in the basement, where people rarely saw it. The ones with low use had the meter in the front hall where people passed, the little wheel turning around, adding up the monthly electricity bill many times a day.

The message

The story makes a neat point.  A simple way to improve performance is to give people the information they need.  Just do it in a straightforward, easy to read and readily visible format.

Then let them do the rest.

Unfortunately “simple and straightforward” is rarely easy.

P.S. you should buy Donella Meadows book “Thinking in Systems: a Primer. It is fascinating.

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Performance improvement through data

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Comments

  1. James, is there any reliable source for that story? I shall certainly spread it if there is.

    • Unfortunately not, the only note she makes in her book is that it was told to her in a conference in Kollokolle, Denmark, in 1973. Unfortunately I was only 5 at the time so will struggle to vouch for it.

  2. “What gets measured gets managed” came to mind as I read the last paragraph. But to your point, it needs to be visible. Measuring and then hiding the measurement (in the basement) clearly has no benefit.

    Annette :-)

  3. James, great story and great advise. I would add two other factors; 1) be nonjudgmental and 2) make sure the people are empowered to take the required actions.

    People with their electric meters on the first floor could shut off lamps, the TV, and even do laundry when everyone is sleeping. Unless we give employees the same “power” they will get frustrated and you will not see significant changes.

  4. As your post suggests, (potentially and possibly) there is a lot to be gained by sharing with employees both positive and negative information that affects the enterprise. If this done in real-time, or near real-time, so much the better.

    One pre-Internet example of this that a colleague and I recalled for our 2001 book, Customer WinBack, was the technique of “radical inclusion” practiced by a Texas advertising agency. Occupying several floors of an office building, the company would gather employees in a stairwell to announce major news.

    Another example is one from my recent blog about MBNA. Before being purchased by Bank of America, the company had TV monitors installed around their buildings so that employees could see, on a daily basis, how the company was performing on key customer experience metrics. Since employees were given quarterly bonuses based on their performance, this was great incentive – and recognition that MBNA wanted them to be partners in delivering high value.

  5. Thanks James, it got me thinking about the importance of more progress being made on data reciprocity. EU DP rules and other changes will increasingly raise the bar in expectations of customers seeing the data you hold on them.

    But surely the opportunity for business is to not just transparently share back that date (for corrections, updates etc), but to add value. For instance, some insurers are already sharing back with policyholders the risk experience of their postcode. I feel the really opportunity is to be transparent in individuals data & add value to the customer through how analytics on the macro-data can provide functionality for the customer.

  6. James – this is an interesting anecdote about what happens when people are informed. But I don’t agree that performance will improve simply by giving people information. When I first read this article, I was left wondering, what “completes the circuit?” Information alone won’t change habits or behaviors – there needs to be an understanding of the benefits. In the vignette you described, cost savings was part of the equation, hence motivation. Interest, too.

    But benefits should never be assumed. There are millions of people who are routinely measured in real time, informed about their output, and still ask, “why am I doing this?”

  7. James,
    A great little story which shows that there is a clear link between seeing our consumption of something in real time and how it impacts our actual comsumption. Perhaps, they should implement this sort of thing for water in California and it may help their water problem?

    Adrian

  8. James – great story that indeed begs the question, “to share or not to share?”. Part of the employee engagement factor that we promote with clients is to indeed have an open book policy.

    One recent example is with a sales team for a large manufacturer. They utilize a team based approach to selling, rather than assigning accounts to specific individuals. The company was struggling with tracking account activity, sharing information, and moving opportunities through the various stages of their opportunity pipeline.

    Borrowing from “The Great Game of Business” which we practice ourselves, we challenged the team to participate in a game. Together they decided on the target metrics for the end of the year. Then we helped them to break the game down into quarterly mini-games. Those mini-games all contained sub-driver metrics (activities per week, opportunities in a stage, etc.) that were tracked weekly. The mini-games also included not only small, medium and large goals but prizes for meeting those goals! Individuals on the team were held accountable for gathering the metrics and the team met weekly to review them.

    As a result they held each other accountable for meeting the goals set. When they did reach the goals, they celebrated together. This not only motivated the team to work harder but also benefited the original goals of the organization… better visibility into activity tracking, information sharing and moving opportunities through the pipeline.

    Human beings have a greater propensity to support what they have the opportunity to contribute to, rather than just being asked to follow the rules others have set.

  9. Hello James,

    Delighted to find you recommending Donella Meadows’ book. Why? It is one the best (readable, informative) books on Systems Thinking that I have ever come across.

    If you want a story that blows the mind there is now shared by James March. It is about a bunch of soldiers that got lost in the Alps. They were paralysed. Then one of the soldiers pulled out a map. The map allowed the soldiers to plot a path and move. My following their path they got out of the mountains and back to base. The interesting thing is this: the map turned out to be of the Pyrenees not the Alps.

    All the best
    maz

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