Twenty to eight, the last spreadsheet of the quarter
It is twenty to eight on the last evening of the quarter, and the finance director is the only person left on the floor. On her screen is the scrap report for the plant, and it says what the plant manager has been saying in the corridor for a fortnight: scrap is down by about a third since the summer. Beside the keyboard is a printed sheet she has been asked to sign. It confirms the saving, so that the team on the line, who changed how the presses are set up at the start of each shift, can be paid the share of it they were promised in the spring.
She believes the team did something real. She has seen the new set-up sheets taped to the presses. But she also knows three other things, and they sit in her stomach like a stone. The plant changed its steel supplier in August, and the new coil is more consistent. Volumes were low in the autumn, and the presses ran slower. And the summer, against which the autumn is being compared, was the worst quarter for scrap the plant has had in three years. Any of the three could account for some of the fall. She has no way, at twenty to eight, to say how much.
She is a composite, drawn from the way these evenings are described in the literature on measurement and in the house's own practice, and no firm is meant. If she signs, and the number is partly the steel, the share is paid on a gain the team did not entirely make, and the next time a saving is claimed nobody in finance will believe it. If she refuses, the team that did change the presses learns that its work counts for nothing, and the next idea stays on the floor.
On the line, the same evening, the team leader is finishing a late shift, and his view of the quarter is simpler. In April his people noticed that most of the scrap came from the first hour after each changeover, when the presses were set up from memory by whoever was on, and that the best setters on each shift did it differently from the rest. They wrote the best set-ups down, taped them to the machines, and asked everyone to use them. They did this on their own time, at first, because they were tired of throwing away good steel. He knows his people did something. He does not know about the summer's bad luck or the new coil, and nobody has told him that the number his team will be paid on is being weighed against them. If the share is refused, he will hear only that the work did not count.
Ammanuel Santa Anna's canon, writing on how organisations judge contribution, is careful not to take the easy side of her dilemma. "It is not that measurement is bad," it says. "Measurement is essential. The problem is the adequacy claim". The adequacy claim is the belief that the right metric, found in time, captures the whole of what people contributed. The scrap report is a good metric. It is not adequate, on its own, to tell her whose gain this is.
This issue makes one claim, and it closes the argument the four before it have made. A gain can be shared only if it is measured in a way both sides believe, and almost all of that belief is earned before anyone knows the answer: in a baseline agreed from records already kept, in adjustments named in advance, and in a calculation that someone other than the interested parties can check. The finance director's difficulty at twenty to eight is not a failure of arithmetic. It is a decision that was not made in the spring.
The rest of this article, its sources and its practice are kept in Where the Flow Stops, Chapter 5, in the colour art edition.
