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February 20, 2006

Performance Madness At Ford

Here's an astonishing factoid from Laurence Haughton:

"In 2005 Ford executives spent over 4.4 million management days tracking and assessing their company’s performance. That’s just short of 100 days per manager on average, over 19 work weeks looking at how everyone in every department was doing and creating new plans to hit budget. And if you add it up over the last 5 years Ford has invested some $6 billion dollars and some 21 million person days in the same activity – reviewing performance and generating new plans."

I do not know the source of Mr. Haughton's numbers. But, let's accept them for a moment and explore the implications. For example, don't just think about the managers. Think too about the time, attention, effort and cost put into preparing for meetings with managers about performance at Ford. If we imagine for every managerial hour there are, say, four non-managerial preparation and attendance person-hours, then a total of 21 million person days were spent at Ford tracking and assessing performance in 2005.

Assume that, with holidays, sick days and vacation, an average person at Ford works 240 days per year. That means Ford deploys 87,000 full time equivalent folks each year tracking and assessing performance and generating new plans for performance.

According to a recent article, Ford has about 300,000 employees worldwide.

So, if Laurence Haughton -- and the assumption about non-manager prep time and effort -- are correct, 29% of the company's work force spends their time focused on reporting about and planning for performance -- instead of, say, performing.

Ford badly needs to change. And, a focus on performance is the surest path to successful change. But constant, overweening attention to metrics and plans do not necessarily equate with a focus on performance.

Say, for example, you wish to lose weight. You set a goal and you'll do well to review your progress against that goal regularly.

But, let's ask this: Would it make sense for you to spend 29% of your weight reduction effort reviewing how're you doing and only 71% actually exercising, eating less and eating more wisely?

Folks often seek to lose weight to reduce the stress in their lives. My hunch is spending 29% of the time worrying over weight loss results would add more stress and reduce less weight than the reverse.

Sure, Ford must set goals and monitor performance.

But 29% of resources stressing out over measuring, reviewing and planning for performance?


That is not performance -- it's performance madness.

Posted by Doug Smith on February 20, 2006 05:58 PM | Permalink