Thursday, July 23, 2009

Confusion of Means and Ends

In his book, The Peter Principle, Laurence J. Peter describes sending in his application for a teaching job. The application was returned with a note that policy had changed. In order to ensure receipt of applications, they had to be sent by registered mail. Someone was paying attention to the means but ignoring the fact that the end had already been achieved – his application was safely received.

As strange as that event seems, less obvious examples of confusion of means and ends abound in our society. I once worked in a company that set out to get the benefits of “just in time” manufacturing. In fact the company even sent many of us to training courses on the subject.

The idea was to use components very soon after they were produced. If a flaw crept into the production process it would be detected quickly and corrected before it produced a lot of bad parts. In fact the trainers told us quite explicitly that the purpose was not to avoid large amounts of inventory but to improve quality. Clearly that was a good idea in many situations. Just as clearly, it was an idea that required thought in its application. Keeping inventory low was not an end in itself; it was a means to an end.

Sadly many company managers confused the means with the end. In fact they hired a consultant who went through and found “excess” inventory, then uncritically recommended that it be thrown away. Among the inventory discarded was the stock of a specialized transistor no longer manufactured. The result was expensive. The company received an unexpected order and had to take scarce design engineers from other projects to do an emergency redesign. Had decision-makers kept in mind the purpose of a low inventory they would almost certainly not have created that problem.

Sports teams can also fall victim to this confusion of means and ends. Such things as tackles for loss in football and three point baskets in basketball make for good statistics and can help win games. However when they become ends in themselves they divert attention from other aspects of the game. In the effort to get tackles for loss a football team may provide opportunity for long gains. It only takes a couple of long touchdowns to change the outcome of a game. A basketball team may get lots of three-point plays, but that may cost them the higher percentage shots from the two-point range. In either case, the coach and team may concentrate so much on statistics that they forget that their objective is to win the game. How often do we hear that a team won every statistical battle except the final score?

In personal life, a shopper may unthinkingly pursue bargains to the point of ignoring other aspects of his or her purchases. Driving 40 miles to save a couple of dollars will cost more than just paying more closer to home. Likewise buying something on sale that you would not buy at the full price does not save money, it costs. Finding the lower price is a means to the end of saving money; it is not an end in itself.

This confusion of means and ends affects all aspects of human life, from personal and family life right up through the federal government. However as organizations get larger the problem becomes more severe. Large organizations are necessarily bureaucratic and bureaucracies pay attention to processes. They cannot function without lots of rules so it is no surprise that many employees come to regard those rules as the purpose of their jobs. However the rules are means, not ends in themselves.

The clerk in a government office or large company may regard filling out paperwork as the objective. In most cases that clerk or even the department manager has no idea of the purpose of that paperwork. In fact should the reason for the paperwork change it is quite unlikely that the required paperwork will change with it. That is one reason large organizations become so hide-bound and unable to react to conditions. And of course the larger the organization, the worse this problem becomes.

With that it is no surprise that the organization with probably the worst case of confusion of means and ends is the largest organization we have, namely the federal government. It is so large that there is no way to run it except through rules and procedures that end up being one size fits all “solutions.” One of the most amusing examples (if you weren’t the victim) happened with the Y2K problem, the scare that computers wouldn’t work after the year 2000. The Securities and Exchange Commission rightly worried about how brokerage computers would handle dates after that time.

That needed attention so in July of 1999, “The Securities and Exchange Commission approved a rule requiring brokerages to cease business and transfer customer accounts to other firms if they haven't adequately addressed year 2000 computer problems by Nov. 15.” What that meant in practice was that the brokerages had to show that they had computers that would handle dates beyond 2000.

For most brokerages that was a reasonable rule but there was an exception. One small brokerage had been quite successful operating with no computer at all. Their pencils, papers, and calculators had no Y2K problem, and would not have had trouble with any year beyond that. The simple and logical reaction from the SEC would have been to just say, “OK, your system will work beyond 1999 so you are approved.” Did they do that? Of course not, they insisted that the brokerage show them how their computers would work. Eventually the brokerage had to buy a computer to comply with the rule. I suspect they sold it later, after the worry went away.

I could probably multiply examples endlessly, I’ve only scratched the surface here. However the above should suffice to demonstrate the problem.

Next time I’ll discuss some ways to avoid confusing means and ends.

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