Overcoming Functional Myopia

by Daniel R Tobin

Functional myopia (not a vision-related term) occurs when employees focuses so strongly on the goals and standard practices of their work function that they sub-optimize the work of the organization. Harvard Business School Professor Ted Levitt coined the term “marketing myopia” some 50 years ago, and while this near-sightedness certainly can apply to the marketing function, functional myopia can also apply to every function within an organization.

One definition of a “professional” is a person who pays greater adherence to the norms of his or her profession than to the goals of the organization for which he or she is working. And, certainly, this is often a good thing. For example, we want our doctor to practice good medicine rather than blindly follow the guidelines imposed by an HMO. Similarly, we trust a CPA to adhere to the standards of the accounting profession rather than to “fix the books” of his or her employer or client.

But, in many cases, the adherence to functional or group norms can adversely affect the overall goals of the organization. Here are some examples from my own experience along with other examples I have collected over the years from a wide variety of organizations.

• Back in the 1980s, when I worked for Digital Equipment Corporation, I initiated a project to create a “Network Presales Handbook.” The project was designed to create a loose-leaf binder that contained a wide variety of materials, created by many different groups within the company, that would provide a single-source compendium of information for networking sales and pre-sales specialists. The audience for this project was very enthusiastic about the idea and development of the materials was done in record time – until it was time to produce the materials. (Today, we would put it all on-line very quickly, but back then, we had to rely on distribution of hard copy.) While I was getting calls every day asking when it would be ready, I could only answer that it was “in production,” and it actually took seven months before the first copies were distributed. When I asked the production staff why it took so long, they told me that the company required them to go out to bid on each component of the notebook: the binders, the spine and front-cover inserts with the title, the printing of the documents, the printing of the tab-separators for each section, and the assembly and packaging of the notebook. And, once they had the lowest bidder for each component, they had to wait until every component was produced before assembly and packaging. After the job was done, I asked them to go to any single vendor of their choice and ask what it would have cost for that single vendor to do the complete job as well as how long it would have taken that vendor to get the job done. The answer came back: it would have taken that vendor 6 weeks to do the complete job and the cost would have been $0.45 cents more than the costs using multiple vendors. The difference of $0.45 per notebook (on a total cost of $43.00, delayed getting this valuable information to the people who needed it by 5-1/2 months! That is functional myopia!

• My company sought to enter into a strategic partnership with another company, a partnership that would greatly benefit both companies. The new product that would be developed by the joint effort would lead the market. Executives from both companies were so eager to get the partnership up and running that they reached agreement on basic terms very quickly. And then, they turned the project over to their lawyers to get it all down on paper. The lawyers spent five months arguing over inconsequential word changes and, by the time they had dotted every “I” and crossed every “T,” another competitor beat them to market. The executives blamed themselves: “We should have known from past experience that the lawyers would get into these types of ‘spitting contests’ because that’s what lawyers do. Instead of just handing it off to the lawyers, we should have told them that it had to be done within 30 days.”

• A metal-working company had to order a special alloy to create parts for an aerospace company. The company’s purchasing agent went to their suppliers to source the alloy and found that the best price they could get was for 500-pound blocks of the alloy, so they ordered those blocks. This is what purchasing agents do – they find the best price for the materials the company needs to purchase. The problem was that the parts that were to be created with this alloy were very small and the amount of time it took to cut down the large blocks and the amount of scrap material created in the process reduced the profit margin for these parts by more than 50% from the margins that would have occurred if they had purchased the materials in 2-pound blocks (but the 2-pound blocks would have cost 5% more per pound than the 500-pound blocks).

• A company’s customer service call center was getting extremely poor ratings from customers. Complaints poured in every day. “I had three questions. Your service rep answered the first question and then hung up.” “Your rep rushed through the call, and I didn’t understand anything they told me. When I tried to ask for a better explanation, she told me to read the manual.” The company hired a new director for the call center and the first thing the new director did was to provide several days of training on customer service. Almost immediately, the response from customers turned around: “I don’t know what you did, but your rep was fantastic and took the time to make certain that I got my problem fixed.” And the call center staff was even happier: “The training was great. It is so nice to be able to really help the customers solve their problems.” The changes lasted for almost two weeks, until one of the reps had his annual performance review. “I’m afraid that I can’t give you a raise this year,” the manager told the employee. “I was just reviewing your performance statistics for the past two weeks. You were averaging 5.5 minutes per call, and our standard is to get calls answered in less than 3 minutes.” It didn’t take long for word to spread across the call center and for every rep to return to the old behaviors, where they could get the calls answered in less than 3 minutes.

In each of these cases, the employees were adhering to the standards of their own groups and, in each case, these standards did not always result in optimal performance for their companies.