A story on "Bottom Line"

Organisations obsession and excessive focusing on "bottom line" is characteristics of many, especially in this competitive market. Bottom Line in most cases refers to 'profit', 'saving', 'improvement or good performance measurable using financial models'

Bottom line is perceived as some magical figures, using some financial modelling in measurement of profits, saving, some tangible results. In some organisations, elaborate Performance indicators, Management by Objective (MBO), are instituted with the assumption that each individual department bottom line improvement make the total corporation bottom line improvement or quantum leap.

Here is a story on Quality Family Organisation, as an illustration of organisation erroneous focus on "bottom line".

Parents "stated and implied needs" for their children can be as follow : Do well and pass the academic examination with good result. The good grade certification is a passport to good career in the society. Hopefully the children can have comfortable living and take care of the aged parents later.

The product of the Quality Family Organisation is "transformation of children into highly successful professional or Business Entrepreneur". Hence the Vision Statement of the parents can be stated as follow " To be the excellent career achiever of Business Enterprise" (so as to make a lot of money, implied). The mission statement can be "To be successful examination scorers". Hence the bottom line is "get the good grade certificates, get a good job"

With the above vision and mission, the parents implement the following strategies :

At the end of the year, a Management by Objective (MBO) exercise was carried out. Specialists (private tutors in various disciplines, e.g. Mathematics, History, Science, Literature etc.) are engaged and help to chart the long term and short term objectives in different disciplines for the children. Initially, the important benefits (and hence mission) of each discipline are emphasised. Performance indicators for improvement were set up. The previous scores of the children in the previous years are plotted in graphs. Target setting was made. Hence if the average score of the History is 60 %, target is set to 75 %, if the average score of Mathematics is 55 %, target is set to 70 %, and so on.... The target setting is mostly arbitrary, that is some magical figures plucked from the head in the name of 'continuous improvement' or some benchmarked figures from other "best in class" schools. At the end of the exercise, the children are 'released into the environment', in this case the school environment and expected to perform in accordance to the MBO plan.

In the course of implementation, the children will have the following types of requests or suggestions e.g. to buy text books or reference books, to go to library, to attend to some extra classes etc. With the entire focus on "Bottom Lines" by the Quality Family Organisation, all practice, proposal, behaviours, ideas, have to be severely scrutinised under the "justification" framework, using "cost / benefits" measurement.

In the case of buying text books or reference books, "justification", say in term of how many times the contents of the books were the subjects of the previous years final examination questions. An elaborate cost / benefit model can be worked out using unit cost assignment technique to examination questions and probability theory.

Special tuition fees in certain discipline study under a renowned and expensive tutors are justified against the MBO set objectives. It is obvious that, in the case of the children interest in Music, which is not one of the subject in examination, no budget allocation is given.

Going out picnics with friends will certainly cannot be justified under the 'bottom line' focus framework. But some clever children will cite the importance of the picnics in term of gathering knowledge about nature, rivers, birds, frogs etc. which are important learning for the Biology subject. Such clever justification, though without financial backing model as it is largely intangible benefits, may sometimes get the approval.

'Justification' and 'bottom line' thinking are applied daily to all activities, behaviours, time spent on entertainment, visiting friends, fashion, etc.

During the following end of the year MBO review, 'reward and punishment' concept is applied depending on the score of the examination in various disciplines, whether meeting the target set the previous year.

Such practice is repeated year after year. In most cases the parents are still impatient or anxious over the performance : sometime there is some improvement, later that good performance slips, sometime certain subjects score high marks, at the expense of other subjects so on and so forth.

Such robotics and 'scientifically automated' treatment of children certainly sound alien to most of us as parents. It is because we treat children as human being. We do not drive our children towards the absolute focus on 'bottom line'. 'To pass the examination with excellent grade' is a desired goal and outcome, but certainly not at the expense of stressing and exceeding the limit of the children. We have witnessed many disastrous results of 'bottom line parents : children go opposite direction, 'bohsia', rebels, drug addits, some ended up in mental hospitals.

Quality Family treatment of children focus on the "totality" in a balanced manners: attending to the needs arising; ensuring the children are happy with good friends and company for various social activities; do not just depend on specialist tutors on their homework; but now and then discuss with them; while plotting the past examination results trend of certain particular subjects, much openness is promoted in charting the fishbone on causes and effects.

Business Organisation approach is no different from above. But the basic assumption must be that organisation is an organism, making up by various hardware components and people. The people are to be treated like our children. The focus and emphasis must be balanced, not just on 'bottom line' alone.

When bottom line becomes the focus of an organisation, Quality then is consciously or unconsciously equated with profit, dollars and cents, Quality is Competition, Quality is Win-Loose, Quality is Survival.

What then is Quality?

ISO 8042 definition on Quality "The totality of characteristics of an entity that bears on its ability to satisfy stated and implied needs"

This definition has three very important elements : "Characteristics totality" "Ability" "Needs"

In the context of the above discussion, these three elements are explained as follow:

"Characteristics totality" is the "system as a whole". In the case of the Quality Family organisation it can be the 'children, school environment, parenting, etc.'

"Ability" is the "process capability". The process capability is also dependent on the system as a whole, i.e.. the characteristics totality. In the case of the Quality Family organisation, it can be children mental capability, inclination to certain skill and knowledge like Mathematics, History etc.

"Needs" is the Outcome, the Desire, the Expectation, the Specification, the Mission, the Vision etc. 'Bottom line' is ONLY one of them.

Not until organisations realise and appreciate the interracting, interdependent, interacting and interconnicting "forces" of the environment and system they are subjected to, continuous indulgence in "bottom line" aspects will only bring about a speedy extinction of their business, especially in this present world of dynamic change and borderless society.

Note : The Discipline and Methodology to address "System Forces" in a balanced, cohesive and harmonious manner to realise the Vision of an entity, will be dealt with in other articles..

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