Functional myopia (not a vision-related term) occurs when employees focus so heavily on the goals and standard practices of their work function that they under-optimize the organization’s work. Harvard Business School professor Ted Levitt invented the term “marketing myopia” for approx. 50 years ago, and while this myopia can certainly apply to the marketing function, functional myopia can also apply to any function within an organization.
A definition of a “professional” is a person who is more compliant with the standards of his profession than with the goals of the organization for which he or she works. And certainly this is often a good thing. For example, we want our doctor to practice good medicine instead of blindly following the guidelines imposed by an HMO. Similarly, we have the confidence that a CPA complies with accounting standards rather than “arranging the books” with his or her employer or client.
However, in many cases, compliance with functional or group norms can negatively impact 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 variety of organizations.
Back in the 1980s, when I worked for Digital Equipment Corporation, I started a project to create a “Network Presales Handbook.” The project was designed to create a loose-leaf binder containing a wide range of materials, created by many different groups within the company, that would provide a single source component of information for network and pre-sales specialists. The audience for this project was very excited about the idea and the development of the materials was done in record time – until it was time to manufacture the materials. (Today we would put it all online very quickly, but back then we had to rely on paper copy distribution.) While I got calls every day asking when it would be ready, I could only answer that was “in production” and it actually took seven months for the first copies to be 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 every component of the laptop: the binders, the spine and the front to front with the title, printing documents, printing tab separators for each section and assembling and packaging the laptop. And when they had the lowest bid for each component, they had to wait until each component was produced before assembly and packaging. After the job was completed, I asked them to go to each supplier of their choice and ask what it would have cost for each supplier to do the complete job, as well as how long it would have taken that supplier 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 cost of multiple vendors. The difference of $ 0.45 per Notebook (at a total cost of $ 43.00 delayed getting this valuable information to the people who needed it by 5-1 / 2 months! It’s functional myopia!
My company was trying to enter into a strategic partnership with another company, a partnership that would benefit both companies. The new product that would be developed by the joint effort would lead the market. Managers from both companies were so eager to get the partnership started that they quickly reached agreement on basic conditions. And then they handed the project over to their lawyers to get it all down on paper. The lawyers spent five months arguing about unchanged word changes, and as they had dotted every “I” and crossed every “T,” another competitor hit them in the market. Leaders blamed themselves: “We should have known from past experience that the lawyers would get into these types of ‘spit competitions’ because that’s what lawyers do. Instead of just handing it over to the lawyers, we should have told them that it had to happen within 30 days. “
A metal processing company had to order a special alloy to create parts for an air carrier. The company’s purchasing agent went to their suppliers to find the alloy and found that the best price they could get was for the 500-pound blocks of the alloy, so they ordered those blocks. This is what the brokers do – they find the best price for the materials the company needs to buy. The problem was that the parts to be created with this alloy were very small and the length of time it took to cut the large blocks and the amount of scrap material created in the process reduced the profit margin of these parts by more than 50% from the margins that would have occurred had they purchased the materials in 2-pound blocks (but 2-pound blocks would have cost 5% more per pound than 500-pound blocks).
A company’s customer service call center received extremely poor ratings from customers. Complaints are poured in every day. “I had three questions. Your service representative answered the first question and then hung up.” “Your representative 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 provide several days of training in customer service. Almost immediately, the response from customers turned around: “I don’t know what you were doing, but your representative was fantastic and took the time to make sure I fixed my problem.” And the call center staff were even happier: “The training was fantastic. It’s so great to be able to really help clients solve their problems.” The changes lasted for almost two weeks until one of the representatives had its annual performance review. “I’m afraid I can’t give you a raise this year,” the manager told the employee. “I was just reviewing your efficiency statistics for the last two weeks. You were missing 5.5 minutes per call and our standard is to get calls answered in less than 3 minutes.” It did not take long for words to spread across the call center and for each repetitive to return to the old behavior where they could answer the calls in less than 3 minutes.
In each of these cases, employees met the standards of their own groups, and in both cases, these standards did not always result in optimal performance for their businesses.