Internal Customers & Incentives LO1327
Sat, 20 May 1995 14:04:02 -0400

Tom: [ is unsure which msg...]

Thanks for your earlier post where you said in part

>>> However, in order for this to be real, all client's have the literal
opportunity to accept or reject the supplier. Here's the rub. An
internal client could have the option to reject the service of the staff
employee and outsource the need. The staff employee could reject
acceptance of the job the internal client had to offer. With true choice,
eveyone stands in the marketplace, everyone is a competitor, not just the
salespeople. I have tried to visualize this. It seems to me a
pay-for-performance scheme. If everyone were true client-servers, if all
clients had a choice, there would be a mind to satisfy the true client's
needs. <<<<

This is a great insight IMHO. We struggle with this in my organization ( a
large nonprofit) and I have been encouraging my program directors to
consider going outside for administrative services when our own
administration can't or won't meet their needs. This seems to make
everyone nervous both the program director and the people in
administration. However, this element of choice is necessary if we are to
follow this idea ot the internal customer to its logical extension.

And if we do allow choice and people do go outside, then why do we have
these incompetents inhouse? It is indeed survival of the fittest and
people are scrambling to improve to keep their jobs.

The fallacy I see with the logic of the marketplace is that outsourcing
certain functions also implies the loss of certain control. We do things
in our organization based on certain values "the company way" so to speak.
Other organizations might get the same job done more cheaply and
efficiently, but perhaps not in a way congruent with our values, and this
involvement then might detract from the success of the organization to
achieve its overall mission.

This idea of allowing a choice for internal customers over the provider is
intriquing and pokes at the issue of incentives and also leads to issues
of differentiation, autonomy, and empowerment.

David Markham