Typical Management Action (TMA): The Canoe Race

A Japanese Teacher Retirement System and STRS Ohio decided to have a canoe race on theOhio River. Both teams practiced hard and long to reach their peak performance before the race. On the big day, the Japanese won by a mile.

Afterwards, the STRS team became very discouraged and depressed. The management of the STRS Ohio decided that the reason for the crushing defeat had to be found. A "Measurement Team" made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was that the Japanese had 8 people rowing and 1 person steering, while the STRS team had 1 person rowing and 8 people steering. The Management of STRS hired a consulting company and paid them incredible amounts of money. They advised that too many people were steering the boat and not enough people were rowing.

To avoid losing to the Japanese again the following year, the rowing team's management structure was totally reorganized to 4 Investment Staff, 3 Benefits supervisors, and 1 Accounting supervisor. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the "Rowing Team Quality First Program", with meetings, dinners and free pens for the rower. "We must give the rower empowerment and enrichment through this incentive program."

The next year the Japanese won by 2 miles. Humiliated, the management of the STRS laid off the rower for poor performance, halted development of a new canoe, sold the paddles and canceled all capital investments for new equipment. Then they distributed the money saved by giving a High Performance Award to the Investment managers and distributed the rest of the money as bonuses to the Benefits supervisors and the Accounting supervisor.

We now have distributed the savings based on their value to STRS!