When the presentation ended, all eyes turned to the new CEO. His comment changed the mindset of the company: "Sorry, there is no market for bits … the market is for holes." From that day forward, the employees of the company looked for better "ways to drill holes" not how to manufacture better drill bits.

There are three morals to this story that apply to any organization implementing Activity Based Management:

ABM is about needs, not wants. Solve a need when implementing and sustaining an ABM system. It is virtually impossible to "push" ABM on an organization. Instead, there must be managers "pulling" for answers to business needs. Needs such as the CEO saying "I need to reduce costs." Or the VP of marketing saying "I need to find out if we’re making money on every product and customer." If you push a rope across a table, it buckles. But if someone pulls it, the rope travels in a straight line.

ABM is about output, not time. Speaker of the House Bob Livingston recently announced that he is converting the U.S. House of Representatives from a 3-day workweek to a 5-day workweek. I immediately sent him an E-Mail saying "I’m more concerned about the House’s output, not the amount of time they work." One of the most common contributors to the demise of an ABM system is measuring activity time percents to the fourth decimal point yet not measuring activity output. What counts is not the number of hours you put in, but how much output you produce in those hours.

ABM is about users, not uses. The uses of an ABM system are almost endless. Yet one of the most common reasons why organizations have failed to sustain their ABM systems is because non-financial users have not been trained "how to" read, interpret and use the reports from the system. Those organizations that provide hands-on, interesting and relevant ABM training to all their employees are the most successful. The organizations with the most powerful ABM systems will not win the race. Instead, those organizations with employees who use ABM to produce quantifiable bottom line benefits will survive and thrive in the new millennium.