Pricing Meetings

Why organizations should account for attention as carefully as they account for money.

Universities account for every dollar in next year's budget. Yet I've never seen one account for the cost of a meeting.

One of my favorite Seinfeld episodes is The Chinese Restaurant. Jerry, George, and Elaine spend the entire episode...waiting for a table. No great plot twist in the episode; just 22 minutes devoted to what, in almost any other show, would have lasted 22 seconds. It’s brilliant because we’ve all lived it.

Universities can occasionally feel like The Chinese Restaurant. Smart people can spend astonishing amounts of time waiting for something to happen—or discussing things, which somehow become important simply because they’re being discussed.

I’ve watched working groups spend more energy debating $100 differences in merit raises than discussing how to grow enrollment by 500 students. I've also sat through lengthy discussions about whether one academic journal belongs one tier higher than another—with 70 faculty and staff members in the room. Put even a conservative value of $75 on an hour of each person’s time and a one-hour discussion costs the institution $5,250. Keep going for 45 more minutes and we are approaching $10,000 to settle the placement of a journal most people in the room will never read.

The conversations are never irrational in isolation, which is why they are dangerous. Nobody wakes up thinking, "Today I'd like to ignore enrollment and spend two hours discussing office furniture." Organizations simply drift toward the familiar because it has history, rules, and people are prepared to speak about it. The journal list already has a committee, and everyone knows how to argue about journals. Almost nobody knows exactly how to reverse a 15 percent enrollment decline.

Every university has its version of the journal-list meeting; it’s an opportunity-cost problem. For more than 20 years, I’ve taught students one of economics' central lessons: scarce resources flow to their highest-valued use. Oddly enough, one of the scarcest resources inside any organization—collective attention—defies the laws of economics. Every hour spent discussing something trivial is an hour not spent discussing something consequential. The question isn’t simply whether an issue deserves discussion; it's what discussion it displaced.

And, here’s where universities get themselves into trouble: they behave as though attention is free. One long-running study found executives were spending nearly 23 hours a week in meetings, up from fewer than 10 hours in the 1960s. We’ve built organizations in which the people with the most expensive and consequential attention spend much of the week sitting in rooms together.

We know how to price almost everything else. Every purchase order has a dollar amount attached to it. But put fifteen well-paid people in a room for an hour and the meter somehow stops running: a meeting with 15 people is not a one-hour meeting, but, rather, a 15-hour meeting! A meeting with 70 people is a small institutional investment; we should probably ask what return we expect.

The economist and one of Buxton, North Dakota’s sons, Mancur Olson spent much of his career thinking about why successful institutions—and entire countries—gradually become less adaptable. He called it institutional sclerosis. The phrase has always stuck with me because sclerosis rarely arrives through one dramatic failure. It accumulates one intervention at a time. Every additional meeting, rule, or policy change makes sense when it’s adopted. Over time, though, a university, a company, or an entire becomes a confusing web of rules and red-tape.

After working with a number of really good university presidents, one thing still surprises me: they rarely allow themselves to be pulled into the weeds. Early in my career, I mistook their superpower for superficiality. I now think it is discipline: they aren't trying to master every detail because their job is deciding which details deserve executive attention—and which ones don't.

Universities, unfortunately, reward the opposite instinct. At many universities, service accounts for roughly 10 to 30 percent of a faculty member's evaluation, depending on rank and institution. The fraction of time might be rational, and shared governance matters. But we rarely ask a corresponding economic question: Are we getting a good return on that investment of faculty time?

I am not observing all of this from atop Mount Wisdom. I’ve argued over journal lists; I’ve argued over merit raises down to an amount small enough to cover little more than a nice dinner over an entire year; and I have left meetings feeling victorious because my preferred learning goal survived into the final rubric. Universities can make almost anything feel profound if enough smart people are sitting around the conference table.

But, here’s a question I’d genuinely like answered: At the average university, what percentage of senior leadership’s attention is devoted to enrollment? Student success? Budget? Fundraising? Academic quality? And what percentage is devoted to everything else? I honestly don’t know.

Somewhere in America today, a room full of professors is debating punctuation in a policy manual while another meeting somewhere else is trying to figure out why enrollment is down 15 percent. I’m willing to bet the punctuation meeting has the clearer agenda.

Smart organizations often suffer from the opposite problem people imagine. They don't suffer from too few ideas; they suffer from too many reasons not to decide. Institutions rarely fail, therefore, because someone forgot to update paragraph 4(b) of the faculty handbook. They fail because markets and technology change faster than they do. And while everything is changing rapidly all around them, the committee is still discussing paragraph 4(b).

Universities account for almost every dollar, but they almost never account for attention.

That's unfortunate because attention is probably the scarcest resource an institution has. It may also be the one resource when, once wasted, no amount of fundraising can replace.