Paul makes sense of economics

It was a fine summer's day. Paul sat by the open window and gazed at the activity outside. Presently he heard two of his workers - one driver and one of the fuel pump attendants - in conversation.
"Hey, Billy!" called the driver. "Can you give me a hand with this roof-rack. I need to remove it from the car before the next trip and it's a bit stuck."
"Sure thing Jack," replied Billy. And they set to work.
Paul was incensed.
How was Billy going to account for this time. He was not working on his designated tasks - he would doubtless be late for something. And Jack - he was being paid for work not all of which he would have done himself. It made him seethe with anger.
He got to work with pen and paper and by the evening he had come up with a plan. The very next day he called all the workers together for a meeting.

"It has come to my attention that tasks within the company are being performed by random personnel," he began. The drivers and washers and pump attendants and all the other workers looked nonplussed.
"Work is being performed by personnel outside of their usual occupation, which will have downstream knock-on effects on productivity."

The staff looked mystified.

"To combat this I am from today introducing a new system whereby individual groups can both sell their services to other groups and purchase others within the company. The drivers' grouping will be known as the 'General Performance - Car Concern'; the fuel pump attendants and washers will form the 'Forward Taskings' group; the management in this building who oversee and regulate all the work will be known as the 'Sedan and Hatchback Agency'. All will have budgets for which they will be accountable and from which they need to purchase services from other groups. They may of course attempt to turn a profit - either by also offering their services elsewhere, or by looking for services that are cheaper outside and thus saving money. This degree of competition will, I am sure, drive up the quality of what we do."

The staff looked mystified.

"How on earth is that going to make us more efficient, Paul?" they asked. "For a start it'll take half our day just to manage all this new paperwork."

"Ah!" countered Paul, pleased that he had an answer to this. "We will employ new people to do this for you. The 'Profitable Car Traders' will work with you to achieve maximum profits."

"Surely this just adds to the expense, Paul? These extra layers of bureaucracy won't make us work any better."

"Oh, I think they will." smiled Paul knowingly. "Once you have your individual budgets to safeguard you will understand the meaning of efficient, cost-effective and accountable work. Competition with the outside world is no bad thing."

"Maybe not," argued the workers. "But we have fuel pumps and washers here on site. Why would we go anywhere else? For a start it would take us miles out of our way and so increase the time spent on a job."

"Other companies can now tender for providing these services more cheaply. Once you see you are saving money you'll change your minds."

The staff looked mystified. "Saving what money, Paul? This all comes from the over-arching budget of the company. There's no real money behind this initiative - only numbers on a spreadsheet, accounted for in a different way."

"Wait and see," said Paul, and got up and left.

And so the drivers and washers and fuel-pump attendants all convened into their nominated groups and started to buy and sell services to each other, though did not notice much difference in the way they worked, other than there was a lot more paperwork.

The Profitable Car Traders closely monitored the number of interactions between the General Performance - Car Concern and the Forward Taskings groups and the Sedan and Hatchback Agency set targets for the maximum allowable number of these interactions. At the end of the year there was very little change in the number of journeys the drivers had undertaken or the way in which the company was perceived by the outside world but there was a large amount of data on how this had come about.

And the drivers noticed that as attentions were now so focussed on the flurry of paperwork that pervaded the buildings no one really gave much thought to the customers anymore.