Posted 22-04-2008
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Conclusive Advice
by Stephen Cuff

Nowhere to hide

I recently read a government RFT (Request For Tender) that wanted consultants for business process re-engineering. And laughed.

The idea of business process re-engineering is to investigate what processes exist and refine things to improve the operation of the activity. I laughed because I know full well the problem they are trying to solve is not a business process issue, but a productivity and management issue.

In most of these cases, where a re-engineering is being called for, they are trying to improve efficiency by changing their structure and systems. When you are dealing with government entities of that size, who have been in their line of business for as long as they have, the chances of finding any significant improvement by adjusting business processes is laughable. Even if you did improve their business systems, if you did not also give them people management systems, your change efforts will have little effect other than to stir up the staff for a while.

What they are actually lacking are ways to measure productivity down to the individual staff level. The term KPI usually makes me cringe. What this KPI (Key Performance Indicator) is supposed to do is provide an indication of how well an area has performed. If the KPI measurement timeframe is any longer than one month, all you get is a nice historical (and often hysterical) idea of how well things have gone. It does not provide any useful, real time measurements to help you manage in the short term, so application of KPIs can be limited.

The ideal is to measure and manage in shorter timeframes - and to measure EVERYONE.

Image this:

Each employee of a large bureaucracy has a responsibility to produce something (revolutionary concept ;-).
 Each one records their production weekly in the form of a statistic.
 Each of these statistics is graphed the same way by every staff member. A simple line graph is used with the timescale along the bottom of the graph, and the volume of production up the side of the graph.
Each graph follows a common set of rules. The bottom of the graph represents the worst case you would wish to have for the time period being monitored (usually NOT zero), and the top of the graph shows a healthy yet realistic target for the time period (12 weeks is good for weekly stats). Microsoft® Excel has these types of rules automatically applied most of the time; but you can change these manually.

With the above implemented, a quick look at any graph can tell you how well or otherwise any employee is performing, totally independent of what their product actually is.

Some people say that this is not universally applicable, does not apply to 100 per cent of their staff. How do you measure weekly someone who is in corporate sales and makes three multi-million dollar sales per year? In cases like this, you can always measure their inputs, how many sales calls, how many meetings with key buyers, and so on. You are always better off measuring the results of someone’s work, rather than their actions (or inputs) - but better to measure inputs than nothing. (And high-end sales people are usually rainmakers - they acquire business of high level and quality - and usually drive themselves as much as a business owner does, so monitoring and control is less necessary.)

What do common rules for graphs, and every employee having their own graph, do for a business?

1. Provides a level playing field for whatever bonus scheme you wish to use.
2. Makes it almost impossible for dishonest people to hide within a team.
3. Gives management good visibility and predictability for production.

There may well be other benefits, but these ones by themselves make the effort more than worthwhile.

Hope this helps - or at least provokes.

 

Stephen Cuff is the Managing Director of Conclusive Consulting Group, specialists at increasing the productivity of organisations and individuals. Coaching, consulting, mentoring, planning, implementation of business success frameworks. Contacts: www.conclusive.com.au or call 0413 049 070. Free subscription to monthly tips e-news also available.

 

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