By Wes Friesen, Portland General Electric
“Improving performance does not happen by accident. It is the result of a commitment to excellence, intentionality and focused effort.”
Peter Drucker was the considered the Father of professional management. He said “Leadership is lifting a person’s vision to higher sights, the raising of a person’s performance to a higher standard, the building of a personality beyond its normal limitations.” Being in a management role provides us the opportunity to intentionally raise the performance levels of our teams – and the individuals that comprise them.
To improve the performance of our teams, we need relevant performance measures to inspire, provide a common focus and allow us to track progress. Here are some tools to help develop powerful performance measures:
Ask the Right Performance Questions
The Right Questions express the critical few things by which to judge our performance results. Put yourselves in the shoes of your key stakeholders (investors, customers, employees) and ask what is important to them?
Organizational Development expert Brad Fishel points out that when you answer the Right Performance Questions realize that some measures you develop in response will be Quantitative (numeric) in nature (e.g. how many pieces of mail were produced last month), but some will be Qualitative (subjective) in nature (e.g. how satisfied are our customers). Don’t ignore qualitative measures – consider the usage of surveys and other rating instruments. Fishel also says “Better to have subjective judgments about important questions than objective data about unimportant questions”.
Develop “balanced” measures to judge success
Effective teams add value to all important stakeholders and avoid a singular focus (e.g. being low cost) to the detriment of other important outcomes (e.g. high quality). Following are potential types of measures to consider. For each measure that gets used, we should have a target/goal to compare actual results against:
1) Productivity (productivity is simply a measure of Goods/Services produced divided by Resources Used)
2) Quality (e.g. reliability, accuracy, mistake free, meets requirements, etc)
3) Volume (how much is being produced)
4) Timeliness (are work products completed when needed)
5) Service (are customers satisfied with the service they receive)
6) Compliance (are postal regulations, Sarbanes-Oxley, HIPPA, and other regulations being met)
7) Cost (e.g. measure overall costs and/or cost per unit)
Intentionally focus on improving performance
How can we strive to improve productivity and overall performance? Following are some tools to choose from:
1) Lay out a challenge (illustrated by the closing story)
2) Enhanced Training & Development
3) Provide recognition and use incentives
4) Pursue wise use of technology
5) Look for process improvements
6) Be a better servant leader and show more care for your employees
7) Solicit ideas from your team members
8) Learn from other successful teams
Let me close with the following story from the life of Charles Schwab, former head of U.S. Steel. Schwab said:
I had a mill manager who was finely educated, thoroughly capable and master of every detail of the business. But he seemed unable to inspire his men to do their best.
One day I asked him: “How is it that a man as able as you, cannot make this mil turn out what it should?” “I don’t know” he replied. “I have coaxed the men; I have pushed them; I have sworn at them. I have done everything in my power. Yet they will not produce.”
It was near the end of the day; in a few minutes the night force would come on duty. I turned to a workman who was standing beside one of the red-mouthed furnaces and asked him for a piece of chalk. “How many heats has your shift made today?” I queried. “Six” he replied. I chalked a big “6” on the floor, and then passed along without another word.
When the night shift came in they saw the “6” and asked about it. “The big boss was in here today”, said the day men. “He asked us how many heats we had made, and we told him six. He chalked it down.”
The next morning I passed through the same mill. I saw that the “6” had been rubbed out and a big “7” written instead. The night shift had announced itself. That night I went back. The “7” had been erased, and a “10” swaggered in its place. The day force recognized no superiors. Thus a fine competition was started, and it went on until this mill, formerly the poorest producer, was turning out more than any other mill in the company.
Good luck as you partner with your team and intentionally pursue a higher level of performance!
Wes can be contacted at Wes.Friesen@pgn.com.
Showing posts with label benchmarking. Show all posts
Showing posts with label benchmarking. Show all posts
Tuesday, January 4, 2011
Monday, September 22, 2008
Surviving Best Practices
Posted by Mark Brousseau
An interesting article from Business Finance magazine on best practices:
The Pragmatist's Guide to Best Practices
by Anand Sanwal
Created 08/18/2008 - 17:11
Are you suffering from best practicism? There is no doubt that best practices can be helpful.
Why wouldn't an organization want to learn from others who've been down a similar path, as this can help to avoid costly mistakes and may yield quicker results. But taken too far, the pursuit of best practices can replace independent thought and actually have deleterious impacts on an organization. When this occurs, an organization is afflicted with what we call best practicism -- the errant belief that replicating other organizations' processes, strategies, and ideas is the route to success.
The Skeptic's Guide to Best Practices
When used in moderation and carefully considered, best practices can be immensely valuable. The key is to have a framework by which to evaluate best practices so that you can determine which are really "best."
There are eight key considerations or questions to use when you are evaluating a best practice:
1. Who is the messenger or advocate, and what is in it for them?
Remember that it pays to be skeptical, as many folks are trying to sell you something along with a best practice. Ask lots of questions and push the vendor on their claims.
2. Is it a well-constructed, multidimensional best practice or one-dimensional silver bullet?
Major organizational issues and challenges are never one-dimensional, so it is a fallacy to believe that complex problems can be solved with simple solutions. If the best practice advocate doesn't have a plan that considers processes, systems, and organizational culture and behavior, it is not sufficiently robust.
3. What is the detailed ROI of the effort, and is it reasonable?
The costs of the effort should be well-detailed and should consider ongoing costs in addition to the upfront costs. Although the ongoing costs may not be precisely known, they should be included using the best information available.
The benefits should also be quantified. Nebulous claims of increased transparency, agility, customer retention, etc., are not sufficient, as these vague claims are impossible to measure and hold people accountable to. Remember that what gets measured gets done. This forces people to think about the specific economic reason they're undertaking the best practice and also lets those reviewing the effort evaluate the reasonableness of these assumptions.
4. Is the opportunity compelling even when I discount the benefits significantly?
Even with an ROI in hand, discount the benefits and increase the costs to see if the results are still compelling. Failure rates for multiyear projects are quite high, especially those that may involve software or technology. If the initiative still seems compelling after discounting, you may be onto something.
5. Is the best practice based on a practitioner's or a consultant's view of the world?
If the best practice has been dreamed up by a consultant, run! If it is based on the work of practitioners who actually built the discipline and understand the organizational complexities of making real change happen, then there may be something of merit in it.
6. In other organizations who've adopted the best practice, who is talking about it?
If you want to understand the power of a best practice, look to see if senior management is talking about it. If the CEO, CFO, CIO, unit president, et al., are talking about it, the effort has gained some momentum and gone beyond a single organization or individual whose pet project it is.
7. How long have other organizations been doing it, and what have the results been? Are the results believable?
Ask lots of questions about the results to understand the methodology that they are using to make the claims about performance. Remember that there are numerous other things going on within an organization at any time that may impact performance. Make sure that the causality they may be indicating makes sense and is credible.
8. Can you keep the employees who may lead this effort working on it for the life of the initiative?
Many best practices require multiple years of effort to realize the benefit. Oftentimes, people who begin the projects get credit for selling the vision and starting the project and then they move on. Then, if the benefits are not realized or the costs spiral upward, the original person is not accountable, as they can claim that they were no longer involved. Therefore, keeping the original visionary tied to the project is important, as it ensures that they really believe in the idea and are comfortable in delivering the benefits they've outlined for the given cost.
Now Separate the Fluff from the Stuff
When you think about all of the factors that drive a business to be a success or failure -- industry, management, talent, market conditions, competition, innovation, customers, vendors, strategy, luck, geographical focus -- it is amazing to think that plucking ideas from other companies and putting them into your own can work universally. But this thinking happens all the time because of the structure and sanity that best practices seem to provide in an increasingly complex, fast-paced, and sometimes insane business world.
For long-term outperformance, organizations would be better served to cure themselves of best practicism and aspire to become the leading practice. Once they've done this, they can take satisfaction in watching others follow the best practices they have developed.
An interesting article from Business Finance magazine on best practices:
The Pragmatist's Guide to Best Practices
by Anand Sanwal
Created 08/18/2008 - 17:11
Are you suffering from best practicism? There is no doubt that best practices can be helpful.
Why wouldn't an organization want to learn from others who've been down a similar path, as this can help to avoid costly mistakes and may yield quicker results. But taken too far, the pursuit of best practices can replace independent thought and actually have deleterious impacts on an organization. When this occurs, an organization is afflicted with what we call best practicism -- the errant belief that replicating other organizations' processes, strategies, and ideas is the route to success.
The Skeptic's Guide to Best Practices
When used in moderation and carefully considered, best practices can be immensely valuable. The key is to have a framework by which to evaluate best practices so that you can determine which are really "best."
There are eight key considerations or questions to use when you are evaluating a best practice:
1. Who is the messenger or advocate, and what is in it for them?
Remember that it pays to be skeptical, as many folks are trying to sell you something along with a best practice. Ask lots of questions and push the vendor on their claims.
2. Is it a well-constructed, multidimensional best practice or one-dimensional silver bullet?
Major organizational issues and challenges are never one-dimensional, so it is a fallacy to believe that complex problems can be solved with simple solutions. If the best practice advocate doesn't have a plan that considers processes, systems, and organizational culture and behavior, it is not sufficiently robust.
3. What is the detailed ROI of the effort, and is it reasonable?
The costs of the effort should be well-detailed and should consider ongoing costs in addition to the upfront costs. Although the ongoing costs may not be precisely known, they should be included using the best information available.
The benefits should also be quantified. Nebulous claims of increased transparency, agility, customer retention, etc., are not sufficient, as these vague claims are impossible to measure and hold people accountable to. Remember that what gets measured gets done. This forces people to think about the specific economic reason they're undertaking the best practice and also lets those reviewing the effort evaluate the reasonableness of these assumptions.
4. Is the opportunity compelling even when I discount the benefits significantly?
Even with an ROI in hand, discount the benefits and increase the costs to see if the results are still compelling. Failure rates for multiyear projects are quite high, especially those that may involve software or technology. If the initiative still seems compelling after discounting, you may be onto something.
5. Is the best practice based on a practitioner's or a consultant's view of the world?
If the best practice has been dreamed up by a consultant, run! If it is based on the work of practitioners who actually built the discipline and understand the organizational complexities of making real change happen, then there may be something of merit in it.
6. In other organizations who've adopted the best practice, who is talking about it?
If you want to understand the power of a best practice, look to see if senior management is talking about it. If the CEO, CFO, CIO, unit president, et al., are talking about it, the effort has gained some momentum and gone beyond a single organization or individual whose pet project it is.
7. How long have other organizations been doing it, and what have the results been? Are the results believable?
Ask lots of questions about the results to understand the methodology that they are using to make the claims about performance. Remember that there are numerous other things going on within an organization at any time that may impact performance. Make sure that the causality they may be indicating makes sense and is credible.
8. Can you keep the employees who may lead this effort working on it for the life of the initiative?
Many best practices require multiple years of effort to realize the benefit. Oftentimes, people who begin the projects get credit for selling the vision and starting the project and then they move on. Then, if the benefits are not realized or the costs spiral upward, the original person is not accountable, as they can claim that they were no longer involved. Therefore, keeping the original visionary tied to the project is important, as it ensures that they really believe in the idea and are comfortable in delivering the benefits they've outlined for the given cost.
Now Separate the Fluff from the Stuff
When you think about all of the factors that drive a business to be a success or failure -- industry, management, talent, market conditions, competition, innovation, customers, vendors, strategy, luck, geographical focus -- it is amazing to think that plucking ideas from other companies and putting them into your own can work universally. But this thinking happens all the time because of the structure and sanity that best practices seem to provide in an increasingly complex, fast-paced, and sometimes insane business world.
For long-term outperformance, organizations would be better served to cure themselves of best practicism and aspire to become the leading practice. Once they've done this, they can take satisfaction in watching others follow the best practices they have developed.
Sunday, May 11, 2008
Benchmarking "Do's" and "Don'ts"
By Mark Brousseau
One of the hottest topics at TAWPI’s Payments Capture & Clearing (PCC) Council meeting last month in Las Vegas was how organizations can get the greatest benefits from benchmarking and best practices.
That same question was put to a gathering of top supply chain executives at the Supply Chain Leadership Forum, an event hosted by the Supply Chain Consortium.
By comparing notes and taking a Consortium survey, forum attendees identified the Top 5 “Do’s” and “Don’ts” of benchmarking and best practices. The survey gathered information from participants’ real-life experiences, including supply chain areas that have achieved performance improvements and benchmarking information that has been used and interpreted by their companies.
The Top 5 Do’s:
1. Do align with key stakeholders.
2. Do succinctly summarize benefits for top management.
3. Do reduce your scope to actionable items.
4. Do maintain perspective of both your business and cultural model.
5. Do test multiple options before drawing conclusions.
The Top 5 Don’ts:
1. Don’t use competitors that match up poorly with your processes.
2. Don’t ignore your competition.
3. Don’t use the “boil the ocean” approach (focus, focus, focus).
4. Don’t use benchmarking and data analysis tools without understanding how they work.
5. Don’t work in a vacuum and think your organization knows it all.
Do you have any benchmarking "do's" and "don'ts" to share? Post them below.
One of the hottest topics at TAWPI’s Payments Capture & Clearing (PCC) Council meeting last month in Las Vegas was how organizations can get the greatest benefits from benchmarking and best practices.
That same question was put to a gathering of top supply chain executives at the Supply Chain Leadership Forum, an event hosted by the Supply Chain Consortium.
By comparing notes and taking a Consortium survey, forum attendees identified the Top 5 “Do’s” and “Don’ts” of benchmarking and best practices. The survey gathered information from participants’ real-life experiences, including supply chain areas that have achieved performance improvements and benchmarking information that has been used and interpreted by their companies.
The Top 5 Do’s:
1. Do align with key stakeholders.
2. Do succinctly summarize benefits for top management.
3. Do reduce your scope to actionable items.
4. Do maintain perspective of both your business and cultural model.
5. Do test multiple options before drawing conclusions.
The Top 5 Don’ts:
1. Don’t use competitors that match up poorly with your processes.
2. Don’t ignore your competition.
3. Don’t use the “boil the ocean” approach (focus, focus, focus).
4. Don’t use benchmarking and data analysis tools without understanding how they work.
5. Don’t work in a vacuum and think your organization knows it all.
Do you have any benchmarking "do's" and "don'ts" to share? Post them below.
Sunday, October 7, 2007
Benchmarking Blues
By Mark Brousseau
In a column in the October 15th issue of FORBES, Publisher Rich Karlgaard notes that a flaw common to business and rampant in government is the failure to benchmark. In sports, performance and relative performance are laid bare for anyone to see. But in business, the instincts are to shut our eyes to benchmarking, Karlgaard wrote. “We don’t want to see,” he claimed. Karlgaard’s recommendation is to start the benchmarking process with three questions:
... What does our competition do better than we do?
... Are our shortcomings rooted in our personnel, our system or something else?
... Which companies that are not competitors now could step in and eat our lunch tomorrow if they wanted to?
As another benchmarking tool, TAWPI just launched a survey to track error rates in remittance and retail lockbox operations. The results will be available by year’s end. Want to learn more? E-mail me at m_brousseau@msn.com.
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