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Business Resources Employee Training Employees goals Improvement Leadership Small Business Strategic Notepad

Leading your team to goal setting

Last week, I suggested that you communicate company goals to each team member so that your company-wide goals have context for them in their daily work and with their department’s goals. That’s only part of the job when working with team members and goal setting. The other part is making sure they have a process for identifying what they want to accomplish and how they will break it down and knock off the steps required to make departmental and personal goals happen.

Goal setting training?

You might be looking at that last paragraph and wondering how it is possible that anyone on your team doesn’t already have a process they’re happy with for goal setting. Have you asked them what process they use for identifying, prioritizing and achieving goals? For a business owner, this may not seem possible, but business owners usually have a different worldview, mindset, background (and so on) from at least some of their staff.

To shine a light on that thought: In all the companies I’ve worked for and with since I started post-collegiate work in the early ’80s, not one offered (much less required) goal setting training of any kind to help employees or teams with this critical responsibility.

NOT ONE. How is this possible?

Even if your team members have a goal setting / achievement process they are happy with, do you know how it fits with the process your company uses? What if yours is better? How will learning yours impact their work and life? What if THEIRS is better? How would that change the lives of the entire team and the future of the company?

Yes, training.

The same way that it’s possible for companies to forget to train their people on project management, process management, product management, etc. The assumption at companies that don’t do this may be that “We hired an experienced person, so we expect you to know this.”

That’s great, but if the experienced hire hasn’t been trained, or uses a sloppy, misguided or incomplete method – who pays for that? Even if the method is good, but it’s incompatible with your company’s process, it’s worth discussing.

Are these things a part of your employee on-boarding? Are you showing them where the health insurance forms are and how to file expense reports, but failing to provide them with information (and training) on the company’s preferred goal setting process? Are you spending any time acclimating them to how project management is done at the company?

Are they being trained on the systems and tools your company uses to communicate, manage projects, collect and review feedback, store ideas, plan projects and identify goals? If not, how will they thrive in your system?

People systems are as important as other systems

It’s all too easy to see a need in a company, hire for it, plug someone into a position and turn them loose like a replaceable part. You may feel that your front line people can be handled that way since they aren’t viewed as a strategic hire. I suggest that they are because they are customer-facing, but it’s more than that and goes back to our discussions last week where giving context to company goals is critical to achieving them.

When you take that concept of giving your team context to company goals and apply it to the systems across your entire company, even the front line staffer needs to know your systems and the importance of using them. How else will they determine and achieve their goals? How else will they know the importance of passing along client feedback, much less how to do it?

One of management’s responsibilities is to see that the staff has the systems and training to handle everyday situations. You train them to run the register, but it shouldn’t end there. What are you doing to prepare them to become of strategic value to your company? We see stories on a regular basis where someone started at an entry level position at a large company and somehow managed to end up as the company’s CEO (or as the company’s owner). These things don’t happen by accident.

How you prepare someone to become an integral part of your success is more important as any other training you provide. Train, mentor and guide them – even if you don’t plan for them to become CEO.

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Employees Improvement Leadership Small Business Strategic Notepad strategic planning

Are you communicating company goals?

The natural thought process for small business owners at this time of year is often about goals, i.e.: “How can we do better next year?”

Before you can answer that, you need to decide what “do better” means. What’s your process for thinking that through? If you decide it’s about increasing a high level focus item like profit (rather important), you’re going to have to break it down so you can focus on the actions that produce the increase you’re looking for.

Departmental goals matter too

Once you’ve settled on an area to improve, don’t limit improvement ideas solely to your focus. If you have a staff, you have to get them involved. If you’re big enough to have multiple departments, you have to get them involved. Get them together and take them through the process you went through. For each department or area of the company, what data should they review? For each department or area of the company, what else needs review and discussion? What do they think they can improve upon this year that will have the most significant impact on their area’s quality and speed? Each department needs to understand how achieving their goals will contribute to other departmental goals, and vice-versa. Finally, all departments or areas of the company need to understand how their area’s goals contribute directly to company-wide goals.

Communicate company-wide goals

Most business owners are pretty good at breaking down the achievements required to reach their goals, but a common misstep is to overlook the communication required to make sure that the owner’s company-wide goals have “Why does this matter to me?” context at all levels of the company, for every employee.

This is a critical step for several reasons, most of which are connected to the need to provide employees with context to the company’s goal(s). When discussing the context of the goals with your team, answer these questions from the employee’s perspective: Why should I care? How can a brand-new employee contribute to such a high-level goal? How can an employee who feels their work is “menial” possibly believe their effort is critical enough that it rolls up into the company’s goals? What do I need to hear about my work to make this company goal important? (If they don’t know these things, they won’t likely be bought in to company goals.) My low-level work seems unimportant, so why does this matter to anyone? I watch the clock all day, how could my work be of importance to the company?

Each person, regardless of what they do, needs to understand how their work contributes to the company’s goal(s). They also need to understand what their department’s goals are. They need to be reminded that the most “menial”, seemingly “low level” task is important because that work is often where the company has significant contact with the customer. If they don’t truly understand the importance of what they do – their leader needs to step in and help.

Obvious, but often overlooked

You might be thinking this is all so obvious, but in small, closely-held companies, these things are not commonly communicated, or are not explained to a level that makes them resonant with the staff. If your company goals don’t resonate with the staff, they really aren’t company goals at all. The same goes for departmental goals, which can produce silo’d behavior that leaves people with the impression that the performance of one group or even one person is not all that meaningful to the rest of the company, when the truth is that all of these pieces working in sync are critical to making the entire company’s goals.

Things to consider

What are the three most valuable pieces of information you learned about your clients this year? Of those three, which demand that you leverage them with into the new year? Is any one of them such a competitive advantage?

What is an area of strength in each department that can be leveraged for the entire company? Is this a strength limited to that department, or can that department teach the rest of the company how to gain from it?

When you sit down to look at these things and discuss them, be sure that you’re thinking about and discussing the data, rather than going on gut feel. It’s way too tempting to do this by the seat of the pants, but don’t do it.

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Competition Improvement Management

Work Linear vs. Parallel

This week I traveled to Kyiv, Ukraine for meetings with a software team. The meetings went well and I will be on my way home by the time you read this, however I had some travel issues.

It’s worth noting that all of the issues I encountered were either created or they were problems that are not allowed to solve themselves because the people and systems communicate with each other at a level that forces them to work in a linear fashion.

It prompts questions we should consider for ourselves and our clients.

What do I mean when I say “Work linear vs. parallel”? Some examples from my trip provide a good illustration.

Working linear

When my plane from Missoula left Salt Lake City (SLC), it left late because the de-icing line in SLC was long. I don’t know if they had a de-icing truck out for repairs, or if they simply didn’t allocate enough trucks or drivers, or if something else was going on.

Regardless of the reason, the situation and the possible lack of fallback solutions (ie: backup trucks, drivers on call, etc) created delayed flights for many that day – creating a linear problem.

If the normal pace of takeoffs cannot be maintained, then SLC becomes a bottleneck in the West and flights to surrounding cities start struggling with schedules as a result.

This cascades into many linear problems at once since every city with a late flight potentially has stranded passengers or passengers with missed connections. Old news, but it’s important to consider how quickly this can cascade.

When my plane left Missoula, it did not de-ice. I don’t know what the protocol is for de-icing, but about 15-20 minutes into the flight, we had failed to continue our climb to cruising altitude and started to turn back. The flaps would not retract and this wasted too much fuel. Unfortunately, we were above maximum landing weight, so we circled for 20-30 minutes to burn off enough fuel to land.

The irony is that this circling was burning the same fuel and time we would have burned if we had simply continued to SLC with the flaps down, normally a 54 minute flight.

This quickly ate into the layover I had built in.

When we got to SLC, we were unable to pull into our gate right away. By the time I got to the gate for Paris, the plane door was closed and I could not board.

Five minutes matters

The big thing that hit me during this process was seeing multiple instances of seemingly insignificant two to five minute delays cascading into hours of delays. Any one of them could have been planned out of the airline’s response and it would have allowed enough time for three people on the Missoula flight make the connection to Paris, much less all the other people who were missing connections that afternoon.

The thought to consider is this: How many two to five minute delays are built in to what you do, how you serve, how you deliver, etc? How do these affect the client’s outcome? What costs do they increase when service fails? What costs will the client incur?

What happens when a few of these five minute delays push your delivery of products or services to the next business day?

What systems do you have in place to automatically tend to conditions that can create these delays?

Working parallel

Every business encounters problems. How businesses react to them and what they do to eliminate / prevent situations that are controllable is critical.

How does automated, perhaps parallel problem solving save money? What delays can be addressed without waiting for them to happen? What delays can be reacted to with automation to accelerate a response and solution?

Cost examples from a plane trip:

  1. What’s the circling fuel expense to get below max landing weight vs. the cost to continue to SLC?
  2. What’s the cost of lost seat revenue for the empty seats and hotel stays for interrupted travel?
  3. How much delay is introduced at the gate when you don’t automatically rebook travelers?
  4. On a daily basis, what does a five minute gate wait cost, in missed connections, lost seat revenue and hotels?

Look at your business. Make a list of preventable delays. Knock off one at a time.

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Employee Training Improvement Leadership Management Small Business Strategic Notepad strategic planning

Is your New Year planning done?

New Year planning for your business is often a mechanical process involving adding x% to various budgets and reducing others or leaving them the same. While financial planning is important, be sure to invest some time at a deeper level so that next year isn’t simply a repeat of this year with a different calendar.

Even if this year has been your best year to date, there’s always room for improvement. In fact, the year after your best year often requires even more focused effort to maintain your current pace. On the other hand, if this year wasn’t so great or was “simply OK”, then these discussions will be in context to turn things around.

Here are some questions to consider for your New Year planning…

Strength Training and Leverage

Who isn’t getting the training they need? What parts of the company would likely produce improved performance after receiving additional training to leverage their strengths? What sort of training is required? For whom? This review should involve everyone in every department, from the owner to the newest employee.

While training can go a long way toward dealing with strengths that need reinforcement, the real solution is often found by delegating certain work to other people. Fighting someone’s weaknesses is usually a waste of time, talent and money. Can they be overcome? Perhaps. Is it worth it? It depends on experience and whether or not the questioned work is the person’s real gift.

You might be tempted to think “They run the cash register. How is that a gift?

The register isn’t the point. The people at your register, at your receptionist desk, on your support lines, taking inbound calls… they’re the people who make the first impression at your company. They’re great at public facing work, or they aren’t. Some will grow into it. Some never will, but may excel at other things. In the meantime, every new prospect and client interacts with these folks. Wouldn’t you prefer they interacted with someone who rocks that register, receptionist desk, or inbound call?

Ever had a great experience at a hardware store cash register? Ever had a bad one? Ever called in or met a receptionist who was a company’s best asset or worst first impression? How are these things going at your place?

Assess Leadership

Over the last year, you can probably name the high and low points from a leadership perspective. This includes owners, managers and team members. Last week I talked about the comfort you feel when you know someone has your back. A good bit of this is driven by leadership and example setting.

For every leader on your team, consider what would help them grow as a leader in the coming year. What can you do to help? What about everyone else? Have you and your managers taken the time to identify staffers who show potential as leaders? What process will be used to do that?

If you’re a team member and you want to lead, two things: Continue leading by example and be sure to let your manager know that you want help becoming a better leader. Assuming they can read your mind isn’t a great plan for your future.

Communication

As with leadership, you can probably identify the highs and lows communications-wise over the last year, both with your clientele and your team. What’s your plan to learn from them, train based on what you learned, reproduce the wins and address the less than ideal?

Is there anyone on your team who needs communications training? Do you cringe when you read emails from some people? Does anyone on your team struggle to get their point across verbally? What can you do as an owner to help them?

If you’re the one having difficulty communicating, who can you ask for help / suggestions? Again, don’t assume anyone will come to your rescue. Take initiative. The ability to communicate effectively is a big differentiator for you and your company.

New Year planning and individual goals

All of the things we’ve discussed above relate to individual goals. Either you want to improve or you want your direct reports to improve, or both. What have you done to communicate the company’s goals for the coming year? What about your departments? What about your personal ones?

It’s time to have these conversations.

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Business Resources Buy Local Employees Improvement Management Small Business Strategic Notepad strategic planning

Strategic notepad: Small Business Saturday

The Black Friday, Small Business Saturday and Cyber Monday rushes are over. If things are going as planned, your sales are on target with no signs of missing your revenue budget for the holiday season. Unless things are going poorly, you might not have started thinking about what you’ll do differently next year – yet now is the perfect time to plant the seeds for those changes.

Why am I asking this moments after the Black Friday / Small Business Saturday / Cyber Monday trifecta? Because the wounds from the sting of procrastination, “didn’t have time to get it all done”, and “shoulda / woulda / coulda” you suffered through the last few days are still sensitive. While the tenderness remains, and the rushes are behind you, it’s time to take a brief moment to reflect on what you learned the last few days, and continue to make note of what you notice over the next few weeks. How long is brief? Long enough to make a note. This doesn’t need to be an afternoon of deep thought.

In the heat of these rushes, did you notice things you’d forgotten to do, prepare for or setup prior to Thanksgiving? Did you notice things that weren’t organized or communicated as well as you would have liked? Did you notice things that could be improved? Write it down.

Simple examples: Did your business run out of coffee, shopping bags, change, receipt paper or rewards plan signup materials? Were all of your shifts covered with enough people, but not too many? Did you have enough inventory on special items? Were shelves restocked/pulled enough? Did a certain group of customers not show up? Did you have the new client traffic you expected? Write it down.

Planning and backdating for Small Business Saturday

You probably have a list that helps you keep things sane for November / December, and that list probably includes tasks that have to be performed months earlier. Are these items already on your calendar with perpetual reminders? Are they backdated to build in sufficient time for completion? Are their prerequisite tasks given sufficient lead time to avoid cascading deadline failure?

For example, to get a mailing / email / Facebook promo (better yet, all three) out prior to Thanksgiving weekend, your marketing calendar needs tasks for promotion planning, email sequence planning, ad / email copywriting, artwork creation, printing, etc. You can’t wait till November 1st to start. If it didn’t happen this year, build it into next year’s calendar so it DOES happen. Write it down.

Write it down now, consider and plan later

While the memory of your “How did we miss / forget that?” moments are fresh, take a moment to make some notes so that when you have some solitude / planning time, you don’t forget the little things you noticed as the rushes occurred. Put a pad next to each register, next to the phone, next to the coffee pot, next to the back door, next to where you keep today’s mail.

Notepads in all of these places allow you and your team to jot down something in the heat of the moment while “that thing” is fresh in your mind. Take a moment at the end of the day to consolidate (and date) the notes for the day. If there’s anything you can take immediate action on, get that done ASAP and review the rest later.

It’s critical that you go back over what went well and can be improved, as well as what didn’t go so well. Don’t wait until you finally relax for a few minutes after January’s inventory and try to remember the little things that happened weeks earlier. You won’t remember them and that will likely mean you’ll encounter them again next year. Keep these notes and your calendar for 2016 updated with the things you notice every day for the next 5-6 weeks.

Include your staff in Small Business Saturday planning

Encourage and remind your staff to write these notes and initial them so they can provide more details when time permits. They probably see different things than you do, and often from a different perspective. Their feedback will likely have a more direct impact on your clients’ experience as well as the ability of your staff to deliver to the best of their ability.

Take advantage of the lessons, gotchas, highs and lows. Write them down.

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Automation E-myth Improvement Management Productivity Small Business strategic planning systems

How fast can your business go?

Is your business ready to face a no-huddle offense?

In case you aren’t a football fan, here’s a quick summary of differences between “regular” and “no-huddle” offenses:

  • A regular offense has 25-30 seconds (depending on the league) to “read” signals (instructions) from coaches on the sideline, swap players in and out from the bench (if desired), huddle (have a brief meeting) and start the next play. In the huddle, the quarterback tells everyone what the play is, communicates the information necessary to run the play, and makes sure everyone knows what signal they’ll use to trigger the hiking of the ball to start the play. The read, swap, huddle process starts as players walk and/or jog back to their teammates at the end of the previous play.
  • A no-huddle offense handles the read signals, swap players and huddle steps as they run back to the line to setup for the next play. As soon as they are set, the ball is usually hiked to start the play. Instead of 25-30 seconds between plays, you might see 8 to 12 seconds (on average) on a well run no-huddle offense.

The big difference between these two setups is that the defense also has the same time to read, meet, swap and setup for the next offensive play – with the regular offense. With the no-huddle offense, the defense has to react much more quickly. While the offense has to move fast to keep the defense “unprepared”, they at least know what’s going to happen next – even if the quarterback makes last minute changes (audibles) before the play starts.

A no-huddle offense quickly exposes defenses that haven’t practiced against no-huddle offenses. More importantly, it exposes a team without a system in place to deal with playing a no-huddle team.

Ok, that was a long-winded setup, but I didn’t want to lose anyone unfamiliar with football in the U.S. The point of comparing the regular offense and the no-huddle offense is that there are parallels between how defenses handle the tempo of a no-huddle game and how your business deals with the increasing tempo of business, much less the pace of change.

Are you feeling the pressure to deliver faster than last year? Did you go faster last year than the year before? Do you expect this need to accelerate every year is going to continue, or do you think that things will go back to normal once you get past this next push?

I think you need to plan on need for speed sticking around for the duration.

Two ways to go fast

With that expectation on your back, the need to increase There are two ways to go fast – with haste, or with a system.

While those who start off with haste might get a lead, it’s pretty typical that they will find themselves assembling the plane while rolling down the runway. Some pull it off. Most don’t, because they aren’t designed for speed. Instead, they simply decided to go fast.

Deciding to go fast is OK. Deciding to do it without a system designed to keep the quality of everything at level your clients are used to (or better) is risky.

Systems are the key

A system of systems is what you’ll need to increase speed without losing the quality and other factors your clients already depend on. Each system can be simple, but you have to be able to replicate it, perhaps automate it and most of all – depend on it to perform a certain job. A system’s job might be to check the quality of one step of a process, or simply to verify its completion. 10 systems might check quality at 10 places, or might make sure you follow up properly, insure that you have the right data recorded, or confirm that you have the right materials and labor scheduled for a particular item. These processes become a system of systems when they work together to help your business work.

When this system of systems is designed to protect the moving parts of your business, then you’re designed for speed and can increase the speed of production and delivery without risking quality and reputation.

Once you have these things in place, you’ll be more difficult to compete with. Not only do competitors have to keep up with your quality, but now they also are forced to deal with the pace you maintain.

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Competition Customer relationships Employees Improvement Management Small Business The Slight Edge

On the playing field, little things matter

Saturday was a bit of a football day. I attended my first Griz game, watched my Razorbacks disintegrate in the fourth quarter (yes, again) and stayed up late watching a fascinating, action-filled Utah / Cal game.

It was a day full of watching highly skilled athletes do little things that have a substantial impact on their success – or fail to do them.

On the way to a great night on the field, Utah’s Devontae Booker did a little thing that many running backs don’t do. For example, when he ran up the middle and found himself stuck in a pile, he didn’t simply keep driving as if he thought he could push a pile of 10 guys somewhere – he turned and ran around them.

The Griz failed to do a few little things, one of which was managing their use of the clock near the end of the game. With less than three minutes left, they managed to use 90 seconds to run three plays and punt. Some teams drive the length of the field in 90 seconds. This time, nothing of substance was accomplished.

In each of these three games, little things contributed substantially to each team’s loss or win. All the teams involved are capable of operating at very high competency levels, yet these little things forgotten even once in some cases can nullify everything they’ve accomplished that day.

The same little things that have a transformational effect on the field are exactly the kinds of things that make or break your customer experience on a hour to hour, day to day basis. That’s your playing field.

What are YOUR little things?

If you and your staff aren’t sure or aren’t on the same page about what your little things are, make a list. Once you have a list of your own, have your staff make a list. That’s where most people stop.

To really standout, take that list and prioritize it. Once you’ve done that, share it with a few trusted clients. Ask them to prioritize the list from their perspective. Ask all of your clients on occasion what little things make them come back to you.

Once you’re there, training is essential to keep these skills sharp. Yes, it’s a skill to keep the little things top of mind and perform them well, rather than simply going through the motions.

These little things may not be obvious and your staff may not think they are a big deal until you explain WHY they are and how they bring back clients repeatedly. If you aren’t absolutely sure that your staff ties the return of clients to their job security, be explicit about it. Explain how much a lost customer costs and how many lost customers translate to a job.

Repetition and training matter – but they matter more when you give them context. Not everyone sees the big picture like you do – and some may see it differently or better, so discuss it as a team.

Too busy to deal with little things?

We all react differently to increased workload, pressure and a larger than normal number of customers (internal or otherwise) demanding our help at the same time. What often disappears from your customer experience under these circumstances are these little things. Courtesy is often one of them. We communicate less in order to get the task done and to our client, it feels like an uncaring interaction.

The costly part of these failures is that at a time when your people are stressed with how busy things are, your clients are too. How you deal with them under these circumstances is a big deal. These little things can be easy to forget when you’re in a hurry, under pressure or dealing with a lot of people at once. When your team is fully present, focused and attentive to the client in front of them and their transaction and is focused solely on that (even if the client is on the phone), the experience is memorable. When the mindset is “I must get this done quickly so I can get the next 22 people taken care of“, the customer experience will suffer.

The emphasis on these little things, along with reminders and training are critical to getting your company to the point where these things happen as a natural part of doing business without explicitly thinking about them.

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Automation customer retention Employee Training Improvement Productivity service Setting Expectations Small Business systems Technology

Filling cracks with automation and metrics

How many emails did you send last Tuesday? How many phone calls did you make last Thursday? How many things fell through the cracks last week or last month?

The first two are trivia until you start thinking about the time they consume compared to the return they produce.

The last one is the big one: tasks that fall in cracks, meaning you forgot to do something, or have someone else do something – like make a call to close a sale or follow up on a lead.

I’m guessing you have no idea how many things disappeared into cracks last week unless they’ve cost you business since that time. If they didn’t have a cost, does it matter? I think it does, but not for the reason you might think.

Metrics are lonely fellas

Metrics are great, until they aren’t. Their failing? Metrics tell you what happened and in some cases, what is happening, but they don’t tell you what to do next. By themselves, metrics can get lonely.

Automation can cure that by either telling you act on what’s happened (or is happening), or by doing it on your behalf with your advance permission.

You need to get metrics hitched up with automation, but not solely to get your metrics delivered regularly. While that’s certainly a very good idea, there’s more to the marriage of metrics and automation than prompt and consistent delivery.

There’s curing that crack problem.

Preventing cracks is better than fixing them

If you drive a diesel pickup, particularly one that’s chipped, tuned and so forth – you know what I mean. If you’re a tuner, you probably have an Edge or similar device monitoring exhaust temperatures and other engine information.

Those are metrics.

If you have an Edge or similar, you may even have it setup to tune your engine’s “brain” as engine metrics signal a need for something different.

The tuned diesel truck owner uses tools like this to prevent engine rebuilds while getting the best possible performance out of their truck. In a similar fashion, stock traders use automation to sell stocks when they hit stop loss points because they want to prevent portfolio rebuilds while getting the best possible performance from their investments.

Create a crack prevention system

Metric driven automation like that used by the stock trader and the tuned diesel owner can likewise keep our business fine tuned simply by making sure we’re aware of things that need to get done on a daily basis.

Simple but effective methods include making appointments for yourself and keeping reminder-enabled todo lists in your phone. Obvious? Sure, but they can be all but life saving when chaos finds its way into your week.

I use a few simple online tools to keep track of my work, but I’m always on a quest to find a way for them to nag me more intelligently. These tools help me remain responsible by making sure I get the right things done at the right time.

For example, after seven years, my Flathead Beacon editor knows he’s going to get this column from me every week, even if isn’t there on deadline day (five days before press day). When he gets to his desk on Monday (press day), he knows it’ll be there and it won’t require editing, except for rare occasions when my headline is a bit over the top.

Occasionally, 11pm Sunday arrives and the column isn’t finished. I have a reminder on my phone to tell me to get up 90 minutes early on Monday (ouch, right?) so I can get it published on time, allowing him to meet his commitments.

Here’s the crack prevention: Automation helps me meet my commitment, no matter how hectic life gets, no matter where I am. If the automation was fully data-driven, the reminder would only occur on Sundays when my column hasn’t yet been posted. Some situations will demand that level of data-driven automation. You don’t have to cut it as close as 11pm on the night before. Getting up 90 minutes early on Monday is my self-inflicted punishment / motivation not to let that happen.

Together, automation and metrics allow you to become more dependable as your business / volume grows, while still remaining independent. Don’t forget to show your team how to use automation to improve their performance.

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Competition Habits Improvement Leadership Management Small Business The Slight Edge

Making good metrics into better metrics

The last two weeks I’ve been dancing around the topic of metrics without getting to the point, which is: How are things?

More importantly, how do you know?

Most businesses have some metrics. Some are very data-driven, some are barely so and there are plenty in between those two points. One of the differences between the very data-driven companies and those that are “sort of driven” is the quality of the metrics.

Good data vs. great data

There’s nothing wrong with good data. It’s certainly better than no data. Good data includes facts and figures like sales, costs, profit, inventory, payables and receivables.

Here are some good metrics: We have 1207 trucks on the road. Our drivers make $0.38 per electronically logged mile. It costs us $1.39 per mile for truck, driver, fuel and overhead (taxes, insurance, maintenance, etc).

Key to making good metrics into better metrics: Drill deeper. Hiding inside most good metrics is better, actionable information.

Quality isn’t just about accuracy, it’s also about the depth of the metric and the insight it communicates. What would happen if you drilled deeper into your good metrics? Would you find additional information to take action on?

Let’s drill deeper into the trucking metrics I mentioned above – on one topic: downtime.

Downtime isn’t on the list of metrics. It’s hidden inside overhead. It’s not solely about the maintenance to get the rig back on the road. It has hard costs (repair parts, repair labor) to you and to the driver (lost mileage and thus lost pay), in addition to the possible cost to your reputation. Showing up late or not at all not only risks your relationship with the client, but may also put their client relationships at risk. Embarrassing a good client by showing up late with their clients’ goods and materials can cost you far more than the price of that run.

What if that downtime makes you late for the next pickup? How far can this cascade across your business and the business of your clients?

Drilling down into good metrics

Here are a few downtime related questions to drill down with:

How many minutes of unplanned downtime do your trucks average per 100000 miles? What’s the average cost to get them back on the road, per incident? Per downtime hour? What would the change in revenue and expenses be if you could cut the average time in half?

If all of your rigs are company-owned, which model and model year are accruing the most downtime? For companies who lease rigs from drivers, which model and model year accrue the most downtime?

Is this downtime consistent across all owners or is there an 80/20 breakdown, where 20% of the drivers are accruing 80% of the downtime? Same 80/20 question for company-owned rigs. What costs are within 10% of the rest of the industry? Which ones aren’t?

Can any of these differences in performance be resolved with references to a better repair shop, a different brand of part / fuel / oil, better record keeping, more frequent maintenance or a different maintenance process?

For the ones that are outside industry norms, what can be done to leverage and improve the ones where you are beating the industry? Is there a legitimate reason for your business to be “below industry standards” in some ways?

Getting to better metrics

Having the answers to your business’ drill-down questions helps you improve consistently on a sustainable basis.

There are a couple of keys to drilling down:

Get organized. Before you can find better metrics inside your good data, your good data needs to be organized.

Take it a bite at a time. It’s easy to do one pushup before you get in the shower. Tomorrow, it’ll be easier to do two. Next week, 10 will seem easy. If you try to take on all of this at once, it will be discouraging because of the size of the task and the complexity of it. Keep it simple so it’s easier to delegate later.

Leave the rabbit chasing for another day. There will be plenty of time to address the things you notice while drilling down into one thing. You will almost certainly notice other things that require attention. Resist the urge to jump on them. Instead, make note of them and then finish the task at hand.

Procrastination is not a good metric. Start today. The more you know, the better prepared you’ll be for radical industry changes, like big rigs without drivers.

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Automation Competition Improvement Management Manufacturing quality Small Business systems The Slight Edge

The importance of performance metrics

Last time, we talked about metrics that answer questions to help you increase sales.

Metrics aren’t solely about sales and marketing. Quality and performance metrics drive your business. Can you identify a few that would cause serious concern if they changed by as little as five percent?

If there are, how are you monitoring them? Monitoring and access to that info is what I was initially referring to last time. The performance metrics I’ve been working on are a mix of uptime, event and work completion information. In each case, a metric could indicate serious trouble if it changed substantially.

Uptime metrics

An uptime metric shows how long something has been running without incident. In some fields, particularly technology, it’s not unusual to have seemingly crazy uptime expectations.

Anyone who has picked up a landline phone is familiar with the standard in uptime metrics – the dial tone. For years, it was the standard because it was quite rare to pick up the phone and not get a dial tone. Its presence became an expectation, much as our as yet unfilled expectation of always-unavailable cell and internet service is today. The perceived success rate of the dial tone is probably a bit higher than reality thanks to our memory of the “good old days”.

Today’s replacement for the dial tone is internet-related service. Years ago a business would feel isolated and threatened when phone service went out. Today, it’s not unusual for a business to feel equally vulnerable when internet service is out. The seemingly crazy uptime expectations are there because more businesses function across timezones (much less globally) than they did a few decades ago. Web site / online service expectations these days are at “nine nines” or higher.

Nine nines of uptime, ie: 99.9999999% uptime, is a frequently quoted standard in the technology business. Taken literally, this means less than one second of downtime in 20 years. There are systems that achieve this level of uptime because they aren’t dependent on one machine. The service is available at that level, not any one device. Five nines (99.999%) of uptime performance allows for a little over five minutes of downtime per year. Redundancy allows this level of service to be achieved.

Events that idle equipment and people are expensive. What’s your uptime metric for services, systems, critical tools like your CNC, trucks on the road (vs. on the side of the road), etc?

Event metrics

Event metrics are about how often something happens, or doesn’t happen – like “days since a lost work injury” or “days since we had to pull a software release because of a serious, previously unseen bug“.

In those two examples, the event is about keeping folks focused on safety first and safety procedures, as well as defensive programming and completeness of testing. You might measure how many crashes your software’s metrics reported in the last 24 hours and where they were. Presumably, this would help you focus on what to fix next.

What event metrics do you track?

Work completion metrics

Work completion metrics might be grouped with event metrics, but I prefer to keep them separate. Work completion is a performance and quality metric.

Performance completion not only shows that something was finished, but that successful completion is a quality indicator. Scrap rates and scrap reuse get a lot of attention from manufacturers in part because of the raw material costs associated with them. Increasing scrap rates can indicate performance and quality problems that need immediate attention.

One system I work with processes about 15,000 successful events a day – not much in the technology world when compared to Google or Microsoft, but critical for that small business. If the number dropped to only 14,900 per day, their phones and email would light up with client complaints, so there’s a lot of emphasis on making sure that work completes successfully. Catching and resolving problems quickly is critical, so redundant status checks happen every 15 seconds.

Events of this nature are commonly logged, but reviewing logs is tedious work and can be error prone. Logs add up quickly and can contain many thousands of lines of info per day – too much to monitor by hand / eye via manual methods.

These days, business dashboards are a much more consumable way of communicating this type of information quickly and keeping attention on critical numbers – such as this example from klipfolio.com:

business performance metrics dashboard

What work completion metrics do you track?