Lesson Learned #23
There is an interesting phenomenon called the "above-average effect" which is the tendency of most people to believe they are above average, despite the obvious math contradiction that introduces. There is also a theory that suggests the less skilled you are at doing something, the more likely you are to overestimate your own performance, precisely because you don't really know how to judge it properly. We have learned that most managers, our own company included, think they are better than they actually are at managing.
In defense of all of us managers, managing is extremely difficult no matter what industry, and requires an uncommon blend of skills. Organization design and circumstance are also stacked against most people. Perhaps the most common problem is that most managers get to where they are due to their technical proficiency, not their management skills. Another significant issue is that the key tools designed to support management, the various information systems available, usually don't support management nearly as much as they were intended.
So is this a big deal? So management is tough and our own self-assessments are a little high. Turns out that it is a big deal if you are trying to drive performance up. A key part of most performance improvement efforts is getting managers to change how they interact with their people. How they set expectations, follow up and coach. If managers don't see a need to change, it's very hard to get them to change.
We address this issue by doing what we call management studies. We spend a day observing a manager and then break their time into categories. To compare what people actually do to what they think they do, we ask the manager at the end of the day to do their own categorization. Almost invariably managers misjudge how they spend their time. But if you do the same study but stop every 30 minutes and briefly discuss what happened, you can relatively quickly recalibrate someone's perceptions. The study doesn't change behavior but it does help a manager understand that there may be a better way to allocate their time, which as mentioned, is a necessary component to broader performance improvement.
Lesson Learned #22
Golf is one of those rare sports that is actually more boring watching live than it is watching on television. For those people who like playing golf, it is strangely addictive. Matching yourself against par, or using the handicap system to play against others is a big part of golf's appeal. Competition is fun for many people, even if only against yourself. However, can you imagine someone playing golf every day without a scorecard? Just walking around the course hitting the ball towards some distant flag. Yet that is exactly how many people work, every single day.
When we work in an area and walk around during the day we often ask people how they know if they are having a good day or not. Most people will respond something like, "when customers (or my manager, or sales) aren't giving me a hard time." What is noticeably absent in many cases (especially in office environments) is any reference to a performance number. Whether that is attainment to a specific schedule, a productivity level or a service score. People often struggle to define what a good day is in anything other than anecdotes.
We have learned that many people respond well to some form of competition, perhaps especially in repetitive task environments. They like to have clear expectations and to measure themselves. They like visual feedback boards that chart their progress through the day. They like to know where they stand relative to others. They like doing well, and we think a big part of it is simply adding some interest to their work day. Walking around the same golf course, everyday, without a scorecard, would eventually be worse than watching golf live.
Lesson Learned #21
We have a training session about problem solving that uses an interesting deception. We show a paragraph that describes a young charismatic leader of a nation facing a tough decision. You have to guess who the words are describing. With a few historical and personal story elements it is very easy to figure out that it is John F. Kennedy, which everyone latches onto halfway through the exercise.
The deception is that it isn't John F. Kennedy, it's actually Adolf Hitler. The circumstances and surrounding elements between the two turn out to be quite similar. The exercise demonstrates our tendency to jump to conclusions too quickly and once we do, we exclude alternatives. Apparently our innate shortcuts help us navigate day-to-day living but get the better of us when it comes to thinking about things analytically. The exercise has demonstrated this point brilliantly every time we've used it, except once.
We were doing some work for The Ritz-Carlton Hotel Company and they asked us to train some of their European Quality Managers in Istanbul. The session was going well and we got to the problem solving exercise. After the paragraph was shown, a fairly bold and dramatic, "Who is this person?" appeared on screen. The answer it provoked may be remembered as one of the more confusing moments in the history of Carpedia training. While we patiently anticipated the usual wrong answer, the quality managers looked at each other a little awkwardly and said, virtually in unison, "That sounds a little like Adolf Hitler."
There were a few additional grumblings about whether Adolf Hitler was an appropriate leader to showcase and certainly whether "charismatic" was an appropriate description to use. Not a single person saw the description as John F. Kennedy, even after it was explained how the exercise was supposed to play out.
There were a couple lessons learned in this. The first was simply to be more aware of how important personal context is for people. It was an interesting example of how regional and cultural bias affects how things are perceived. The second was to think through what you plan to present and be cognizant of potential sensitivities. The exercise works in North America because people jump to the conclusion it is Kennedy, a perceived good guy. The fact that it is Hitler, a perceived evil guy, makes the error more dramatic. But it doesn't work in reverse.
Lesson Learned #20
There is a pretty funny story about a lesson learned by a consultant. It was told to us by a client who himself was an ex-consultant so we have never been sure if it really happened or it is some kind of urban legend. In any case, a consultant was doing a presentation to a number of managers, including the President of the organization. At one point the President started to get bored and asked the consultant to get the point and let her know the net impact of the recommendations. Not wanting to be thrown off his agenda, the consultant replied, "Great question but you're one step ahead of me, I will be covering that off a little later in the presentation." So the President collected her notebook, got up and walked to the door and turning briefly as she was leaving said, "someone come and get me when he gets to that section."
There are a couple of lessons or maybe broader questions we can derive from this story:
1) Should you answer a direct question when asked in a presentation, knowing that you will be discussing the issue later? And (2) should you structure your presentations by answering the main question up front and then supporting it, or build a case to reach a hopefully obvious conclusion at the end? In our experience these are actually fairly interrelated questions.
Many of our senior clients are results-based individuals. It tends to be in their nature to want to know the answer up front and then have it supported with arguments. They don't like it when we present arguments leading up to a conclusion because they feel slightly manipulated. They want the answer early on so they can have a chance to balance our arguments and see if they would draw the same conclusions. So as a general rule we always give away the punchline up front and then support it. In the story above, we would suggest that it is better to answer the President's question directly, even if it will be repeated later in the presentation.
So, should you always give the answer up front? Like everything, there are some exceptions. The best advice may be to tailor your presentations to your audience. While our preference is to give the answer at the beginning, if we are presenting to an audience specific information that we know will not be well received, or we know the audience is pre-disposed to be hostile to the recommendations, we will sometimes build the case first. In these instances building the case gives you a chance to present a few arguments that may get the audience to at least consider the logic of why the recommendations were developed. It doesn't always help, emotional feelings usually trump logical arguments.
Lesson Learned #19
We have a fairly well outlined performance compensation plan for all of our staff based on the actual attainment of measurable results. Not willing to leave a good thing alone, we dreamed up a concept a number of years ago that random financial rewards would be a novel way to recognize people's performance. To make it more colorful we decided to give the money out in unique ways.
The first recipient was a long term manager who had done a great job with one of our manufacturing accounts. So we searched around for a silver attaché case and filled it with money. It turns out that quite a lot of money doesn't look like very much when you put it in a briefcase, so we went back to the bank for smaller denominations and then also layered it with cut newspaper underneath. It looked impressive when we were finished. A couple of the senior partners invited the manager out to dinner and then asked him to come out to the parking lot where the rental car was parked. They gave him the keys and asked him to open the trunk and take out the silver briefcase. He wasn't exactly sure what they were up to and was a little reticent to open the briefcase. When he did and saw all the money he was both relieved and thrilled.
The second and last time was for a consultant who had done a great job in a hospital laundry. Not a very pleasant place to work. He did a tremendous job for the hospital and never complained about the difficult conditions. The partners gave him the money in a hospital laundry bag. He was thrilled.
What was not anticipated was the reaction everyone else in the company would have. No one was thrilled. There may have been one or two people mildly amused at the theatrics, but the general response to both events was distinctly negative. The basic question most people had was what specifically did these two do to deserve this type of reward? It seemed to many to be arbitrary and it isolated individuals when they were both clearly part of a larger team effort. There were even quiet murmurings of partners playing favorites, which unfortunately made the recipients targets for fairly critical peer reviews following the rewards.
The lesson learned from this experience was to be very careful when handing out rewards. For rewards to be effective the expectations and measurement needs to be very clear so that people understand the manner in which decisions are made. People tend to be accepting and even collectively supportive if the criteria and measurement is reasonably fair. Without that, rewards can easily backfire. When it comes to handing out money, we learned that novelty doesn't trump transparency.
Lesson Learned #18
Peter Drucker once wrote, "The productivity of work is not the responsibility of the worker but of the manager." Over the years we have learned to appreciate and understand what he meant. When you start in consulting, you spend a lot of time watching people work. Hours upon hours of observing activities in a plant or in an office so that you can better understand how work flows through an organization. From this vantage point you also get to see the many problems that crop up through the day and how workers and managers interact to try to fix them.
One of the most fascinating things you learn, if you spend enough time watching people work, is that the problems will happen to them whether or not you are there (a point we made in an earlier Lessons Learned about "observations"). You learn that these repetitive and recurring problems eat up a significant portion of an average person's day. Finally, you also learn that the person has little or no personal control over the problem. The root problem often resides in some upstream department or area. Information is missing or incorrect and so starts a chain of rework or duplicated effort to try to fix the issue. Fixing errors that occur somewhere else in the process is very common in many businesses. If the upstream department needs to change what they are doing, the employee cannot influence that, only the manager can.
Of course not all errors originate outside a department. But errors are never intentional. There may be a skills issue with some employees but that would also mean a training issue on the part of the manager. If a person needs training to improve their skills, they need a manager to provide or orchestrate that.
Sometimes you just have too many people working for the volume of work (restaurants, hotels, retail stores, and hospitals are good examples where this can easily happen). Matching supply and demand is difficult in many environments but it is not something an employee can control. Forecasting volume and scheduling resources to match the forecast is a manager's job.
So how do you improve the productivity of work? Only the manager has the scope of control to affect any change that will have a meaningful impact on the workload of the line employee.
Lesson Learned #17
One of our early clients asked us if we were interested in helping him develop a strategy for one his company's divisions. We said of course, and without asking him enough questions we drew up a proposal which laid out a fairly classical approach to developing a strategy. The proposal looked at studying the current market situation, establishing goals and objectives and then developing specific action plans. He looked at it and then said, "Too 'text book' guys. Before you go out and spend time and money analyzing the market place I want you to figure out what or even if we have a problem. If we have a problem then we need a strategy to fix it."
Nodding in agreement, without really understanding what he was saying, we asked him to explain what he meant. He said most strategies he had come across in his career were too generic. "Everyone says they want to improve customer service and employee satisfaction, reduce cost and grow. That's a basic wish list for every company on the planet. But there's usually not enough thought gone into trying to figure out what the actual problem is that requires a strategy. A good strategy addresses the current gaps in the value you are bringing to the market, your ability to make money, and your organizational strengths." He carried on explaining how he would approach developing a strategy. We listened intently, furiously making notes while at the same time trying to look slightly bored. We learned a great deal about how to make sure a strategy a practical and useful tool, rather than a self-important document destined to be confined to the CEO's desk drawer.
The essence of what he told us what that you need to figure out the problem before you start searching for a solution. To do this you need some sense of what your objectives are and then work backwards. Let's say a company wants to earn a 10% profit after tax in three years. If you are currently earning 5% then you have identified the gap, or the initial problem. To close the gap you can grow your revenue, reduce costs, or both. If you think you need to grow your revenue, you can do the math and figure out by how much. If you look at your historical growth and project it out over three years, and you are well below where you would need to be, then you have identified another problem. Do you add products? Change how you sell? Acquire another company? Starting with the answer allows you to put a stake in the ground and then identify the obstacles that are going to stop you from getting to where you want to be. It helps you identify what the practical problems really are. Once you understand the problems, it is much easier to craft a game plan to try to figure out what you are going to do about it. The strategy then becomes a working road map, and a problem solving tool, that can help guide how you allocate your time and resources.
Lesson Learned #16
Observations are a problem solving technique designed to get people to actually focus for a few hours on some part of a process to determine how much of a person's (or a machine's) day is adding value or not adding value. It's like being a human video recorder with the added task of having to actually analyze what you are seeing. It can be a little boring if you are watching a repetitive task but it is remarkable what you see if you have the patience to really pay close attention to what is happening. We consistently find that as much as 50% of the time people are "busy doing something" at work, they are not actually adding any value to a product or service. It's the time people spend reworking, or fire-fighting, or expediting, or doing something because there's a breakdown somewhere else in the process. It might have to be done, and it can be hard work, it just doesn't add any value.
When we introduce the concept of observations, managers are concerned that employees will feel uncomfortable if they have a "human shadow". Employees do of course have some initial awkwardness, but once they get over that (which happens quickly) they appreciate the fact that someone is trying to see the world through their eyes. Managers also at first think that an observation is "artificial" in some way because surely a person being observed will be more diligent or harder working than normal. This turns out to be somewhat irrelevant. What we find when we do observations is that problems happen whether people want them to or not. Operating problems are caused by having the wrong information supplied to you, or a needed part is missing, or you have to re-do something or you simply have to wait for some reason. All of these problems occur whether someone is standing next to you or not. We rarely observe pure idle time but we still see as much as half a person's day doing things that ideally shouldn't need to be done.
On projects we get managers to conduct their own observations. We have found that it is important to get them to see the opportunity for themselves rather than just rely on a consultant's opinion. Invariably managers will comment on how useful observations are. But also invariably, when we come back six months after a project ends to review the status of what was implemented during the project, we find that most managers have stopped doing them. The simple reasons they stop doing them is because they are time consuming, often boring, and they are not "required" activities of a manager. It's too bad, it's a very valuable problem solving tool that rarely gets used.
Lesson Learned #15
The first significant purchase made by the Carpedia partnership, about four months after starting operations and despite the protest of spouses, was a custom-made pool table. It wasn't purchased to be hip or trendy, as became fashionable years later with the dot com era start-ups, it was because the partners really enjoyed playing pool. Roughly 19 years later it is still in the head office, although now relegated to a basement lounge, and has been played a sum total of about five times by the partners. So what went so terribly wrong?
Two things conspired to ruin the vision of playing pool at the office late into the evening. The first was arguably inexcusable for a management consulting firm: it didn't fit the space. It turns out pool tables need quite a lot of room to use them effectively, and the original office was not very spacious. This should have been picked up in the design phase but somehow got overlooked in the excitement of purchasing the table. To use the table on one side the partners had to buy child-size pool cues, which significantly took away from the experience. That little planning error, by the people who designed Carpedia's methodology, has been quietly buried in the company archives.
The second problem was not foreseen but made sense in hindsight. Hanging around to play pool at the office after a long day of work wasn't nearly as much fun as playing pool at a local pub where there was people and noise and action (not to mention that neither plan went over particularly well with spouses.)
One of the many lessons we took away from this disappointing experience, and actually adopted into our projects, was the importance of thinking about the impact method changes have on the environment, and not just focusing on the mechanical change in the process. Process changes can shift the dynamics of how people function and interact more than you sometimes realize. It was one of the reasons we introduced "prototyping," a key step in our process, so we can test a change and observe what happens in and around the process. It was well worth the cost of a custom-made pool table.
Lesson Learned #14
We have learned over the years that scheduling is one of the most important and least understood aspects of many organizations. Its possible because it's generally so dull as a topic. If you start talking about planning parameters and standards, you also start to see most people's eyes get heavy. We often joke that our MBA recruits always want to talk about strategy and finance. Nobody ever went to business school to become a production scheduler. But every industry we have entered has been marked by top clients teaching us how important scheduling is for them to manage profitability, and us in turn working with their management to try to figure out how to improve it. Here are a few of the many interesting things we have had to figure out how to schedule more effectively:
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Operating rooms to optimize the use of physicians' time.
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MRI diagnostic equipment to manage wait lists.
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Aircraft assembly lines to match inventory with production flow.
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Restaurant kitchens and wait staff to match meal patterns.
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Retail store personnel to balance the ebb and flow of shoppers.
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Housekeeping staff to coordinate with hotel room availability.
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Truck delivery stops to optimize loads and frequencies.
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Software engineering milestones.
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Sales rep call patterns to optimize customer value and requirements.
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Procurement part reviews to drive material savings through alternate sourcing.
In every industry, scheduling the resources to match the demand is the key to its success. It is very often the difference between the high and low performing organizations. Yet despite its significance, it's also remarkable how often there is somewhat of a black box methodology when it comes to scheduling. It's often strangely difficult to analytically determine how exactly scheduling is accomplished. When we dig into the details we often discover some of the following:
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Schedules change frequently making control of inventory requirements extremely difficult.
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Planning standards are inconsistent, not used, or considered inaccurate.
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The ERP system used by the organization does not generate actual schedules, only sequence lists of things to do or build.
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Schedules are sometimes really "short lists, rush lists or late lists".
Without these important base parameters, schedules are frequently more a reflection of what has historically happened, rather than what will happen. That may be okay as long as the business is fairly predictable. Its trouble however if the product or service offering is complex or gets more complex over time, or demand changes significantly. What we've learned over time is that improving scheduling is critical if the business wants to improve its performance. Improved performance means scheduling more aggressively (people, equipment, etc) which invariably puts pressure on supply lines throughout the process. This is as true in the office as it is on the production floor.