If You Can’t Measure It, You Can’t Manage It! by Richard Cronin

Measuring and managing change

Richard Cronin founded Balcroft, an operational consulting firm, four years ago by bringing together a group of highly-regarded, former C-level executives from FTSE/Fortune 500 type firms to combine their experience and transform organisations.

To ensure delivery, any benefits Balcroft signs up to deliver are guaranteed, it is passionate about transferring skills to achieve sustainability and employees don’t operate out of an office, to keep its carbon footprint low and so it doesn’t pass unnecessary overheads on to its clients. 

Balcroft has supported the Sunday Times in recognising the most improved Best 100 Companies to work for and Women in the City, a highly respected, award-winning organisation that promotes, recognises and rewards female talent.

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We never cease to be amazed by how many mid-large organisations we engage with that do not have effective tools and processes in place to forecast, plan, measure and report work. Yet these same companies expect their managers to drive improvements, to continue increasing revenue and profitability.

To develop a useful forecast, a manager must estimate the volume, and the mix of work that is required to be completed over a forecast period. Once a forecast is created, resource requirements can be established. Forecasts should be created through combining historic data, seasonality, input from sales and any planned improvement in performance.

The forecast should then be broken down into monthly, weekly and daily plans and where appropriate, a job-by-job basis. The purpose of a plan is to let you know when you are off it, so you can identify the issue through short interval control, remove it and get back on track, with a minimum loss of time, thereby maximising the use of resources.

To measure performance against a plan, the right KPIs need to be in place. Too often, we see a suite of KPIs or scorecards within organisations that are easy to measure, but not what is necessary and required. Sometimes KPIs can contradict one another or drive the wrong behaviour, this can lead to people perhaps trying to fudge figures in order to try and persuade their managers they are being productive. However, the KPIs in place are never going to drive productivity. An example of this is in engineering environments where businesses track numbers of jobs completed per person, per man-day.  This is not a measurement of productivity it is just a number. The reason it can be meaningless is because some jobs may be much bigger and more complex than others. So, if a person does 2 complex jobs in one day, does that mean to say they are any more or less productive than a person who completes 5 much smaller, easier jobs? No!

Furthermore, if productivity is low, it is not down to individual failure, it is a system and process failure, which has been created by the senior management team.

Reporting is also a key tool within a manager’s armoury to help them manage their teams. The reports must be meaningful though and not simply produced because history dictates they should be. The purpose of reporting is to provide the manager/supervisor with the information needed to make appropriate decisions and to take corrective action. A report should indicate how much was accomplished when compared to the volume of work planned. A report should contain specific elements such as availability of people, how utilised and effective they were and this will then enable a manager to calculate how productive they were. Reports also need to highlight the accuracy of the plan, quality & customer service indicators and exceptions to the plan.

The report section should be laid out starting with the lowest level reporting then built up to the higher-level reports i.e. Daily – Weekly – Monthly.

The reports then need the be reviewed by the managers to determine the causes of exceptions to the plan and what type of corrective action needs to be taken, to ensure the issue does not arise again. The root cause will then be identified and eliminated.

By repeating this cycle and enhancing the forecasting through the learnings gleaned, the company will then drive continuous improvement. Managers will have the effective tools and processes in place they need to be able to identify and remedy issues that are preventing their teams from completing work in a timely manner, first time. In addition, employees will be much happier, because they will not have barriers preventing them from undertaking their work, and customer satisfaction levels will rise significantly because they will not need to chase to get something completed/fixed.

However, there is a caveat to this, if managers are not confident about using the effective tools and processes that have been implemented to drive performance, this is a different matter. Often people promoted into the role of a supervisor/team leader/manager were promoted because they were excellent at their previous job – and a promotion was a way of giving them a pay rise. However, if they are not natural, active leaders, they may well revert to their comfort zones and busy themselves doing the work they did previously or they may sit behind their desks and hide behind lots of admin. If this is the case, they will need to be coached and mentored so they start to understand how beneficial having effective tools and processes are, to enable them to manage more actively and improve their team’s outputs.

So, don’t put pressure on your employees to achieve the revenue and profitability goals you have for your business, without first putting in place all the elements they need to achieve these targets. Set your people up to succeed, not fail, and everyone will win!

 

The Business Transformation Network brings you this article in partnership with Balcroft.

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