A 2,000 percent solution is any way of accomplishing 20
times more with the same time, effort, and resources. How
do you develop such great improvements?
Follow these steps:
1. Understand the importance of measuring performance.
2. Decide what to measure.
3. Identify the future best practice and measure it.
4. Implement beyond the future best practice.
5. Identify the ideal best practice.
6. Pursue the ideal best practice.
7. Select the right people and provide the right motivation.
8. Continually repeat the first seven steps.
In this essay, I'll focus on the first step
Measurements Help Erase Complacency
Most people view the measuring process too narrowly. Here's
an example: A corporate planner went to a seminar given by
corporate strategist Peter Drucker. The planner asked
Drucker to pick the best single measure of corporate
performance. Drucker replied, "My dear sir, you obviously
know nothing. There is no single measure of corporate
performance that is any good. Use them all and try to
develop new ones, and each will teach you something you
need to know." Drucker's point was that measurements are
highly subjective and imperfect. Would-be stallbusters are
going to need lots more measures.
I'd Rather Not Know That!
One CEO tells another Peter Drucker story about
measurements. Drucker had presented a seminar on personal
improvement to the CEO's U.S. Air Force group years
earlier. Each man was instructed to measure in great detail
how he spent his time for a week. The CEO found this task
to be a life-changing experience. The measurements revealed
all of his bad habits and put the CEO on guard to avoid
those bad habits. Unfortunately, this CEO's example is
rarely followed.
Try this exercise for yourself. Measure how much time you
spend each week on the telephone, doing each routine task,
commuting, watching reruns on television, and so forth.
Then look at how much you accomplished. You will see that
measurements can help redirect your efforts into more
productive activities.
A Perpetual Measuring Machine
Visitors to the finance and data processing staffs of a
large company were astonished to note that each cubicle's
walls were literally covered with performance measurements.
The idea was to encourage more focus on expanding
productivity. Almost all of the measurements had been
developed by the workers for their own use. By looking at
each others' measurements, staff members could see how well
they were doing in comparison. People pitched in to help
lower performers improve so that everyone could earn
department-wide, performance-based bonuses.
How did they do? Personal productivity gains of 25 percent
were not unusual. Furthermore, corporate productivity in
these same areas grew by a similar degree. By comparison,
most organizations shoot for 2 to 3 percent annual
productivity increases. Those low targets telegraph to
everyone that they can take it easy.
End Results Versus Causes
Management of a luxury hotel chain learned that guests were
dissatisfied because it took too long for room service
breakfast orders to arrive. The chain jumped in to solve
the problem. It added more room service waiters. It even
added more kitchen staff. But the situation got worse, not
better. Finally, they looked at how long it took for a
waiter to make a delivery and return to the kitchen. Wait!
Here was something. The round trips took much too long.
Management asked the room service waiters why. The
bottleneck was quickly spotted. The waiters were delayed by
as much as eight minutes by slow elevator arrivals at the
kitchen and the guest room floors.
What was going on? Housekeepers were delivering a day's
worth of clean sheets and towels at the same time. Since
housekeepers had to unload large amounts of linen on each
floor, they usually stopped the elevators while the
unloading occurred.
Understanding the cause, linen deliveries were rescheduled
to another time. Room-service complaints dropped to near
zero.
With enough of the right measurements to find the causes of
your performance, you'll soon be working on the right
things, too.
Almost Perfect Is Often Not Good Enough
After many American manufacturers found that their quality
badly lagged non-American competitors in the 1980s, quality
improvement became an obsession. Soon, many companies were
bragging that they performed at Six Sigma levels (hardly
any errors per million activities). Closer examination
suggested that some of these companies had missed the boat.
They had only achieved being nearly perfect in delivering
outmoded offerings. Motorola, for instance, the renowned
Six Sigma innovator, saw its profits evaporate in the 1990s
when the company fell behind Nokia and others in delivering
new digital technologies to the market.
Some companies also didn't know how to measure their
performance. They broke down every process into hundreds of
aspects. Each aspect was measured for performance. Sure
enough, almost all aspects were done perfectly more than
99.9 percent of the time. Everyone was smiling … except the
customers. As measured by what customers cared about,
deliveries were deficient almost half the time. What was
going on? It turns out that those little errors across
hundreds of aspects compound and can cumulatively hit the
customer hard. The firm should have been primarily
measuring its ultimate performance for customers and then
looking selectively into detail to locate where large
strides could be made.
A key business lesson is that excellence is a moving
target. When you satisfy the customer in one area, you need
to move your attention to other wellsprings of
dissatisfaction. Many organizations forget to move on to
the next area of concern.
In the unending mantra heard in many organizations to serve
customers better, it's easy to forget that there are other
stakeholders. Be sure to check how you are doing for them,
too. If employees hate working for you, customer service
won't be very good either.
Be cautious in your measurements. Small experiments may
work simply because of the Hawthorne Effect: Performance
may improve simply because you've made a change, rather
than because of what the change is. Stop making changes,
and performance will often drop off again. Now, management
pros understand that you have to check your tests to be
sure that improvements will be lasting.
Tailor Your Measurements to Fit
Measurements may need to be improved with adjustments. For
instance, farm tractors cost a lot more now than they did
in the 1930s, but they also do a lot more. If you measure
cost per tractor, it looks like productivity declined. If
you measure by cost per acre plowed in inflation-adjusted
dollars, the cost of plowing has gone down substantially.
Feedback Nourishes Learning
It's not enough to measure. You also have to learn from
what the measurements tell you. Then, when you can access
information that competitors lack, you can sneak ahead.
Here's an example: Dell Corporation leads in personal
computers and gains its orders through direct sales over
the telephone and the Internet. Its competitors sell
through wholesalers, value-added resellers, and stores.
Dell is learning moment by moment what features its
customers most want. Competitors have to use indirect,
after-the-fact measurements to estimate what Dell already
knows. Dell can be out testing a new insight from daily
measurements long before the competitors even know about
the new customer need. With each iteration of this
feedback, Dell's knowledge moves further ahead of
competitors. As a result of learning based on powerful
measurements, Dell was able to steam ahead of all its
well-known global competitors despite Dell's humble
beginnings in Michael Dell's college dormitory room.
STALLBUSTERS
Use Measurements to Improve Your Personal Effectiveness
Ask yourself the following questions to better allocate
your time and efforts:
• How could I avoid having to do the least productive tasks
at all and get better results?
• How else could I have gotten these tasks done to get
better results in less time?
• How could I delegate these tasks to others for better
results?
• How could I inexpensively automate these tasks and meet
my purposes?
• When was I effective?
• Why was I effective then?
• When was I ineffective?
• Why was I ineffective then?
• How much time am I spending on time wasters?
• How could I better spend the time I use on time wasters?
• What will be the benefits to me and others of spending my
time in these more productive areas?
Use Measurements to Improve the Effectiveness of Others
After you have acted on the answers to your personal
improvement questions, you will be prepared to be credible
as a helpful coach to others, especially with the answers
to the following questions:
• How can you interest other people in measurements?
• How can you help others set up and use helpful
measurements?
• How can the message about the value of properly using
measurements be spread even further?
Copyright 2007 Donald W. Mitchell, All Rights Reserved
----------------------------------------------------
Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of six books including The 2,000 Percent Squared
Solution, The 2,000 Percent Solution, and The 2,000 Percent
Solution Workbook. You can find free tips for accomplishing
20 times more by registering at:
=========> http://www.2000percentsolution.com .
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