Category Archives: Accountability

Scalability

Leave a reply

From the Ask Tom mailbag –

Question:
We have worked very hard to refine our core process. We believe we have the highest quality in our product offering and simultaneously have driven out extraneous costs. So, our customers enjoy a high quality product at the most competitive price. In spite of that, while sales growth is steady, our profitability suffers. Our gross margin is good, but by the time we get to the bottom line, the net is not so good. We have tried to cut SG&A, but that seems to make the net even worse. The more we try to take our company to the next level, the more frustrated we become.

Response:
You are in that No Man’s Land dilemma, too big to be small (amongst your competitors) and too small to be big (among those companies who have the biggest market share).

This is a classic integration issue. You describe your refined core process, which is clearly a step up to S-III. Your core system is well-honed, but scalability is elusive. Your core system creates your gross profit, right where it needs to be, but it sits among other systems that drag down the net profit. Companies at S-III have great products, but scalability only happens at S-IV.

  • S-I – Product
  • S-II – Process
  • S-III – Core system (sequenced processes, critical path)
  • S-IV – Integrated systems (multiple critical paths)

Your core system is critical, it is the product that your customers want, but it is now surrounded by other systems. Not only do these systems have to be effective and efficient, but they also have to be integrated together, and that is the challenge at S-IV.

Most core systems exist in a defined operation function, and are surrounded by a marketing function, sales function, project (or account) management, quality control, research and development, sustaining engineering, human resources, facilities and finance. You may have a strong core function in ops, but your company will never scale without the integration of all those internal systems.

Out of Integrity

Leave a reply

“When we hired Lucas, we were clear about our values,” Alex described. “He’s been here for two weeks and we already caught him.”

“Can you be a bit more specific?” I asked.

“One of our values, integrity,” Alex replied. “We found him skipping the product testing step in quality control. Not on every unit, but he was only testing one in five.”

“How did you find that out?” I wanted to know.

“Easy. We have a reject rate of 20 percent. I know, I know, that’s high, but we had some raw materials out of spec lately, so our reject rate is higher than normal. Lucas’ reject rate was only 4 percent.”

“What did Lucas say?”

“He was proud. Said he thought a lower reject rate was good. Something about sampling. Pointed to his bonus on output. On that, he was right, his output was 16 percent higher than anyone else. But now we have to go back and re-test the entire batch.”

“The entire batch?”

“Yes, his lot output was mixed in with the other lots, so we don’t know which is which,” Alex answered.

“I have three questions for you,” I said.

  • How is your bonus system out of integrity with your quality standards?
  • How is your measurement of output out of integrity with the raw materials problem?
  • How does your management system blame an employee attempting to do his best, when this is really a management issue at a higher level?

    • Done or Done, Done?

    Leave a reply

    “But, Paula promised to finish that report by Friday,” Francine lamented. “Now, I guess I will have to finish it myself, to meet the deadline for the Board meeting.”

    “So, your definition of finish and Paula’s definition are different?” I asked.

    “What do you mean, finished is finished,” she flatly stated.

    “I understand what you mean by finished and I understand what Paula means by finished. Your understanding is that the report is complete, legible, proofread for accuracy, math checked and double-checked. What you mean by finished is published. What Paula means by finished, is substantial completion of the report so she can go home at 5p.”

    “But, on Monday, we were in agreement,” Francine protested.

    “Yes, but you agreed on different states of completion,” I nodded. “What words could you, as the manager, have used to clarify the agreement?”

    Innovation Metrics

    Leave a reply

    “We are going to start measuring innovation,” Samuel announced.

    I gave him a raised eyebrow.

    “Yes, we believe our competitive advantage is our ability to innovate and bring new products and variations of products to the market, so we think it is important to measure it,” Samuel added.

    “When you were working on your efficiency program, you developed metrics to determine improvement,” I said. “Why do you think your metrics worked well in those circumstances?”

    It didn’t take Samuel long to ponder. “We had a system, and we worked to make that system predictable. When we determined what we wanted to control, the metrics just fell into place. Any variation was quickly identified and eliminated.”

    “Pay close attention to your words,” I replied. “You were working in a system with predictability, control, seeking to eliminate variation. You now want to create a system of metrics to do just the opposite. Innovation is hard pressed to be systematic, certainly unpredictable, sometimes outside the bounds of control and designed to encourage variation. Just exactly how do you intend to measure that?”

    Skill and Capability

    Leave a reply

    “I want to send this guy back to training,” Roger pursed his lips.

    “Again?” I replied. “This would be the third time through.”

    “I know, I know. But the mistakes he makes and the bone-headed decisions he makes, they just seem careless. If he would apply himself a little harder, he might have a break-through.”

    “Roger, you have a classic managerial case of fixitis,” I replied. “You think you can fix people.”

    Roger nodded. “Yes, I guess I do.”

    “There is a big difference between skill and capability. You can train a skill, a skill can be learned. A skill can be practiced, honed and coached. But, you cannot teach capability. Capability is what it is. Please understand, capability grows and matures through a lifetime, but not from a two week training period.”

    Interest, Passion, Required Behaviors

    Leave a reply

    From the Ask Tom mailbag –

    Question:
    We recently had a new hire not work out, so we decided to terminate. The mistake on our end, I think, was in the Required Behaviors element, but I’m not sure. The position we hired for was an administrative support position. We decided it was Hi-S-I, Lo-S-II based on timespan, using checklists, and expertise. Tasks were getting done, but there seemed to be a missing behavior around awareness, interest in helping others, and assertiveness. Am I assessing correctly that this falls into Required Behaviors/Passion-Interests in the 4 Absolutes?

    Response:
    First a quick review of the Four Absolutes required for any position, no matter the discipline –

    • Capability (measured in Timespan)
    • Skill (technical knowledge, practiced performance)
    • Interest, Passion (high value for the behavior)
    • Required Behaviors (contracted behaviors, habits, culture)

    You describe that task assignments were completed, I will assume on time and at quality standard. Your disappointment was in –

    • Awareness
    • Interest in helping others
    • Assertiveness

    The question is, how could this have been detected in the interview? Let’s take the easy one first. Interest in helping others. I cannot see interest, I can only see behavior connected to interest. So, how does a person behave, who has an interest in helping others?

    • Tell me about a time when you worked with a team that required a great deal of interaction and support among the team members?
    • What was the team? What was the purpose for the team?
    • How many members on the team?
    • What created the need for interaction and support?
    • What did you need from the other team members?
    • What did the other team members need from you?
    • How did the other team members let you know they needed your support?
    • What did your support (what they needed from you) look like?
    • How quickly did they need that support?
    • Step me through an example where a team member needed your specific support?
    • How did you become aware they needed your support?
    • Step me through your response?

    You can already see through these questions, that the interviewer will learn about your other two disappointments, awareness and assertiveness (speed of response). A person who is aware, will be able to respond easily to these questions. A person who is assertive will respond quickly with specific behavior appropriate to the situation.

    These questions are behavioral, I am not interested personality, only behavior. Restrict your questions to real examples from the past. The best predictor of future behavior is past behavior. Under pressure, people will retreat to what they have done in the past, even if it didn’t work.

    Timespan of Intention

    Leave a reply

    From the Ask Tom mailbag –

    Question:
    Sometimes, I question my assessment of a team member’s capability. At times, I am delightfully surprised, other times, disappointed.

    Response:
    Timespan assessment of capability is a manager’s judgement. There are clues, but most of the time, managers look in the wrong places. Here is the text from my slide defining Timespan.
    Timespan is the length of time a person can effectively work into the future, without direction, using their own discretionary judgement, to achieve a specific goal.

    Effectiveness is not a metric, it’s a judgement. Often, goals are stated to allow for some measurement at the end of the day. The problem with the metric, it does not take into account the unanticipated obstacles that get in the way. A sales metric of 100 units does not take into account the stiff competition from a company with superior technology, economic contraction in the marketplace or a new government regulation the influences a reluctant market. Often a successful sale has more to do with the company’s reputation in the market, than the direct effort of a salesperson. To protect businesses’ brand’s online reputation, you may choose the right partner like the top reputation management firms for your needs. The goal (metric) is one important data point in the judgement of effectiveness, but it is not the only data point.

    Self-initiated action. Part of effectiveness is to determine, who is doing the problem solving and decision making? Most people can follow a system, but it takes a higher level of capability to create the system.

    Discretion is decision making. A decision is not a calculation, it is a judgement. If decisions were calculations, then computers could make all decisions. Many human based decisions are now better calculated with computers (AI), because computers can detect data faster, with more precision. But, a decision is a judgement, a judgement in the face of uncertainty and ambiguity. The longer the timespan of the decision, the more uncertainty exists.

    All action is goal directed. Timespan of discretion relates to the decisions that must be made in the pursuit of the goal. Timespan of intention is related to the direction of that behavior. Elliott Jaques was quite interested in that fifth dimension of human behavior, the timespan of intention. All behavior is goal directed behavior.

    The Anabolic Window

    Leave a reply

    The meeting was almost over. Butts in chairs began to shift toward the door.

    “Take this 3×5 index card and write your name on it. Below that, write down the one thing you are going to do in the next week based on what we talked about, today.” The puzzled faces gave way to ideas for action and the writing began. Forty-five seconds later, we started around the table, each in turn, in front of the group, making a public commitment.

    At the end of each meeting, there is an anabolic window that most managers never take advantage of. This window is a short period of time in which growth occurs. Ten minutes later, the window is gone.

    Public commitment to action. Your team was engaged the past twenty minutes in a meeting about improving the work-flow process. At the end of the meeting, you could adjourn and lose the window, or you could stop and ask for a public commitment to action. It could be the most powerful three minutes of the meeting.

    Oh, bring your 3×5 card to the meeting next Monday. We want to know how you did.

    Wasn’t My Fault (Was It?)

    Leave a reply

    Eight managers and a senior VP sit around the table, this table of Eager Beavers, Vacationers and Hostages. What will prevent them from participating? What will drive them to contribute with enthusiasm?

    “Houston, we have a problem!!” booms the senior VP. Enter FEAR stage right. The VP just raised the spectre of fear. Here’s the question, “Does the way you state the problem have anything to do with the way people approach the solution?”

    I could see the Face of Fear as I looked around the room. The silent responses were predictable. The darting eyes spoke volumes. Beneath the whisper level, emotions pounded.

    • It wasn’t my fault, (was it?)
    • It couldn’t have been my fault, (could it?)
    • It was supposed to happen that way, (wasn’t it?)
    • Since it wasn’t my fault, it must have been Tim’s fault (right?)
    • I didn’t approve that, (did I?)

    Multiply those responses by the eight managers and then calculate what has been accomplished so far. What headway has been made toward solving the problem in Houston? Worse yet, if no headway has been made, what direction is everyone looking?

    Does the way you state the problem have anything to do with the way people approach the solution? The mindset around the table is looking for blame, a scapegoat, something, anything to deflect responsibility for the problem in Houston. Everyone is checking out, the quicker the better, last one standing holds the bag. Disengage, no eye contact, pass the buck, Chuck.

    As the Manager, you don’t know who has the idea that is going to save the day. You cannot afford to have a single person disengage from the meeting. You need full engagement from everyone in the room for the entire meeting. One idea, one phrase, one twisted word may trigger the solution.

    Does the way you state the problem have anything to do with the way people approach the solution? Take the problem and create a positive question that points toward the solution.

    IWWCW. In what way can we increase sales in our Houston territory? Take the problem and create a positive question that points toward the solution. Now, look around the room. You will find positive engagement. It is impossible not to. (Sorry, for the double negative.)

    A bit of science. The human mind cannot “not answer” a question. (Another double negative.) The way the human brain is wired, when presented with a question, it is impossible for the mind to do anything other than search for the answer. If you want to engage the mind, ask it a question. If you want to engage a team, ask them a question. If you want to engage a team to solve a problem, state the problem as a postive question that points toward the solution. In what way can we…?

    Company Growth, Personal Growth

    1 Reply

    “I know I need to delegate more,” Hannah shook her head side to side. “But, I am often disappointed when I give someone a task and they don’t complete it to my standards. It’s just easier to do it myself.”

    “Okay, I will agree that you can complete the work better than anyone else on your team,” I replied. “As the manager, if you have to complete all the work, how much work can you do in an 8-hour day?”

    “I know where you are going with this,” she said. “If I do all the work, our output capacity is limited to how much I can personally get done. Not to mention, everyone else will be standing around all day.”

    “There is more to it than a capacity issue, output for a day,” I nodded. “It’s output capacity, forever. If all you produce is what you can personally produce in a day, the company will never grow. More importantly, you will never grow.”