What is Necessary?

Leave a reply

“Where do we start?” I repeated. “If the system has the most impact in productivity, efficiency, anything connected to people working together, where do we start?”

Derrick looked at me blinking. “That’s a pretty big question,” he finally replied. “I think about a lot of things during the day, but to answer that question, I have to put almost everything else aside.”

“Yes, if you stripped everything else away, back to a blank sheet, how would you design the organizational system? What are the first things to think about?”

“Well, it has to go back to purpose,” Derrick nodded his head. “I am an entrepreneur. When I think about machinery, equipment, facilities, I only think about what is necessary to achieve the purpose. So, it gets back to vision and mission.”

“So, if you connect back to vision and mission, you would put in place only what is necessary?”

“Yes.”

“When you think about machines, equipment and facilities, what is necessary, is pretty easy. When you think about the people you will need, what do you think about?” -TF

System of Roles and Relationships

3 Replies

“It’s the system, Derrick,” I began. “If you imagine the relationships between Managers and their direct reports, between team members and their Managers-Once-Removed. If you can see these relationships as a system of people, do you think the structure of the system has anything to do with the way that people behave inside of this system?

“It’s the way that we define those relationships, define those roles. It’s the system. Unfortunately, most managers, most VPs, most Chief Executives never sit down to think about this structure, this system. And the system has the largest impact on things like productivity, efficiency and even morale.

“There are excellent systems and there are poor systems. Tell me, what do you think is the difference? Where should we look first?” -TF

System Variables

Leave a reply

“What do you mean, I avoid making judgments about team members who report to me?” asked Derrick. “We have a very sophisticated performance appraisal system. It is based on something called Management by Objectives. And we have bonus compensation tied to it. The employee always knows where they stand based on the measurements.”

“What is it that you measure?” I replied.

“Well, it’s based on a number of things, for example, if they are able to meet production quota each month, that counts.”

“And what are the variables that influence production to quota?”

“It’s pretty cut and dried, they either make it or they don’t.”

I stopped for a moment to let Derrick catch his breath. “So, you are telling me, that your raw materials always meet spec and go right onto the line?”

Derrick turned his head slightly, looked at the floor, then back at me. “Well, no, sometimes we have to reject some of the material and that slows things down.”

“And what about the production machine, the one you were going to replace last year, but didn’t. You know, the bottleneck in your system, where all the materials stack up in front, waiting to go through?”

Derrick laughed, “You’re right on that one. That machine comes down about twice a week. We really should have replaced it. Maybe next summer. That’s why it’s important that everyone works extra hard to make sure they get their bonus.”

“So, let me understand this,” I responded. “Two system variables, raw material spec and machine down-time can have dramatic impact on production to quota, and you think you are managing employee performance based on that number?” -TF

A Judgment Most Avoid

Leave a reply

Picking up our discussion about Results vs. Effectiveness, Kurt posed the question.

Question:
Results can be measured, how do you measure effectiveness?

Response:
Effectiveness is a matter of judgment. Effectiveness is a matter of managerial judgment. How well does Rudy perform in the achievement of the desired goal? Given all the ins and outs, the difficulties faced, the unanticipated, unplanned monkey wrenches that get in the way, how well does Rudy perform?

This is a matter of managerial judgment.

Given that:
1. Any task (or role) requires a certain capability.
2. The person assigned has the appropriate capability.

The judgment is whether the person is committing their full capability to the task (or role).

This is NOT a “matter of counting outputs, super credits for super outputs, or penalties for lateness or sub-standard quality.” * This is about bringing their full capability to the completion of the task.

It is the job of the manager to observe and account for all the surrounding circumstances and make this most important judgment. And it is precisely this judgment that most managers avoid.

*Elliott Jaques, Requisite Organization, 1989.

Thanks Giving

5 Replies

We have just rounded the turn on three years at Management Skills Blog. Our first post was November 15, 2004. I had no idea. This is post #757. I am amazed.

I am amazed at the number of readers and the widespread geography. A few weeks ago, we created a survey. Here are the top ten countries.

  • United States
  • Canada
  • India
  • Australia
  • United Kingdom
  • Denmark
  • Belgium
  • Pakistan
  • Taiwan
  • Sweden

I always wonder who stumbles across this blog. (71) percent of readers are either Chief Executives (23 percent), Vice-Presidents/Sr Managers/Directors (21 percent), or Managers/Supervisors (27 percent).

I am amazed at the experience of those responding to the survey. (51) percent have more than ten years in management, (22) percent of readers have more than twenty years in management.

Finally I am amazed at those readers who tell me that their day starts with Management Skills Blog and a cup of coffee. For all of you I am grateful. As much as you may be drawn to read, I am also drawn to write.

In the United States, this is Thanksgiving week, with the actual eating festivities this Thursday. Management Skills Blog will return next Monday. Until then, Happy Thanksgiving. -TF

Results vs. Effectiveness

1 Reply

“I’m curious, though,” Jonas remarked. “As we create these tests for Rudy, to determine his capability in longer Time Span tasks, I am wondering how long this assessment period will take? If we test his capability on a 12 month Time Span task, does that mean we have to wait for the results after 12 months to make our decision? We base our Performance Appraisals on results. In fact, we hired a consultant to come in to develop our Results-based Performance Appraisal System.”

I held back, all but a glint of a smile. “You bring up a very interesting question. Many companies proclaim an undying commitment to a results orientation. Management For Results. But let me ask you this, Jonas. When you observe a 12 month Time Span task, do you have to wait 12 months for the results to determine whether the person is being effective in the position?”

Now, it was Jonas’ turn to smile, as he shook his head from side to side. “No, you don’t. You can tell way before that.” Jonas stopped, then continued. “I wonder about our system of Performance Appraisals. Perhaps instead of Manage for Results, we should Manage for Effectiveness?”

Only Then, The Promotion

Leave a reply

Jonas leaned forward, his face brightened. His concern about Rudy and wondering about Rudy’s capability turned to curiosity. “You’re right. Off the top of my head, here are a couple of things.”

I held up my hand. “Wait a minute, Jonas. We are not going to work off the top of our head on this. Our testing needs to be scientific, so we can make a valid judgment about Rudy’s effectiveness working at longer Time Span tasks.

“First we need to make a list of 2-3 things that we might challenge Rudy with. On that list, with each of the challenges, we need to determine the Time Span associated with the task. We have made a judgment that Rudy is effective at nine-months, so these challenges need to have Time Spans longer than nine-months.

“If we can identify a longer Time Span task and Rudy is effective at that task, we will have some confirmation for our decision. If we can test Rudy over 2-3 of these challenges, and he is successful, then he will actually earn the promotion. And we will some confidence that our decision is sound. Only then, do we make the promotion.” –TF

Time Span Challenge

Leave a reply

Jonas was quiet for a moment, thinking about Rudy and his performance as a nine-month Time Span supervisor.

I broke his concentration. “So, tell me about this gut feeling you have about Rudy. You are concerned about having him shift gears and become responsible for the system?”

“I don’t know,” Jonas replied. “It’s just a feeling, maybe I am afraid that if I promote Rudy to this position and it doesn’t work out, Rudy might get upset and quit. He’s a proud man. And I don’t want to lose him. After all, he is our best supervisor.”

“So, what could you do to find out, to challenge Rudy’s capabilities without putting him into the position where he might fail?” I asked.

Jonas smiled and shook his head. “You’re right. There are certainly some things we could do to test Rudy, before actually giving him the position.”

“So, let’s make a list of some things we can challenge him with, to confirm his capability.” -TF

Calculated Measurement

Leave a reply

“Yes, and Rudy is really very good at it,” Jonas observed. “Our last supervisor that controlled our inventory ramp-up at year end always sent his crew into overtime pay to catch up when he got behind. Rudy recalculates the ramp-up schedule when we hit those little sales spikes, so he recovers over a period of 2-3 weeks instead of 2-3 days. It’s our off season so these spikes rarely put our inventory levels in danger.”

“So, we have identified that Rudy’s longest Time Span task is nine months, and you believe that he is successful at that Time Span?” I asked.

“Oh, yeah. It’s not just me, you can talk to almost anyone, his manager, his MOR (Manager Once Removed), in fact, you can talk to Rudy, and just by listening to him describe what he does, you can tell he has things firmly under control.”

“Jonas, this may sound like casual observations about Rudy, but here is what we have established about his current role. The longest Time Span task in his role is nine months and his effectiveness in that role has been judged as positive by multiple people (multiple data points). This is not casual conversation, this is calculated measurement of Rudy’s performance.” –TF

The Longest Time-Span Task

1 Reply

It’s good to be back home after a week on the road. Just returned from San Diego at the Vistage/TEC International Chair Conference. I got to spend two solid days sharing with them, my favorite subject, the research of Elliott Jaques.
__
Jonas and I were talking about his realization that he truly had no one responsible for the system in which his company worked. He was hesitant to assign that responsibility to Rudy.

“He’s the best supervisor we have, I just have this gut feeling that he’s not quite up to the challenge,” Jonas remarked.

“Let’s talk about Rudy and his current responsibilities in terms of Time Span,” I suggested. “Rudy is one of your top supervisors?”

“Yep,” Jonas confirmed.

“I know he responsible for daily scheduling and weekly production output. Tell me, what is his longest Time Span task, beyond the daily and weekly stuff?”

Jonas smiled. “That’s where Rudy really shines. You see, once we get out of our busy season, we go into a mode where we look nine months down the road, right before we go right back into next year’s busy season. Our sales volume isn’t volatile, but it has a predictable cycle.

“Based on the forecasts for next year that come out of our planning meetings, Rudy takes those numbers and charts out a nine-month production schedule so when we go into season, we have our par-level inventory on hand.

“But it’s more than just creating that schedule. Sometimes during the year, we have a spike in sales that will relieve some of our on-hand finished goods. Rudy is always on top of things, identifies the depletion and re-charts the ramp up to busy season. For the past two years, over that nine-month period, Rudy has come with 100 units of our par-level when it’s time to go into busy season.”

“So, the longest Time Span task that Rudy has is nine months?” -TF