Dashboards

Photo by dawnhops

I have touched the subjects of information, vital signs and the right way of measurement many times in this blog. That is why I rejoiced when I saw a post by Seth Godin titled: “Dashboards“. The idea is to create new and improved ways to present important information in real-time. Godin presents it from a marketing perspective. But it is just as applicable from a manager’s perspective.  An interesting quote:

Or consider the ambient dashboards that have been built in surprising ways. One company put pinwheels on a VPs desk. When sales went up, the pinwheels spun faster.

Just curious: what do you think would happen to energy consumption if every car registered in the US was required to have a digital mileage readout installed?

Imagine that you could sit at your table and see how each and every one of your employees is doing… that your dashboard will be able to show you the vital signs of your organization and employees. Imagine that your employees could see it as well, and get an instant validation for their efforts.

Off course when we design these dashboards we need to think about all the challenges that were mentioned in my other posts and in Godin’s one. What do we measure? We should be careful not to measure something just because it is there and available. We should think off the affects that the dashboard has on our decision and frame of thinking. Taking Godin’s example: do we really want to put sales as our vital sign? How will that effect decision making?

Challenges notwithstanding, I am pretty sure this is where management of people is going. Not only balanced scorecards that are discussed every quarter, but continues attention to details in real-time. The questions that this approach will raise cannot be predicted. We should especially be careful from short term attention this could create. But I am confident, that it will help us create a much needed culture of greatness.

Elad

What are the Kanbans of your employees?

Photo by Chris J

Yesterday, the concept of Kanban was discussed in operations class. This is Kanban according to Wikipedia:

Kanban (where kan, means “visual,” and ban, means “card” or “board”) is a concept related to lean and just-in-time (JIT) production. The Japanese word kanban (pronounced [kambaɴ]) is a common term meaning “signboard” or “billboard”… Kanban is a signaling system to trigger action. As its name suggests, kanban historically uses cards to signal the need for an item. However, other devices such as plastic markers (kanban squares) or balls (often golf balls) or an empty part-transport trolley or floor location can also be used to trigger the movement, production, or supply of a unit in a factory. It was out of a need to maintain the level of improvements that the kanban system was devised by Toyota.

The main idea is one of signaling. In a manufacturing or production line, signals are used to communicate information between different employees and workstation, thus creating a better flow.

The idea got me thinking about the signs we see in non-manufacturing settings. What is the signs our employees give us to let us know they are in trouble in need our help? I don’t think the answer to this question is as straight forward as the one in manufacturing, but I think it warrants the thinking of managers.

In the past I discussed in this blog the concept of Vital signs (Also see this). A clear set of measurements that  allows you to know the state of your business. I also discussed the ideas of the new challenges of measuring employee’s performance – the problems of finding the right measurements in the sea of data we have about our business.  I think the Kanban thinking adds another dimension these dilemmas.

On one hand, it makes us think not only what the vital signs are and how can measure them, but also about how we make sure they are communicated to us clearly. The all idea of a Kanban in a manufacturing environment is that the signal determines the behavior of the workstation. If you agree with me that a manager’s job is to make sure that his employees excel, the question is how we, as managers, can make sure that we see this signal and act according to it.

On the other hand, employees are not machines. The problems they are facing are more complex and they have psychological barriers to report the signs to us. So the question arises how can we make sure the signs will be there constantly? How can we articulate the importance of the Kanbans to our employees?

I have no answers to these questions. I am not sure there are general answers to cover every case. But I think every manager should consider them and ask himself – what are my employees Kanbans?

Elad

Are automation and checklists the only answer for the problem of microdecisions?

photo by myuibe

A few days ago I read an article in the Harvard Business Review Blog by Tom Davenport called: “Microdecisions for Macro Impact“

Here is a short part of it:

What many companies don’t realize is that microdecisions – small decisions made many times by many workers at the customer interface – can have a major impact on the business. How they are made can be the difference between sloppy and effective execution, and between profit and loss. If you can identify a few key microdecisions that can be addressed and improved, you can often dramatically improve performance.

I really like the basic idea. The little things do matter. It reminds of the “Broken Windows Theory” which I really believe in. Davenport suggests two main practical methods to implement after identifying microdecisions in order to dramatically improve performance:

1. Automate - take the decision out of human intervaention and thus make sure it is done in the correct way. Completing Davenport’s article, James Taylor writes:

Even if you don’t want to completely automate a micro decision, you should probably think about using decision management to reduce the range of options available to a human decision maker or at least rank the available options by likely effectiveness. A decision service can automate a micro decision but it can also provide support for a micro decision in this way.

2. Introduce checklists - There is ample research that shows checklist improve performance even in cases of professions like doctors in hospitals.

3. Key metrics - If you cannot automate, establish key metrics that are consistent with the goals of the process.

 I must admit that I like the last advice better than the first two. It reminds me of the concept vital signs and of the change in the thinking about measurementI discussed just a few days ago. While I recognize the importance of automation and of checklists and realize that in certain setting they could be very effective, I think that in other settings they have a potential to hinder efficiency and create technocrats and to reduce motivation. So, they should be introduced with thought where they can really make an impact and where they fit with the environment, people and culture.

This reminds me of the basic difference between Common Law systems (like that of the US, UK, Australia and more) and Civil Law systems (like those of France, Germany and more). While in Civil Law systems the law tries to create a code, which is basically a list of possible outcomes and assign a rule to each outcome, in Common Law systems, generally speaking, the law gives a general guidance and leaves the interpretation of the law to the court.

 The problem with trying to create rules that encompasses all the situations that can happen in a business setting is very hard to do. Life is just more complicated. Mr. Murphy likes to pay a visit from time to time. I think we all sat in front of some customer service representative trying desperately to fight the computer system telling him/her that the request of the costumer is not possible.

This is why, in situations where automation is not the answer or in addition to automation, people should be empowered to make decisions. But how do we still avoid the problems of microdecisions? two thoughts:

1. Communicate your vision and goals clearly in a way that guides people’s decision making. When someone is deliberating what decision to make, he should have the company’s guiding principle in his head, guiding him to make the right decision.

2. Chose the right people. People who have the ability to make the right decisions as a matter of intuition. I would refer you to the talk about “Practical Wisdom” by Barry Schwartz and the discussion of it in my blog.

Elad

The new challenges of measuring and evaluating people performance – a few non-personal lessons from prison

 Photo by aussiegal

A short story about prison

I don’t remember where exactly I read it. I think it was in one of Marcus Buckingham’s books. Anyway, the writer described an interview with a manager of the prison authority in England. That manager told the interviewer about the ways in which that organization became much more effective. Now, when you think of a prison, you would probably think about things in the lines of tightening security. But the most important activity that was described had to do with the way the prison authority measured its effectiveness. Instead of measuring how many people got out or escaped, which was the traditional way to measure the effectiveness of prisons, the manager changed the way that organization measured it success. They started measuring how many people who got out of prison legitimately, returned to prison. The manager said that he realized that the objective of a prison is to make sure prisoners who return to society don’t go back to the life of crime. In how many other places in life do we still measure the wrong thing because of habit or because of the available data?

From prison – to the basketball court

I was reminded of that story this week when I read this amazing article by Michael Lewis from the New York Times called: “The non-stat All-star”. In a nut shell, Lewis describes the story of Shane Battier, the NBA basketball player of the Huston Rockets. Battier, is the kind of player that his contribution to team does not show on the “regular” statistics usually measured during a basketball game. But if you look closely, you see that the effect he has on his team is amazing.

Now, I know what you are thinking. Because my E-book tries to draw conclusions about life from the basketball court to real life, and Lewis writes in the article that: “In its spirit of inquiry, this subculture inside professional basketball is no different from the subculture inside baseball or football or darts. The difference in basketball is that it happens to be the sport that is most like life”, I am discussing this article in this blog. But that is not the case. I bam discussing this article because of these quote:

There is a tension, peculiar to basketball, between the interests of the team and the interests of the individual. The game continually tempts the people who play it to do things that are not in the interest of the group… When I ask Morey if he can think of any basketball statistic that can’t benefit a player at the expense of his team, he has to think hard. “Offensive rebounding,” he says, then reverses himself. “But even that can be counterproductive to the team if your job is to get back on defense.” It turns out there is no statistic that a basketball player accumulates that cannot be amassed selfishly. “We think about this deeply whenever we’re talking about contractual incentives,” he says.

Isn’t this just like life in organizations?

Sounds familiar? Similar to basketball, where the interest of the individual player is to do things that benefit him, but hurt the team, the business world is a world where the individual has all the incentives to act for his own benefits even if it is not beneficial for the organization. In other words, the interest of the individual and organization are not in alignment. This is what is usually called, the agency problem or the principal-agent problem.   

After reading Lewis’s article Tom Davenport wrote in the Harvard Business blog that:

In business, we’ve all known managers whose units or companies perform better when they’re in charge. Unlike professional basketball, however, most companies haven’t yet begun to evaluate managers or employees systematically based on their individual and team contributions. No plus/minus statistics have been developed for a business context. The emerging field of human resource analytics has a lot to learn from the Houston Rockets

It is the measurement, stupid!

I think the story Lewis describes, although about basketball, actually represents some of the most urgent problems the world is facing today:

• 1. In order to create comparative advantage, new ways to make people more effective are in high demand. If we create a way to the get people to do the right thing for the organization where other employees of other organizations don’t, we create a comparative advantage.
• 2. Many of the incentives we have in the world today, measure the wrong things. Just read some of the explanations for the Global Financial Crisis.
• 3. Today it is much easier than it used to be to measure things. Basketball, off course is just an example. Think about companies which accumulate enormous amounts of data in ERP systems. The data is immense, and it is almost free to collect it. but still, although we have more data and statistics than we ever had, we still succussed at measuring the wrong thing. It is more than that. The more data we have, the tendency to measure the wrong thing only increases.  

What can we do? - let’s return to prison

Two things you can ask yourself:

1. Am I measuring the right thing? Think about the prison example and about the way they used to measure basketball players. The fact that we can measure or that we have a certain stat does not mean it is the right one to use.
2. What can that data I have tell me about the non obvious things. In Rudy Giuliani book “Leadership” he describes some of the process he implemented in order to improve New-York city. Most of them revolve around using statistics they had to measure different things. One story I remember vividly is again, about prison. They found out, that when sales in the prison cantina went up, it meant there are going to be prisoner riots. The prisoners were gathering food for the hard time after the riots. 

Vital signs

A few months ago, after reading a manifesto tilted: “Redeeming Sisyphus – Get Out of Control! Get More Done!” by I. Barry Goldberg of Entelechy Partners I wrote:  

Everybody knows saying by Peter Drucker that what isn’t measured does not get managed. But modern economics and behavioral economics, also shows us that if you decide on the wrong measures (or in Goldberg name: “vital signs”) you can create negative incentives. Books like “The Goal” by Eli Goldratt have been saying this for years. So, I believe the challenge of managers in the next few years, especially in the more subtle fields that are hard to measure will be to create the right vital signs

After reading Lewis’s article about Battier I think this is an understatement of the challenge. The challenge of managers today is to find the needle of right measures in the haystack of statistical data. The challenge is to re-think the way we measure our success. The challenge is to re-invent the way we interpret the actions of people.

Elad

How do you decide how to measure other people performance?

Photo by Leo Reynolds

Yesterday I read this very interesting manifesto tilted: “Redeeming Sisyphus – Get Out of Control! Get More Done!” by I. Barry Goldberg of Entelechy Partners. Goldberg describes a very interesting thesis. In a nutshell, he claims that most managers deal so much with micromanagement due to their inability trust their employees that they create an atmosphere that reduces creativity and productivity. Goldberg claims managers need to stop delegating (a “I say – you do” thinking behavior) and start passing responsibility and accountability (a “you do – I listen” thinking behavior). He claims that when employees are held accountable for their work, they become much more engaged with they work, thus becoming more creative and productive.

I really like this manifesto and I recommended it with all my heart. I think, at the heart of it, you can see two of the concepts I talk about in my E-book, “Playing It to Excellence and Happiness in Real Life – Five Concepts I Learned by Playing Basketball, Working and just Living”. One, is communicating. Goldberg claims that a manager’s role should be limited to listening to his employees and helping them reach their solutions by themselves. In order to do that, you need to create a very open and productive relationship with your employees – a relationship of trust. This can only be created by communicating a lot with your employees and by adhering to a nuber of simple communication rules. Second, I think the idea is to let your employees do what they are best at and focus on what the manager is best at – managing. When you are trying to be involved in every decision your employees make you sterilize their advantages. A manager today can’t know everything and can’t be an expert in everything. If you are involved in all the decisions, you immediately doom the work of your team to the sad lie of mediocrity, which is a grave danger it today’s world.

But I think the most intriguing part of the manifesto is this:

“The first step in delegating accountability is to understand the vital signs of your business… Be rigorous and clear. Do not get tempted to ooze into soft measures. Not all of a business or project can be measured quantitatively; however, the discipline of defining the critical measures of your business’ health is worth the effort. Refine this down to a set of vital signs that are every bit as indicative of overall health as those your doctor takes at your annual physical. Remember, a vital sign is a numeric value and your vital signs must take in the overall health of the whole body of the business. If the sales levels are positive but turnover in the sales organization is out of control, you will not know about the soon-to-emerge higher recruiting costs and risk. Turnover should be on your list of reportable vital signs”.

Everybody knows saying by Peter Drucker that what isn’t measured does not get managed. But modern economics and behavioral economics, also shows us that if you decide on the wrong measures (or in Goldberg name: “vital signs”) you can create negative incentives. Books like “The Goal” by Eli Goldratt have been saying this for years. So, I believe the challenge of managers in the next few years, especially in the more subtle fields that are hard to measure will be to create the right vital signs. How do you go about doing that? I don’t know. Goldberg doesn’t exactly say either, although he does offer a thinking model to try and locate them. I think if someone will create a good process to identify the vital signs of organizations, he could transform the field of management…

Elad