Simple metrics can put you and your company on the road to continuous improvement. Bulwark Exterminating’s Adam Seever shares how.
Big firms save millions by reducing errors and waste through Six Sigma, Kaizen and Lean Management. But for small and mid-size companies, these principles can be hard to apply. It’s easy to get lost in the jargon, said Adam Seever, CEO of Bulwark Exterminating in Mesa, Ariz.
His suggestion? Keep it simple: Focus on measurement.
Commit to the power of metrics.
First, your organization must embrace three key values:
Hamilton path in graph. Arrow: edge of graph, Blue dot: vertex of graph, red arrows show Hamilton Path. (Photo credit: Wikipedia)
- Measurement is good.
- If it is measured, it will improve.
- If it is not measured, quality will not exist.
“You have to accept that measurement is necessary for improvement,” said Seever. “You may have great employees, but if the systems they work in aren’t measured, they can’t see how they’re doing compared with each other and you can’t see how the systems relate to the overall money-making capacity of the business.”
Take a reality check.
Get managers together and discuss what employees should be doing but aren’t. Write these “shoulds” down. “That’s a success in and of itself,” said Seever.
This process is all about discovering reality, which is “whatever your average employee is doing when no one is looking,” he said.
Here’s an example: You want your technicians to start the day’s first service in the first 20 minutes of the 8 to11 a.m. time block. Your average technician, however, isn’t showing up until after 10 a.m. Technically he’s not late, but delaying this first service can throw his entire day behind schedule.
Should you fire this employee? Give him more training? Neither, said Seever. “You just can’t throw the axe every time the average person isn’t doing what you want them to do,” he said. And lecturing is useless, especially when the employee is protected by the work habits of the majority. “They will not change. You will not find increased productivity,” he said.
According to Seever, “They’re not the inadequate one. You are.” When you have the mean of individuals in your system acting contrary to what the management team thinks should happen, that’s the fault of management not employees. The goals you’ve developed and the systems you built are insufficient.
Prioritize and measure.
Identify one or two of the “shoulds” and brainstorm how to measure them. Start with something you easily
can get your arms around.
“It’s a learning process for everyone in the company.” If you’ve collected people who like to ride the gravy train, there’s going to be friction. Bulwark Exterminating put GPS devices in service trucks to monitor when technicians arrived at their first call. A simple spreadsheet — check yes or no — recorded whether employees showed up in the first 20 minutes of the time block.
Do the math.
Calculate the economic impact if the majority of employees changed their behavior. This can be a little involved, but it doesn’t have to be overly complicated, said Seever.
What would happen if the average technician showed up 95 percent of the time in the first 20 minutes to his first appointment? How much more money per day would he generate if he could service more accounts by 5 p.m.? Would you have new capacity to handle emergency calls? Would customers be more satisfied?
Pay for it.
Develop a bonus system to reward employees who change behavior. Bulwark Exterminating found it could save $200 per month per technician if employees showed up to the first service call within the first 20 minutes. Technicians who do this 95 percent of the time get a $100 monthly bonus. The bonus helped employees accept the GPS monitoring.
Some business owners have a problem with splitting the difference with employees, said Seever. They figure, why should I pay them more to do something they’re already supposed to be doing?
“You are paying exactly for what your average employee is doing right now,” he explained. Say you have 100 employees and 70 are not doing something to your expectation. You can’t expect one of those 70 people to change when 69 of them are protected by the norm.The employees who do meet your expectation are getting robbed. “It’s all about putting your money where your mouth is,” he said.
This approach can make annual pay reviews obsolete, as salary and hourly wage increases are based on increased productivity. Without real measurement, annual reviews are subjective and vague, and metrics almost always prove managers play favorites, said Seever. The human element is important — Do customers compliment him, is he personable, does he smile? — but without real
measurements, how do you really know?
Watch culture change.
English: Bulwark Exterminating (Photo credit: Wikipedia)
Eventually, employees will embrace the expected behavior. Almost all of Bulwark Exterminating’s technicians now show up to their first call as expected and receive the $100 bonus each month.
If you get the average to comply, it’s easy to isolate a minority 20 percent not meeting expectations and train or terminate them, Seever said.
This approach cannot be accomplished by one person, he cautioned. At Bulwark Exterminating, a team of believers makes metric-based management happen.
And don’t expect results if you merely have the “warm and fuzzy” need to make your financial statements look better. “That type of engagement in any program, especially in regards to metrics, won’t work,” he said.