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Archive for the ‘David’ Category

You know You are an Elite Recruiter if…..

Wednesday, March 10th, 2010

For those that attended the ERE webinar – Going from Good to ‘Elite’  – - I hope I inspired you to take action J!

For those that missed it we discussed the competencies/skills of Elite Recruiters.  I have also started work on another fun project related to this subject… 

Shamelessly stealing from Jeff Foxworthy – - “You know you are a redneck if . . . “comedy routine, I am trying to develop a LONG list of “You know you are an Elite Recruiter if . . . “.

This fun exercise has also been inspiring me to reflect on what it is to be an Elite Recruiter and what I need to do to be one!  Performing at an elite level doing anything is very difficult.  Recruiting is no different. 

Documenting these attributes in a fun way helps keep this passion burning and top of mind.

So OK – - You know you are an ‘Elite Recruiter’ if . . .

  1. You get referrals from candidates you turn down for a position. 
  2. Your hiring managers ask you who they “should hire” . . . And listen to your advice.
  3. Candidates seek your input on preparing for the interview with the hiring manager, making a decision on an offer, etc. 
  4. You keep track of all the people you have hired and have kept up an ongoing relationship with 90% of them. 
  5. You track your performance (quality, efficiency, responsiveness/ delivery) on a quarterly basis. 
  6. You quantify the ROI of your services to your key stakeholders.
  7. You have clearly written quarterly Performance Improvement goals.  
  8. You spend time each week helping those less fortunate find employment, craft a better resume, prepare for an interview, etc.
  9. You invest at least 15 minutes to ½ hour developing a written – hour by hour – daily plan of action that you deploy before each day.
  10. You have received gifts from candidates/hiring managers for “changing their life” for the better.

PLEASE – WE ARE LOOKING FOR MORE ADDITIONS TO THIS LIST!  Can you please email us at info@leanhumancapital.com with your ideas!  

 _______________________________________________________________________________

‘Elite’ Recruiter Benchmark study!

Our goal is to get 2500 recruiters to participate in our free self-assessment benchmark study!  To provide more granularity, we have decided to categorize ‘recruiters’ as outlined below.

To participate, just find the link that best describes you and . . . sign in!  It will take you about 15 minutes to complete.

NOTE: This is for your OWN self-improvement!  With that said, for us to have fair and accurate benchmarks, please take this seriously and respond with honestly. 

We will publish the results at a later date to use as a benchmark!

Competency/Skills of an Elite Recruiter – Healthcare

Competency/Skills of an Elite Recruiter – Financial Services

Competency/Skills of an Elite Recruiter – Retail

Competency/Skills of an Elite Recruiter – Technology

Competency/Skills of an Elite Recruiter – Third Party

Competency/Skills of an Elite Recruiter – Manufacturing/Engineering

Competency/Skills of an Elite Recruiter – Other

Good To Elite

Wednesday, February 24th, 2010

For those folks that know us, we are passionate about the pursuit of being “Elite” recruiters.  Over the years, we have written about it on numerous occasions. 

 Some posts that have received chatter include:

Success Attributes of World-Class Recruiters

The Changing Role of the Recruiter

On March 10th, we will be facilitating a webinar with ERE entitled “Going from Good to Elite – Becoming an Elite Recruiter”.  In preparation for this event, I have been collaborating with colleagues in the industry discussing this topic and getting their opinions on: 

  • Skills/competencies of Elite Recruiters
  • What Elite Recruiters do that average recruiters don’t.
  • How to go from average or good to elite.

If you have thoughts/opinions on this topic, I would love your input. Just drop me a note (email)! 

Over the last year we have been working on a competency/skill model for recruiters.

If you are interested in taking a self-assessment, just click on the links below!

Recruiter Skills Assessment

Staffing Competency Assessment

I hope you all can join us for the webinar on the 10th

Just as important, I would love your input on this topic!

Are you recruiting ‘Passive’ Candidates as if they were ‘Active’?

Wednesday, February 10th, 2010

I had a recent conversation with a very frustrated hiring executive: The conversation resurfaced some ‘best practices’ around recruiting quality talent.

He was frustrated with the current recruitment efforts on critical to fill positions in his department. While they had gone through great lengths to deploy a sourcing strategy to drive quality, passive talent into the recruitment process, the vast majority of candidates they were interested in were “bailing” out of the process.

Pondering the situation, I asked a few simple questions to try and identify the root cause of the defects (for those that sat in on our 7-Deadly Sins webinar – - you know what I am talking about :o )).

  1. How are you engaging candidates into the process?
  2. How quickly are you engaging candidates into the process?
  3. Who are they meeting with on their first visit?
  4. Where are they meeting?  
  5. Does the candidate fully understand the next steps after their first meeting?

 The answers I received from the recruiter/hiring manager might not surprise you:

  1. Well we have them go through the normal process.  If they are interested, we ask them to go online to register in our system”.
  2. “Once they hit the system, the recruiter is calling them within 24 hours – - hopefully – - to do a pre-screen with them.”
  3. “We like to have them come into the office and meet with the recruiter first – - then meet with the hiring manager.  Ideally, we like to get a slate of candidates to come in and interview all the same day/afternoon.  It is much more convenient for the hiring managers.”
  4. “Ideally – the office. It makes it easier for us.”
  5. “We let them know that we are interviewing several candidates and will have feedback within 3-5 business days.”

I think you know were I am going with this!

So after listening to his answers, I reflected and responded:

“So your managers are requesting the recruitment team to find the highest quality (often passive) talent possible but . . . you want the passive candidates to engage on your TERMS?

  • Fill out paperwork before I will talk to you
  • Come to my office
  • Sit in lobby with other candidates
  • Wait for a response

I don’t know about you folks, but if the University of Alabama used these technique to ‘recruit’ the most talented football players – - I bet they would not have won the national title last year!

While I don’t want to make light of this situation, I find this dilemma within hundreds of companies throughout the country.  Simply put:

They are trying to recruit quality, ‘Passive’ candidates with their ‘Active’ candidate process.

Organizations that excel in recruiting top talent, take a holistically different approach to the passive candidate recruitment efforts.

Some Best Practices

1.     How are you engaging candidates into the process?

Once the recruiter makes contact with a top prospect and does a preliminary pre-qualification (hopefully on the same call), they immediately seek to set up a “cup of coffee” meeting with a dynamic hiring manager.  No initial paper work. We can take care of that later. No resume? No problem, lets just meet and have an exploratory conversation.

2.     How quickly are you engaging candidates into the process?

Immediately (as outlined above)! I have worked with hiring managers that literally say – - if you get a top notch person on the phone, I will meet anywhere, anytime.

3.     Who are they meeting with on their first visit?

While I am not saying they shouldn’t meet with a recruiter on the first visit, the quicker you get them connected with a dynamic hiring manager the better.  From experience, it is much easier to engage a talented professional to have a “confidential, exploratory discussion over a cup of coffee” if for nothing else – - to network VERSUS – getting them to come for an interview with a recruiter!  

4.     Where are they meeting?

When you are not looking for a job, the last thing you would want is people to THINK you are looking.  Coming to a competitors office for a visit – - in this day and age of LinkedIn, Facebook, etc. – - is very risky at best.  And to ask them to sit in the lobby with other “candidates” is disrespectful in my book.

5. Does the candidate fully understand the next steps after the first meeting?

If you meet someone and like them, you should recruit that person. What is wrong with showing your excitement for taking the next steps – ask them their availability to meet with a key executive – - BEFORE you leave that first meeting?  I am not implying an offer? I am just showing sincere excitement about moving forward and keeping the positive momentum during our courtship!

These are simple best practices I have seen successfully deployed by organizations that don’t fall into the trap of trying to recruit quality, ‘Passive’ candidates with their ‘Active’ candidate process.

If you find yourself in this dilemma, please share this with your hiring managers :o )

7 Deadly Sins of Waste in Recruiting: Overproduction/Inventory

Wednesday, February 3rd, 2010

For those of you that missed our recent webinar – 7 Deadly Sins of Waste in Recruiting – -one ‘deadly sin’ always seems to drive a lot of feedback/discussion - Overproduction/Inventory!  In the Lean Six Sigma world, the word “Overproduction” is defined as “Production ahead of demand.”  The word, “Inventory” is defined as all components, work in process and finished product not being processed. 

Arguably these are the biggest offenders to creating waste and . . . the time/cost required to eliminate them.   

Examples of these areas of waste in talent management and solutions: 

  • Overproduction/inventory in postings.   Most organizations, as part of their staffing process, post each and every position to their website and a large job board (like Careerbuilder or Monster).  While this seems to be a quick, cost effective sourcing solution, for those positions that do not require additional applicant flow and/or positions that have a very low probability of being filled by this source – - the cost/time associated with managing the unqualified applicant flow far exceeds the benefits.

Solution(s): When you receive a new position, evaluate the historical source of hire.  If 80% of the time this type of position was filled through internal applicants or referrals, why not exhaust those channels before publishing the position to the masses?  If less than 5% of the time a position is filled by large job boards, investigate more effective sourcing solutions (direct sourcing, niche job boards, etc.) before generating a routine posting on a large job board.  Also remember that job aggregators (simplyhired.com, indeed.com, etc.)  are going to “wrap”  any posting you put on your own site anyway.  

  • Routing multiple candidates to the interview stage.  Historically, managers have requested (and we have provided) a ’slate’ of candidates for each and every position.  Minimally, the rule of thumb has been the magical  ‘3′ candidates per position.  In some cases, we find recruiters routing 5, 10 or worse yet – – – all the candidates that applied for the position.  To the definition, every candidate routed to the hiring manager that does not get hired is WASTE. 

Solution:  While psychologically I can understand that a manager wants to review his/her ”options” before making a critical decision like hiring a new employee, if they trust that the recruiter has exhausted all candidate/sourcing options in order to come up with the best, and they understand the concept of waste, then there is no reason that there should ever be more than 3 candidates routed for consideration unless of course those first three don’t meet the requirements. If this happens, it indicates that not enough time was spent up front understanding the requirements of the position and how each candidate would need to demonstrate that they are able to perform the required tasks. The more time spent up front with the hiring manager and those participating in the interviewing process to ensure all are in alignment and to validate how the candidate will be selected; the less time wasted in sourcing. 

For high volume hiring and/or for managers that have experience hiring for a certain position, evaluating each candidate against previous hires (and more importantly – - the competencies/skills necessary to excel in the position) is a much better predictor of success than evaluating one candidate against another. Challenge the old-school mindset of “3+ candidates routed per position!”

  • Developing a slate of candidates for positions that go on hold.   Ok – – how many times have you developed a slate of candidates for a position that . . . goes on hold!  Now in fairness to hiring managers, there are legitimate reasons that this happens that for the most part are out of their control.  But unfortunately, we know that other managers often post positions ahead of approval that have a high probability of never being approved.  Talk about WASTE!  The time spent sourcing/pre-screening candidates for positions that go on hold for some organizations is astronomical! 

Solution: Consider making approval processes mandatory, or holding off on the sourcing process for 48 hours to double check the position approval status.   For those of you that want to be more progressive – gain approval to implement a “charge back” policy!  Charge back to the manager/line of business for openings that are put on hold and waste the valuable time and effort of the staffing function!

While we will never eliminate all of the overproduction/inventory in our hiring process, taking simple steps to incrementally remove waste will exponentially save you time and money!

Spend less time searching for resumes and more time searching for people with intelligence!

Wednesday, January 27th, 2010

OK - You have a critical, difficult-to-fill position and you have performed all the ’normal sourcing tactics’ to fill it.

  • Posted on your website and a large job board or two
  • Networked with key employees
  • Surfed the Internet for candidates
  • Checked out LinkedIn

And unfortunately, you still don’t have any interested, qualified candidates.

Does this sound familiar? What do you do next?

For many, the next step is the ‘wait, hope & pray’ tactic.  You wait, hope and pray that some qualified candidates fall in your lap :)

For others, that have the time and expertise, you dive into deep Internet mining tactics (Boolean/semantic search) scouring remote databases/information for the elusive, ‘passive’ candidate. 

From my experience, very few recruiters immerse themselves in identifying people that will KNOW the people you are looking to find and talk too!  

This fundamental shift in thinking is so simple but very powerful. If implemented, this technique will transform the way you source candidates forever!   

Instead of asking the questions:  

  • Where can I find qualified professionals?
  • Where should I look for them?
  • What search techniques should I use to find quality talent?

Ask:

  • Who would know the person I am looking for?
  • Who can I talk to within a particular company (that has the talent I am looking for) that would know the person I am looking for?

For many creative sourcers, as part of the search strategy, they try to identify key words to source such as:

  • Competitor companies
  • Similar job titles
  • Key tools/technology the qualified candidate uses to perform their job

Now drive laterally through these questions with: 

  •  Who works with/for the person you are looking for? What is their job title?

And your search becomes more three dimensional.

Now drive straight down the middle with the question:

  • Who has recently left that company that knows the person I am looking for in that company?

And you can strike oil!

Let me explain.

The first question – - Who works with/for the person you are looking for? – - will exponentially increase the # of people you can talk to to locate the person you are looking for (you know – - the whole 7-degrees of separation thing).

The second question – - Who has recently left that company that knows the person I am looking for in that company? – - will connect you with folks that have left an organization and probably do not have a vested interest in withholding sensitive, confidential intelligence. Heck – if they were let go, they are even more willing to assist in providing information that might help you and . . . unfortunately . . . ‘hurt’ their former employer. 

Another important point here is the person’s level.  While first instinct may be to go “to the top” and call the SVP or VP (like in a traditional sales approach), you may have non-compete issues that cause the contact to be reticent to provide the information you need.  Don’t avoid this level, but be mindful of it. You may have greater success with peers and/or individuals that worked for the person you are seeking to identify.    

Some examples to illustrate this concept:

  • Searching for accountants — talk to actively looking controllers
  • Searching for .com developers — talk to actively looking SQL – DBA’s
  • Searching for OR nurses — talk to actively looking anesthesiologist.
  • Searching for Market Research professionals — talk to the Account Manager at the research firm.

Note – I referenced ‘actively looking’ in each of these examples. Probably the best person you can ‘network’ with is an active candidate that has recently left an organization. 

Not only will they know the person you are looking for, but they often will provide un-sanitized information about the people you want to connect with. Add in other thought provoking questions to your conversation like – - Who were the top performers? – - Who worked best under pressure? – - and you might gain valuable insight to pinpoint your search.  

A simple, straight forward approach to contacting them: 

John:

 I wanted to reach out. I saw you online and saw you worked for _________.  I  was hoping I could network with you and see if you could help me - and potentially one of your peers - out.  

I have a great opportunity for the right person…. I am seeking ___________________________. I thought you might know the ________ folks at __________ that might be interested in this opportunity? 

Were there some folks that you thought were really good that I should connect with?

Anyone that was not very happy I should connect with?

Any advice you would give me to help me with this search? It is a great opportunity for someone! 

________________________________________________________________

Then when closing, I would always recommend asking them how you can assist them in their job search: 

I really appreciate all your help. As mentioned, I found your information online.  

 How can I help you? – - what are you looking for?  

What have you done so far to find a new opportunity?: 

Have you tried www.indeed.com and/or http://www.simplyhired.com/   

I will keep my eyes/ears open…, etc . 

 

The key to your success in engaging individuals is your sincere interest in helping connect individuals to excellent opportunities!  

Too often I think we spend too much time searching for resumes versus people with intelligence that can help us with our search.  We wrote a similar post on this subject that you might want to check out – The Indirect Networking Call.

Happy Hunting :)

Ensuring Staffing Process Excellence

Wednesday, January 20th, 2010

By Bradley Savoy

This week I had the pleasure of presenting to our local SHRM chapter on Staffing Process Excellence. Here are some of the highlights:

I know what you’re thinking, “We’re hiring fewer people this year”, or “Our hiring’s flat, so why bother with a Staffing Process Excellence exercise?”

Whether you’re hiring 5 people or 10,000 (yes – there are still companies that are hiring that many people), it’s the beginning of someone’s tenure with your company, and it acts as an extension of your brand.

A Staffing Process that’s excellent will enable you to utilize Voice Of the Customer (VOC) data to define and deliver an error-free fulfillment process that will deliver world-class customer satisfaction, improved retention, and even quality of hire.

The simple steps in Staffing Process Excellence are:

  1. Gain Executive Buy-In.  With every process improvement initiative you need the executives’ buy-in.  Typically the best way to do this is to align the project to a business initiative.  Are you trying to trim costs, improve customer satisfaction, or reduce attrition.  All of these can be addressed with an improved staffing process.
  2. Gather the Voice Of the Customer data.   Begin by using surveys, focus groups, or other channels to tap into the perspective of those that work through your process each day.  Hiring managers, candidates, recruiters, and others that are involved, should be consulted on how the process should look.  Find out what opportunities exist to streamline the process from their perspectives.
  3. Gather Process CTQ’s (Critical to Quality).   These are aspects that are critical to meeting and exceeding customer expectations.  These will also typically come as part of your exercise to gather the VOC information from your stakeholders.
  4. Align the process.  By now you have the needs of the customer (VOC) and you’ve gathered those aspects of the process that are critical to them (CTQ).  Now you have to align the two, making sure the wants of the customer and the critical needs can be met.  Exec or Org.  Initiatives??
  5. Define the staffing process.    At some companies this is a detailed chart of the staffing life cycle; for others it’s a simple list of bullet points.  While best-in-class is a clearly articulated and defined process, even bullet points on a Word document are a start.  The end goal is that with the input from customers you can now define the world-class process – and the best part is no one can say “Hey you didn’t ask me!” because each of the customer segments gave their input.
  6. Educate, Implement, and Continuously Measure the new process.  You’ve put all of this effort into your new process; now make sure it “sticks!”  Don’t just email the new process out to everyone; instead, leverage executive buy in to have a big kickoff.  Executive announcements, internal staff meetings, and even e-mails can have more power jointly coming from line execs and HR/recruiting.

You’re also going to need to educate each of the stakeholders on the new process, and then of course continually measure the results.  Consistent surveys, focus groups, etc with the “customers” of the process will ensure long-term adherence.

If you have questions on staffing process excellence, or you’d like to discuss an audit of your staffing process, contact me

Seven Deadly Sins of Waste: #2 – Waiting

Wednesday, January 13th, 2010

By Bradley Savoy

So I’ve just screened an exceptional applicant, and the next step in my process is to forward information to the hiring manager for approval to schedule an interview.  I send the information along….and now I’m in the middle of the next sin of waste – waiting…..

If you think about your current staffing process, and you had analytics on it, you’d find that in many cases an inordinate amount of time is spent waiting.  There are multiple reasons for this: delays based on decisions needed, peoples’ schedules (vacations, meetings, etc.), and various other factors that come into play.

Back when candidates held the power and the war for talent was in full swing; waiting on a decision for the next phase of the hiring process was a death knell.  Back in my management consulting days I remember losing candidates to competitors if we couldn’t make a hiring decision in 24 hours because by the time we got to them they already had offers from our competitors in hand.  Those days may be long gone in most cases, but they still exist for critical talent.  For many healthcare organizations RN’s and PT’s are still critical positions to fill, and recruiting departments don’t want to wait days for approval from a hiring manager to move forward with the hiring process.

In our Proof of Concept we look at our clients’ staffing process flow, as well as the efficiency and time spent during the various stages of the process.  We often find that a simple lean solution in reducing waste is to reduce the amount of time spent waiting on decisions from the various stakeholders of the process.  A hiring manager may expect candidates faster than you can deliver them, and you may expect to receive feedback on candidates faster than the hiring manager can respond. 

One way we address this is through establishing better relationships with hiring managers, as well as managing expectations on both sides.  See our previous posts on being a Strategic Business Partner and establishing a Service Level Agreement.  These will give you some simple tips and techniques to address this area of waste in your staffing process.  And of course you can register to attend our webinar next week where we’ll discuss this, as well as other facets of the 7 Sins of Waste in Recruiting.

The Seven Deadly Sins of Waste: #1 – Overproduction

Wednesday, January 6th, 2010

Before the holidays, we had an enormous interest in our recent whitepapers on Just In Time and The Seven Deadly Sins of Waste” in Recruiting.  Based on the interest, we’ve decided to not only publish our thoughts on these topics in upcoming blogs, but also to host a webinar to discuss these topics.

If you’d like to attend the webinar on Wednesday, January 20th at 2:00pm EST, please register here.   

One of the seven deadly sins of Waste is Overproduction.  In recruiting and staffing – we’ve not only tolerated overproduction over the years, but we’ve actually rewarded recruiters for it!

For as long as I have been recruiting, I have found most recruitment organization manage by (and reward) the “How Many” philosophy:

  • How many calls did you make?
  • How many applicants responded to the posting?
  • How many people showed up at the open house/job fair?
  • How many people did you interview?
  • How many candidates did you route to the hiring manager for consideration?
  • How many resumes are in our database? How many resumes to you have access too?

Most have lived by the “more is better” philosophy.  

Having read The Goal by Eli Goldratt, early in my recruiting career, I never understood this mentality. 

I always understood my goal to be:

  • To generate the most amount of quality hires/month for my organization (Mr. Goldratt calls ‘Throughput’).

and that:

  • I had a fixed amount of time, money and resources (He calls ‘Constraints’).

I could not understand why:

  • I was measured by how many calls, interviews, or candidates routed??

Isn’t that counter-productive to the goal? 

In reality – shouldn’t I have been rewarded for the following: 

“Talking to the least amount of people that allowed me to hand pick a select few that I interview that nets me the perfect candidate I route to the hiring manager that gets selected and hired and becomes a top producer within the organization for  the next decade!”

When you start to look at the staffing supply chain with this lens you start to ask yourself some different questions:

  • Why do we track how many calls, interviews, etc. a recruiter makes? Shouldn’t we track how efficient we are with the candidate activity we put into the staffing supply chain “funnel”?
  • Why would we post every position on a large job board when it causes a tremendous amount of overproduction/waste of unqualified candidates?  Especially the positions most often get filled by internal candidates or other sources and rarely, or NEVER get filled by internet postings?
  • Why does a manager need to see 3-4 candidate before making a decision if we have identified the top candidate through sourcing/selection? 

Don’t have time to get everything done during the course of the day? A root cause to your problem just might be the time associated with managing the waste caused by overproduction. 

The fact of the matter is that overproduction causes waste.  It also takes time, money and resources (that we have a limited amount of) to remove waste from the process.

And to think that most of us not only tolerate overproduction, but in some cases reward our recruiters, vendors, job boards, etc. for it!

A great way to safe time and cut costs is to analyze each step of your staffing process for overproduction and look for ways to eliminate it BEFORE it gets into the process.

For more information on the Seven Deadly Sins of Waste in Recruiting, join us for our free webinar on January 20th at 1pm EST.

“Seven Deadly Sins of Waste” in Recruiting – Preview

Thursday, December 17th, 2009

I found an excellent report on Lean (Toyota production Systems – TPS) by Wharton and the Boston Consulting Group called, “Rethinking Lean: Beyond the Shop Floor.”

It provides excellent examples of how you can apply the principles of waste elimination and process efficiency within service organizations (including healthcare and financial service industries). 

As I read the report, it became evident why implementing the principles of waste elimination, worker involvement and continuous improvement within the recruitment/hiring process can be so successful.  

While the principles of waste elimination, worker involvement and CI haven’t changed much since TPS was created 50 years ago the results are very impressive.

In January, we will discuss eliminating the “seven deadly sins of waste” in the recruitment process.

If you are interested in how we use the principles of lean, materials release planning, and supply chain optimization to answer the age old question, What is the acceptable number of requisitions per recruiter? check out our published white paper on the subject.

I hope you have a great “pre-holiday” week!

Some snippets that I found particularly interesting from the report are outlined below:

  • “Do you understand your customer segments?” Can you serve the most valued customer more effectively?
  • Companies should always begin their lean efforts by asking, “What are you trying to achieve?” “It doesn’t begin with a rule. And it’s not about isolating one piece of the business and deciding its fate.  It’s about rethinking every business process.” “It’s not about cost cutting across the board,” he says. “It’s about judicious investing. It’s not about starving. It’s about building muscle, trimming fat.”
  • Many companies struggle to align lead times, inventory and other data to financial measures, even with performance metrics in place.  This is probably because they are not measuring the right things. Instead of coming to a better understanding of your organization and how to improve it, “Many die a death of a thousand metrics.”
  • “When people think about lean, they often associate it with reducing the workforce,” Faber says, “But the cost is not in the line labor; it’s in the overhead.”
  • A key part of Lean involves looking at the business differently. You need to have metrics on moving applicants through the staffing supply chain. That requires sourcers, recruiters, coordinators, HR business partners, and hiring managers engage in a collective dialogue around ensuring efficiency.
  • In manufacturing no one sees how things get made. They probably don’t care. But in staffing/hiring – customers see the process and it is extremely personal.  So if your service doesn’t track customer dissatisfaction you might never know what people thing about your organization.
  • Lean initiatives begin with identifying and standardizing a process. “Try to think of your business as repetitive. Once you have that identified – think of how long someone stays in that process, the waste being created, the dissatisfaction occurring, and the impact of that person staying in that process. Next, measure performance.
  • TPS is a way of life. A continuous improvement process that never stops. TPS wasn’t implemented just once. Its constant improvement, constant innovation and constant elimination of extra steps. The most important principle is that this is not a four-month project. You will see benefits, but you must do it continually.
  • Key principles of lean ask the following questions, “What is important? What matters to the customer? What delivers value?”
  • Lean is not new or rocket science. It’s like your diet. You know what to eat and how much to eat but old habits are hard to break. That is why behavior modification, measurement, accountability, training is so important.
  • “Lean works best as a balanced top-down and bottom-up effort.” Christian Terwiesch, a Wharton professor, remembers trying to talk with hospitals about lean initiatives several years ago. “They thought I was evil. They said ‘We’re doctors. We help people.’ Now these same institutions have chief medical officers saying, ‘We want to run this place like Toyota!’”

Best Practices in Moving to a Management by Fact Culture

Wednesday, December 9th, 2009

McKinsey recently released results of a study of practices of 230 companies across the globe.

The firm’s primary goal was simple – what makes companies perform well?  For the sake of this post, I’ll hone in on one key point:

“Executives, in their search for ways to make organizations function more successfully, frequently adopt simplistic solutions.   A new analysis of more than 230 global businesses shows that combinations of carefully selected actions can be far more effective than one-dimensional interventions.”

McKinsey makes an interesting point here.  In some cases adopting the simple – or easy – solution is not always the best approach.  Unfortunately in many instances the decisions are made through a high degree of subjectivity and then tempered with a small depth of objective criteria (data).

Over the last 20 years, management concepts such as the balanced scorecard, process management, key performance indicators (KPI’s) and strategy deployment have prompted many executives to revisit their measurement systems.   Practices such as Management by Objective (MBO) and Management by Fact (MBF) have become increasingly popular. 

Successful companies strive to combine real world management experience with the objectivity of data.  This is not to negate the subjective experience of a tenured executive, but to aid in their arsenal of decision making tools. 

As a result, many companies are adopting objective based measurement systems.   These systems ensure objective data measurement is added to uncover the missing elements, or facts, needed to make key decisions.

So if you’re aiming to launch a new measurement system to shift your culture to one of Management by Fact, here are my top three best practices to consider:

  1. Tie your measurement criteria to the goals of the business.   Each business unit or department of your company must provide input related to their specific business goals, and the needs of their customers.  During this exercise the synergies of various departments will come to light.  For example, customer loyalty could exist across multiple departments, and the overall company strategy.  If that is the case, customer loyalty then becomes a key indicator of performance across the various departmental stakeholders.  In this example, an overarching measurement criterion may be customer retention or customer satisfaction. 
  2. Ensure adoption and accountability at the right levels.  Those parties responsible for this new way of thinking must have the knowledge and authority to manage the performance of new processes.  Establishment of a core team of metrics and process owners representing critical functions of the organization is critical to ensure the mind shift is successful. 
  3. Communication is key.  Development of a comprehensive communication strategy is critical to ensure broad understanding and acceptance.  All employees need to understand the importance of the new philosophy and their roles within this process.  Care should be taken to ensure that each employee is able to answer the question, “What’s in it for me?”  Each employee needs a clear understanding of how they, as an individual, can impact key metrics.  Creating communication aids such as learning maps and utilizing executives to act as personal communication channels can increase acceptance of the strategies as the goals of the organization are achieved.

If you’d like to lean more and see a great example of utilizing the Management by Fact approach, check out David’s article on why requisitions per recruiter is not a great method for resource planning.

Companies will achieve success by ensuring that the management measurement solutions they create tie to core business objectives and are accepted, adopted, and communicated effectively by all stakeholders of the process.