It’s that wonderful time of the year again for a great huge decrease in productivity across your company. According to Challenger, Gray & Christmas Inc. the US economy suffers a loss of $1.8 billion (yes, that’s $1,800,000,000.00) during this season due to employee distraction, poor time management and general distraction. Not sure if you are being affected? Check cube walls for brackets and web logs to see how many people are engaging in this annual exercise in college pageantry and sport.
For those of you unfamiliar with this American rite of spring, every March there is a series of college basketball tournaments for larger colleges which form a group called the NCAA that starts with 68 teams from across the country and game after game eliminates teams until we get to a final game which will determine the best college basketball team in the country. There are actually two tournaments running, one for women and the other for men. If you don’t think this isn’t a big deal, consider that when Prime Minister Cameron from the UK came to visit this March President Obama took him first to a NCAA basketball game! Not only is it a big deal for the players and the national interest, but few offices are devoid of an office pool betting on the eventual winner with prizes that can run into the thousands. Even an 11 year-old student in Nebraska was caught running a betting pool for the tournament this year with a $5 entry fee for each student interested.
While it might be a huge loss for the economy with the distractions and hard feelings of losing fans, it is a wonderful example of how we can work better in our organizations. How might you ask? Well, the first hint is that this is a BI blog. BI is all about getting people to see, understand and most importantly act on data.
The last part is sometimes the most difficult piece but is often addressed with simple, but effective, social engineering and psychology. To give an example let me tell you a story of a plant that I used to work at.
One of the processes involved separating thin sheets of metal by slightly bending the whole thing and then sliding a set of metal bars between the cracks caused by the bending and separating them. Care had to be taken not to bend the sheets too much or to crush the corners of the thin sheet of metal resulting in scrap which had to be melted down and processed at a loss.
We had several teams who had to do this physically demanding, dangerous and boring work. This was no one’s favorite task and the scrap rates and injuries of cut fingers were atrocious. It would be easy to simply blame the process and say that high scrap rates were inevitable in such a manual and sensitive process. After all, a million different variables could affect the outcome, why not just leave the process alone and worry about other things? Besides, the employees would just say that they needed automated equipment which the plant couldn’t afford and we’d be right back where we started at. Injuries were their fault for not paying attention so everyone should just move on.
Fortunately, along came a very smart manager who saw this not a problem of process or equipment, but rather a problem of people. The manager put together a scrap rate calculation for each team that was working this process. When the manager looked at the data he saw that some teams were just flat out better than others in both safety and productivity. His solution, not to cross train, not to reassign resources, it was to put a copy of his analysis on the wall.
That’s right, he simply published his work. Instantly, the worst performing team at the plant improved by reducing their scrap rate by almost 40%. The best team actually improved even more and although they couldn’t consistently hit 100% good quality, they were very close and went days without a reject. Injury rates dropped to zero with no reportable injuries for years. How exactly did this happen? Could it be repeated?
The answer to those questions is simple and clear. People respond to the motivation of competition. We are hard-wired from our caveman days to compete for resources and to be the best at what we do. No one wants to be on the team that gets blown away in the quality and safety scoring. Being the loser is no fun, but it was something that could be affected, and so they did!
As BI consultants we often refer to this phenomenon of self-correction with phrases like, “Measurement alone changes outcome.” This is one of the biggest values of BI as it helps focus people on what needs to be changed in their organizations. Of course the downside of this natural measurement effect is that sometimes watching a particular value or metric creates problems with perverse incentivisation which is a separate blog…or five.
Now to the question of repeatability; recently we put a dashboard in place at an Aluminum refinery in Europe and found a similar situation where one shift was significantly underperforming compared to its peers. The result from publishing the data was that the shift supervisors got together with their compatriots in the other shifts and asked some hard questions about what they could do differently to change their scores. This process took place outside of a top-down driven project and reduced the “bad” shifts scrap rates from the mid-20% range of quality to the low 10% range. Competition is a very powerful motivator and can almost never be over-estimated in its impact.
So how can you do this at your companies? Well, one, embrace it. No one wants their employees slashing each other’s tires in the parking lot, but that doesn’t mean you can’t engender a sense of positive rivalry and competition in your organization. The trick is to put together KPI’s and metrics which follow a simple pattern below and then publish the KPI’s with rewards and celebration for winners. Competitions should be regular (monthly or quarterly is the longest) and the rules should allow new teams to get the top spot on a regular basis. Rewards need not be significant, but $50 worth of pizza for lunch on the company with the plant manager in attendance for the winners is surprisingly effective. It tells them that not only did they do well; but that even the top dog is there to celebrate and congratulate them…who doesn’t want their boss to be proud of them?
The trick now is to make sure that you have a fair and even playing field. One of the great things about the NCAA basketball tournament mentioned earlier is that even though some schools present teams which are considered unbeatable every year there are multiple Cinderella stories of small schools, unknown coaches and undersized teams going way further than anyone expected of them. In fact 8 different winning teams have taken home the trophy since 2000.
Here are some tactics when building competitions in your organizations. While this isn’t a complete list, make sure you think through these items:
• Ensure an even playing field. All teams should have both a realistic chance of winning if they work hard, but also that one team doesn’t have a significant advantage that will turn off the other “players”. Nothing is worse than feeling that the game is stacked against you. Teams can be teams of one of course, but if one team has one person and the others are staffed with 10 people, one side or the other will not be happy!
• Clear goals, rules and referees – transparency over complexity. It is imperative that the players know the rules, the refs, and the way the points are tallied. How can people improve their score if they don’t know its calculation? This can be very difficult to do as sometimes the scores are difficult to calculate without serious math that can be manipulated by the players if they know the exact formula but it can be done. Sometimes you have to get simple!
• Play fair. This sounds obvious but one company I was at found out that the players had some assistance from the stands. Other employees outside of the measured group were changing data in the system to reward their friends. The result was that the offending 6 employees (including 2 supervisors) were fired and the rules of the game were understood to really matter. This wasn’t an overreaction; people were getting bonuses based on their performance. Stealing from the company is no laughing matter!
• Make games that positively affect the final score. Most of us work for companies which are pursuing a profit. Senior management is only going to be interested in games which help the bottom line and can be identified as being positive for the company and not just an exercise in team building or an expensive morale booster. Make it clear how your game affects net income and remind everyone why this game matters to the bottom line.
• Consistency and endurance. The NCAA tournament wasn’t a success overnight and games should be constructed for the long run. If you are going to do this; do it as you promised. Having one team’s bad numbers published one month and their improvement never posted is a real morale killer.
• Review and Report. One of the biggest problems with people putting together games is the lack of review. The results of a game should be very public, not just who won and loss, but also the impact on the company. If people know that it wasn’t just an exercise they will respect the management vision and also the next game that comes along. It may happen that one game will lose its value over time or become redundant, but when everyone knows what is going on there will be understanding, even if hesitant, over the required changes.
• Avoid complex and overly-long games. The temptation might be to measure and reward every single activity but that is neither advisable nor particularly valuable. People can only respond to so many motivators before they become overwhelmed and lose their desire to compete. Think of the NCAA teams. If they had to play a game of basketball, soccer, football, chess, badminton and cricket against each other to determine the winner would you watch? While there certainly would be some brave souls who would compete, would it have the same level of competition and energy? Games should have a laser focus on a particular trouble spot that has a reward for everyone.
I hope that I’ve put some ideas in your head that will get you thinking about what you can do with your KPI’s to truly change your business. Putting them on the wall and buying lunch can make a surprising difference and just because this is a simple solution doesn’t mean it shouldn’t be a part of your vision to utilize the data in your organization. Too many times we make KPI’s and don’t put them in the hands of the people who can truly affect them. KPI’s aren’t just for the CEO you know!
What have you seen work in your organizations? I can’t be the only one who has used this technique…am I?
Photo Credit: © Justin Smith / Wikimedia Commons, CC-By-SA-3.0
The drive from Dubai to the Omani coast takes you through deserts with sand dunes and mountains along roads with warning signs to watch out for camels. Sure enough, I did see camels just wandering around in the desert.
When I arrived at the client I was visiting that day in Oman, I had to wait in the security hut until someone came to pick me up. The security guard did not speak English but I tried to strike up a conversation anyway. I told him that I had seen camels on my drive there. I could see he did not understand the word camel so I took a pen and paper and drew a picture of a camel. As soon as he recognized what it was I was drawing, he jumped up in the air and shouted “Jamel” (hence I discovered the Arabic word for camel!).
