How to Improve Productivity Quickly

Raise Productivity – Build on Your Strengths, Not Your Weaknesses

by  Andrew Cooke, Growth & Profit Solutions

Raising ProductivityToo often in business we focus on our business’ and staff’s weaknesses.  The reasoning is that by addressing our weaknesses we can improve.  This is a fallacy.  The only way that you can improve and raise performance on a sustainable basis is by building on your strengths.

Let’s look at it diagrammatically.

 

Building on Weaknesses

In this first chart we are looking to address a weakness.  This weakness means that we are currently performing below the level of performance that is expected.  We spend time, effort, resources and money on this and we raise the level of performance – but only to the expected level of performance.  The risk here is that, despite your best efforts, this may not be sustainable as once the pressure is off the individuals they may revert to their old habits

Building on Strengths

In this second chart we are looking to build on and leverage a strength.  Currently we are operating the level of performance that is expected.  We spend time, effort, resources and money on building  this and we raise the level of performance – to a level of performance significantly above that which is expected.  As this is a strength, and a good habit that is in place, it is likely that this improvement will be sustainable – even when the pressure is off the individuals.  Here people are working smarter, not harder, in a way that is aligned with what they do well making it on-going.

The Implications

So what does this mean for us as leaders and managers?

Firstly, invest more effort, time and resources in developing your best people – not your mediocre people.

Secondly, and this many seems counter-intuitive,  but it pays to assign the best workers to the best bosses because that strategy results in the largest productivity gains.

For example, if 75% of your business’ value/productivity comes from 25% of the workforce then getting a 10% improvement from your top 25% means you’ve increased organizational value creation by 7.5%. Not bad. Your remaining 75% would have to boost their collective productivity by 30% — triple the top performer’s rate — to match that 7.5% net increase.

What’s the better and more rational bet? That top management can get a 10% spike from their top people? Or that they can get the demonstrably less talented, less capable, less productive three-quarters of their enterprise to dramatically increase their value outputs by almost a third? Which group would you invest in? I know where I’d put my money.

So What Do You Do?

Firstly, leverage your business and key performers’ strengths and make it into a virtuous cycle.  Secondly, don’t ignore the weaknesses – but remember it shouldn’t be the squeaky wheel that gets the oil and the attention.  You have limited resources; use them to the best effect.  Thirdly, look at how you can remove the weaknesses – either by changing people to roles where they are better suited, training (if it can produce sustainable improvement and after investments in your areas of strength), or removing them (take out the dead wood and non-performers).

A recent piece of research entitled The Value of Bosses from the National Bureau of Economic Research empirically argued (unsurprisingly) that bosses matter. Better bosses generate better results. Underlying this were two findings:

  1. That the most significant impact bosses had didn’t come from their motivational skills, but from teaching workers how to be more productive, i.e. capability building. That’s important.  Research showed that replacing a supervisor from the bottom 10% of the pool with one from the top 10%  increases output about as much as adding a 10th worker to a nine-worker team. Not only that, but about two-thirds of the productivity boost from working under a good supervisor persists even after the worker switches bosses.
  2. The second finding is that the most efficient structure is to assign the best workers to the best bosses rather than have the best bosses bring the weakest workers up to speed.

So to raise productivity on a sustainable basis build on your staff’s strengths, in doing this the business’ leaders and managers need to be able to teach their teams how to become more productive, and to cascade this skill and associated capabilities throughout the business.

What are you doing to enable your leaders and managers to practically develop these skills, so that they can develop them in others?  For ideas, insights and any questions please email me or comment here.

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Risks of Conforming, The

Doing things with rigor takes effort, but not everything you put effort into is done with rigor. 

We often look at how hard we work as a measure of the quality of our work. But this is wrong. When you are looking at the quality of the outcomes you or your team produce you need to consider two elements:

  • Effort – how hard you work at getting the work done.
  • Rigor – how well you adhere to the process of getting the work done.

To be efficient and effective in your work you need to be high in terms of both the effort and the rigor which you apply.

An effort is focused on doing the best with the inputs (the tasks), it is about being efficient. Rigour is about focusing on the process of getting the work done, doing it consistently in the manner which has already been determined – this is about being effective.  You need to do both to produce long-term quality work outputs. As you can see in the matrix below the level of rigor and effort you make will largely affect your work outcomes.

The Rigor/Effort Matrix

 

 

 

 

 

 

 

  • Low Effort/Low Rigor – this is the worst situation where people, make little effort in getting the work done and when they do, they tend to do it in an ad hoc manner.  Processes and/or guidelines tend to be ignored, or not followed properly, and the work produced is poor quality, substandard, and costly (especially as work will need to be either redone or people in this quadrant will need a higher level of management oversight).
  • Low Effort/High Rigor – here people, make little effort in getting the work done, however, they do tend to follow the processes/guidelines that are in place.  So, although the work produced is of a suitable quality or standard, the work completed or produced does not meet expectations in terms of what need to be done or which has been planned.  Again this can result in further costs to the business as either more people are required to produce the necessary volumes, or those who are high producers are put under greater pressure as they pick up the slack.  This can lead to them being overworked, stressed and potentially more likely to want to leave for a less stressful job.  This can result in a business losing its best people and retaining the worst.
  • High Effort/Low Rigor – people make a lot of effort but do it in an ad hoc manner.  This can result in a lot of substandard or poor quality work being produced as they do not follow processes or guidelines. This can lead to a lot of waste, rework and may necessitate a lot of investment in quality control to try and manage the symptoms of low rigor.
  • High Effort/High Rigor – here people make a considerable effort, are engaged, and do good work on a consistent basis.  This produces great work for customers, improving customer retention, reducing costs, and improving revenue and profits.

Use this tool to assess where the individuals in your team are.  Assess their level of effort (1=very low, 10-very high), and the level of rigor they demonstrate (1=very low, 10-very high). From this plot them on the chart.

For each individual then determine where you want them to be and identify three actions that they can take that will help them bridge the gap.

So make the effort and be rigorous in doing it! Remember, doing things with rigor takes effort, but not everything you put effort into is done with rigor.

To view or download a PDF version of this blog click here

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

How to Assess Potential High-Flyers

How to determine and assess future leaders, and where and how to focus your efforts in their development.

You are looking to develop future leaders for your business. How can you do this so that you can consistently evaluate them across the board? What is more important when you evaluate them – their past performance or their future potential? It isn’t an either/or question. You need to understand both their past performance, and to identify their future potential. This is where the Performance/Potential Matrix comes to hand.

Performance/Potential Matrix Overview

This consists of a 3×3 matrix contrasting the two elements:

  • Performance – this is the extent to which the person achieved their objectives (“the What”) and the extent to which they demonstrated the appropriate leadership behaviors. (“the How”).
  • Potential – this is a person’s capacity to be a top performer in a more senior role.

By assessing where an individual sits on each of these two axes you are able to determine two factors:

  • Where they currently sit as you and/or others perceive each individual;
  • With whom to focus your efforts and where (performance and/or potential)

An example of how each of the 9 grids can be labelled is shown below. In doing this the matrix provides a simple and effective tool by which to calibrate criteria and expectations, and acts as a diagnostic tool for development. As such its real value is in being a catalyst for robust dialogue and it facilitates shared ownership rather than one person’s opinion.

Headings

  • Red Headings – people in these grids are likely not to be retained
  • Grey Headings – these people are unlikely to progress futher, but given their level of performance may be best suited in develping further in their existing field
  • Yellow Headings – these people may develop further, but need attention and resources to help them develop. If they do not develop further, or sufficiently, they may slip into a red or grey box.
  • Green Headings – people with real potential who should be in the firs tier for leadership development.

Common Pitfalls to Using the Performance-Potential Matrix

  • Misunderstanding high-potentials – there are misconceptions about the term “high- potential.” People use the term to talk about all top talent, as opposed to talent with the potential to become leaders. It can be difficult for managers to assess “promotability”. Often most managers are subconsciously thinking, ‘Do they remind me of me?’ “
  • Using the tool for individual assessment. – the matrix is not designed for individual assessment, you need to be able to compare different people. Without comparison, it enables neither valid assessment nor career decisions about an individual.
  • Expecting too much. – the matrix is only one tool. You need to ensure that you use other mechanism with more data e.g. 360-degree reviews.
  • Using quotas for each box don’t try to allocate people by quote, you need to reach a common understanding and agreement where each person should be realistically placed.
  • Failing to include change management – when using it you need to engage peope so they understand it and buy-in to the approach and understand what the benefits are for employees and the organization.
  • Overcomplicating the process – don’t try to make the matrix more complex, the effort will usually not add significant insight or value.
  • Failing to differentiate between employees – once you have identified the stars and top performers, you need to direct resources towards developing them—higher salaries, plum work assignments, mentorships with executives, exceptional training opportunities and coveted job rotations—to retain them and develop their talent.

Benefits of the Performance-Potential Matrix

  • It allows managers to use the matrix to assess their people and calibrate them between the leaders.
  • Assists in the creation of meaningful, accountable development plans.
  • Allows you to aggregate relative comparisons between talent.
  • Stimulates discussion and constructive debate, and creating a shared and common understanding.
  • The accuracy of assessing performance and potential improves with multiple perspectives. Managers often have blind spots with their own employees, and are

unaware of how they are perceived by others. These discussions can help shine a light on superstars and poor performers.

  • Creates collective responsibility for the team in building a stronger organization. It encourages everyone to be candid, to listen to each other, and to develop each other’s employees.
  • It uncovers both individual and organizational strengths and weaknesses. As such the matrix serves as a needs assessment for development actions that need to be taken
  • Helps managers and leaders to assess potential which they normally struggle to do.

Next Steps

Work with your peers and use this tool to review your employees to identify your prospective leaders. Try looking at the people by yourself, then share your ideas, insights and reasonings with your peers to create insights, ideas and a common perspective. Use this to stimulate debate, and look to use other tools and means by which to identify the prospective leaders.

To view or download a PDF version of this blog click here.

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Improving Your Personal Effectiveness

3 Ways to Improve How You Work

by Andrew Cooke, Growth & Profit Solutions

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We are often so busy doing the work that we forget to take a step back and give ourselves the time to focus and re-energize ourselves.  Here are 3 tips for improving your personal effectiveness, no matter what you do.

1. Boost your personal efficiency
When looking at profit improvement potential (or waste) in a business it is often said it is easy to identify 30% of your current overheads as ‘waste’. The same can be said if you audited yourself for your levels of efficiency. 30% of what you do on a day-to-day basis is waste. Outside the box ways to boost your efficiency are required. Some key tips are:

  • Hire a Virtual Assistant to prevent you performing tasks you don’t have to
  • Stop doing many of the things that are not in the 20% of things you do which create 80% of the benefit
  • Build processes and document all aspects of your business you currently do ‘naturally’ so you can delegate more of what you do
  • Use the latest technology platforms such as Ipads, Livescribe pens and various apps to better collect your notes, ideas, strategies and increase your speed in finding them at a later date

2. Protect your energy levels
Think of the networks of people in business and personally you associate with on a regular basis.  Are these people providing you a boost in your energy levels when you connect with them or are they taking away your valuable energy levels (acting as what we call ‘Energy Vampires’)?  If you have the balance wrong and have a large portion acting as ‘Energy Vampires’ it can have a detrimental effect on your ability to implement change and deliver the outcomes you are seeking.  Perform a quick audit on your circle of business and personal contacts; what do you have to change?

3. What is your ‘theme’ for the next 12 months?
Having a theme for your plans for the next 12 months can help focus more acutely your team, customers and importantly yourself on what’s important when driving strategies / actions. Themes could include: “Innovation”, “Growth”, “Efficiency”, “Profit”, “Downsize”, “Consolidate” or “Improve Life Balance”.

What has worked or not worked for you? Share your knowledge, share the wealth!

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

How to Hire for Attitude, Not Just Aptitude

How attitude is a good predictor of prospective employee success, and how you can identify those with the right attitude for your business.

The top challenge for CEOs according to a survey from the Conference Board (January 2013) is Human Capital – the ability to develop and acquire the right people, with the right skills needed to take the business to the next level.  But skills alone are not enough.

“Hire for Attitude, Train for Aptitude”

This is an old mantra which, if ignored, can be costly.  Companies I have worked with have found that recruiting people with the right skills can be costly if they do not have the right ‘attitude’, where there is a lack of ‘fit’.  This is reflected in a study by Leadership IQ of over 20,000 new hires over 3 years which found that 46% of the people about to be hired will fail within the first 18 months on the job. And they won’t fail for lack of skills but rather for lack of attitude.

Top 5 Reasons for Why New Hires Failed

The following are the top areas of failure (i.e., were terminated, left under pressure, received disciplinary action or significantly negative performance reviews):

  • Coachability (26%): the lack of ability to accept and implement feedback from bosses, colleagues, customers and others.
  • Emotional Intelligence (23%): the lack of ability to understand and manage one’s own emotions, and accurately assess others’ emotions.
  • Motivation (17%): insufficient drive to achieve one’s full potential and excel in the job.
  • Temperament (15%): attitude and personality not suited to the particular job and work environment.
  • Technical Competence (11%): functional or technical skills required to do the job.

The key point from this is that when new hires fail, and 46% of them will, 89% of the time it’s because of attitude and only 11% of the time because of skill.

As such, the key predictor of a new hire’s success or failure is their attitude, not their skills.  As such we need to be clear on what attitude we are hiring for. To do this requires two steps:

  • Define the Specific Attitudes – what are the attitudes that make your business different from the rest.  This is both in terms of what is good (which you want) and what is bad (which you want to avoid).
  • Adapting the Hiring & Interviewing Process – you need to make sure that you focus on these attitudes, so adapt how you do this as appropriate.

How Do We Do This?

Define the Specific Attitudes

Attitudes in themselves are not visible or tangible.  Where they are made apparent is in people’s behaviors.  How people behave is an active display of their attitudes.  Their behavior should also be a reflection of the business’ core values which provides guidance to people in the business.  A good example of how the core values are made tangible, and the expected behavior (and hence attitudes) is shown below.

The US Marine Corp

The US Marine Corps has Core Values of Honor, Courage, and Commitment.  The concept of these core values runs throughout all aspects of Marine life, beginning in recruit training and continuing into combat. These “warrior ethos” provide guidance to Marines in difficult ethics situations and as a reminder to provide good order and discipline. These values are defined as:

  • Honor – integrity, responsibility and accountability.
  • Courage – do the right thing, in the right way, for the right reasons.
  • Commitment – devotion to the Corps and my fellow Marines.

Adapting the Hiring & Interviewing Process

Too often, when interviewing, we focus on prospective employees’ technical skills and competencies.  Why?  They are the easiest to assess but, as we have seen, they are a very poor predictor of the success or failure of a new employee.

When you look at jobs being advertised the experience, skills, and qualification that are detailed it can be seen that the business advertising the position has the expectation that a perfect candidate will apply.  This is about as far from reality as you can get.  Realistically, there is no ‘perfect candidate’ and, as such, there can only be attitudes that are right for your business – they will never be perfect.

Tests for Finding the ‘Right’ Attitudes

  • High Performers’ Test – what are the distinguishing attitudinal characteristics of your top performers.  List up to 10 responses that reflect your business.  For example:
    • They own the problem.
    • They always see problems as opportunities.
    • They are great listeners and communicators.
    • Etcetera.
  • Low Performers’ Test – what are the distinguishing attitudinal characteristics of your low performers.  List up to 10 responses that reflect your business.  These are not just the opposite of the attitudinal characteristics that make a high performer. For example:
    • They avoid responsibility and are quick to blame.
    • They focus on themselves rather than others.
    • They do the bare minimum work required.
    • Etcetera.

Once you’ve got your two lists, conduct a quick assessment to make sure every point is on target. This can be done by asking yourself the following two questions about each attitude listed:

  • How does this attitude add value or competitive advantage to this organization? (If the attitude brings no benefit to the organization, it doesn’t belong on the list).
  • Who cares about this attitude? (If the attitude doesn’t bring benefit to your customers, it doesn’t belong on the list)

Doing this provides insight into both what you want and what you don’t want in the terms of attitudes and the associated behaviors.  It then helps you to prepare for the interview by focusing on how they respond to questions around both these areas.  However, how the questions are phrased is just as important as what the question is.  You need to develop the question with the kind of response that you are looking for in mind.  But that is a separate article.

In summary, be clear on what values, attitudes and behaviors you want in your business, and which you want your new employees to exemplify in what they do and how they do it.  Get clarity by distinguishing the attitudinal characteristics of both your top and low performers – this helps you to identify what you want from a potential employee, and what you don’t want.  Around this then adapt your interview and hiring process to ask the kind of questions that will help you elicit answers which will help you determine the prospective employee’s values, attitudes, and behaviors.  Take this into account when you look at their technical skills, as it is their attitude that is a predictor of their skills – not their technical skills and competencies.

To view or download a PDF version of this blog click here

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions,

Which Would You Rather Be – Efficient or Effective?

Which would you rather be – efficient or effective?

by Andrew Cooke, Growth & Profit Solutions

Efficiency is doing things right; Effectiveness is doing the right things.The focus for many businesses today is on the short-run, getting more for their dollar and squeezing more out of their resources.  Productivity is the name of the game.  Although this is laudable it has focused businesses on the short-term and distracted them from the long-term.

Efficiency & Effectiveness

Efficiency and Effectiveness are two competing yet complementary approaches to business.  For the purpose of this article these are defined as:

Efficiency

This is ‘doing things right’ and concentrates on tactics focusing on achieving short-term results.  It means doing things better and quicker.

Effectiveness

This is ‘doing the right things’ which is critical to the success or survival of any organisation. Strategy is the key, not just any strategy, but one that is well constructed and then executed.

How these two factors interact impact the business and an overview of these interactions can be seen in the Efficiency/Effectiveness matrix below.

Efficiency/Effectiveness Matrix Efficient vs Effective Matrix

THRIVE: Highly Effective & Highly Efficient

Businesses that pursue the right strategy efficiently thrive. They can meet strategic targets earlier than anticipated, and can go on to meet more challenging strategic targets, so as to sustain their ability to thrive.

SURVIVE: Highly Effective & Inefficient

Many businesses ‘survive’, they show potential but never attain the growth that they should be capable of.  This can be due poor management or inefficient practices.

DIE SLOWLY: Ineffective & Inefficient

The business lacks a clear vision of what it is trying to achieve, and so lacks the right strategies or has weak strategies on which to execute. The lack of clear strategies means that the short-term plans and tactics are lacking.  As such the business delivers poor results for several years and are in a state of steady decline before the business eventually ‘dies’.

DIE QUICKLY: Ineffective & Highly Efficient

Here the business is executing very well, but on the wrong strategies which drive it into a state of rapid decline.   The business leaders are not learning from their mistakes, or are not aligned with the market’s realities, and by doing so negatively compound the effects of their wrong strategies.
What Do You Do Next?

For businesses to thrive they need to get both their efficiencies (tactics) and effectiveness (strategies) aligned – have the right direction and the right actions to help you bridge the gap between where you are now and where you want to be.  Look at what you are doing and where you are going  – review your assumptions, get an objective perspective, and continually review and improve to reflect the realities  of your business, marketplace and the business environment.

So what are you going to do? And will it take you in the right direction? And are you effective and efficient in what you do?

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

 

The Real Costs of Poor Management & Leadership

The Cost of Management & Leadership Shortfalls

by  Andrew Cooke, Growth & Profit Solutions

The costs and risks associated with having weak managers and leaders are often overlooked.  What does it mean to you?  How can you overcome it?  And what are the benefits of doing so?

A recent report from the UK’s Department for Business, Innovation & Skills Leadership and Management Network Group (LMNG), showed the UK’s economy has been negatively impacted by a lack of training and support for new managers.  Across 18 management practices by country the UK ranked 6th, whilst Australia ranked 9th – behind France and just ahead of Mexico.  This strongly suggests that the findings for the UK are equally applicable to the Australia and that there is a stronger sense of urgency.

John Hayes MP, UK Minister of State for Further Education, Skills, and Lifelong Learning, suggests that effective leadership is what makes the difference for successful, innovative companies. “Strong leadership and management is a key factor in fostering innovation, unlocking the potential of the workforce and ensuring organisations have the right strategies to drive productivity and growth.”

However, in the UK the research shows that effective management is the exception rather than the rule.

Too many of our organisations, both private and public, are failing to achieve their full potential: managerial shortcomings and a lack of strategic thinking are holding them back. Overcoming these weaknesses and improving our leadership and management capability is fundamental to creating a culture where more organisations have the ambition, confidence, resilience and skills to respond to the current economic challenges and compete successfully both nationally and globally.”

By providing more comprehensive management training and development for budding leaders, companies can gain the edge over competitor firms.

Key Findings of the UK Research:

  • Ineffective management is estimated to be costing UK businesses over £19billion per year in lost working hours.
  • 43% of UK managers rate their own line manager as ineffective – and only one in five are qualified.
  • Nearly three quarters of organisations in England reported a deficit of management and leadership skills in 2012, contributing to the productivity gap with countries like the US, Germany and Japan.
  • Incompetence or bad management of company directors causes 56 % of corporate failures

Quite simply, improving leadership and management capability is an issue that no organisation wishing to achieve long-term success can afford to ignore. There is no question that good leadership and management can have a truly significant impact on organisational performance, both in the immediate and longer term.

  • Best-practice management development can result in a 23% increase in organisational performance.
  • Effective management can significantly improve levels of employee engagement.
  • A single point improvement in management practices (rated on a five-point scale) is associated with the same increase in output as a 25% increase in the labour force or a 65% increase in invested capital.

Business’ long-term success is dependent on developing these management and leadership skills, these  are crucial to ensuring high performance working and business success. This is especially true as more new managers and leaders will be needed over the next decade as the number of experienced baby-boomer managers and leaders who are retiring increases.

Why are businesses underperforming when it comes to developing their talent pipeline in management and leadership?  There are a number of reasons including relatively low levels of training, shortages of key skills, the failure to apply skills strategically, and employer concern about the relevance of training provision, have also been identified as potential reasons. Other factors include difficulties in recruiting graduates with the right skills, particularly for small and medium sized companies; a perception that leadership and management skills are something you “pick up” on the job; and lack of clarity about the specific leadership and management skills and behaviours managers need to display.

Improving our leadership and management capability makes sound business sense. Helping managers at all levels to develop the right skills and behaviours will ensure organisations have the ability to adapt, innovate and evolve, and seize the growth opportunities that lie ahead.

So what are you going to do?

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.