Sometimes I get asked how I can help people in industries and market areas in which I have no direct experience. The answer to this is surprisingly simple. I don’t need to have the expertise in a particular area to teach and assist in the management of that area, because management has nothing to do with technical ability.
The Management Mindset
Managing anything relies on one thing above everything else – the ability to “see” the process. What I mean by this is that you need to be able to think about things in terms of how something starts (inputs), how something is finished (outputs), and what happens between the start and finish (process). You don’t need to be able to DO the process, but you have to understand what the process looks like.
How to Measure
My training and experience as a project manager put rather concrete terms around measurement. In project management it’s the Triple Constraint: TIME, COST and QUALITY. In IT, there’s an old adage when building a system or selecting a vendor – “Fast, Cheap or Reliable: pick any two”. When you’re managing a business, and you’ve identified the key processes that you need to improve, you then need to measure your current performance. It’s important to get a good measurement on all three numbers, because otherwise it’s too easy to sacrifice something that’s important without realizing it.
Accuracy is important, but consistency is vital. Even if you’re only 80% confident the numbers you’ve produced are correct, you need to use the same methods to measure when you’re judging improvement as you did when you first looked at the “current performance” numbers. You can change the way you measure if you find a more accurate method, but when you do you’re essentially re-starting the whole improvement process, so think carefully about when you want to implement the new methods.
How to Manage
Once you have a good picture of your current performance, you can then start setting targets. Depending on the culture you’re working within, you could set improvement targets anywhere from 10% right through to 10x. But which areas are you going to work on?
The best method I’ve come across is to simply rank the three measurements. Often this needs to be done from a top level, rather than per-process, but you’ll usually find that there is a focus within your team already – you’ll want to make sure that you’re aligned and working towards the same goals here, otherwise you have some culture work to do. When you rank the three measurements in terms of importance, you will have one which is your key performance indicator (KPI), one which is your minimum requirement, and one which is your variable.
For example, you may have a client onboarding process that you need to manage. You will decide that the onboarding experience is vital to the long-term health of the business, and will set QUALITY as your key performance indicator. You’ll then look at TIME and COST. There will be an industry standard for how long things take to get moving, let’s say it’s usually a week. This is your minimum requirement for TIME. Your variable is COST. So you will accept a higher COST to ensure a higher QUALITY, provided you can still hit your minimum TIME requirement. You would not accept a higher COST to deliver faster (TIME) unless you weren’t able to hit the one week minimum requirement.
Each of these measurements can fall into any one of the categories, and although it’s common for a company to have a standard, often there will be some processes that will have their own prioritization.
It’s also important to understand that categorizing these measurements doesn’t mean that you have unlimited freedom – there are minimums and maximums that will apply to all areas. Setting and working within these boundaries is critical, have a look at the upcoming post on Setting Boundaries to see more on this.
How to Improve
When it comes to actually achieving those targets, it’s all down to the people on the job. As the manager, you need to understand their constraints and concerns – what do they need to hit the targets you’ve set? Then you need to work together to identify steps in the process that are inefficient, or not required at all.
If you have an improvement budget, use that for training or for one-off costs to improve your key performance indicator. Make sure your budget considers both time and money – pulling your team away from their core responsibility for a day of training costs more than just the invoiced amount, otherwise you’re paying staff not to work in the hopes that they’ll be better equipped to perform in the future. Ask your team about what tools they’d need to perform at a higher level, or what jobs could be automated. Do your own research, speak to your vendors and their competitors, find out what others are doing in your space.
If you don’t have an improvement budget, start by looking at how your team is already performing. For every job or process they do, you will have someone on your team who simply does it better. Get them to document and train the rest of the team in that process.
Improvement is an ongoing concern, you’ll never have everything perfect. Look at your numbers, and identify where you’re seeing the biggest variance – that’s an opportunity. Look for where you are repeatedly spending the most time – even small improvements there can make a huge difference overall.
Set challenges for your team, and reward success. Recognize individual improvement as well as overall team performance. When they hit your targets, be ready with another challenge. If your team are losing motivation, let them choose their next challenge from a shortlist you’ve already prepared.