This is the first of a series of short articles on leading through factoring in the "Hu" Human Element as it relates to operational excellence and its impact on employee satisfaction and engagement. The first concept that we are going to explore is the role of the leader in engaging new and seasoned employees. To do this, we are going to look at the principles of connection and meaning.
Tapping Into That Desire To Do Well
What is evident in our current work climate is that people generally want to do a good job. Looking at the hoops that a typical person will have to go through to get a position, you know they are going to be committed to the job. So what happens after they get that job? Do you take advantage of that commitment and excitement to - get them to work?
Research shows that despite these people coming to a new job with a high level of zeal, very quickly, they will slide into that 33% range of engagement (Gallup, 2016) that the majority of employees wind up at. Why is that?
The Importance Of The Leader
In a word, leadership. The number one factor impacting employee engagement and satisfaction is their immediate leader. Close to 50% of employees who leave a position or company do so because of their immediate supervisor.
Connection & Meaning
We know that people are social by nature and that connecting at work forms a big part of that. We are also driven by those things that provide meaning. If you, as a leader, do not provide connection and, meaning then you are already losing the engagement battle.
The responsibility of a leader is to create a team (connection) and then show them how what they do contributes to the company goals and objectives (meaning). Let your team contribute to improving the work and recognize that contribution, and you will have employees that will be engaged at unheard-of levels!
To quote Winston Churchill. "We make a living by what we get, but we make a life by what we give." What we will explore next is what you can do to provide connection and meaning for your team. Performance Leadership - Think About It!
Let me review what we have learned so far. Effective reinforcement or recognition has to occur as close to the desired behavior as possible. The person typically best able to provide that recognition is the immediate supervisor due to proximity and role. In short, they help the team to set the goals, identify the desired behaviors, and provide recognition when those behaviors happen. So what is missing in this cycle?
Presence. It should be obvious, by now, that a person leading a team of people who are looking to reinforce a set of behaviors around performance needs to - be there - to catch those behaviors and provide recognition. I call this active supervision.
Active supervision should be organic, intentional, and habitual. (How’s that for a mouthful?) The supervisor needs to create a habit of getting around to where the team is. They need to decide what behaviors they are going to recognize (intention), and they need to do it often enough so that it does not seem out of place (organic).
At an LNG plant, the head operator typically stays in the control room to monitor the panels. These head operators and I were having a discussion one evening about how their supervisors, who sit literally across the hall, never get out to see the crew and are for all intent, absent. So I asked one head operator how often he got out each shift to see his staff? He thought about it and had to admit rarely, if ever.
Upon further discussion, he decided that his assistant operator would take over the panel a few times each shift so that he could go out to see the crew and provide some recognition for the behaviors he wanted. It seemed strange to them at first because this had never happened, and so things were a bit stilted. But as they got used to seeing him around, they became used to his presence, and he was able to provide the recognition he wanted to his team. And yes, performance went up. What is more, he felt he had a better grasp of what was happening on his team.
Too often, we get in the habit of what the Army calls leading from the rear. There is no replacement for being there. It is the only way to look for those things that you want to reinforce. Performance Leadership - Think About It!
"Hu" The Human Element of Organizational Effectiveness - Who is Best Positioned to Drive Performance?
We left off with a question regarding reinforcement; If reinforcement needs to happen as close to the desired behavior as possible, who is going to be in the best position to offer it? The obvious answer is the immediate supervisor.
Immediate Supervisor or Leader
Interestingly enough, many companies tend to move that activity higher up the ladder without realizing it. Leaders who are responsible for small teams will often defer to their bosses when it comes to driving performance. This is not unusual as they are typically the least experienced leaders in the chain of command. If you step back and think about that for a minute, you will see the challenge. The least experienced leaders are given the most immediate opportunity to drive performance in a company.
You might see this as a problem, but I see it as an opportunity. People who have just moved into leadership roles are often very keen to do a good job and (hopefully) have not developed any bad leadership habits. They are open to new ideas that will help them be more effective, and often I tell them to run with a new idea before someone tells them it is not possible.
Do It Before Someone Tells You It Is Not Possible
In one case, crews working on a well-site completion were looking at ways to reduce maintenance intervals. There were several new leaders I had trained in operational excellence. When someone suggested that perhaps they could start maintenance as soon as a zone was finished (a potential safety hazard), they took a fresh look at the issue. Regulations called for a minimum of 2 layers of valve separation from the wellhead, so that opening up pumps for maintenance might cross that boundary. But if they rigged in a 3rd layer of valves, that would address that safety concern. Therefore they could start with their maintenance sooner and would be ready for the next zone with no need for a maintenance interval at all!
Let me be clear, they were not running with their "gut." They had teams that had already been collecting a lot of data on maintenance times and rig-in times, and they knew that time spent rigging in one more layer of valves would more than make up in time saved in removing maintenance intervals. And yes, the upper management had reservations - it had never been done that way before - but with their metrics and a solid plan, they made a compelling argument. It wasn't just successful - it was transformative. The client, who is at the pinnacle of the industry, had never seen a crew that could run 24 hours a day without maintenance intervals. They were breaking new ground in that industry!
Turning Problems Into Opportunities
The newest leaders, driving high performing behaviors and achieving industry-changing innovation! What some senior leadership might be tempted to look at as a problem turned out to be a huge opportunity. That is what organizational excellence is all about! Performance Leadership -Think About It!
Let me put this out there and see what happens. Recognition "Programs" don't work. Now that a bunch of you have jumped up to shout in protest, especially if you are the ones that authorized the expenditure of funds for these programs, let me explain. Recognition works. Recognition Programs rarely do.
Intention & Timing
What is the difference? Two things; intention and timing. Most "programs" have some form of intent like safety. Safety is the behavior they want to recognize. Yet, I have stood in my fair share of town hall or staff meetings where a safety recognition award was being handed out, literally months after it was achieved. Usually, in that gap between the time it was done and, the time it was given out, another safety "event" occurred, and the clock was reset. Needless to say, the impact is negligible.
Timing is crucial for reinforcing and driving a desired behavior like safety or any other performance-related behavior. A reinforcer (in this case, a simple acknowledgment of a "good job") should happen as close to the desired activity as possible. The further away from the desired behavior, the weaker the reinforcement. It is weak because of extended timing, but it is also weaker because it has to be connected to the specific action (intention). The longer the timeline for recognition, the less clear the desired behavior is in the mind of the person receiving the reinforcement.
Removing the Lag Time
Recognition programs are typically lagging reinforcers, and with longer lag times, the less effective becomes the reinforcement. To really have recognition drive performance, you need two things; you need to know what action you are looking to enforce, and you need to be there to catch them when they are doing it.
Food for thought, who should be the primary reinforcer? More about that in our next blog. Performance Leadership - Think About It!
In the process that I coach for Operational Excellence my favorite phase is when crews start to report and share results from their metrics. Many ask me why it is important to report results from the data the crew is collecting and there are many reasons but two big ones stand out. The first is that the act of reporting results continues to embed "ownership" of those results in the person reporting. Second, and this is particularly true if the group or team are all reporting at once, the reporter gets a clearer picture of how what they do fits into the overall company process and goals. They no longer see their results in isolation but rather as part of the bigger picture.
Boost Employee Engagement
From an engagement perspective, the first point is gold. Getting employees to own their results is a huge leap forward in terms of driving performance. Ramping up engagement beyond the average of 33% will already reap you big rewards that impact your bottom line.
Super Charge Innovation
However, this process gets "super-charged" when reporting happens in the larger team or group setting. A frac group I worked with hit this phase in full stride. Daily meetings went from two minutes to thirty minutes almost overnight. As results were shared members of the group began to make connections between what everyone was doing. Suddenly ideas to improve process or maintenance and downtime started coming out of these meetings. When a job was completed all the crews would meet for a post-frac review and they started developing opportunity lists from the things that had come up during the job. Everything from improvements to safety, processes, maintenance, and communication and even creating new pieces of equipment went on that list. With the support of the data collected within the team front line leadership were able to implement innovative new approaches to each of these areas.
The result was staggering. Performance burst into the 90% plus range and operational costs and times went down. One crew presented a request for a new piece of equipment that they could prove would save the company over $3M in one year alone! The biggest take away was the response of the clients. One client sent their VP of Operations to congratulate these crews on their outstanding performance and how they had been able to add 25% more wells to their completion cycle that year because of it. New clients heard about them and came knocking to sign them up. But the response that the crews valued the most came in the form of an observation made by one of the operations consultants for a client. He said, and I quote, "In over 30 years of work in this industry I have never seen a team operate at such a high level. You guys are absolutely the pointy tip of the spear concerning setting new standards of performance for what you do." High praise coming from an industry veteran - and you know in the "patch" those don't come easily!
Tap Into Your Tribal Knowledge
You better believe that this commentary circulated like wildfire around the crew and they approached every new job with a sense of enthusiasm and vigor. The reality is that there is a lot of useful knowledge (I call it tribal knowledge) circulating around a company. The ability to get your team to develop, track, and report on their metrics and tie that to company goals is key to finding and using that knowledge. Metrics move to tracking, which moves to reporting and on to innovating and developing new metrics, that how this cycle should fit together. Reporting is key to innovation, don't miss out on that part of your Operational Excellence cycle. Performance Leadership - Think About It!
"Hu" The Human Element of Organizational Effectiveness - Helping Your Team Create Meaningful Metrics
In my many years of providing mentoring and consulting I have come to learn one very important fact; The more steps, you require someone to learn in a new process the less likely you are to succeed. Implementing Organizational Effectiveness has a higher chance to succeed if the steps are limited, simple, and easy. Another way to put it is that complexity works against implementation.
What to Measure?
This is usually the first sticking point in the implementation process. Most people will have a hard time describing how what they do contributes to the success of the team or company. Even crew members who operate machinery vital to a process will have a hard time making this connection. Identifying high performing behaviors are a good place to start.
What You Can See And Count
With one crew I worked with there was a lot of specialized machinery and many specialized roles. To keep it simple they came up with measuring how many times maintenance was done each shift by the crews for each piece of equipment. Downtime was a big issue so counting the amount of times maintenance was done seemed a good place to start. Doing maintenance is a behavior that can be seen and counted. The expectation was that maintenance was happening and as it turned out - not so much. However, once they started tracking it they discovered that downtime began to drop. Why? Because tracking that behavior communicated its importance and how it related to the success of the crew. Tracking this behavior elevated it to a higher level of visibility with the crew and helped them grasp that they were accountable for that part of the success of the team.
In one restaurant the manager and staff decided to track smiles at the drive-through window. Their reasoning was that every encounter was an opportunity to boost client satisfaction (one of the restaurant goals). Smiles were recorded as checks on a napkin! (Remember the "simple is best" rule.)
One executive office support group tracked the number of times their client (VP, EVP, CFO, COO or CEO, etc.) asked for material for a meeting that had been set. They took the attitude that it was their job to have all materials prepared and in the hands of their boss before each meeting. They believed that if their boss was not constrained by these delays before meetings they would be more effective for the company. If a boss asked for something then the EA's regarded that as a missed opportunity to serve their client effectively.
With metrics, KPI's, or measures it is the same. The more user-friendly the reporting mechanism the easier it is to implement. How easy you ask? In most cases, it begins with hand-drawn graphs. Once staff, crew, or plant operators have an idea about what they want to measure I get them to make their own graphs to track it from shift to shift. These eventually move to a spreadsheet but the key is that each person creates their own tracking system (graph) that makes sense to them and is easy to input information into. It doesn't have to be high tech.
All that is left then is for you as a leader to allow them to report their results. This could be one on one as you spend time touching base with them. It could be at the start or end of shift meetings or regular staff meetings. Getting staff to report their results ties them clearly to what they are tracking and they "own" it much more quickly. The point is that these things don't need to be complicated. In fact, you should make sure they are not complicated. Once you do these things watch and see how your team will transform. Performance Leadership - Think About It!
Metrics are a powerful tool. As someone who has explored the use of metrics across a wide scope of industries and settings I can tell you that setting the environment for the use of metrics is key to giving them meaning and effectiveness. This is important for two reasons; first, you need the collectors of those metrics to view them as their own. Second, you need to provide a safe place for those metrics to happen.
Your Metrics or Their Metrics
Getting your staff or team to own their metrics is key to giving power to those measures. This is important for a number of reasons; one reason is it creates a linkage between crew or team metrics with the company or unit goals - they see how they contribute to the overall success of the group. When that takes place staff can now see themselves in the larger picture and understand better how they contribute. It also gives them a better sense of "team" where they can communicate better with regard to needs and issues. A good example of this was a group of plant operators who after going through a process review were challenged to come up with key pieces of information that they needed to do their job better. Once everyone knew where they fit into the bigger picture it was easier for them to say "I need x, y, and z from you so that I can be more effective on my shift.” What it translated into was a clear set of expectations and talking points for each cross shift meeting so that better communication enhanced overall performance.
Getting staff to "own" their metrics is the other part of making a metric a tool to drive performance. In one plant two crews took different approaches to this. The Plant Manager wanted more leadership from his floor leaders so that they spent less time "doing" tasks and more time "teaching" tasks. The challenge was presented to the supervisors and each was to come up with solutions. One supervisor went in and told his floor leaders that he wanted them to do more mentoring and he was going to be checking for that on a regular basis. He outlined the need and established a metric that they report back on the number of times they spent showing staff how to do things on each shift. It was hit or miss as the supervisor had to constantly remind his team about the metric but as soon as he left the floor things went back to the old way.
The other supervisor met with her team and brainstormed what a good metric would be for this challenge. They concluded that often the temptation was to do the task for an operator rather than a mentor because it was quicker. Because the floor leaders had been promoted through the ranks it was easy to just fall back into "doing" rather than teaching. They came up with an ingenious metric - bums! Every time a floor leader was spotted "head down and bum up" doing an operator job either a fellow floor leader or operator had the right to call them on it and the tally was totaled at the end of each shift. Because they had come up with this as a team and because it was the floor leader’s idea they really ran with it. Discussions that revolved around this were collegial and non-threatening and soon they were doing way more supervision and mentoring and the crew performance was also on an up curve! On a side note, those floor leaders moved to the front of the line for a promotion as well.
Let's be clear, these were both great crews and leadership but what was the difference? With the first crew the supervisor "owned" the metric and with the second crew the crew "owned" it. It was their idea and they were invested in making sure it succeeded. But what if the supervisors or the plant manager had been a couple of hard-nosed tyrants? Could either of those two scenarios have taken place? The short answer is no.
Making It Safe For Metrics To Work
The single biggest obstacle I face in my work with Operational Excellence is overcoming the residue from toxic work environments. Even when there is complete agreement at all levels about the need for the changes being undertaken it is hard to overcome some of the distrust that has been created in the past. The first question I typically get is "will the management be doing this too?" Asking someone to create and track a measure related to their performance is asking them to take a big risk. They know there will be good days but they also know there will be bad days. What happens on those bad days? Are the measures they are collecting going to be used against them?
In addition to teaching leaders how to get crews to develop their own metrics I also spend a lot of time teaching them how to respond to those metrics. The temptation is always to lead the discussion around a metric and fix whatever issue is at hand - wrong. Getting that crew member to explain their results (good, bad, or otherwise) and getting them to come up with a plan to improve a result is key to their success. If they ask by all means offer input but for the most part, let them report and run with it - that is part of getting them to own it.
When crews take these first steps one of the things leaders will come to me with is "the metric is too soft or too safe", that it doesn't give them the information they need. This is normal and again here is where a certain amount of poise and patience is needed. Crews will figure out on their own that their measure isn't giving them what they need. They will learn that metrics are dynamic. That is to say, they ought to be constantly evaluating in order to adjust to new challenges and needs. In addition, once a safe environment for measuring performance has been established you will find that the next move to fostering "innovation" will be much more seamless. Creating opportunities and potential innovations get easier when they lead with solid data and when they feel safe enough to contribute.
Get Your Metrics To Work For You
Metrics can be a powerful tool. I have seen them transform the way crews perform and in that transformation change entire processes for production. It is not easy and it does involve a time commitment at the front end of the process. However, when everything falls into place you will be amazed and how much of your time is freed up. Metrics don't just have to be a speedometer that measures how fast you are going right now but can be used as a motivator to get crews to aspire to break the next barrier to performance. What do your metrics do right now? Performance Leadership - Think About It!
"Hu" Centered Leadership - When is a metric not just a metric? When it drives performance not just reports it.
I spend a lot of time working with leaders and their teams. We talk a lot about metrics and how to use them and I admit it took me a while to realize that often we were talking about two very different things.
“I do not think that word means what you think it means?” Inigo Montoya – The Princess Bride
Many of my clients come from an engineering background and regard metrics as something that is used to report performance. For example; last month we produced X number of widgets. Or we lost X man-hours last month due to maintenance downtime. These metrics tell a story regarding how a company is doing in terms of things like production, time to market, cost of sales, and so on. All companies have them in one form or another.
But there is another metric that is out there and it may even be the same as the metric you are now using to report performance but that is where the similarities end. The difference is that reporting performance does not drive performance. Let's use the first example to examine this more carefully.
One Metric – Two Purposes
A company may have a metric around production. Last month we produced X number of widgets. If we dive down into this metric we could ask questions like; how many departments had a hand in reaching that production number? In those departments how different people were required to get that part of the product made? If there were bottlenecks where did they occur and why? You get the picture.
Let's be clear, at this point all of these are just subsets of the overarching metric of total production numbers and are still just reporting performance not driving it. The shift to driving performance happens when each of the individual contributors to that process understands how they are contributing to it and whether today's effort was better than the day before. Metrics drive performance when those who contribute to the metric take ownership of their contribution.
We use metrics to drive performance in our everyday lives but strangely enough, we seem to struggle with them at work. Don't believe me? What was the score in the Stampeder football game last weekend? How many medals did Canada get in the last Olympics? What is your golf handicap? What is your bowling average? Are you a better bowler today than you were last time you bowled? How do you know? Metrics. One of my favorite movie scenes involves Billy Crystal as a grandparent attending his grandson's baseball game. He discovers that in that league they don't keep score, there are no outs and every game ends in a tie. Needless to say, he is incredulous and rightfully asks the question; "what is the point?" As humans (Hu) we are wired to respond to metrics this way.
We are all competitive at some level. We respond to that urge naturally and numbers help us gauge how effective we are - they drive performance. To prove it to one front line leader I asked him to simply post a number between 1-10 in the crew room at the end of each shift and not say a word. The first day it was 6 and nobody said anything. The second day it was a 7 and the crew took note of it. On the third day though, he posted a 3 and they went through the roof! How could today be a 3? Hadn't they done the same work as the "7" day, what did they do to warrant a 3? All it took was three days and that metric was already driving performance!
Are You Plugged Into Your Power Source?
That is the power of a metric for driving performance. That leader did not have to take his crew through some pre-planned analysis of what they were doing, good, bad or otherwise, the crew interpreted the numbers to be a performance metric and had already at some base level begun to try and figure out how their boss was arriving at that number. Going up was okay, going down not so much!
Perhaps you are using and collecting metrics and the data around them. Perhaps you have a good handle on what performance looks like at your company. But are you using those metrics to drive performance with your staff? Do they know how they contribute and whether they are improving? If not, why not? Performance Leadership - Think About It!
Operational Excellence is one of those terms that can have a wide variety of meanings depending upon who you speak with. For one group it is about streamlining processes. For another, it is about developing and tracking key operational metrics. And for others, it is about developing an "engaged" workforce that can spot and adjust to necessary changes quickly. I am sure you have your own unique understanding of what operational excellence is and what it means to your group. The fact is that all of these things are correct. Operational excellence is a dynamic blend of organizational design, process improvement, the development and use of metrics, continuous improvement, performance management, and employee engagement. Key though, to all of it is that really great Operational Excellence factors in the Hu (Human Element).
This interesting blend of approaches is indeed dynamic and the unique ratio of each of these elements will reflect your company, it's culture, and what it needs. What is not dynamic and what is not up for interpretation is the purpose of operational excellence. Improving profitability. This can mean "becoming" profitable, increasing your profit margins, ramping up a competitive advantage, increasing client satisfaction, increasing quality - you get it - and the list goes on. All of these goals have their nexus around increasing profits.
Let's look at a couple of examples; one that was pretty straight forward with an immediate outcome. And a second scenario that took a bit more time but with pretty spectacular outcomes as well.
We Need To Free Up Budget Room Now!
Company A was in the advanced stages of implementing operational excellence into its field workforce when it suddenly realized it needed some pretty drastic and immediate savings around its Op-Ex budget. Gains were beginning to come in from the field but this was a bigger and more immediate issue. A team of facilitators was brought in and various components of the company came together to spend the day brainstorming. Breakout rooms were created for teams that had representation from each department that touched production from start to finish. I facilitated one team and had them create a process map from when they came into the picture to when they handed it off. It all went up on one wall and for the first half of the meeting, it was just each department mapping their part of the process. In the second half of the meeting, each group described their process and needs until all had presented. Then the magic happened. For many of them, this was the first time they saw the process in detail from start to finish, and questions and ideas began to percolate and flow. By the end of that session, they had come up with a pretty extensive list of potential operational savings. I won't say that every item was approved but that session generated literally millions of dollars in savings!
Law of Unintended Consequences
Company B wanted to get field operations to learn to use performance metrics to drive day to day activities. For the executive, it was really about developing a more detailed data set to stay in front of needs and issues. We took it a bit further by teaching the frontline leadership to not only get their crews to develop their own metrics but to use those metrics to drive performance and innovation for their teams. In a short span of time crews increased performance by over 40% (based on their own metrics), downtime virtually disappeared and it was not uncommon to have more "perfect days" each month than days with issues. Crew engagement went up and client satisfaction soared! And oh yes, they collected so much valuable data that clients were now coming to them to use it. One of the unintended and pleasant side effects of this improvement was the awarding of several very high-value contracts (over $100M) with clients that only months before were considered well beyond the group's reach!
Necessity is The Mother of Invention
Two different companies, two different applications of operational excellence yet very similar outcomes in terms of impact on profit. Two things I want to make note of is that first of all key in both scenarios' was the involvement and work of the people in the process. The other thing I have come to notice is by the time I get called in the pain is unbearable for these companies. In desperation they look for answers they would not normally have considered. I guess necessity truly is the mother of invention! My question for you is simply this; why wait? Operational excellence is something any company can implement and it works! Performance Leadership - Think About It!
We are living in "interesting" times. Where I live we have been hammered by COVID shutdowns on top of energy unfriendly policies emanating from our nation's capital and an actual downturn in our energy sector. These times have seen victim after victim of the downturn and lockdown. Industry sectors who are used to going through this type of "contraction" every few years see it as just another part of the cycle. Markets go down, people get laid off, markets go up we hire them back. This is the tune everyone sings. But I suspect that this time that tune may be coming to an end, that as we GOT (Game of Thrones) fans are apt to say "winter is coming." There has always been a cost to these things, so in true operational excellence tradition, I am going to lay out some "placeholders" just to give us an idea of what that cost looks like.
The Immediate Cost
There is a lot of research in HR circles around the estimated cost of losing an employee (voluntarily or otherwise). Those numbers are often represented as either loss in months of salary or percent of salary. In the months model, the number most frequently provided is nine. That is to say that it costs the equivalent of nine months' salary to replace someone in that same position. For the percentage model, the numbers range from 15% to over 200% of those positions' salaries to replace them. This is based upon the premise that replacing an EVP is more costly than replacing a manager or geologist. For the sake of this discussion, I decided to opt for both. I figured that nine months' salary is the same as 75% so why not use that as a place holder. It is not 15% but it's not 200% either.
I did some further research and a study done by Hayes Oil and Gas Recruitment a couple of years ago pegged the average O & G salary in Calgary at around $130,000. When we take that number and multiply by 75% and then factor in an example of 300 laid off we get a cost of $29.25M. That is to say, this is what it will cost the company to get these positions back when things turn around. These numbers include things like recruitment, interviews, background checks, on-boarding, and training (assuming they get each hire right the first time around). It also includes lost productivity as it is estimated that workers don't get back up to pre-exit levels of performance for at least six months.
"But wait!" you say what about the savings to the company in terms of wages? Fair question and again using the latest set of layoffs as an example it would mean that our company has saved an average of $39M. Factor out the cost for re-hiring later and that is a net gain of $9.75M. A respectable number to be sure but is it really a net gain?
Decline in Engagement
Research done by Gallup shows that during down cycle periods employee engagement drops from an average of 33% (let that sink in for a second) to somewhere around 28%. This is attributed to low morale created by the loss of coworkers and the uncertainty of the current market. New metrics measuring profit per employee have been conducted and the numbers for this come in at $366k (USD) per employee. Source: Zacks Investment Research. Again for the sake of argument lets assume a straight 1-1 correlation between engagement and profit per employee. That two percent drop in engagement works out to a drop in profit of around $50M/year. Of course, that is a ridiculous number and doesn't factor in things like the current drop in market prices (impacting profit per employee) and so on. So let's drop our number to 0.5 of one percent or one half of one percent. That still works out to a drop in profit of $12.6M. Suddenly that $9.75M savings doesn't seem quite as respectable does it?
Now before all the accountants and CFO's form a lynch mob let me restate, these are only place holders and there is going to be variation between companies and these will be impacted by many factors. The point is they DO tell a story that contraction may not always be the best solution.
Winter is Coming!
Here is the kicker. When markets pick back up companies are going to be confronted with a very different workforce demographic. The "boomers" have decided that this downturn is just the motivation they needed to take that step into retirement and they are now moving out of the workforce in large numbers. As Stats Can reports that rates retirement have already moved from 175,000 per year to over 250,000 per year and that is expected to climb to 400,000 per year shortly. This group takes with them all of that "tribal knowledge" around operations and productivity and they take a large amount of leadership knowledge and experience. The demographics that are following this group the Y'ers, X'ers, Nexters, and Millennials are much smaller, lack that "tribal knowledge" and lack the leadership experience and skillsets.
Rather than ramping back up as anticipated many companies are going to be scrambling to fill those positions with qualified people. It won't be business as usual and companies that are not RIGHT NOW training and preparing their teams to use operational excellence - to do more with less - are going to be ill-equipped to compete. Winter is coming and what are you doing about it? Performance Leadership - Think About It!
This is the next in our series on the "Hu" (Human Element) of Organizational Effectiveness and Leadership.
"The leaders who work most effectively, it seems to me, never say 'I'. They don't think 'I'. They think 'we'; they think 'team'."
Today, in looking at "Hu" centered leadership I want to explore the idea that a good leader will know and utilize the skills found on their team. For some, this is an easy topic and for others, it can be a bit intimidating. It is one of those "mom, apple pie and Hershey bar" type of statements where everyone nods agreement. In practice, though it often is missed either intentionally or for other reasons.
You are not Superman
I have to say that new leaders will often avoid this area as they have come into the role under the false impression that as a leader they must know it all. After all, it is a natural and common mistake as most people will move into leadership for technical expertise, not leadership skills. Validation has come not from what they do as leaders but how they contribute from a technical expertise perspective. Interestingly enough this struggle to let go of one's "expertise" to allow others to use their skills is not new.
Probably the best example I can provide is that of the game of chess. Aside from the pawn the weakest player on the board is the king. What exists on the board are in fact a team (okay army) of players who each have a unique skill (movement). The king doesn't have to do it all and in fact, can't do it all. But an effective chess player knows how to utilize the unique characteristics of each player to further their position in the game. And so it is with a good leader in a business unit, or crew or company.
You may have guessed from the previous pieces of this study that this does require the leader to get to know the skills on their team. Some companies are already getting pretty good at this and certainly, one useful tool is to develop a skills matrix. It will help you identify where there may be gaps in your team's skillsets and will allow you to address those gaps with either training or hiring. However whether the company has something like this or not, it is a good idea to get to know what your team members can contribute.
Look for the gems in the mix
Skills focus is about all your team's strengths which may include hitherto unknown skills (Excel wizard comes to mind) or if they have skills around things like communication, teamwork, detail vs global thinkers, and innovators. Since this series of articles is derived from Gallup's Strengths List suffice it to say that they have an extensive list of skills to explore and it makes for a good team-building exercise. There are other tools out there as well such as Myers-Briggs, Insights, and so on. And while I know that some of these items may be viewed as personality traits they are and can be profound skills as well which in the right circumstances can be used to really help the team meet its goals.
Everyone can contribute
Just a quick example (which is why the Excel wizard sprang to mind) of how that can work. One crew I was working with had developed personal metrics and team metrics but wanted to represent those numbers on something more than hand-drawn charts (which are fine by the way). It turns out that one of the crew, and literally the last person you would have thought of, had a real passion for Excel and volunteered to put a spreadsheet and graphs together for them. It was amazing and not only did wonders for the team but it really boosted that person's level of engagement as well. It was something that he was uniquely skilled at and he "owned" it.
Find your team's skills and be their advocate and encourager concerning developing them further. Train yourself to look for gaps that each individual can fill and let them go for it! Don't know your team's strengths? What are you waiting for? Performance Leadership - Think About It!
This is the next in our series on the "Hu" (Human Element) of Organizational Effectiveness.
With the skill of being purposeful, we see how these talents actually fit together and support one another. If you have created outcomes and are driving your team toward them then being purposeful in prioritizing performance (metrics) instead of succumbing to organizational politics becomes almost second nature. In fact, being purposeful seems far less difficult, and "politics" becomes a non-issue.
Every Company Gets The Performance It Wants
When I talk about politics I use it in the more generic sense and really this could be interchanged with "company culture". Culture or the ethos created by it (politics) is a direct result of what company leadership requires and more importantly what they ignore. This is a powerful principle. For example, a company may give lip service to issues around safety but if they ignore or brush under the carpet safety issues in favor of increased profits they send a clear message to their team about what is really important. In the oil patch, there are companies that make so much money that issues of downtime and productivity are simply not important; the margins are so big. That is until the inevitable downturn hits but by then it's too late. Downtime is accepted and with a wink and a nod the supervisor or operations manager says "well its the oil patch - crap happens!" What that really means is that they don't care or know enough to realize that they could be operating at much higher levels of performance. In this instance, leadership does not have to be purposeful because nothing is being measured and there is more than enough padding in the profit margin to make up for those "little" mistakes. This is the type of "politics" I am referring to in our exploration today.
Purposeful Leaders Are Disrupters
So prevalent is this culture that both client and service provider make allowances for it; that is until someone who is decisive comes in to disrupt the natural order of things. In one case the change was stark. Service crews were working for a client. The daily schedule allowed for an hour of maintenance every four hours or so. Often downtime issues came up during those four hours of run time and when those issues had nothing to do with this service provider, out came the computer games while they waited for whatever issue was to be resolved. That is until one front line leader who was using outcomes to drive his team's performance decided that this was a horrid waste of good time.
Based on the data he was getting from his crew he calculated that there was quite a bit of maintenance that could be accomplished during these interruptions. This was a risk because he could be halfway through maintaining a piece of equipment and they could be called to get back to operations. But because of the input from his crew (the outcomes they had been measuring), he knew exactly how much time was needed and he didn't hesitate to talk to the site manager to confirm the estimated downtime for the issue and communicate to him what he planned to do.
What happened? It turned out the data he had was good and when interruptions happened his crew was prepared and went out to do maintenance. It was close sometimes but they were always ready to roll when the site manager asked them to. Here was the kicker; because they got so good at using these windows of opportunity for maintenance they did not need the scheduled downtime! Of course, the client was pleased as punch, and suddenly what had been the norm (waiting out interruptions playing on the computer) quickly faded away, and a new much more productive norm was put in its place. All because one front line leader made a decision and it paid off.
You Can't Have One Without The Other
It is important here to point out that this leader could never have made that decision if he had not already been driving outcomes with his team. Not only that but he could not have presented his case so effectively to the site manager if he hadn't had the data to back it up. You may want to be purposeful but without the outcomes and metrics, you are just taking chances. This is often where leaders who are purposeful run into issues; upper management is not going to run with your "hunch" when you have nothing to back it up with. So you may be naturally purposeful but you need that assertiveness and drive to outcomes to compliment it. You really can't have one without the other.
You may be reading this and saying to yourself that you want to be purposeful but that the company culture or your boss isn't open to it. Do you have the data to support your position? If not then set about getting it with your team, work with them on driving to those outcomes and just watch and see what happens! Performance Leadership - Think About It!
"Decisiveness is a characteristic of high-performing men and women. Almost any decision is better than no decision at all."
The second leadership skill I want to explore is that of decisiveness. This is not the type of decisiveness that is brash and aggressive but rather a steady, persistent drive toward outcomes. It helps to stop here and explore what I mean by outcomes because depending upon your motivations those outcomes may be somewhat different. If, for example, your outcomes are career advancement and never letting anything "stick to you" those are not the outcomes we are talking about. Or if your outcomes are to keep you and your team safely under the radar so as not to attract unwarranted attention, play it safe, and never stir things up then those are not the outcomes I am speaking about either. The outcomes I am speaking about are the ones you have developed for you and your team that not only align with company KPI's but also go the extra mile to explore ways to improve performance, add to the bottom line, and enhance everyone's experience of being on your team.
You Need to Know
Of course, what this suggests is that you have a clear idea of what outcomes you want. Too often we get the idea that good leadership is about doing your job, making sure your team does their job but really never exploring what goes into making that happen. A good symptom of that type of leadership is the recent phenomenon of companies abandoning their performance review processes. Don't get me wrong, there are many poorly structured performance management processes out there that don't do what they should but the bottom line is that they don't work because many in leadership don't know what they want as outcomes! Thus we find ourselves grasping at straws when it comes time to assess performance.
Job descriptions are not outcomes they are simply a description of the job that person has been hired to do. Outcomes are more about how they do that work, how they contribute to the mission of the group, how they contribute to improving the work they do. For example, a manager of an HSE group had a clear idea of the outcomes she wanted from her team. Their job descriptions were pretty straight forward in terms of ensuring there was compliance with the company HSE policies and that adequate training and onsite supervision were in place. This manager established outcomes that aligned with those aspects of the role and more. She began to require her team to establish their own outcomes such as determining success or failure rates of compliance initiatives in their area and all the reasons around those successes or failures. She had them start to track safety and environmental events both in terms of raw data but also using root cause analysis. And she required them to initiate discussions and training with operations leadership around behavior-based safety compliance that related to the outcomes of those root cause studies.
Keep it Simple
What then were the actual outcomes she drove? Simply this; Was her team counting? Were they counting compliance failures and trends? Were they counting safety and environmental events and trends? How many events had a root cause analysis done? How many recommendations and behavior-based procedural changes were brought forward to operations leadership and how did those changes impact the relevant trends around those issues? She had each of the team tracking and reporting on these things and they knew exactly what they were driving for.
What did she track? Aside from the data provided by her team she tracked how many times she asked for that information when meeting with them at various sites. She tracked how many had performed root cause analysis, how many had suggested procedural changes, and how many had established positive working relationships with the operations leadership. As she shared with me, "It was slow at first but every time they saw me they knew I was going to ask for their numbers and a rundown of what was happening on their site. I knew it was starting to take when I would show up and they already had graphs and information up and ready to show me."
Don't Stop Requiring
Getting her team to drive to the outcomes she wanted is the kind of decisiveness that good leaders practice. She knew what outcomes she wanted, she made sure her team knew as well and that they developed their own outcomes that aligned with her goals. She made sure to hold them all accountable for those things. You might be tempted to think that no-one enjoyed working on her team but nothing was farther from the truth. They knew what was expected of them, they knew where they stood and how they were performing and they loved it. What's more, is they felt that they were no just "doing" their job they were excelling and making a difference.
How is your decisiveness in terms of driving your team's outcomes? Performance Leadership - Think About It!
This is the first in a series of discussions around the core strengths people need to develop as part of becoming a high functioning leader. In focussing on the "Hu" Element in organizations leaders need to acknowledge their humanity and also the humanity of their team. Of course, we all know we are human but do we understand what that means? The list we are going to explore was developed through research conducted by the Gallup organization around what strengths folks need to have to be effective leaders. In fact, Gallup is so compelled by their findings that they have now taken the position that leaders should be hired for these strengths and not necessarily for their technical expertise in that given area. While it may seem radical it has certainly provided food for thought.
The first leadership talent is the ability to motivate others. The power of motivation is something that is found in novels and movies and stories. We love a good story where a leader motivates a group to overcome a challenge. It could be a sports story, a story around a crisis, or just a success story like the ones we find with people like Steve Jobs or Bill Gates. Who hasn't been moved by movies like "Blind Side", "Gandhi" or "Apollo 13"? We are wired to respond to motivation and an effective leader will tap into that natural human aspect on their team.
Create A Compelling Vision or Mission
I can walk into a company or plant and immediately determine those leaders who are not motivating vs those who are. Our words are powerful indicators of one or the other; "don't ask questions, just do your job" vs "that's a good question let me show you how what you are doing is a key part of what we deliver for our clients." Get the difference? I recall one story where a manager in a fast-food restaurant told his drive-through staff to count the number of times they made their clients smile. It was a contest and it worked but it also tied into the much needed positive client experience.
I can think of two very different stories around this. In the first story, a young manager for a crew in an LNG production facility told his team that his goal was to make them the best crew in the plant. They sat down and agreed on a list together about what made a great crew, broke it into pieces for each of the crew, and set them free to do it. The work was no less redundant but the crew went at it with renewed vigor. Even though they were only measuring against their own previous performance soon the word got out and a friendly rivalry began between the crews and everyone's game went up a notch or two (or three!).
In the second story, an office manager struggled with motivating a group of office staff to come together as a team and ramp-up performance. They all did their work but did not seem to work well together. It was a source of frustration until one day a client came into the small office to commend the receptionist on having helped out with a billing issue and left a box of chocolates. Everyone saw it and the manager jumped on the opportunity. She brought the team into the conference room and sat the box of chocolates down in the middle of the table. She commended the receptionist but then asked her to think if there was anyone else that had made her help to this client possible? She didn't even have to think about it because she had needed to pull an archived file and one of the other people on the team got that for her. That team member spoke out about how it was a good thing that the information had been filed properly by another team member who was responsible for that and someone else talked about how the bookkeeper had saved the day as well with timely input on how to deal with the issue. By the time they were done they all realized that each of them in some way had been a part of that success with the client. That was enough for the manager to start to build a mission for that team on being a team and from that point forward things changed.
Clients, Tasks, or Team
Usually building a vision or mission that is compelling is going to involve looking at either how what we do impacts, clients, for the better, how the tasks we do contribute to the overall goals of the company. It could also be how we function as part of a high performing team. Sometimes these things are obvious such as being a doctor or firefighter where the benefit to the client is clear. Or in a manufacturing scenario where your task is part of a series of tasks that all combine to create a product. Sometimes it is simply that your task may not change the world or save a life or build a desk but it means a lot to your fellow workers in because it contributes to their success - no one ever really wants to let the team down. Whatever your situation look for where the best connection to vision is. That is where motivation begins.
Being able to motivate is something that you can learn to do or if you already are doing it, do it better. It is a key strength to have as a leader so ask yourself how is your "motivate" going? Performance Leadership - Think About It?
Appreciation is a wonderful thing: It makes what is excellent in others belong to us as well.
Like the "Practice Random Acts of Kindness" movement this very effective tip is similar in that you need to practice it but it differs in that you absolutely must NOT be "random" about your recognition. If that sounds a bit contrived let me explain.
Where Is Your 90% Being Spent?
In my earlier posts on ramping up the "Hu" human element, we discussed that most leaders spend 90% of their time on 10% of their staff. The issue is that our tendency is to spend a large amount of time focusing on the under-performers. That being the case, the question becomes, what are you doing with that 90% of your staff who are performing at or above expectations? If we are honest while there "may" be the occasional recognition, for the most part with this group "no news is good news." The reality is that "no news is no news" and believe me they know it. This is the group you should be focussing on to drive performance.
Do You Know What You Are Looking For?
Connected with focussing on the performing group is the idea that you should know what you are looking for. What are the behaviors that you want that drive performance? In one case a supervisor wanted his Crew Cabbers (outside leadership) to be instructing and mentoring crews during set up and takedown. It was too easy for them to take over and go "butt up and head down" doing the work that the crew should have been learning and doing. So a rule was implemented that Crew Cabbers were not to be seen doing work but teaching and supervising work. One cold February morning as a crew was setting up the Superintendent looked at me and said "look at that, John (the names have been changed to protect the innocent - lol!) is actually teaching that guy instead of doing it for him!" With that, he went outside and gave "John" a hearty pat on the back and even brought it up later at the leadership meetings. The supervisor knew what he was looking for and so it was easy for him to spot and recognize the behavior he wanted.
It's Non-Random - So Make a List
Of course, it won't just be one behavior it will be several and so you should make a list to be sure you don't miss anything. In one case the head of a corporate group had a list of behaviors in a jar and each morning she would take one out and spend her day looking for that behavior in her group. She had enough behaviors on her list to last a few days and so she made sure she did not use the same item two days in a row. Her group did not know she was doing this but she reported to me what a huge difference it made in their performance and how much more satisfying it was to "hunt" for high performing behavior rather than bad behavior.
Make The Recognition Meaningful And Change It Up
Here is where the other tips can make this part easier. Through your listening, micro-meetings, tracking, and accountability you should have come to know your people pretty well. Make sure your recognition is something they will appreciate and respond positively to. For some a thank you is good enough for others it might be the chance to sit on a committee and for others, a "well done" during a meeting is good enough. The point is "know" your people so that naming someone at a meeting doesn't cause them to want to crawl under the table and disappear. Be creative in how you provide your recognition and don't let it get stale - as good as a "pat on the back" is, after 30 of them, it starts to get old! As well, make sure to provide the recognition as close to the behavior as possible. Waiting to say something during a monthly meeting is too long and it diminishes the effectiveness of the recognition.
Work at these things and you will be amazed at where your employee engagement goes and moreover what it will mean to your bottom line. Performance Leadership - Think About It!