Essays in Operational Excellence - The Metrics and Talent Loop

“You can't improve what you don't measure.” This quote often attributed to?Peter Drucker, is one most people in the operational excellence world have used at least once. Companies have used this to identify and articulate productivity improvements over the years. This has led to the operational performance being measured in terms of metrics to the continued evolution as KPI, OKRs etc.?

There is however a larger connection between operational metrics to the overall behavior within an organization which has an impact on the culture, people, and cost of operations.?

Lack of measurement: I have worked with companies where the day-to-day operational metrics can take weeks to collate. By then, the customer needs have changed, the business reality has been impacted and you are left trying to solve a problem that has shifted from its initial dimension. We have all heard the excuses – ‘it is not the right time’; ‘our systems don’t help us with it’; ‘our people do not have the time’; or ‘our leaders don’t look at the metrics' (which is a topic for another day). Every day is a good time to start measuring progress. It does not have to be a perfect solution, however, must reflect the ground reality. Volume, turnaround time, and throughput are great sets of metrics to start with to gather baseline performance.?

Lack of alignment to strategy: The lack of measurement results in a lack of clarity and alignment toward the overall strategy at all levels. This impacts the work product generated by individual team members, impacts overall productivity, creates confusion within operations, and impacts customer delivery due to delayed decision-making. The team members have no clarity on what success looks like for their roles or job responsibilities. This also leads to variation in the output by individual team members. Given there is no system to measure this, it can impact the morale of the team due to inequitable distribution of work and/or credit.

Lack of growth and development: Measurement of performance is an important aspect of growth and development of individuals within an organization. It can be as stringent as what GE did or as amorphous as what companies have adopted in recent times. How do I know I am doing better than yesterday? How do I compare with my peers? When I do well what does growth look like for me? All these questions have a foundational need for operational metrics tied to performance. I have worked with multiple teams where growth is seen as a vertical factor and lateral growth is not the most exciting aspect for them. If you are looking to be a well-rounded professional, it’s always great to jump at the opportunity for lateral exposure as much as vertical growth. This is a great way to challenge your areas of strength and surmount your areas of weakness. A well-defined career path helps employee experience as much as enhances the achievement of organizational goals. As @Richard Branson says: “Clients do not come first.?Employees come first.?If you take care of your employees, they will take care of the clients.”

Loss of talent/ knowledge: An employee who has clarity about their contribution to the organization’s mission and vision while achieving their personal goals and objectives is a motivated employee. We live in a new world where work experience is a two-way street. There is no more blind loyalty to a brand or mission. In this space, when the goals and objectives of the employee’s mission statement are aligned with the organizational mission statement, it can create magic for clients and customers. In the event organizations fail to do so, there is a greater risk of knowledge and talent drain. One of the key metrics I learned in GE was “Cost of Turnover”, which includes the cost of recruitment to fill the vacant position + onboarding & orientation costs + the productivity ramp-up cost and Gallup has estimated that this costs an?organization approximately $3,400 for every $10,000 of salary, or 34%. This is exacerbated in niche industries with minimal documented knowledge management resources and retention of business processes through tribal knowledge.?If organizations are not disciplined about key metrics, these factors may also go unnoticed which then feeds the vicious cycle further.?

While there is always a reason to not start measuring the operational metrics, there is a lot to consider regarding the repercussions – not only towards daily operations, transparency, and visibility, but also towards the employee morale that can propel the organization to achieve greater heights.

#operationalexcellence #metricsandmeasurement #employeemorale #talentmanagement