Make It Visible.

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Make It Visible.

We have written often about Goals and Objectives and Management Measures and Key Performance Indicators. And rightly so. It also ties into my management philosophy of Understanding, Acceptance and Commitment. We MUST have clarity, everyone has to Understand what it is we are trying to do, everyone has to ACCEPT that what we are trying to do and that leads to everyone being committed to getting it done. I call that UAK, from my friend Malcolm Phares, who felt it was more memorable that way.

I want to address now the reporting of the progress towards meeting or surpassing the goals, objectives, management measure and key performance indicators.

Some time ago I was on a board of a manufacturing company. They did fusion welding on cylinder heads and line boring and rebuilding of various components as well as resurfacing camshafts and crankshafts. It was a good business. The owner wanted me to see what we could do about improving throughput. We went about the project in the usual manner and had UAK. But what really made a difference was in how we presented the results of everyone’s efforts. We put up graphic and table results every day in the employee break room.

We had a quick team meeting in which we explained what we were going to do and how we were going to collect the data and how we were going to present it to them. I was a little surprised at the level of interest in this reporting approach. There was very little interest.

The first few days, we started at the beginning of a month, there was rather disappointing interest. It started picking up toward the end of the first week. By the time the second week was finished the employees had figured out how their efforts could influence the results. They started trying out different methods to achieve the results, some that worked and some that did not work. But they quickly figured out how to have the maximum results in how they approach their work.

No one told them what to do, they figured it out themselves. I have always said that the employees doing the job know how to do their job better than anyone else. It has always been rather easy for me to explain to employees what is needed and you will be surprised at what comes out of it. This is standard best practice management isn’t it? That sure happened in this example.
By the end of the first month the improved results were very obvious to everyone. No additional spending, no changed written procedures, and no-one standing above every employee pushing them. Just management and supervision helping the employees out when they wanted assistance.

By the end of the first quarter under this program the throughput nearly doubled, open work orders were down by more than 50% and as you can imagine profit increased. The customers had improved results as well. Lower invoices as the times to do the work went down and the invoices were produced within a day of the jobs being completed.
I believe it was simply the reporting of the results. Made the results visible, explain how you get the information and how you produce the results and then just let it go.

If you already are doing this you know what I am talking about. If you don’t what have you got to lose? Try it out you will be surprised by the results.

The Time is NOW.

Attracting and Retaining Employees

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Attracting and Retaining Employees

 

On January 25th 2016 we published the first blog called Memorable Moments. It dealt with my early years and life. It stopped with the line “That was the beginning of the end.” And it was also the end of the beginning of my life.

Hewitt Equipment provided me with a tremendous opportunity. I was hired on a twelve-month contract. My mission was to find and fix what they felt was a problem with the computer system application in use to manage parts inventories. When I found the fix and got it implemented my job was completed unless we both agreed that I should stay.

This was the point at which I was given a gift of learning. A senior partner from Urwick Currie, his name was David Steele, was tasked with teaching me everything I needed to know about inventory management and business systems to manage parts inventories. He spent one day a week, all day, with me and only me. How many people are given that type of opportunity? I received this opportunity because of my university programs majoring in Mathematics and Physics, with minors in Statistics and Computer Science. In the early days of computer applications mathematics was heavily involved. For instance, there was no square root operator in the computer systems at that time. In using Machine Language, COBOL or FORTRAN programming languages, you had to develop a mathematical model to calculate a square root. Without totally boring you there was an error in the formulas used. The number “10” was put into the program instead of “1.” This meant that the Order Quantity for each part put on a stock order was too high by a factor of about 3.17.

I also was given an opportunity to go to Caterpillar in Peoria and meet with the Parts Management (Bob Kirk) and some of the founders of Dealer Data Processing (Larry Noe). We were going to build an interactive model to simulate our parts business under variable order point and order quantity conditions. Both of these men were extremely talented in their fields and took the time to deal with me even though I was only 22. I am told by coworkers at the time that I was a very impatient pushy person. That clearly is a description with which I will disagree. I mention this because of the view that the leadership and team members have about millennials and the younger workers in the Industry. I don’t think they are any different than I was at the same age.

That first six months left me with a hunger for more. I was a new hire. I was given a specific mission, a project if you will. It had clarity, a very clear objective and time line. I was given specialized training, by the consulting firm and Caterpillar experts. I was given a free hand. I had to make a presentation to the executive and make my case and get the changes I wanted to get made approved. I felt that I had a purpose and an important task.

How do we go about attracting and retaining these new employees? These younger workers? They are our future. I think we better figure out what we are going to do and how to get this plan implemented. Don’t you?

The Time is NOW.

The Why and the How

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The Why and the How.

The transition to team management, while still encouraging personal curiosity and initiative, continues to struggle as the usual leadership doesn’t know how to encourage risk taking without contradicting the work of the team. The true story of the ages is that people will take risks when they have less to lose and be risk averse when they have a lot to lose. In his book Leaders Eat Last, Simon Sinek, talks about the “Circle of Safety.”  Within this circle we can say what we want about what we want, as long as it doesn’t get personal, without fear of exposure or consequences.

The German Philosopher Friedrich Nietzsche said “He who has a ‘why’ to life can bear almost any ‘how.’” That is a very powerful statement to me. So, we are confronted with a conundrum: How to encourage individual participation inside a team while at the same time maintaining the health of the team. All of our operational and process challenges exist because we have been rather timid over the past years to tackle changes necessary in a meaningful manner.

We have to have each of our teams understand the rules. Each team member has to understand their responsibilities and job functions. They have to know what has to be done and how to do it. The primary working rules from Lou Holtz, the one-time coach of the Notre Dame football team, are very simple and very clear. Do your best. Do what is right. Honor the Golden Rule.
This about the team goals having supremacy to individual goals. Team success ahead of selfishness. The role of the leaders is to provide protection, cover, to the employees working on their team. The individual team members will have more confidence in doing what is right when they feel trusted by their leaders. And that is a winning position to be in.

The Time is NOW.

Badges, the Computer, and College Everywhere

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Badges, the Computer, and College Everywhere

Last week, we left off with Patrick Suppes and his realization that students learning online were receiving modestly better results than those in the traditional classroom.  This week, we continue with his journey and conclude our discussion.

In 1972 Suppes taught a class on the Introduction to Logic. He created a wholly automated computerized version of the class. He introduced the class on the first day and from that point forward he did not attend any lectures. The students did all their learning in the educational laboratory. Then he computerized his Axiomatic Set Theory course.
This created the important concept in learning science of “transfer” which is the process which people apply patterns and concepts learning in one context to another. Strengthening transfer is the goal of all good education programs.

The next step in this process brings us to Sebastien Thrun. His specialty is Artificial Intelligence. Carnegie Mellon hired Thrun as a professor in 1995 where he also worked on how computer science, statistics and machines interact. In 2003 Stanford hired him back as head of the Artificial Intelligence Laboratory. IN 2005 the pentagon’s Advanced Research Projects Agency held a contest to see who could build a car that used AI to drive itself across treacherous desert terrain. Thrun was part of the team that build the winning Volkswagen SUV. Google hired him to work in its research laboratory while he continued to teach as a tenured professor at Sanford. In 2011 he was viewed as a rock star in Silicon Valley. He gave a TED talk describing how he and his colleagues had built the self-driving car. Afterward Thrun watched an energetic former hedge fund analyst named Salman Khan. Kahn was the creator of the Kahn Academy, famous for instructional videos for elementary and high school students. Thrun thought the same could be done for college.

Thrun worked with Peter Norvig who was Google research director and they created a graduate course called CS221: Introduction to Artificial Intelligence: principles and Techniques. The course consisted of lectures and reading assignments and problems to solve followed by exams to certify what was learned. They put the videos and problems sets and emailed them to members of the global AI community to let them know that anyone could take the course for free. Within two weeks there were 58,000 people signed up for the class. This was when the administration caught wind of what was going on. Then the lawyers got involved. However, a New York Times reported heard about what was happening and wrote a story about the course. Enrollment quickly reached six figures and continued to rise. This was the beginning of the education revolution.

Thrun didn’t start any of this. There were others already doing many of the same things. Notably two professors at the university of Manitoba named George Siemens and Stephen Downes. What Thrun had done was call it a “course.” There were no caveats assigned to it. It was a course. He soon found out that his Stanford students started to take the class like everyone else and they got better grades than when they attended live lectures. BUT Stanford was disrupting the one thing about Stanford that mattered above all else; its name. Thrun gave the students a test to certify what they had learned and that is when Stanford stepped in. Thrun was giving away something for free for which Stanford charged $50,000 a year. The compromise was that Thrun could not issue college credits he could only issue a “Statement of Accomplishment.”

When the university said no to credits Thrun finished out his course and walked away. Then he started Udacity. Another start up aiming at University education online is Coursera. And there will be many more.

The problem is the recognition and the certification. That is why we are working with IACET: the International Association of Continuing Education and Training to obtain certification. This will allow our students to earn CEUs which translate into college credits.

Then Socrates will issue badges along with a “Certificate of Completion.” The badges will represent specific areas of learning: selling, operations, finance and leadership.

The Time is NOW.

Badges, Socrates, and Education Today

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Badges, Socrates, and Education Today

The following comes from a book called The End of College by Kevin Carey which is background information for the internet-based learning environment.

One of the struggles in the changing world of education is the recognition of alternative methods of learning. In each of the traditional Universities and Colleges and Junior Colleges there is a degree. In the vocational or technical school setting there is a “journeyman” standard applied. With the internet-based learning programs none of these are available.

In the book Carey talks about the digital world and how the evidence of learning throughout an individuals’ life will be maintained. “People will control their personal educational identities instead of leaving that crucial information in the hands of organizations acting from selfish interests. To earn a “degree” you had to accumulate credit hours. As Carey says “The creators of the credit hour didn’t mean for it to measure how much students learned. The colleges used it that way anyway.”

Robert Hutchins, of the University of Chicago wrote, “the intellectual progress of the young is determined by the time they have been in attendance, the number of hours that have sat in classes, and the proportion of what they have been told that they can repeat on examinations given by the teachers who told it to them.” Hutchins also predicted that rapid rise in the cost of college and university. He said that the schools would start competing to attract students and would build all manner of facilities that had little to do with learning. He was very outspoken about how the schools operated. He said “You pay no attention to what you teach, indeed to what you investigate. You get great men for your faculty. Their mere presence on the campus inspires, stimulates and exalts. It matters not how inarticulate their teaching or how recondite their researches, they are, as the saying goes, an education in themselves.”

Stephen Joel Trachtenberg, who for a time was the President of George Washington University. He understood something crucial about the University. He understood that “people will pay extra money for the feeling associated with the name brand.”

I want to leave off here today, because there is a lot to digest.  There’s a great deal more to come over these next weeks, as we take a close look at education and learning.

The time is NOW.

Coaching is Critical!

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Coaching is Critical

Leadership, which is a required aspect or skill of management, cannot be done successfully without the leader being a great coach. Being a great coach means that you are a terrific communicator. However, time becomes your enemy. You really will never have enough time to provide pertinent feedback to your direct reports. So how are we supposed to be able to be effective as coaches?

In the world in which we work and live there is too much going on. We are having to constantly upgrade our skills. This is true for us as managers, as well as for our support groups and teams. As a result of the time squeeze and the need to be constantly upgrading skills, sufficient time spent coaching employees is rare. This is an area that has found a good amount of study at Universities and Think Tanks. How do we continue to be able to lead and coach and keep current with skills? Harvard brings us the concept of what they are calling “a connector.”

HR leaders surveyed by Harvard found that they expected Management to spend 36% of their time developing their subordinates, their team members. But a survey within the same organizations with the management found them saying that they spent 9% of their time developing employees. This is a tricky result. More time coaching is not necessarily the answer.

Another survey by Gartner of 7,300 hundred employees and 100 HR managers asked “what are the best mangers doing to develop employees in today’s busy work environment?” They created four different categories of management.

1) Teaching Managers:
Coach based on their own knowledge. This is advice-oriented feedback to employee job performance.

2) Always-on Managers:
Provide continual coaching, it is part of their daily work. This category is typically in alignment with what HR executives think that management should be doing.

3) Connector Managers:
Provide targeted coaching. They constantly are assessing skills and provide specific coaching from the best coaches available. Not necessarily themselves.

4) Cheerleader Managers:
They are supportive. Providing positive feedback and have the employees in charge of their personal development.

The most common type is cheerleaders, which represents 29% of management. While the category representing the least followers was teaching at 22%. The splits are relatively the same.
So, let’s go back to the statement that more time coaching is not necessarily the answer. This survey by Gartner found that “there is very little correlation between time spent coaching and employee performance.” “It is less about quantity than quality.” This is pointing out a stark reality. It is time we start teaching managers how to “COACH.”

As I mentioned last blog we are in the process of creating a coaching class. We are aiming at providing learning on coaching that addresses building trust with team members, tapping into employee potential, creating employee commitment, and actually executing and meeting goals and objectives.

We have referenced the International Coaching Federation (ICF) which has published a set of ethical standards for coaches to build this class. They ask coaches to pledge to do the following

 Show genuine concern for the individuals’ welfare and future.
 Continuously demonstrate personal integrity, honesty and sincerity.
 Keep confidences.

More on that list will come in the weeks and months ahead.

The Time is NOW.

Coaching

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Coaching

We are constantly looking to our clients to help us determine what additional learning classes we should create. We get a lot of very good suggestions.

Recently, I was asked to create selling skills classes for service management and supervision, foremen and customer contact personnel. We are creating those classes now.

Another suggestion from our clients was regarding the management courses we offer. We have taught management and supervision now for over twenty years in the classroom, with webinars and most recently our internet-based classes. However, it was tied to the functions within the department. It was never “pure” management functions. That program is now under development.

Another learning area that was requested of us was coaching and mentoring. We were first approached with the need to help a specific individual with their management skills with their team. Communications skills were specifically requested, as well as leadership and trust. That was matched with another request to assist in the development of a new manager in a new job function.

It is always necessary to make changes in our programs based on what is needed in the “learning arena.” As our industry changes, I adapt as well.

Coaching is the subject I would like to explore more with you this week. Personal success is a common and constant pursuit for talented people, for curious people, for self-motivated individuals. Satisfaction comes form being able to tackle and overcome difficulties in our lives. As John Wooden said we he defined SUCCESS. “Success is the Peace of Mind, which is a direct result of self-satisfaction in knowing that you made the effort to become the best you are capable of becoming.”

I have been telling the story in classrooms and in talks for a long time now about the individual who at sixteen years of age, let’s call him James, is told that they have POTENTIAL. That is a wonderful thing. It holds such promise and hope. Now I would like you to imagine that James is now sixty-six years of age and is still told he has a lot of potential. Shouldn’t the next question be “what have you been doing the past fifty years?”

Coaching is vey personal. It is working with individuals and helping them to reach their potential. A good definition of coaching is that the purpose of coaching is “unleashing or unlocking the potential of another human being.” Perhaps that sounds too overpowering to you. But that is what you do if you are coaching another person. You are helping them become better at what they do.

Gallup surveys everything and coaching is one of the subjects on which they have conducted surveys. Their surveys say that 30% of the people want coaching to help them with “life, purpose, vision, creativity and integrity.” That is a real mouthful, isn’t it?

At the end of the blog last week I stated that “I think we all can do much more in our lives and in our careers.” Sometimes that challenge overwhelms us. Don’t let that happen to you. Take up the challenge. Find a coach: someone you trust, someone you respect and someone who will be honest with you. Then get started. As the US Army commercial says “be all that you can be.”

The Time is NOW.

e-Learning

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e-Learning

Twenty years ago, in 1999, John Chambers, then CEO of CISCO Systems said, “Education over the internet is going to make email usage look like a rounding error.” The renowned Clairmont Professor and business guru thought that “Knowledge has to be improved, challenged, and increased constantly, or it vanishes.”

As those of you who read this blog know we are serious proponents of providing tools for employees whereby they can reach their potential. Learning to me is a lifelong pursuit. You really only start to learn once you leave the structured education system that we have in place. Too many people, however, act as if that is the end of their education.

We are extremely pleased to be in the final stages of certification by the IACET, the International Association of Continuous Education and Training. They have a very rigorous certification process that we have completed and are in the final review process. You will hear more on this in the near future when we get all of the documentation completed.

This is the final step in our platform for training in the Heavy Equipment, Light Industrial, Material Handling, Trailer, and Ground Water Industries with which we are associated. We will be the only certified company in these Industries in the world.

We ran a brief review of our offerings within the past month and it is quite substantial. We currently have around 90 people taking classes on line every day. We have enrolled over 600 people in the past two years. It is starting to take hold.

What we offer is an employee development structure for each job function in the Parts and Service world. We assist dealers and distributors and some manufacturers now in creating a learning path for specific jobs. A career path if you will. We are in the final stages of announcing our “badge” program.

The Physical Universities and Vocational Schools are the only ones who can provide a “parchment” that says University Degree. The internet-based learning world is “not allowed” to offer degrees. We offer and provide badges. In our programs the badges cover; Operations, leadership, Sales, and Finance. Each class earns a badge and after accumulating Badges taking classes there are four levels of achievement; Platinum, Gold, Silver and Bronze. Each student can share their learning results from us with their prospective employers which provides, we believe, a much more complete picture of the knowledge of each individual who has followed our programs.

A study done in 1000 by WR Hambrecht + Co called “Exploring a New Frontier” provided the following list of factors driving e-Learning:

• Rapid obsolescence of knowledge and training
• Internet access if standard at home and at work
• The need for just in time training.
• Technological advances enable interactive and media rich content.
• Efficient means to train a global or national work force
• Increasing bandwidth allowing more streamed content
• Increases in skills gap and demographic changes
• Growing selection of e-learning products and services
• Demand for flexibility for lifelong learning
• New standards to facilitate compatibility, usability of e-learning product
• Wide variety of topics addressing business objectives
• HR, Management, Customer Service and Compliance Topics
• Simple access point and integrated data
• AICC and SCORM standards for inter-operability

I believe that e-Learning is now starting to hit its stride. All of the above points are even more pronounced today.

We are hitting our stride as well:

 We have created our platform – the learning management system
 We have developed the products – over 112 different programs
 We are in the final stage of accreditation – IACET
 We are finalizing the recognition programs with our badges

Now it is time to sell the program and get more people learning on a daily basis.

We highlighted a quote from Peter Drucker at the outset of this blog “knowledge has to be constantly improving or else it vanishes.”

Where are you in your learning?

 Are you reading books and taking classes constantly?
 Or is your knowledge becoming dated and no longer current?

I think we all can do much more in our lives and in our careers. In fact, with the rapid rate of change in the world around us I believe it is absolutely critical for us to continue to learn. What do you think?

The Time is NOW.

People

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People

Nothing is possible in the parts and service business without people. We closed our last post with the fact that we have standards of operations that address the people subject. These are “traditional” standards which are based on traditional operational methods and systems and processes.

But our operations need to be tuned up. Let’s start with productivity. Do you think that with your current structures and personnel levels you will be able to handle the business that will come with increased sales and market share we discussed last time? I submit to you that it will never be achieved if all you do is continue to do what you have always done.

The Industry started in the late 1970s and early 1980s to look at sales per employee as the holy grail of headcount. However, most companies looked at those standards and said to the operational people that they needed to operate at higher and higher sales per employee levels. That the higher the number the better it was.

WRONG.

The truth is that if you do not have enough people to do the job properly the people will decide what is important that needs to get done. What that is to them is satisfying the customer that the yare dealing with at the moment. If there is no time for anything else – such as calling back on backorders or calling out to customers who have not been seen or contacted for some time, or anything else to protect or grow your market share – so be it.

That is exactly what we have today with most parts businesses worldwide.

Is it any wonder that the authorized equipment dealer has a parts market share is in a range of 20% to 40%? Quite frankly they don’t deserve even that much.

Let’s go back to the fundamentals of the numbers of people to employ. Let’s look at financial standards based on the compensation packages offered to employees. This compensation package covers all payroll expenses, sales, wages, commissions, as well as all benefits such as medical, vacation, paid time off, etc.

The following are standards that are normally what I see in best practice dealers.

 Parts < 7%
 Service < 15%

If you are higher than the above measures then you need to focus on innovation. Improve methods, processes, systems and everything you can to achieve the personnel numbers above. The only way you can achieve radical improvements in operational performance is if you get all of your employees involved in the process. If you are lower then you are unable to satisfy the customer needs and need to hire more people. It is that simple.

The Time is NOW.

Innovation and the Challenge

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Innovation and the Challenge

Last week we talked about the challenge in the acquisition and retention of the talented people that you would need over the coming years. We also addressed the challenge of the new partnerships required between businesses and the education system.  Through this partnership, we can fill the learning to employment chasm.

Now I would like to turn to where we have more direct control: Innovation.

This year we are seeing rapid and healthy capital spending by business across the country. This is the precursor to improvements in productivity in the workforce which will lead to higher wages.  These are all good things.

However, what are YOU doing to innovate your way to higher productivity?

Let’s quickly review some high-performance benchmarks for parts and service.

Parts & Service Sales > 40% of Total Dealer Sales.

No matter what you think, you can achieve this level of sales IF you achieve higher market share numbers. BUT that will not be easy. It will not be achieved if all you do is continue to do what you have always done.  You would do well to remember the definition of insanity here, as I reference it so often: continuing to do what you have always done, while expecting a different result.

Some key steps to achieving higher market share:

 Obtain complete accurate machine ownership lists.
 Segment your marketplace.
 Establish a market coverage strategy.
 Assign customers to external and internal sales teams; in the filed and on the telephone.
 Train your market coverage personnel in territory management.
 Establish specific objectives for purchases for each of your assigned customers.

THEN YOU NEED TO MAKE IT HAPPEN.

Operations need to be tuned up as well. Let’s start with productivity. Do you think that with your current structures and personnel levels you will be able to handle the business that will come with the above action steps? No matter what you think you can achieve this level of sales It will never be achieved if all you do is continue to do what you have always done.

We need to attack the structures. So, let’s go back to our fundamental question:

WHAT DOES IT LOOK LIKE WHEN IT IS RIGHT?

To start with all parts and service sales prices are at retail customer price for the following benchmarks. No, you don’t need to change how you price things, although that would be the right thing to do, you can simply do the arithmetic.

To operate at high levels of productivity requires the following benchmarks be achiever. Personnel Costs as a percentage of Sales Revenue.

Parts < 7%
Service < 15%

The above two measures will lead to sales per employee numbers. If you are higher than the above measures then you need to focus on innovation. Improve methods, processes, systems and everything you can to achieve the personnel numbers above. The only way you can achieve radical improvements in operational performance is if you get all of your employees involved in the process.

Remember: Understanding, Acceptance and then Commitment.

More on that next time.

The Time is NOW.