By: Larry Fish, President
I still remember those words. He was a mentor of sorts to me. He was long-winded and intellectual, and many times when I went to discuss things with him, he stole my agenda and turned it into another one of his lessons in life. “If you can’t measure it, you can’t manage it,” he said. He was right. It took me a while to digest all this and put it into practice, but once I did, it made a lot of sense.
Recently, I saw a perfect illustration of these words during a GreenSearch client visit. Several months ago, we had helped this company install an incentive plan. As a follow up to the plan implementation, I was asked to sit in on one of their regular monthly operations meetings to observe the progress they were making with this new management tool. All of the key managers were present, and each was presented with a crisply prepared summary of the financial performance for both the previous month as well as the year to date.
Follow the Trends
The information presented showed trend information including actual versus budget in each of the key categories that were being tracked. There was a comparison to the prior year’s performance during the same period as well. One did not have to be a CPA to figure it out. The company’s owner, who chaired the meeting, went through the numbers and briefly discussed them. There was neither finger pointing nor unwarranted celebration. It was a straightforward report card on a successful company whose business was challenged by weather, seasonal cycles and the services it offered its customers. The difference was that this information was distilled into a few important financial “drivers” and was shared with those whose decisions most affected the results.
I listened to the comments from the folks around the table. They all knew that the results they achieved during the first half of the year would be difficult to duplicate during the second half. Several questions were asked about some of the numbers and then the discussion turned to problem solving. The owner encouraged them to think about the coming spring and summer months and how they might continue to produce the results they were presently enjoying. Ideas that might have been considered “off the wall” as well as those that were feasible, but lacked champions to make them happen, began to surface.
It was clear that tracking and communicating results made what had to be done very clear to everyone around that table. Quickly, the group changed from looking at the numbers (measurement) to what do we have to do to keep these trends going (management).
Combining management and measurement is not always an easy thing to do. It requires a change in one’s attitude and approach to things. It requires a willingness to be measured and accept the kudos for a job well done and answer the tough questions when it isn’t. It’s not for the thin skinned, however management and measurement bring another dimension to a company. They demonstrate the value of how important it is to communicate with, involve and reward people who produce or exceed agreed upon results. They illustrate performance levels and the potential that a company has to improve on them. They provide instant and regular feedback on people’s efforts and decisions.
The value of a reward for a clearly defined result is invaluable. Everyone wants to believe that his or her contributions count for something. Too many companies fail to track and measure important results that they want their people to produce. The end result is a hazy definition of what is expected and what will be rewarded.
The lesson is clear – – if you want to ensure good management, measure its results. Next time you have an operations meeting in your company, bring an extra chair for measurement to sit at the table with you. He knows his stuff!
To learn more about linking management and measurement into your business, call GreenSearch at 1-888-375-7787 or email us email@example.com