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Motivating your Team with Numbers
By Wayne Kurzen, Master Business Coach, ActionCOACH
Online Article can be reviewed here.
Patrick Lencioni, in his best seller, “Three Signs of a Miserable Job,” identifies three factors that “de-motivate” employees. These three include: 1) Anonymity (nobody really cares about me); 2) Irrelevance (my work doesn’t matter); and 3) Immeasurability (I don’t know when I am really doing a good job.
The third cause, immeasurability, may surprise you! Do employees really want to be measured against a standard? Employees at all levels want to have their work count and “measure up” – they want to know where the finish line is. It has been proven that one of the best ways to drive productivity is to measure and publically report individual performance. The competitive nature and peer pressure motivates people to do better.
One company stands out in demonstrating that measuring and highlighting “metrics” or “Key Performance Indicators (KPIs)” produces consistently outstanding productivity.
Pierce Distribution Services Company of Loves Park, IL, is a “third party logistics” (3PL) company.
As a 3PL, they handle the warehousing, packaging, shipping, and return merchandise for major manufactures like Navistar (formerly International Truck), Komatsu and Gehl.
Operating out of nine locations, Pierce Distribution provides industry-leading international services which are fast and nearly free of errors! They have accomplished this feat through innovative and consistently applied employee incentive programs designed to measure and report individual performance.
Kevin Hogan, CEO of Pierce Distribution, has created a culture of “urgency” by tracking, analyzing and highlighting not only individual Key Performance Indicators (KPIs) but also KPIs of the various sites within the company. His nine site managers operate as entrepreneurs with their own profit and loss statements. Bottom line, internal and external error rates, timely responses to customers are meticulously tracked and reported. Hogan often takes the contractually agreed upon KPIs and makes them even more challenging, thereby introducing additional departmental and individual incentives to achieve more.
John Bednar, one of Pierce Distribution’s nine site mangers, implemented this incentive by producing “dashboards” which publish daily KPIs - graphic displays of the status and trends of various elements of performance. His office walls are covered with these dashboard charts and displays. Bednar has also taken the concept of dashboards to every level of supervision. Walking through the warehouse, at every functional area, one finds graphs and charts displaying current and historical data in easy to interpret dashboard or graphic displays of performance. The dashboards use a color code to highlight the relationship of the results as compared to the benchmarks -- red - unsatisfactory, yellow - marginal, green - on target, and dark green - above the benchmark.
Two of the most important KPIs are error rates and productivity. Error rates at Pierce Distribution are measured both internally and externally. In general, internal errors are self-identified by the Pierce Distribution team through a system of internal cross-checks at each phase of the process. External errors are those which occur once the product has left the warehouse and must be tracked and managed on an individual basis. Tracking and identifying the causes of external errors and implementing necessary changes and improvements are key factors in successfully supporting each client.
Productivity at Pierce Distribution is measured by “lines per hour.” All operational activities are displayed on computer printouts where each part is represented by a computer “line.” Company reports reflect the lines per hour completed, right down to each individual employees packing, shipping, receiving and restocking of parts. So each employee is measured by the lines per hour they handle.
One key to effectively using KPIs is to utilize “balancing” KPIs to ensure accuracy. With a focus on output (lines per hour) alone, without an equal focus on error rates, it would be natural for accuracy to suffer. Conversely, focusing only on error rates would cause needless double checking and production would fall off. The system used at Pierce Distribution automatically reports both lines per hour and error rates. Managers and supervisors constantly monitor and display dashboards reflecting these factors and other performance related KPIs.
Supervisors eager to meet and exceed “lines per hour” benchmarks make decisions which will keep their departmental lines per hour high. If shipping demands are low, shipping supervisors will contact other functional areas and offer to transfer some of their people to those areas with higher demands. Instead of “hoarding” people, supervisors want to get the most done with the fewest people. In this way, overall teamwork is enhanced through individual competition – and productivity soars.
The final implementation of KPIs to drive performance is daily meetings – short, stand-up huddles lasting about 10 minutes – during which team members report on their priorities, daily KPIs and challenges - where they are “stuck.” These daily huddles serve to synchronize the teams with company priorities and create the culture of urgency which ultimately drives productivity.
The most important benefit of increased productivity is happier, more loyal employees. At all levels, as his individual performance is measured and reported, each “associate” (Pierce Distribution employee) feels his contribution is recognized. He is motivated to have his performance count for more because his job feels more “relevant.” He gains the satisfaction of being part of a winning “team.”
Imagine YOUR company employees constantly thinking about how to get more done, more efficiently.
For information on how to drive performance with numbers in your company, contact Wayne Kurzen at 678-362-7734 or waynekurzen@actioncoach.com.
Wayne Kurzen is a Master Business Coach with ActionCOACH where he has been selected among over 1,000 worldwide ActionCOACHes as North America Coach of the Year (in his category). He is also one of 70 Gazelles Growth Coaches worldwide…qualified to teach the “best practices” of the leading mid-sized businesses in the world. He specializes in helping business owners and executive staffs grow greater profits, enjoy more personal time, and increase team productivity.
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