Friday, January 29, 2010

Performance: The Test of Management

"Achievement rather than knowledge remains both the proof and aim of management" Peter F. Drucker

Action: Which of your management practices have yielded good results? Which practices should you abandon now? Peter F. Drucker


It's still nice in the Bahamas. What do you think about that iPad? Pretty cool, but No camera? Common!!! Skype is a key management tool, without the camera, well I don't know, for $829 (that's what the 64MB will cost). I think it's a big mistake.

Anyways, Achieve... I have a great story on this issue.

A global shipper of packages asked why they were not achieving higher productivity improvements through their ground stations after having hired a team of 80 (or so) industrial engineers, who had already produced reims of "knowledge" about how to speed up the flow of incoming and outgoing packages. They had studies coming out the wazoo on how to improve productivity. Still, over the months, nothing was changing... no improvement. Sure, there were some localized improvements, but they were just drops on the proverbial hot stone when one saw the overall potential, clearly.

The least productive ground station managers, when asked, usually had the same type of answer: "My facility is different than the other facilities in my division". The potential for cost reduction per package was significant (mid 9 figures per year), not to speak of the capital cost avoidance, and increased revenue impacts... this was BIG stuff on a strategic level. And still month after month, the same players in each division made their excuses, and darn it, they were different to other stations in their division.

The dam finally cracked when there was a suggestion to see if one could group "like" stations across divisions throughout the world. Bingo! No, not that easy. In order to 'achieve', they had to struggle long and hard, through the classification, politics and turf. Finally, transparent, data visible every 1st of the Month was published by station class to all Divisions, without comment or 'drumroll', and the miracle started to happen. The station managers at the bottom of the ranking became real visible, prompting calls from their Division GM's (why are 'we' looking so bad?), and this time the standard answer was no longer acceptable. And word also spread, that the top ranked were also receiving attention from Division VP's, of the congratulatory kind.

The dam broke, when top and bottom ranked station managers started calling each other to discuss how to help and get help: Peer to Peer! Soon the demand for the Industrial Engineers cranked up, and they became real busy. Soon the program was passing the standard of best in-house station to who could become best in class (against all competitors), and the program began to conclude (and deliver huge benefits) when station managers were given the challenge of becoming the ruthless competitor. Not ethically ruthless, but ruthless about anything that slowed them down.

Interestingly, throughout this time, there was only one VP who lost his job because of the changes. The guy who actively/vocally politicked against the comparison across divisions... which was the real innovation in a "turf" sensitive organization.

The example illustrates that it is not sufficient to "know" what is wrong. Management's duty is to actually make the changes necessary to achieve the results, as I think Dr. Drucker urges us to do.

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