Everyone in your organization should have at least one number. One of the components of “The Entrepreneurial Operating System”, based on the book “Traction” by Gino Wickman, is that every person in an organization should have at least one goal they are expected to hit. That goal should not be vague or conceptual…it should be a number.
There is a classic story about Charles Schwab, who grew Bethlehem Steel to be the largest independent steel producer in the world. The story goes that he was frustrated with one of his mills because it was underperforming, even though it was run by one of his most capable managers. The manager had tried everything in his arsenal to increase production, but was just as frustrated as Schwab.
One evening, just before the day shift ended and the night shift came on duty, Schwab and the manager were walking through the mill discussing the issue when Schwab stopped beside one of furnaces and asked the workman there how many batches of refined steel his shift had produced, to which the workman replied “6”. Schwab took a piece of chalk and wrote the number “6” right on the floor next to the furnace, then continued on his way. When the night shift arrived they asked the workman why the number “6” was written on the floor and the workman explained what had happened…that the big boss had come by, asked him how many batches they had produced, and wrote the number on the floor.
The next morning, the number “6” had been rubbed out and a big ”7” had been written in its place. The night shift had thrown down the gauntlet! That night the number “7” had been rubbed out and the number “10” had been written in its place. The competition had begun! It went on until the mill, which had previously been the poorest performer in the company, was turning out more steel than any other mill.
This story illustrates the power of having a number. We all know this works with sales people, who all have a quota. They know that if they hit their quota good things will happen and if they don’t hit it bad things will happen. Don’t hit it too many times and very bad things will happen! Most businesses don’t extend this logic to other areas of the company. Many just don’t think about assigning everyone a number. Others think about it, but can’t quite figure out what the right number for everyone should be. I say, “Get over it”! There should be a way of measuring everyone in the organization, from the receptionist (percentage of calls answered before the caller goes to the general voice mailbox) to the bookkeeper (financial statements produced within 5 days of the end of the month) to the janitor (number of times the restrooms are mopped each day).
To establish the numbers, you need to get creative and involve the employee. Many times the employee can come up with his/her own measurement if you can’t – just make sure it supports the desired behavior and supports the goals of the organization.
If the employee chronically misses their number, it sets up a meaningful discussion about why. Is it a performance issue? Is the goal realistic? Is the job bigger than one person can handle? Do other conflicting priorities and goals prevent the achievement of the goal? Is there a dependency on another person that prevents the employee from achieving the goal? This discussion leads to a learning opportunity for both you and the employee.
Don’t worry if the first attempt at a number for someone doesn’t work out. This will come out in the discussions with the employee. If one number doesn’t work out, try another one, then another one, then another one until you get a measurement that:
– Is meaningful, in terms of driving the desired behavior
– Supports the goals of the organization.
– Is understood by the employee
– Is controllable by the employee
Once you get the right numbers in place for everyone in the organization, you will find that everyone is working on the right things and that everyone is performing at an appropriate level. What would that mean to your business?
For more information on “The Entrepreneurial Operating System”, go to www.thecenter4growth.com.