Management in a Data Guided Business - Keys to Success
I recently had the pleasure of attending an HR conference and getting to speak to some of the most brilliant minds in the space on topics from equality, to management in a business setting.
At one point I asked the group how they felt their managers (both their direct ones and the ones they worked with) handled the usage of data to evaluate their subordinates. I was greeted to a number of iffy responses and some who replied that it was something they would like to see more of. But the one that got under my skin the most was that “managing using data is cold".
Well buckle up, because that thought right there deserves a blog!
A Data First Approach
The first major hurdle that we as managers need to overcome is the notion that relationship management and performance metrics are separate thoughts and unrelated. Today's world is an interconnected one, populated by data points in everything we do. From ordering a coffee, to doing our online banking. In today's world your relationships are sometimes managed by the likes and comments on social media. So for us to think that metrics and relationships are separate is an antique concept.
In fact I have found that many employees desire a clear and transparent list that insures everyone involved in their growth is on the same page of where they are currently and where they want to be. That takes metrics. That takes clear route planning, and it takes strong communication.
Sounds easy right? Yea, I didn't think so. Luckily Keyence has adopted a Data First approach to management and when you break it down to it's simplest components it is quite manageable.
Set No More Than Three Goals
Let's consider for a moment a social media app on your young employees phone. How many "tasks" are available to them when it comes to interacting with their world and tracking their “trendiness"? While each app may have different words for them, most follow the same number of metrics that you can interact with. Likes, shares, and comments. Three different values.
This is a fundamental aspect of human psychology that we react best to no more than three tasks or goals at a time. We can multitask a little, but we aren't machines.
Set no more than three goals? Well that's simple.
Oh, I laugh at your naivety.
As business leaders we often have a hundred different things we want to achieve. I once spoke with a colleague who was trying to figure out the best way to incentive his sales team. “What are the metrics that they are told to hit?" I asked him. He proceeded to show me a list of the sales teams “Critical KPIs". It had 31 metrics on it.
We may want to tell an employee, for example, that their primary metrics for evaluation is number of orders processed per hour. But then don't forget that you also need to keep your corporate credit card offer percentage high, and your cash register error rate needs to be below this threshold, and we are running the promotion for most warranties sold, and we want to collect donations for Make A Wish this week, and don't forget to remind customers about the survey at the bottom of the receipt....(and I wish I was making this all up, hit up almost any big box store and you will see first hand the issues of metric overload).
As a manager you need to look at each employee and take an honest approach on the question of, “If I can only insure you do three things, what three things are most absolutely critical to the success or failure of our business?"
Set Pass, Fail, and Over Achieve Goals
Let me ask you a question, have you ever encountered someone who thought their own worth was higher than you valued it at? If you said no to this question then you may skip the rest of this article, go write a book on your strategies and retire to Tahiti.
Why does this issue come up? Well it's because everyone values their work through different lenses. So how does the modern digital world handle this? With stretch goals. Crowdfunding company Kickstarter has proven how addictive stretch goals can be not only for motivating people but also for metricing their success. Yet often we only give employees one value as a target (Or worse, none at all). We tell them that their goal is to load X number of boxes today. So when they load just 20 less than the 200 boxes you asked for, is that really that far off from what you asked? Now consider you told them that loading 200 boxes is their goal for the day, but 220 is an over achievement. You have now set a very specific identifiable value for what excellence looks like. And it's just 10% more. So if getting 20 boxes more per day than the goal is considered "Over achievement"...what does my 20 boxes under make me? Wow...that last 20 boxes is suddenly worth a lot more in their eyes. In addition you now have a line in the sand as to what is overachieving. When they come in asking for that raise you both understand who consistently is hitting what you consider over achieving.
But what if all of my employees hit the over achiever status?! I can't promote them all! Well two things. First off, congratulations on having a rock star team. But secondly you need to re-evaluate how you set your goals. Especially that over achieve mark. But we will talk more about how to mathematically set those goals in another article.
All Goals Should be Visible
And I mean ALL the time. In today's data age dashboards are something that are just an assumed part of getting things done. If you turn on the TV and watch a ball game you will see player stats on the screen or at least team stats. If you look at your car you have multiple metrics from RPMs to MPG, heck most phones will display a dashboard of your data usage if you just swipe down and right. Visibly accessible data is how we make decisions, and the same goes for managing our employees. If we set a goal for them,make sure it is visible to them and traceable.
“Insure you give great customer service", this is a horrible goal. Now only does it not have a pass/fail/over achieve line to it, but how do you expect to display this to your employee? “Insure you get a 4.2 star rating with all customer interactions, 4.6 star makes you an all-star". This is a better goal, but if you intend to use this as your metric then you had better provide your employee with the ability to check the customer satisfaction scores..and at anytime.
Luckily this is easier than ever. Almost all data sources from Cash Registers to CRM software's have the ability to be interconnected. And data dashboarding software's have never been easier to use.
Celebrate Small Victories
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In today's society we have programmed ourselves to seek out small tasks that result in small rewards. We wear fitness watches that vibrate when we hit our daily move goal, and post pictures of the less than perfect panini we made, just to get a few smiley faces. With a digital culture we have literally wired ourselves to seek these opportunities out. All too often goals for employees are set and then evaluated at the end of year or half when we have their review.“So I looked at your order accuracy numbers and it looks like you came in just under the expectation"
YUCK. First of all, this shouldn't be the first time EITHER of you is seeing this stat. If it is go back to the "All goals should be visible" section and reread it. Secondly, a metric is only valuable to your employee if there is a benefit to hitting it. If someone crushes it month one, but won't see a benefit from that for 5 more months (or worse) then what motivation is there to crush it again next month? Just before reviews come up, all the focus goes to getting the scores up, but by then it may simply be too late. This is why it is critical to celebrate the small victories. It doesn't have to be much, a simple high five or a word of praise. Taking a second to point out how well someone did goes a long way and takes seconds to do. Take any goal that you want to assign to your people and split it into the smallest metric possible. Don't set a yearly sales goal. There is a reason we break them down monthly. And when a goal is hit, recognize that. This way there is an incentive to keep hitting.
Data Guided Management is a Journey
As our workforce continues to get younger and data becomes more and more a part of their everyday lives, the expectations will continue to grow for us as managers to be able to communicate to them in a language that they understand. Our current generation of employees wants to have firm and well defined goals for their success and career growth. They want to know the plan for them into the future and they want to know how to achieve that. They want to see their work celebrated, regardless if it is something big like launching a product or just submitting that monthly report a day early. They want to go into reviews not stressing over what the results will be, but excited to talk about an action plan for how to improve.
Here at Keyence we have spent the last 40+ years focused on being a data guided business and that includes managing our employees with data, setting realistic goals, and constant viability of metrics. Want to learn more? Download the 3 Key Features brochure or contact us to start the conversation!
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