Trindent

SMART EXPECTATION SETTING – CLEAR GOALS FOR ORGANIZATIONS

Use SMART for Expectation Setting

SMART is an acronym commonly used in businesses for setting goals. While goals are great, Trindent focuses on achieving results through active management at the point of execution. That is, we work with clients to instill a continuous practice of clear expectation setting between managers and employees over short time horizons that eventually add up to achieving the business goals.

There are a few variations of what SMART stands for, but we use the following:

S – Specific
M – Measurable
A – Achievable
R – Results Oriented
T – Time Bound

Trindent works with supervisors and managers to use this acronym every time they ask an employee to do something. We believe that the best way to get the most out of employees is to have totally clear and complete communication with them. By covering off each of the five letters in SMART, managers can reasonably assume that the expectation they set with their employees will be understood clearly and completely.

Management direction that is specific allows for clarity and agreement between the manager and employee on what work will need to be completed. This step is often overlooked, and can be the cause of frustration especially for employees who work on relatively similar activities throughout each day.

Next, creating direction that is measurable allows for an objective evaluation of progress. That is, if an employee is asked to “do a few” could do two and feel that they have satisfied the manager’s request while asking an employee to “do 10” leaves no question as to how many are expected.

Ensuring that direction is “achievable” is often less discreet then setting a specific and measurable outcome, however strong managers make this just as simple and practical. For example they might move this to the last portion of the direction and add a simple question, “do you think you can accomplish this?”

Results oriented is generally the most nebulous portion of SMART expectation setting, but can yield the greatest results for a manager long term. Setting “results oriented” expectations refers to explaining the underlying need of the expectation to the employee so as to create an understanding of the intent or
importance. Managers can most effectively communicate the results orientation of any expectation by adding “so that…” or “because…” to the end of the task. This especially pays off when setting expectations of employees to complete tasks that are otherwise outside that employee’s normal responsibilities.

Finally, the simplest way to specify a completion target is to set a specific day and time to have the task completed by. Strong managers use this hand in hand with the Specific step to come to an agreement on the format of the output as well as the timing and mode to be used to verify completion. For example, “put a copy of the completed purchase order on my desk before you leave Monday evening.”

Going through each of these points one by one will seem excessive or feel like micro-managing at first. However, with a little practice – usually diligent use for a week – managers AND employees will begin to rely on the clarity and completeness of the direction. Furthermore, managers will realize that they now can work specifically with employees who fail to meet the expectations. The manager can identify which of the 5 aspects of the expectation (S, M, A, R, or T) were not clear, and effectively reset the expectation based on the missed aspect.

SIMPLE TRAINING – STEPS YOUR BUSINESS CAN TAKE TODAY

Working with our clients across many industries, one of their most common perceptions is that the source of their challenges lies in an under skilled workforce. We hear comments like, “we don’t have the skills in the team right now,” or “we have one or two top performers that carry the team.”

More striking than our clients’ perceptions that their workforce is under-skilled is their own difficulties in initiating a fast moving, practical training plan. While Trindent never claims to be an HR consultancy or have core competencies in skill development, we have developed a method to help our clients more clearly identify their skill gaps and begin closing those gaps – fast.

Before outlining the steps we work through with our clients to kick-start a training program, we should also note that the most common barrier our clients face is the idea that the skills gaps are insurmountable, or will require years of effort and a revolutionized hiring process to overcome.
In short, not only do we disagree, but we think you can start closing the gaps today.

First - Create a Skills Matrix

The first step is to stop thinking of “skills” and begin thinking about what your business needs – people to complete activities effectively. Skills are the underlying ability, but if you think about the activities that need to be performed, it is easier to identify weaknesses that can be addressed. For example, the general “customer service skills” does not lend to specific activities required by the business, but “explain product features to customers over the phone” pinpoints a specific piece of “customer service skills.”
Once you have created a list of activities for a team, match them in a matrix layout with all of the employees who are on the team. Then quickly evaluate each employee and their capability in completing each activity. Best practices use the following scale:

3 = expert,
2 = capable,
1 = incapable,
and [blank] = Not Applicable.

Many managers get stuck here, unwilling or hesitant to evaluate employees without an objective measure. At this stage it is important to remember that this tool can remain confidential and is going to be used to create a training plan, not assess compensation or other sensitive topics. A manager should be able to fill out the matrix by their own subjective measure very quickly.
Here is an example illustrating a filled out Skills Matrix for a Customer Service department:

Second – Identify Gaps

Focusing on activities rather than nebulous skills, and using this simple ranking scale gives you an easy way to identify specific activity gaps. In the simplest approach, take a quick look at the averages to identify the weakest employee breadth averages or the weakest activity depth averages.
Often though, our clients quickly recognize that not all activities are equally important. Going back to the example, perhaps failures in entering customer information into Order System has led to a rash of recent complaints and is more critical than upsell customer on “Widget Warranty.” Or looking at it on the employee side, Paul was hired to quickly become a CS Supervisor and may be more critical of a training need than the lower average scored Steve.

In any situation, once the skills matrix is filled out, the manager should create a training priority list, clearly identifying specific employees will be trained on specific activities.

Third – Identify Gap Experts

Another common barrier that our clients often face is the idea that training must be performed in a structured class-room setting or via corporate human resources training materials. While there are obvious benefits to the focus and clarity available in these methods, we assert that there are faster more flexible ways too.

For example, after identifying training priorities, identify experts at the activities near the top of the priority list. Keep in mind that the business is all one team, and resources from outside the immediate department may be the best experts (as can be seen in the example provided where the engineer and sales manager are included in the skills matrix despite not being explicitly in the Customer Service team). Usually though, when keeping an activity based perspective, Managers and Supervisors have the capabilities for most weaknesses.

Fourth – Commit to Simple Training

Here is the breakthrough step for most businesses.

Once employees and activities have been quickly assessed and gaps and experts identified, make a practical plan to have the experts work with to close the gaps every single day.

Rather than trying to arrange for an outside expert to come in and provide the whole team with a 2 day training seminar at the corporate training facility, have the manager train one employee tomorrow for 15 minutes.

Once you break the mold of training being a team-wide event planned weeks in advance, many formats will begin to come forward. Here are a few examples we have implemented recently with our clients:

Theme days – where the Manager trains the whole team for 10 minutes each day first thing in the morning. Each Monday is Activity 1, Tuesday is Activity 2, etc. Manager daily plan – where the Manager takes sets aside 15 minutes in the morning and 15 minutes in the afternoon and checks off the top two training priorities each day. Activity just-in-time – where specific employee(s) are asked to come to the manager (expert) any time they encounter a need to perform a specific activity and they work through it together.
The principle at work here is that skill weaknesses follow an 80/20 rule. That is, 80% of problems due to skill weaknesses are created by 20% or activities or 20% of employees. By addressing those 20% on a very regular basis, the problems will go down quickly.

Finally – Follow Up / Re-Plan

The final step is entirely for the purpose of continuing the effectiveness of the simple training method.
After an initial evaluation of activities and capabilities and practical pairings of experts and gaps, the gaps will shift to new activities and employees. Therefore, best practices include scheduling a regular reversion back to step one where activities and employees are revised and reevaluated (theoretically, the training priorities have moved from 1s and 2s to 3s).

Often in this step, our clients realize the value in sharing the skills matrix openly with their employees. This tactic when implemented properly can motivate employees to self-improve by alerting them that the business values the performance of certain activities. Further it can motivate employees to actively seek out training or development opportunities.

Summary

Employee skills are commonly a perceived weakness in businesses, and training programs – even in world class businesses – can be slow and impractical. However managers of teams or organizations of any size can create their own practical training plans quickly by considering specific activities, prioritizing gaps, pairing gaps to experts, and breaking the mold of typical business training in favor of small progress every day.

Executive Summary:

Much fanfare has been made of Best Buy’s use of a Results Oriented Work Environment (ROWE) in their corporate headquarters, but very little detail has been published on how they made the transition. Following three key steps can help you focus on actual results over the stale emphasis of ‘time’ and ‘hard work’. Bluntly put, wouldn’t you rather have results achievers than hard workers? First, evaluate and overhaul your results expectations structure. Second, re-frame your organization’s work processes. Finally, cover off the details by driving deep the focus on results.

Results Oriented Work Environments

Results Oriented Work Environments (ROWEs) are gaining popularity fast, but risk falling victim to the ‘business-buzz-word-death-cycle’ if implementations are not well executed. Several business publications in the US has written on Best Buy’s elimination of the ‘8 hour work day’ of their corporate headquarters staff by insisting upon achievement of clearly defined results, while paying no mind to the number of hours worked or where this work is performed. Less noted has been Best Buy’s delay in spreading the approach through the rest of the organization including their retail stores. Though, there are other instances of ROWE success; Netflix has picked up some notoriety in the HR arena with their “7 Reasons to Work at Netflix,” where they boldly offer unlimited paid vacation time so long as necessary results are met. Indeed maybe the most common ROWE is that of commission-only sales forces.

However, ROWE should not be thought of as inapplicable for current ‘hourly’ jobs. With a methodical approach and an openness to flexibility, jobs ranging from the factory floor to the back office to the retail sales floor can be transitioned to ROWE. The key to a successful implementation of ROWE is defining the required results.

Setting Results Expectations

To have a ROWE, results expectations must be explicitly clear at all levels of the organization, and perhaps even clearer to your exterior stakeholders. If words like ‘key performance indicators,’ ‘metrics,’ ‘service levels,’ are unfamiliar, there is work to be done If your organization evaluates performance on a frequent and diligent cycle, a few steps up and you’re on your way to ROWE.

A first step in setting clear results expectations is to define three metrics in order of importance to your organization.

One productivity metric - measuring cost incurred to serve the customer such as cost per unit, labor hours per paid unit

One service metric - measuring the ability to meet the customer’s needs, such as order fill rate, on time delivery, etc.

One quality metric - measuring the perceived value of your product or service in the eyes of your customer

For example, a low cost widget factory may define their metrics as follows:

• 1. Productivity – Cost per Widget – total operating costs / total widgets produced
• 2. Service – On Time Delivery – widgets delivered on time / total widgets ordered * 100
• 3. Quality – First Pass Quality – widgets passing quality inspection on first attempt / total widgets produced * 100

On the other hand a luxury brand support call center would look different:

• 1. Service – Abandon Rate – calls abandoned (e.g. due to long hold times) / total calls * 100
• 2. Quality – Customer Satisfaction Rate – customers satisfied with service / total customers * 100
• 3. Productivity – Calls per Labor Hour – total calls serviced / total labor hours

Once metrics are determined, ensure results can be measured and reported on – with confidence. For line level employees, hourly results visibility is generally necessary. For upper management daily or even weekly results visibility is usually sufficient. Results need to be tracked in a short enough time frame to recognize and address variances before the business suffers.

Re-frame Your Organization’s Processes

The surest way to send a message of disinterest in ‘time-and-effort’ based mentalities is to jump straight to compensation. Using the earlier example, the low cost factory might pay workers based on a 60/30/10 of Productivity / Service / Quality scores against the defined expectations. Realistically though, significantly changing compensation structures is generally a very drawn out process. Also, this can be a slippery slope if metrics are not translated or capped appropriately to prevent bloating inventory, supply chain whiplash or other unintended consequences that may be difficult to anticipate from the outset.

This is where some flexibility can pay off. Insist that the organization is to be a ROWE, but concede that not everyone can work from home starting tomorrow. One successful approach is always to start at the point of the customer’s desires. If your customers are most needy on Monday mornings, keep Mondays an all hands on deck 7am, but by Friday morning be looking to acknowledge those who have satisfied their results for the week.

Creative implementation stages have been successful as well. Some companies have made Wednesdays ‘meeting day,’ or designated the first week of each month as ‘collaboration week.’ On the factory floor schedule the start time for any given work cell and motivate them to earn the full shift’s, but head home as soon as the schedule is met. Further motivate the schedulers to pack the schedule to the brim to meet sales, and of course keep the sales people motivated to load up the funnel.

Cover the Details

Finally, to fully embed results oriented culture you have to drive out the idea of “hard work” and “long hours” as important or valuable. This will require some coaching, and likely some getting used to for your organization. For example, arriving tardy to meetings should not be condoned, but the feedback to the employee should be entirely centered on the organization’s achieving the expected results. “When you arrive late you distract the progress of the meeting” should be transformed to “we are currently under-performing and need you to address the variances.” Indeed, time will never be stricken from day to day discussion. Managers should continue to set expectations of their employees within aggressive time frames, but the expectations and the time frames should be again based on the performance expectations of the business. “Can you have that to me by the end of the day” should be adjusted to “the customer requires this first thing tomorrow morning so I need to have it in time to review and pass on before then, when will you have it to me?”

Implementing ROWE Today

With these three steps, an implementation of a Results Oriented Work Environment is much more likely to find success. The beauty of ROWE is that starting step one will always be seen as a worthwhile activity. Working to clearly define the expectations of the business in terms of measurable performance metrics can be started at any level of management, and can be done anytime.

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Executive Summary

Rationalizing poor performing vendors in favor of more strategic relationships with a smaller vendor base allows businesses to leverage scale for benefits in cost, quality, service, and speed. Rationalizing vendors can be done in three steps:

Rank all Vendors based on actual performance and historical spend

Leverage strategic partners for cost, quality, service and/or speed improvements

Rationalize bottom vendors with tact and professionalism

Business Cycles Necessitate Continuous Vendor Evaluation

As business cycles turn, some vendors improve and innovate while others stagnate and contract. With a tactical and continuous vendor rationalization process in place, your business can take advantage of the cycle rather than fall victim to it.

Evaluate Current Vendor Relationships and Recent Performance

First rank vendors by dollars spent over a given time period. Usually the past 12 months is a reasonable horizon. As a first pass at vendor rationalization, moving large amounts of spend can be a headache. As the organization grows, more sophisticated performance based metrics should be developed to continuously evaluate vendors. Once the list of vendors by spend is compiled, choose the next most critical metric to your business. For example, if the cost of a stockout is very high – vendor on-time delivery may be the best metric, while if your business is heavily regulated, vendor quality and yield performance may be best. A key here is to use actual performance ratings. If vendors have not historically been scored on the metric you chose, take the time to review recent orders from the vendor and assign a score. Clearly this would also be a smart time to implement a standard vendor scoring system going forward. Additionally, it isimportant to rank vendors from first to last. That is, if you have fifty vendors, one and only one vendor must be number one, and one and only one vendor must be number fifty.

Now that all vendors are ranked, plot them on a chart to visualize and group vendors. Use the annual spend ranking as the horizontal axis, with lowest spend on the left and highest spend on the right. The performance metric is the vertical axis, with the worst performing vendors at the bottom, and the best performing vendors at the top. With all vendors plotted, divide the plot area into four equal quadrants. The top right quadrant contains vendors in both the top 50% of spend and the top 50% of performers. These should be considered as prime candidates for strategic relationships, and where to move the spend, which is currently diluted by your worst vendors – all vendors in the bottom half of the plot area.

From here proceed with caution. Businesses are often quick to publish this chart, opening risk of unmanaged communication to the organization, and worse the vendors. For vendors at risk of rationalization this information could spur an immediate abandonment of the performance levels, and maybe worse – top performers could play hard ball when you look to negotiate a benefit for sending more business their way. In fact ,the sequence of the next few steps will maximize the benefits of the act of vendor evaluation and rationalization.

Set Up Strategic Partnerships

Arrange a formal, preferably face to face meeting between representatives in your organization knowledgeable of the details of each vendor, and strong negotiators with representatives of the top vendors capable of making decisions on discounts and service agreements. At the meeting, explain to the vendors that your organization is looking to consolidate vendors and are interested in a proposal from them to take over more business.

Do not forget that you have the upper hand in this negotiation, but also do not be afraid to put some chips on the table. For example, the increased volume alone may not be enough to leverage vendors into strategic partners. They may ask for clearer demand forecasts, access to your engineering resources, or increased transparency in quality inspection procedures.

Also, do not forget that cost can mean a lot more than just the unit price paid. Consider the benefits of establishing a vendor managed inventory agreement to reduce safety stock required on hand. By asking for example, that the vendor deliver not only monthly usage, but also keep one month of demand on hand at their facility with the understanding that you can call to order it at any time if your sales exceed the forecast. The obvious benefits include freed up cash flow and lower inventory carrying costs. Other potential partnership agreements that would reduce total cost could include specific packaging standards to reduce workload at receiving, fully documented quality inspections up to your standards to reduce receiving quality inspection workload, and direct raw material sourcing options in cases where your organization provides raw materials to the 3^rd party (strategic partner to be).

Above all else though, remember what matters most to your organization, the levers of cost, quality, service, or speed, and negotiate hard for significant improvements on those levers in exchange for the increased share of business.

Actively Manage the Vendor Breakups

Finally, as you transition to your new strategic agreements, do not burn bridges with the bottom vendors that are losing the business. Indeed these vendors may feel slighted, desperate, and even act irrationally. Practically, it is likely that individuals at these vendors have developed personal relationships at some level with your buyers or other staff. Therefore, there is serious need to be proactive in alerting vendors losing business that your organization is buying elsewhere. Do not allow a vendor to learn of their losing business through a sudden halt in incoming purchase orders.

Keep in mind that these vendors may be needed again in the future, whether due to poor performance at the recently selected strategic vendors or based on innovation or improvements on their own. Not to mention the all too common occurrence where a pivotal employee may move from the rationalized vendor to the strategic vendor. Whatever the case, being professional and proactive in communicating the business decision of vendor selection will pay off in the immediate term through a smooth disconnection, and in the long run in the form of vendors excitedly competing for your business.

Best practices are to be clear in how bottom vendors were evaluated, but to be professional in resisting vendor comparison or naming the vendor to which the business is moving.. Further, professional tactics such as setting a future date for the bottom vendor to provide a quote to win the business back will only be beneficial to your business.

Competitive Vendor Relationships Pay Off

The costs of setting up a strategic relationship are by no means small, and can even involve taking on risk in the form of reduced diversification, but with a methodical and thorough due diligence ,this risk can be minimized allowing for optimization on the key levers: cost, service, quality and speed.

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Welcome to the trindent.com blog.  This information is for prospective consulting candidates for the 2009 recruitment cycle.

We are soliciting resumes for several consulting openings starting in September/October.  If you are interested, feel free to apply directly to:

canada.recruitment@trindent.com

japan.recruitment@trindent.com

usa.recruitment@trindent.com

Thanks for your interest!