Performance optimization for organizations, people, and processes.
Why Human Performance?
As described on the Lean Six Sigma page, the first order of business in making your organization more capable, is to make sure your business processes are well-designed and maintained. But if performance issues remain, it’s likely human performance is a root cause.
The purpose of a human performance improvement project is to align human behavior and job outputs with the goals of the organization. Until you align behavior in your organization to your strategic goals, the best laid plans may fall astray.
This service is not a broad cultural program where the impact can only be guessed at. We help you look the performance environment to make sure all of it supports desired employee behavior. Gaps in the human performance support system are identified and corrected, leading to measurable results.
Human Performance most important for knowledge work
Lean Six Sigma was originally developed for repetitive, predictable production processes. But organizational success requires effectiveness at both routine and non-routine work, which we can call knowledge work. Only some of the elements of Lean can be applied to knowledge work, and the methods neglect a number of aspects of human behavior. Human performance technology fills in that gap. Examples of knowledge work include:
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Management or strategy formulation
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Sales, Marketing, and negotiation
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Software development
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Product design
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Engineering and technical work
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Service businesses (consulting, financial, legal, research, artistic, training, some customer service)
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Any kind of non-routine problem solving or creativity.
Knowledge workers are now estimated to outnumber all other sorts of workers by 4 to 1.
Enter the concepts and models of Human Performance Technology. All of the services that follow speak to how we change human behavior in organizations.
Metrics & Feedback Solutions
Performance feedback is one of the most overlooked aspects of a performance system. Managing a business or function without good performance feedback is like a guy shaving his face without a mirror.
Better Metrics Means Better Decisions
Measuring the wrong things leads to adverse consequences. A famous case of metrics gone wrong is Wells Fargo in 2016. Personal Bankers (PBs) were measured and rewarded for the number of add-on services they sold to existing customers, because research showed that customers with more services were more profitable. What could go wrong? It turns out that PBs were opening fake accounts then closing them, sometimes transferring money to them, then transferring back. This allowed them to reach their production goals. But it produced no extra revenue, and ended up costing Wells Fargo $185 million in legal penalties. This is NOT a problem to be solved with a new values statement, or ethics training. It was in large part, a metrics failure, measuring and managing the wrong thing. And notice, setting the legal implications aside, it was burning up valuable work time to open, close, and transfer accounts, that could have been used in proper selling. Wells Fargo is one of countless examples. Bad metrics (measuring the wrong things) cause performers to spend time on non-value added activities. Missing metrics can also cause chaos. You know the expression “what gets measured gets managed”. This can lead to us optimizing some aspects of a value stream at the cost of others. When managers refer to “silo thinking”, it’s not some shortcoming of those managers. A lot of this behavior is driven and sustained by measures and incentives that optimize their function at the cost of the larger value stream. It’s the system working against them, not some resistance to cooperation or collaboration.
Better Reporting Means Better Understanding & Control
Its unclear what we need to “do about” some reports. We’ve seen many cases where reports are just some sort of administrative exercise, reporting for the sake of reporting. They may be at too high or too low a level of vantage, making them irrelevant to the consequential decisions that need to be made. And more reporting is better than less… right? If everything is being reported on, it can lead to more confusion as to what to address with limited time. And even if the reports are measuring the right things, they can be either easy or difficult to read and interpret. No one can mentally process a wall of data. Finally, reports may arrive too late to make timely decisions. There is no improvement on the macro scale without effective reporting.
Metric Solutions
The only purpose for measuring is to make a decision. We need to look at well packaged information configured for our purposes, not a wall of data. Here are some of those factors we help you consider and improve on.
Metric Functions
Why are we measuring? Consider metrics in the following functional categories:
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Operational – All the general metrics that track our core and support processes, that in turn produce our products and services.
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Compliance – metrics that may or may not provide useful operational support, but are required by some external agency (OSHA, FTC, SEC, EPA, and other regulators).
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Innovative – these are unique measures that help us identify or diagnose performance improvement opportunities (market analysis, performance improvement potential, run charts, line balance ratio, rolled throughput yield, etc.)
Metric Dimensions
What aspects of our processes, products, or services do we need better intel on?
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Value – A neglected metric because Value has both subjective and objective elements. Of value to whom? Customers. Value can be what customers are willing to pay, or SHOULD be willing to pay, if we explain or demonstrate why our superior service, materials, design, etc., is worth a premium. It also is a close cousin to pricing strategy.
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Quality – Conformance to standard. Six Sigma especially tells us that variation is the enemy of quality, and quality issues cost us money in both obvious and non-obvious ways. Good quality measures also tell us whether we should treat a defect as a worrying trend, or just natural variation.
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Cost – Allocating general and administrative expenses to individual products is rife with problems. It can lead to the distortion of what seems to be profitable or not profitable. Value Stream Costing looks at costs from the perspective of an entire value stream, rather than individual products. Each value stream is run more like a business, with the fewest cost allocations possible. This gives us a more realistic picture of profitability and cost control.
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Time – Important subtypes of time metrics include cycle time, lead time, and % of deadlines met. Time is a greatly underappreciated metric in performance improvement. Delivering things FAST has numerous benefits, including lower costs, greater flexibility in meeting demand, and less shrink or obsolescence. Productivity is best measured in time, rather than number of products.
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Risk – Operational risk should be quantified so we can make better decisions to assume, mitigate, or transfer risk.
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Satisfaction – The main subtypes are customer and employee satisfaction. They help predict the behavior of each of these groups. Satisfaction should be measured with a mix of subjective and objective metrics.
Metric Time-Perspective
Should we focus on measuring the past, the "now", or the future?
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Evaluative – lagging indicators used to judge outputs and outcomes. They highlight the need to make adjustments to strategy, methods, or allocation of resources. They can also be used as a basis for incentives to human performance. Some consultants mock evaluative measures as “driving by looking through the rear view mirror”, but evaluative measures are the basis of any sort of cause analysis, and many statistical examinations. If we don’t master managing the past (gleaning what past performance is telling us), how can we manage the future, where many more variables are at play? Make sure the fundamentals are being covered first, and exploit your existing data for all it can tell you.
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Corrective – current indicators used to provide feedback to job performers or on productive equipment, so their errors can be fixed and performance improved. Corrective measures are very short cycle – it’s the time between when an error occurs and when its resolved. Corrective measures help us fix problems before customers see them and damage our brand. And far too often, corrective metric data is not fed back to performers as a great training opportunity.
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Planning – leading indicators which help us configure our methods and resources for future conditions. If corrective measures are quality control, planning measures are quality assurance. These involve predictions, estimates, and the gathering of data from outside our organization (style trends, economics, pending legislation, and other changes that could impact our profitability). Planning metrics are by definition uncertain. We can minimize this uncertainty by conducting small, short cycle trials of changes and closely measuring their impact on results.
By narrowing what functions, dimensions, and time perspective the team will address, HPE helps you start with the aspects of your business that will most benefit from better performance insights.
Metric Reconciliation
We assess if your metrics align with 1) actual outputs, 2) horizontally in the value stream, 3) vertically through the chain of leadership, and 4) with strategic initiatives. Reconciled metrics help insure that different functions are not working at cross purposes. It also insures we don’t end up managing behavior rather than accomplishment.
Reporting Solutions
Knowing what we want to measure is not enough, it must be reported to the right person at the right time in the right way to support the right decisions. We have thousands or millions of data points, but how do we turn that into useful information?
Report Packaging
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Trends, Not Aggregations – When we aggregate data, it loses 80% of its power to inform. There is natural variation in business results over time. Managers are often pressured to “DO something” when this natural variation gives a below average result. This removes the focus on looking at trends. And comparing June of this year to June of last year, is not going to tell us what we need to know.
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Graphics – Data visualization is important, but the fact of adding colorful graphics does not always mean that your report is an effective decision support tool. Graphics need to signal that action should be taken or not taken, and in some cases, what that action should be. Lose the pie chart!
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Expert Elaboration – sometimes what the reporting system kicks out is devoid of context. Your reports may need to be detailed with events, circumstances, and other elements your performers have closer experience with, which adds that needed context. These elaborations should be made consistent and routine.
Reports & Responsibility
We often find that reports are given to people who don’t have clear responsibility or the authority to make the changes that would improve the numbers. The reports don't match the role. After such an assessment, you may decide that either the metric needs to change, or responsibility and authority need to be expanded or clarified. Otherwise managers can find themselves in a no-win situation.
"Performance measurement is the cornerstone of performance management. Measurement system maturity is a key part of your long term competitive advantage." - Scott Ford
In addition, too much data is as problematic as too little. Employees at all levels should not be bombarded with reports that pull them away from their core responsibilities.
Feedback Solutions
"How Am I Doing?"
Performance feedback is what is actually presented to job performers. Ask most associates how well they are doing at their job, and they cannot tell you. Performance feedback signals to performers what the expectations actually are, and where they should devote their time. The annual performance review is too little, too late. And then there is the means of delivering this information. While performers should have direct access to this information, it is the manager that can provide a context where the feedback is both useful and motivational. We can help design a performance system where associates can tell their managers how well they are doing, and what their plan is for improvement, rather than the other way around. We can also recommend policies and training to ensure performance is delivered in the most constructive way. Performance information should never be used as a club. Performers cannot be threatened into superior performance, not in the long term.
Faster, Cheaper Feedback
Not all performance feedback requires reporting. Reporting systems are yet another system to maintain, and feedback can often be simplified or eliminated:
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Visual Management – sometimes a formal system is not needed for local measures, and simple visual cues, like bins that need to be resupplied, or software controls, can signal when something is out of the norm and needs attention.
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Production Cells – when significant portions of a value stream are grouped with flow (immediate handoffs), it reduces the need for measuring and reporting. Rather than every minor step, we just measure the group of steps. We can still located and address the causes of quality issues.
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Poka-Yoke – This is mistake-proofing a process step. if errors or lack of flow can be nearly eliminated at the task level, we may be able to eliminate constant monitoring.
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Software Decision Rules – there may be opportunities to automate business process decisions, so managers can tackle the more complicated, strategic issues.
In summary, we....
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engage the whole improvement team for buy-in
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start in the most needed measurement areas
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select or design the right metrics
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package performance data for maximum understanding and value
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deliver reports to the right people with the right timing
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find faster, cheaper ways to let performers know what to do, or how they are doing
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use feedback to communicate expectations and motivate
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provide a stronger foundation for business decisions.
Incentive Solutions
Incentive Solutions Deliverables
After consideration of process improvement, motivation countermeasures are good candidates for these sorts of problems. Incentive Solutions provides two main deliverables:
Motivation Report
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A precise description of the behaviors you want to change for an individual, job title, or work group.
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An investigation of the environmental influences that conflict with the behavior you want or support the behavior you don’t want.
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A recommended set of changes to the signals for desired behavior (clearer expectations, system prompts, priorities, and other signals to perform)
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A recommended set of new or revised behavioral consequents for desired behavior (social and tangible reinforcers).
Behavior Influence Plan
Now we need to put the learnings from the Motivation Report into action:
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A precise description of the behavior goals, taken from the Motivation Report.
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How you will track changes in the behavior you want to influence.
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How progress towards the desired behavior will be rewarded.
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The schedule on which reinforcement will be delivered, by who, etc.
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The means to evaluate success in long lasting behavior change.
Aligning incentives with desired behaviors can typically produce an increase of 50% to 300% in performance. They don't work 300% harder, they approach their jobs with an ownership mentality.
Create a motivational environment for associates
Managers know employee motivation is important, but they don’t always know how to address it. Some managers assume motivation is present and leave it unconsidered. Some managers motivate through threat - do it or else. Some others may think of it as a complicated art, difficult to master.
Let’s define motivation as discretionary effort. It is the level of effort employees could give if they wanted to, beyond the minimum required. THIS is our goal as managers, to have our direct reports give discretionary effort. ALL jobs can benefit from motivation, but knowledge work generally has more opportunity and leverage. In surveys, employees report on average they could work about "50% harder" than they currently do, if motivated to do so.
Examples of undesired behaviors that have a likely motivational component are employees that:
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engage in "quiet quitting", doing the minimum necessary
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do it their way, skip steps, or ignore the written standards
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resist direction or create a negative environment
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fail to adopt an implemented change in their own work
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unnecessarily compete with one another, hoarding information or expertise that could benefit the whole team and the organization
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don’t maintain a customer focus
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fail to achieve their full potential in their work
Performance-Based Training
Capture and transfer best practices to all associates
Your inexperienced or poor performers are probably lacking certain skills and knowledge that would help them be more effective in their jobs. The menu of training courses at your organization may be too generic to meet your needs. You could also send them to an industry conference, but this again is not job-specific. You would also like your new hires to reach the production, quality, or customer service skill levels of your experienced staff as quickly as possible. Maybe you’d like to cut this time in half, or perhaps even better. Best practices in jobs are discovered here and there, but they are not uniformly applied, and are often lost as staff leave, transfer, or are promoted.
You have set your expectations for training too low
Performance-Based Training stands in stark contrast to what we call subject matter training. Subject matter training is much like a college course - general, conceptual information that is difficult to know exactly where and how to apply back on the job. Most training you will see - programs at industry conferences, vendor training, college courses, general corporate offerings, is subject matter training.
In Performance-Based Training there is one and only one criteria for success: can the performer produce the job outputs to requirements, without supervision, by the end of the training? What would be the point of settling for less than this? Now, they may not be as fast as your best employees right after training, but that will come with experience, and they won't have to unlearn any bad habits. Good training creates mastery. Guided work experience provides fluency.
Performance-Based Training deliverables
Training Charter
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Validation of training as the appropriate solution to the performance gap.
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Estimated economic return from performance-based training.
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Training roles and commitments (decision maker, consultant, trainers, subject matter experts, materials developers).
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Means by which best practices will be determined.
Training Program Design
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A clear definition of job outputs to be trained.
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What specific skills and knowledge are required to produce job outputs.
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Training activities and sequence - job tasks to be trained, prep sessions, prerequisites, skill checks, etc.
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Based on exemplary performance, not average performance.
Job Performance Aids
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Procedures that embody best practices, in an easy to follow format, that replace the need for memorization of complicated or infrequent tasks. Available to the performer while they are doing their job. They never forget, they never sleep, and they are always right.
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Job aids can take many forms - display boards, paper procedures, references, decision tables, worksheets, online context-sensitive help systems, etc.
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Because job aids capture the way work is done, their development often results in tactical process improvements as well as world-class training.
Trainer's Guide & Instruction
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Procedures for the trainer to follow before, during and after training (preparation, introduction, task demonstration, employee task practice, assessment, training administration).
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Trainers given hands on instruction in exemplary training techniques.
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The means to track the development of training materials, and certification of trainees.
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Tracking procedures.
Performance Based Training is the most efficient and effective way available to have new hires, or those making mistakes, performing like your best.