4/13/2009

EYE TO EYE

Filed under: — Doug Contreras @ 6:55 am on

Bob was a good plant manager who had a solid set of business skills. He had a great way with his people and was the type of guy you could count on to "carry the ball".

While Bob and I "saw eye-to-eye" on most issues, we were 180 degrees apart when it came to dealing with a declining backlog. Bob believed in "stretching the work" and would accept lower productivity from his factory workers during these periods. His theory was that running at or above standard would deplete the backlog sooner leaving him to face deep layoffs. My approach was to continue to achieve or exceed standard and deplete the backlog; and if deep layoffs causing the permanent loss of talented people were a concern, I might consider using the people on "busy work" projects like organizing, cleaning and painting after the "billable" work was expended.

Although some would say that both approaches produce the same the bottom line cost to the company, I offer the following for consideration:

  • Managers need to be consistent in what they ask of their people. Accepting less than best sends a mixed message encouraging workers to independently decide when and where standards apply.
  • A manager who lowers the standard for line workers is like a coach who begins to train his players at a relaxed pace. Getting the team back into shape for the big game takes time.
  • Cleaning, painting & organizing eventually need to be done. Waiting until you’re busy again often means that you’ll be too busy to get it done.

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com



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3/1/2009

THE RESULTS ARE IN

Filed under: — Doug Contreras @ 5:18 am on

When I’m asked to evaluate a company’s data collection and communication process, I frequently find that recurring reports in use are ineffective. For some reason, programmers forget that how the message is conveyed is as important as the analysis. In developing a database to manage or analyze a process, I almost always spend more time on the reports than I do on the programming. Here’s my approach:

  • If a report is being used as a tool to manage a process, the information should be presented in the sequence it will be used. To understand the correct order, talk to the people involved.
  • Reports need to be audience-specific and concise. If the audience is Spanish-speaking, provide the information in Spanish. Offer only the information that is needed. Providing too much information will overwhelm your readers and they will be less likely to focus on the points that are worthy of consideration. Senior management will generally require more information than line supervisors and line supervisors will require more information than line workers. Don’t be afraid to consider multiple versions.
  • Present the information in a format that is pleasing to the eye. Aesthetics do make a difference!

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com



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2/17/2009

APPLES TO ORANGES

Filed under: — Doug Contreras @ 3:40 am on

Allied provided machine shop services to a number of small automotive repair shops in Southern New Jersey. Sixty-five percent of their work comprised of limited production runs to replace or repair parts that were no longer available. Daily production reports were nothing more than a written chronicle of the previous day’s activity and included the following:

  • Customer Name
  • Product Description
  • Product Code
  • Work Order #
  • Line #
  • Production Operation Performed
  • Operator
  • Hours
  • Amount Produced

Absent of any comparison or analysis, each person reading the report saw a different result. And while it was probably equivalent to adding apples to oranges, the production clerk totaled the hours and totaled the production with the hope that these nondescript sums would inspire some action on the part of supervision. Copies of the report were distributed to the owner and each of the key managers while one was placed on file and never seen again.

Since most of Allied’s jobs were custom, individual expertise and effort played a major role in daily productivity. Viewing this as an opportunity for significant improvement, the game plan went as follows:

  • Define every single step in the production process;
  • Through consensus of key managers, set up interim standards;
  • Develop a database program to record and analyze the information;
  • Input the data daily and generate audience-specific reports for all;
  • Explain expectations with regard to interim standards;
  • After six months revise the standards to reflect history and achievability;
  • Insist on accountability and reward favorable results.

One year later Allied’s productivity increased by 22%. As an added benefit, the data collected afforded the company with reports and analysis on line utilization and equipment efficiency.

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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11/16/2008

PIN THE TAIL ON THE DONKEY

Filed under: — Doug Contreras @ 7:58 am on

With the recent federal bailouts of Fannie Mae, Freddie Mac, AIG et al., people are asking "who was responsible?" Not privy to the specifics and the cast of characters involved, I can’t "pin the tail on the donkey."

I do think it is safe to say that what happened is symptomatic of the lack of accountability at senior levels in big industry. Too often we hear stories about executives who receive exorbitant bonuses, golden parachutes, etc. in spite of performance. And now we are reading about middle managers, supervisors and workers who are being terminated, laid off, or downsized.

If we expect a worker to improve, and condition his or her job, bonus, promotion and raise on performance or contribution, how can we look that person straight in the eye when the same requirement does not apply to the big boss?

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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6/21/2008

CHANGE

Filed under: — Doug Contreras @ 10:52 am on

Without a doubt, Barrack Obama’s promise of change has caught the attention of the American public.

As a young plant manager, I was infatuated with change. I guess my thinking at that time was that new was always better than old. As experience matured me and as I got older, I began to see that my desire for newness did not always equate with better.

While I’ll leave the comments on Senator Obama’s battle cry to the political pundits, here’s a list of questions to ask when someone suggests change in the workplace:

  1. Exactly what needs to change and why?
  2. How much will it cost?
  3. Will the benefit outweigh the cost?
  4. What will we sacrifice or lose in order to effect the change?
  5. How long will the process take?
  6. Who will be responsible for implementing the change?
  7. Have benchmarks for progress been established?
  8. Can we do it in a way that minimizes confusion to our staff?

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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6/10/2008

ACCOUNTABILITY

Filed under: — Doug Contreras @ 9:31 am on

If accountability has anything to do with efficiency and performance, why do managers avoid the issue? Here’s my bet as to the top three reasons:

  1. A dislike of confrontation;
  2. A fear of making a negative situation more negative;
  3. A desire to be politically correct by chalking off failures to obscure social issues.

In my experience, these are nothing more than excuses. Employees know better and have a little respect for a boss who buries his or her head in the sand.

If your approach to accountability is missing the mark, consider the following:

  • Clearly define the overall objective, the individual goals and the timing making sure they are doable;
  • Advertise the overall objective, the individual goals and the timing so each person is clear on what is expected;
  • Give your people the tools needed to do the job;
  • Measure progress against goals or benchmark at regular intervals;
  • Issue progress reports to each person involved in the process;
  • Acknowledge those who achieve positive results;
  • Counsel those who fall short.

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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3/29/2008

TOP SECRET!

Filed under: — Doug Contreras @ 8:59 am on

Once upon a time, a small business owner named Fred was unhappy with his company’s productivity and performance. While he made it public knowledge to anyone who would listen, the details that separated good from bad were top secret.

No matter how much Fred’s accountant tried to persuade him that his workers needed objective benchmarks, Fred was convinced that expressing his displeasure with the results was all the information they needed and anything more a serious breech of his financial privacy.

As a young officer in the Army, I was taught the value of "need-to-know", but thirty years of business experience also taught me the importance of sharing information with the workforce. Here is what I learned:

  • Most workers are concerned about the financial health of their company and will do whatever they can to insure its success.
  • Workers need to see the company’s goals in tangible terms. Contrary to Fred’s fears, goals can be expressed and presented in a non-financial way.
  • On a regular basis, workers need to see the progress of their efforts.
  • Performance improvement needs to be rewarded.

If you happen to run into Fred, tell him about my secret.

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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11/26/2007

YOUR ACCOUNTANT IS NOT CLAIRVOYANT!

Filed under: — Doug Contreras @ 11:57 am on

Last week, I had lunch with an old friend. Although the years seem to evaporate between our discussions, Bill and I are as close today as we were in college. As an entrepreneur who has built a highly successful metal manufacturing business, he gave me an earful about his accounting firm which provides his quarterly statements and prepares his business and personal returns.

In a nutshell, his issues could be summed up as follows:

  • When times are good my accountants tell me that I don’t have enough of a reserve for taxes; and
  • When times are tough I’m told after the fact where I should have tightened my belt.

Bill’s complaints are not too much different from that of other small business owners and managers. Many forget that accounting by its nature provides a measurement of historical data which may or may not have any bearing on current activities.

My recommendations:

  • Be aware of current trends by collecting, storing and analyzing key information on a daily basis. The closer one is to the event, the easier it is to manage its impact. Click on my essay: EVALUATING, IMPROVING & MANAGING A BUSINESS PROCESS for some ideas.
  • Involve your accountant beyond the periodic statements and tax returns by providing up-to-date information. Encourage his or her advice and feedback. This will cost more, but it’s worth every penny!

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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9/16/2007

THE AMERICAN WORKFORCE

Filed under: — Doug Contreras @ 8:25 am on

Here’s my take on the American workforce:

  • 99% of all workers want to do a good job!
  • 99% of all workers can do a good job!
  • 99% of all workers will do a good job given the chance!

So what’s the problem?

I say bosses and managers fail on one or more of the following counts:

  1. They have not set standards for their workers;
  2. The standards they have set are not obtainable;
  3. They have not communicated standards to their workers;
  4. They do not systematically compare and report performance vs. standard for workers to see.

Remove the not from each of the above statements and watch the change!

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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7/12/2007

DON’T SHOOT THE MESSENGER!

Filed under: — Doug Contreras @ 2:05 am on

So here’s the scenario:

You show your boss a detailed report analyzing the productivity trend for the last three years. It clearly shows that her new approach to training, staffing and operation has not improved performance as she expected it would. In fact it demonstrates that things have gotten worse. Her correct response should be:

(1) Issue a scathing five page memo challenging your data and analysis and questioning your loyalty to her and the company.

(2) Ignore the report.

(3) Set up a meeting with you to review the validity of your report and discuss your ideas for changes that can be made to get things back on track.

Shooting the messenger NEVER improves performance!


DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!

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5/16/2007

PERSEVERANCE

Filed under: — Doug Contreras @ 1:28 am on

My favorite example of Perseverance is depicted in a scene from the classic movie - THE AFRICAN QUEEN. Charlie played by Humphrey Bogart and Rosie played by Katharine Hepburn are stranded because Charlie’s boat has become stuck in the mud. Having been through so much and realizing that they are close to the end of their journey, Charlie is determined to get to the lake. He jumps overboard and begins to tow the QUEEN with a rope. After doing this for hours, he comes back aboard totally exhausted. When Rosie sees leeches on his back, she shrieks and he frantically tears off his shirt. She applies salt and helps him remove the leeches. Shivering in revulsion, Charlie says how he hates the "filthy little devils", but knows that to keep the boat moving, he has to get back into the water with his tow rope.

While it is possible to be in the right place at the right time when making a sale or introducing a product, I’ve never seen luck affect performance. Process improvement takes deliberate and continual effort and sometimes this means we need to get back in the water with our tow rope and deal with the leeches.

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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7/26/2006

EVALUATING, IMPROVING & MANAGING A BUSINESS PROCESS

Filed under: — Doug Contreras @ 12:11 pm on
In evaluating a business process, there are a variety of ways to look at the events, timing, staffing, locations and costs to provide management with decision-making information. Since no two companies have the same needs, the relative importance of the processes will vary. For this reason, one company may be focusing on inventory while another will be looking at production. The following list of examples are not meant to provide the reader with solutions, but instead are offered to stimulate thought and ideas:

Production
  1. Each day or shift, compare the production, labor hours and material costs on each line or work station to a pro-rated standard.
  2. Total the production for that day or shift and compare that to a weighted standard.
  3. Segregate and compare the results by areas of responsibility and compare worker to worker.
  4. Segregate and compare the results by line or work station and determine relative efficiency and utilization.
  5. Segregate and compare the results by customer to determine who are the "tough ones."
  6. Summarize and compare the results by job type to see which types consistently perform below expectation and where prices can be reduced to increase market share.

Quality
On a monthly basis, segregate, summarize and analyze rejects and re-works by:
  1. Cost
  2. Category
  3. Customer
  4. Product
  5. Work station or production line
  6. Responsible worker(s)

Projects
On a weekly basis, categorize, present and analyze projects by:
  1. Responsibility
  2. Priority
  3. Length of time since initial assignment
  4. Cost

Inventory
On a weekly basis, summarize and analyze inventory and reworks by:
  1. Cost
  2. Age
  3. Loss
  4. Space consumed

Maintenance
On a weekly basis, categorize, summarize and generate plant and equipment maintenance task sheets based upon appropriate timing intervals. Track completion and generate progress reports to responsible individuals and key managers.

Sales & Orders
On a daily basis, track open balances on all orders by customer and/or product. Determine backlog and generate staffing projections. Determine where and when timing conflicts will occur. Distribute reports to responsible individuals and key managers.
On weekly basis, track and summarize sales by customer, product category and salesperson. Compare results to prior periods to determine trends that might affect capacity and staffing. Distribute reports to responsible individuals and key managers.

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!

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7/24/2006

STANDARDS FOR PERFORMANCE

Filed under: — Doug Contreras @ 6:00 am on
In smaller businesses, the periodic financial statement is often the only tool for measuring performance. Accountants come in monthly, quarterly, semi-annually or annually and prepare a statement that tells management one of the following:
  • Things were OK
  • Things were HORRIBLE
  • Things were GREAT
Sadly, the information is dated and the details as to why things happened as they did are cloudy and difficult to interpret. Furthermore, it does not offer conclusive clues as to what to change nor does it provide any glimpse as to trends or future performance.

Fortunately there is an alternative. There are 8 basic steps to performance improvement:
  1. Decide which events impact the bottom line;
  2. Arrive at an achievable and quantitative standard for each event that separates good from bad;
  3. Measure the performance against the standard as close to the occurence of the event as possible;
  4. Prepare timely reports that present the results in way that is easy to understand;
  5. Present the reports on a regular basis to all who have an impact on the result;
  6. Meet with those responsible on a regular basis and encourage feedback;
  7. Insist on accountability; and
  8. Reward favorable results.

Following these steps WILL improve your bottom line!

DOUG CONTRERAS
Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras
I welcome your invite to connect!
doug@performancedatamanagement.com

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