A short visit:
I saw Tony Starks coming out of the airport terminal looking exactly like I had seen him 10 years ago. He is 6 foot 4’ and built like Iron Man himself. He was looking sharper than usual even after an 8 hour plane ride from Europe to India. Starks Enterprise had signed a big agency for the European operations and Tony had come to launch it. Tony had just been named CEO of Starks international after his father’s unexpected demise. Tony is in the services industry and had started working with Vantage Agora as a customer only a few weeks ago. He was coming in to see how the project was taking off before he got completely caught up in his new role. Tony and I worked together in the past. I had come to respect his incredible creativity and brain power in terms of software development. I had also come to respect the fact that Tony was a self made man before he went and joined his dad in his family services business. In under five years Tony had helped grow the sales of the organization grow from a $23Million to a $456Million. For the last year plus sales had stalled because of the relentless economy. The pressure on margins had become so high that Tony had engaged with Vantage Agora back-office service and started his own team with Vantage Agora to leverage from the cost benefit and process efficiency we bring to the table.
On a side note, when we worked together Tony was the one that introduced me to golf. Not only did he introduce me to the game but also taught me the finer points of the game.
Lack of Accountability or Lack of measurement:
We were in the office early next morning at 7:00AM sharp. After a six straight hours at the office we headed out in the mild December afternoon towards my golf club. In Bangalore the weather is beautiful year round but in December it is especially nice between 60 and 70 degrees. On a weekday at 1:30PM in the afternoon there was literally nobody on the course. In India you have the luxury of having caddies that carry your bags. This gave both of us to catch up on varied topics of life and business.
The first hole is a short par 5 which I managed to double bogey while Tony true to his form managed to par with a great sand save. I grumbled to him that his business must have taken off really well and that he is getting to practice even after taking on his new responsibilities. That is when Tony actually confessed that he has been having issues. I casually enquired what kind of issues.
To this he replied, “Oh! It is the usual thing I guess. On one side I have the old timers that are not big on any automation and change. Now they are opposing every change that I want to bring about. On the other side I have people that have no accountability. They all seem do to the job for the sake of doing and don’t seem to care about anything. All they are interested in is how secure their job is and how much raise will they get. I am really sick of all this because I have a great feel for my customers and business but I have no idea what is happening on the floor. It seems that I am running at 100 miles/hour and the rest of company is running at 99 miles/hour but in the opposite direction. Bottom-line there is no accountability at all in my organization.”
I just thought of how typical this problem was with literally every company we meet. Not just in mid-sized or small companies but even in larger companies. Most senior managers believe that their systems have failed them or their employees have failed them. They say this when they themselves don’t use the same yardstick to measure both themselves and the organization. I must not have realized but must have started to smile. Obviously Tony was not amused and challenged me. “You think this is funny. I am here trying to ask you for your help from all your executive consulting background and you are mocking me. Nice!”
By now Tony had made a Par the tough 440 yard par 4, while I had managed a respectable Bogey.
I replied “Tony, if there is anyone that is having fun it is you… by killing me on the course. You are three up on me and we have not even started playing! The only reason that I was smiling is because we have seen quite a few problems like yours. No worries, we take care of it in one quarter. I promise. But you need to help me manage my game better and lower my scores”.
“Deal!!!” said Tony.
On the third hole Tony hit a beautiful 6 iron into the heart of the green that was 210 yards away. While I manage to get onto the far side of the green with my 3 iron!
As we walked toward the hole I asked Tony, “What do you use to drive the company annually?”
Tony replied “Well… it is simple. We make a yearly plan and annual operating plan in December for the next year…”
“How long do you track to it?” I interrupted
He grinned and said “Looks like you have seen many companies like ours. It rarely lasts more than half way into the first quarter”
“Then what do you present at your quarterly board meeting?” I pressed.
“You know, the usual board deck, the spreadsheets that is the flavor of the quarter. What is more important is that this information is socialized to each member of the board to help make sure that there are no real issues”.
“And… I rest my case.” I said “This is nothing new. Most of the companies I worked for had the same issue. Very few companies actually execute their strategies to success. Most companies don’t have an annual plan that is tracked and this leads to huge problems in the end. First thing first you have to create a simple annual plan. This plan should have simple measures for both “Top Line and Bottom Line measure at the highest level. Then assign KRA and KPIs to each of these measures at the highest level. Then let the system work. But it is critical that you have the plan tracked on a weekly basis and YOU have to track this. Remember, discipline starts at the top and unless you walk on that road nobody else will. If you would like, I can send you what we have created at Vantage Agora and you can use that as a template. Since we are still in end of the year you are certainly welcome to use it.”
I paused to chip my ball pretty close the pin but missed a short putt.
Tony must have pondered on what I had said while played because he started to talk even as he prepared to putt “What you are telling me is that my company is an amplified reflection of what I do. I need to start tracking the AOP on a weekly basis. We should set up a dashboard that measures the company. That should then drive everything else in the organization. Right?” and coolly sank a 30 feet put from the middle of the green into the hole!
”Mann!! He is sharp!” I thought, for more than one reason.
By the time we reached the seventh I was five over the course and Tony was still one under the course! I was thinking there was something not fair about this entire golf game. Tony on his part was more concerned about Stark Enterprise and asked me, “It strange but I have heard you talk about defining clear success and failure criterion for an employee or for a department. Even when we started working together you had asked me to define a clear success and failure criterion. Yet, I can’t hold most of my employees, even the senior level managers to clear success and failure criterion. Is this common?”
I was very direct in my response “Tony, a company has to be run top down. You know we talked about the defining clear top level metrics like sales targets for the quarter, quality and timely delivery for each project, these have to have ONE and ONLY ONE owner in the organization. Likewise on the flip side every person in the organization must have a clear set of KRA and KPI.”
“You know this is very embarrassing, I have heard you talk about KRA and KPI. I know what a KRA is, it stands for Key Result Area but what does KPI stand for” asked Tony.
“KPI stands for Key Performance Indicators. A KRA has to have a quantifiable KPI. For example if you have a KRA called ‘New Sales’ then you must have an objective KPI like ‘Sales Closure report’ for the week. On these measures if you have a SLA (Service Level Agreement) then you can determine if a person met his/her goal. Not just you but the people involved should know what they are measured on how they have to work to achieve their goals. They have to buy into it. They have to see how they are progressing towards their goals and their managers should help them get there. Otherwise you can’t hope to measure them against it.”
We continued the round in talking a bit about family, business, sales… the usual golf talk. Tony did promise to try what I had suggested and get back to me in two weeks. As we approached the final hole I was close to shooting a two under my 14 handicap even if I shot a one over on the final hole. Tony said, “I am keeping my end of the bargain. Your swing seems to have stabilized, your strokes are good, but you just seem to be still afraid to trust your swing and your game. Just play without fear. I mean fear of failure. That can’t help anything. Just swing fearlessly and hard at the ball.”
It all sounded a little esoteric for me but when someone is shooting 1 under the course the he has never seen, you don’t say anything. You promise to try.
After dinner I dropped Tony back to Airport where his plane took him back to Dallas, Texas.
Visibility and Repeatability
Exactly two weeks down the road while I was heading back home from the office. I got a call from the US. I knew it was Tony.
Tony as usual was very short on greetings and got straight to the point.
“It all sounded very good when you told me but it seems that I am having a tough time actually implementing the idea of a dashboard, KRA and KPI. It seems that there are reports that are generated but nobody wants to put the effort into getting the numbers right. I am beginning to believe that this is impossible to achieve a dashboard in a company with a culture like Starks Enterprise.”
“Tony, on hindsight I should have told you about the different ways to implement this in your organization. It is quite like how you taught me golf. You don’t give them the final lesson on the first day. You need to start them small. Always start with the projects. Every project has only two controls: Timely delivery and Quality delivery. Just get them to add all operational tasks into a single dashboard. Then manage that for a month. Once you start getting data regularly into it make sure that emails are never sent out circumventing this process. Emails will simply kill all your efforts. You might be wondering ‘What does emails got to do with implementing a dashboard?’ Everything!!!! An organization takes time to react to changes. You have to give it enough time to make everything an operating rhythm. You can’t be sending emails and talking about anything else other than the dashboard and the KRA, KPI. Once you say it enough number of times the people around you will start saying it, then it spreads into your organization when you have a ‘tipping point’. I will list out the steps to implementing any strategy to success. This is a mantra that we follow at every effort in Vantage Agora. The team hates me at times because I say the same thing over and over again but it works. All of us know it now! And that is what matters:
1. Make sure that you don’t discuss KRA and KPI at a personal level first. You first want to find out what measures are being used to run the operations today.
2. Make sure that all task repeating and non-repeating are entered into the same system that is even YOU use. Don’t circumvent it. That will defeat the entire purpose of the system. Make it a point to read the notes on a daily basis and then comment on it on the floor.
3. Once you are sure that your team is successfully entering this data, make sure that you start talking about objective measures for controlling the project. For example, if someone makes an error, ask them where the associated RCA is?”
4. Only when these systems are stable can you start measuring the people on these measures. That is when they have the confidence that these measure actually work.
“Hang on said Tony. What is RCA now?”
“It stands for Root Cause Analysis” I continued “It is critical that you make sure that you don’t talk about measuring their performance with the dashboard but just get them to start using it. Really if you look at it from your perspective you want everyone to get 100% of their variable compensation. This means you as an organization you have done very well and met all your goals set up in your Annual Operating Plan (AOP)! I am sure no company in the world will have the variable compensation to be more than 2% of the entire salary cost! So why would company try to cheap out on it?”
“That is true!” cried out Tony.
“But most people believe that management is out to get them. You have to break that barrier first. That is why I am asking you just start everybody off on getting the data and telling them that this is the KRA for the organization for at least a month. Have patience. Things will come around!”
Tony reluctantly agreed and continued his efforts to push everyone in his organization by driving all efforts through a single task list.
Predictability and the Dashboard
I did not hear back from Tony directly but by February I heard that our team was being measured on timely delivery and quality delivery only at Starks Enterprise. Our team told me it seems that our dashboard is finally being used more effectively now.
By the second week of February, I got a meeting invite where we were being asked to build an executive dashboard for Starks Enterprise. The meeting started with Stark introducing his executive team to Vantage Agora US and India teams. Tony started off by saying “We have started using a single system to manage all our initiatives and now we find that”…
“You have a need to standardize on a system of alerting like the RYG.” Our on VA onsite expert completed his sentence.
“If by RYG you mean a RED YELLOW GREEN and trigger points to determine when a task or KRA is in trouble, YES! But how did you know what I was going to ask” exclaimed Tony.
“Well it is not difficult because we as a company and people have built at least seven such systems in our ‘Executing Strategies to Success’ program. This is a natural evolution” He said.
“My friend on the golf course you were just telling me what you had in your program” He chided me mockingly.
Everyone burst out into a laugher as I responded “Tony, once you start looking and using the same task list everyone would have tried to update it on shared folders. If this was not enough they would have wanted to say that their projects are out of trouble because they know that you are watching it. They all want to look good. This is a good thing. As a natural progression you would have gone ahead and told them give you advance notice when things were not going right. They would be suspecting initially but over a period of time have come to trust that the system was here to help them and their projects and not a slap on the hand. This built up the confidence and now you want a system that can help ensure that everyone can update the system without stepping on each other’s work and make sure that you can get to see updated information every morning either on your computer or better still as an email alert from the system, right?”
“Excellent! It is as thought you were here all the time with us” cried out Tony.
I continued, “In the times to come you will figure out that we have to build this system to have controls set up to trigger alerts well before these projects go into RED or YELLOW or before a mistake actually happens. We have already built such a system and are using it to run VA operations. In fact, the dashboard data that you see as a daily report from your operations at Vantage Agora comes directly from our clubva.com system. Here we have not only built a dashboard but also a control system that helps our customer drill down from our dashboard data all the way down to the errors and the RCA. They can then follow the trail to see how preventive measure put in the RCA is incorporated into the Standard Operating Policies (SOP) to help the organization become a self learning organization. That is the true merit of a dashboard system”.
We ended the call with VA team promising to write up a proposal document that would help the executive team at Stark decide on the how they would like engage with VA in creating the dashboard for themselves.
Consistency of Purpose
By the second week of March we had installed the first version of the Vantage Agora Dashboard Customization at Stark Enterprise and I had given Tony golf tip a serious consideration. To begin with I stopped carrying a score card, stopped playing my skins games and just started playing golf for the sake of playing golf and swing fearless at the ball. The first few weeks the results were pretty disastrous. As the days rolled on my body got used to what I was doing and my scores started dropping.
On a Saturday night I called up Tony (On his Saturday morning). Tony as expected was already out of the house and in his car. After exchanging pleasantries I said “I owe you one. Your advise helped and my scores seem to be dropping. I am shooting in the high 70s and am pretty pleased with the progress”.
Tony was not happy. He said “Look I think you are much better than that. Never settle for anything less than what you did yesterday. You have to start doing this by believing in yourself.” He continued passionately, “What you believe is what you become!” Look at the case of the managing Stark’s Enterprise though a dashboard! We have done a successful transition and got 80% results from it already. It would not have happened if I did not believe we could get this done.”
While I felt that he said something very dear to my own heart about believe in the self, I interjected “Why only 80%?”
“Look, while this is a great tool it seems that I am getting a lot of resistance from people to start on new initiatives. They always tell me that we need more resources, more time, to complete pending tasks, etc., While I know what is going on and get full visibility it just seems that thing take a long time to get off the ground”.
“Exactly as expected” I said and added “This is very common Tony in this case you need to think of what has happened to your organization. It is no longer a small sail boat that you could turn on a dime. Your company is acting more like a large ocean vessel that can do a lot of other things more effectively than your sail boat. But it can’t turn on a dime. As a captain of this ship you need to make sure that you have the patience and consistency of purpose to let your ship take a full hour to turn a few degrees. When you have given this order you cannot simply give another order. You just need to make sure that you give the system a chance to work itself out.”
“Why do you say that? If you look at it we are in services business. All the processing we do is done electronically, there are no machinery to buy, no lines to set up, there is no engineering curing time” he challenged me.
“Good question” I said “How many people do you have in your organization now to what you was the number when you joined your dad five years ago?”
“We had 160 people then and we have over 570 including your team now. I get that from the dashboard too” he quipped.
“There you have it. You now have a company that is a small society in itself. Every time a company grows in size it is takes that much longer to change the behaviour of the organization. Your middle level managers and delivery management have to manage social behavior and create tipping points to make sure that initiatives get ingrained into people, processes and projects. It is more difficult to put this in place in services companies because usually there are many ways of doing things. That is why you can’t drive more than one initiative that impacts everyone in the organization. An initiative a quarter is a good guideline.”
“That is true” replied Tony “It fits what is happening to me. Any initiative that doesn’t involve changes to employee behaviour usually gets done quickly. In fact, the work that I am doing with Vantage Agora in back-office processing has been achieved very quickly for this very reason, right?”
“That is true” I added “While the dashboard is an excellent tool that provides you a consolidated actionable view of everything that is going on in your organization it requires two major commitments. Actually make it three:
1. A commitment from the top management to use ONLY the tool and not any other mechanism like meetings, emails, SMS, etc.,
2. A structured top down metrics which is laid out to the lowest level of the organization as an offshoot from the top numbers measured in the dashboard. Meaning, the top level numbers should be updated by the daily activities happening in the organization
3. Consistency of Purpose from the top management to ensure that we give enough time for the system to react to the commands/initiatives pushed from the top.
If you do this the benefits of the dashboard would be, full Visibility, Repeatability and Predictability into your operations. Beyond this it helps you scale your organization quickly”.
Three Months later
Tony turned around his business by decreasing his operating costs dramatically and putting in a structure to scale the organization. Over a period of time most skeptics to using an external company to help operations and using a dashboard to operate the organization joined the bandwagon as they realized that it would help the organization and their own careers.
Tony on his part has plans of scaling the organization further in to the future and Vantage Agora has helped customized dashboard on their PDAs.
We want you our reader to play the role of Tony and tell us about some of the problems that you have faced or questions that you might have about how your organization can benefit from technology like the VA Operations Dashboard. We will go ahead and post them in the next version of Agora times to help others that might have similar problems like you.