Hazards in measuring productivity

The topic of personal effectiveness is in the air, in books and at business conferences, not for the first year. Thousands of managers around the world, excited by the next genius of technicians, are trying to put into practice everything without which, as it seems to them, modern business is impossible. Under the cut is the beautiful story of Sam McCaffie .


')
"How do you recommend measuring the individual productivity of my engineers?" It was already late evening, I had to spend an hour at the wheel, and there was no longer enough strength to answer questions. But this young manager, who asked the question, whose presentation was after mine, hooked me. He seemed to have read my thoughts, pulled out the greatest annoyance about the management and handed it to me in the form of a question. Energy filled me, and I asked: “First of all, why would you do this at all?” The young man replied: “Well, I was just promoted so that I could manage a team of engineers who were formerly my colleagues. I want to be sure that I am doing a good job for them. I want to be able to measure them in order to make a start from something in further evaluation of their productivity. I want to be sure that everyone works in good faith ... ". It sounds perfectly reasonable, right? So much the worse, because it is completely, absolutely wrong. “Well,” I replied, hanging the bag over my shoulder, “why don't you go with me to the parking lot and describe what you are doing now? I'll give you an honest review. ” In the end, I described to him three specific techniques that he could immediately apply to his team. But in order for them to have any meaning, we first had to quickly consider the key difficulties faced by companies like it.

Today we are all software companies.

Marc Andreessen joked that "software is devouring the world." He hinted at the growing dependence on technology of almost all industries, not just software companies.

The rise of SaaS, cloud technologies, big data, AI and machine learning, as well as a variety of mobile devices with easy access to high-speed Internet, is both a danger and an opportunity for traditional companies, especially those that were founded before the Internet revolution of recent decades. These companies today are faced with the choice of “acting like software companies” or being crushed by competitors.

However, they face serious obstacles to change. Their maturity has a tremendous impact on new initiatives, making it difficult for domestic innovators to achieve a “runaway speed” with their projects.

I regularly encounter three major obstacles to the introduction of innovations and gaining flexibility by such companies:

1. Organizational structures hinder collaboration.
2. Outdated management theories, deeply rooted in the company culture.
3. Legal or regulatory stiffness that prevents risky decisions.
The third problem needs to be dealt with at the executive level. But any manager who leads a product development project can seriously affect the first two.

Traditional control theory is broken

The two authoritative thinkers of the early twentieth century, Frederick Winslow Taylor and Henry Gantt, had a deep and lasting influence on traditions in the field of management. They were in the ranks of those who formed the intellectual foundation for the theory of control in the era of American industrial production. Unfortunately, their continued influence on management techniques in the information age is no longer beneficial.

Taylor is considered the father of scientific management, especially in relation to research on time and movement. As one of the first management consultants, Taylor revolutionized production by introducing observations and measurements into the serving tasks of the production system. By breaking the production cycle into separate tasks and measuring their average completion time, Taylor could make more accurate predictions of the relative duration of the entire project. He also used this method to help employees improve the efficiency of business processes through the rationalization and reordering of individual stages.

Thanks largely to Taylor's influence, workers focus on their utilization as a performance metric. This made sense in the world of non-mechanized service labor. But today we live in very different realities.

Around the same period, Gantt developed the famous Gantt chart for project management. You all must have come across this diagram. This is a framework for visualizing all the resources and tasks necessary to complete a project.

Since the Gantt chart was developed for physical production and assembly processes, it is not particularly useful for knowledge work. It involves the encouragement and punishment of employees for performing individual tasks in order to fine-tune production processes, and completely ignores the dependencies between parallel tasks.

Again, this approach is completely unacceptable in the digital era, when products are created by collaborating teams, semi-autonomous groups.

Deming and New Management Science

One of the early critics of measuring individual productivity was William Deming. In his articles and speeches in the early 1950s, he identified and described the dangers of excessive concentration on the "individual."

He emphasized that the quality of the product of any production system is explained mainly by its configuration and organization, and not the individual productivity of workers. And so Deming believed that it is unacceptable to punish or encourage them for a certain level of productivity.

Deming often criticized the practice of annual bonuses for individual productivity, as one aspect of excessive attention to "individual". In an interview with Industry Week in 1994, he shared his thoughts about involvement in a complex system:

“The chances are great, almost enormous, that everything happens this way because it is a consequence of the system in which he works, and not the result of his own efforts. In other words, productivity cannot be measured. You measure only the combined effect of the system and its efforts. And you cannot separate them. ”

With the collaboration of Deming with Japanese scientists and engineers during the post-war reconstruction, line workers in the workshops allowed to improve the results of their work as a team, which was one of the key components of the phenomenon of just-in-time production.

Toyota’s well-known production system — Agile and Lean Startup — which is among its descendants — is one of the obvious results of the extensive collaboration of Japanese industry with Deming. This is an innovative new philosophy that eventually penetrated the USA in the 1980s through exchanges between American automakers and executives from Tokyo, and was finally popularized as Lean. Considering that Deming was such an influential figure not only in creating “just-in-time” production in Japan and Lean-production in the USA, but also in creating Lean Startup and Agile Software Development methodologies, we may need to listen to his warnings about why we should not measure individual productivity.

“I thought I could track in our project tracking system how much time engineers spend on completing tasks,” said the young engineer manager as we walked to my car. "That would tell me who is faster and who is trying to do his job."

From his tone and gaze, I understood that he was driven only by the best motives. He wanted to do everything right in his new position. Moreover, he clearly respected the engineers who reported to him (he had just been one of them), and sincerely wanted to help and guide every team member who tried his best to keep up with the rest.

“This is a terrible idea for two reasons,” I said. “First of all, measuring the duration of individual tasks will tell you almost nothing about the level of professionalism. Second, stimulate individual work to the detriment of the command. ”

Working in the field of knowledge requires new approaches.

Despite the impressive success around the world of the Toyota production system and Lean production, the introduction of Lean techniques into the sphere of knowledge in large organizations is progressing slowly. I strongly suspect that at least one reason is still a very strong influence of Taylor and Gantt in training managers.

In the past, management tried to evaluate the employees who developed the product in terms of quality, speed, cost, and profit. In today's world, only ingenuity, the ability to cooperate and solve problems are important. All servicing, administrative, and piecework work from the 20th century — even at the “white-collar” level — is automated much faster than you probably think.

As the wave of digital transformation radically transforms companies, we see two parallel and complementary phenomena.

First, companies are slowly moving from a state where most employees have operational or project thinking to customer-oriented or product-oriented thinking. Secondly, tasks that are not directly related to the main process of creating products and customer service are outsourced to specialized firms, or are completely automated.

Thus, although some kind of work performed by individuals is not automated, it is often lower-skilled compared to product development, which adds the basic cost. The vast majority of highly valued product development work is done by teams.

If you manage a company that is in the process of moving to focus on the product and customers, then it is very likely that now the most important activity in your company is not performed by individual employees. Most likely this is a joint, creative work of groups operating together. Thus, it makes no sense to try to measure, and even more so to evaluate the individual employees of these product teams.

This is more or less what I said to that young manager while I was putting the jacket and bag into the car.

“Look, you want everyone in the team to work effectively together, right? Then you have to develop a stimulating and evaluating structure around the team, rather than individual employees. ”

I told him to do the following:
1. To measure the productivity of work, and not the activity of people . Organize work in the form of a queue (plan, task list, whatever), depending on the importance to the business. The only metric that matters is the speed at which work is delivered to customers.
2. Gather people in pairs or groups to perform one type of work at a time . Allow them to focus on collaborative creation, testing, and delivery of this work before giving them a new job from the queue. Moreover, letting them choose their own pair or group themselves (perhaps, at first, small adjustments will be needed).
3. Inspire the team to independently improve the process . Collect everyone regularly and analyze what works and what doesn't. Allow the team to voice problems and suggest ideas that they think will help in solving.

Your task is to help you choose priorities based on business needs, remove obstacles that slow down teams, and report on business progress. This is already quite a lot. Add to this career help and mentoring, and you’ll already become a better leader.

On the way home, I thought, “What a good question. We need to somehow turn this conversation into a blog post. ”