"Beyond Success: Achieving Synergy in Teamwork"

G. Ross Lawford

The Journal for Quality and Participation

Fall 2003, pp. 23-27

This article defines team synergy as when "team members function so well together that their output significantly exceeds what the same individuals would have achieved working on the task noncollaboratively."

To pursue synergy in teams, the author of this article recommends:

• Taking the time to ensure that all participants share the same explicit understanding of the vision, goals, plan, and core values underlying them.
• Using consensus building as the preferred approach to strategy development and decision-making.
• Encouraging all team members to share leadership and responsibility for other team facilitation functions from time to time.
• Demonstrating that all members of the team are important to its success.
• Avoiding assessing blame, and instead supporting all members in learning from mistakes or problems.
• Resisting the temptation to evaluate team members relative to each other or attach more importance to one team function (such as leader) over others.
• Assigning roles to team members to enable them to utilize their strengths and contribute to the team effort.
• Helping all members to understand the importance of their specific roles to the overall project.
• Developing an atmosphere of mutual trust through empathy, physical/emotional/psychological support for each other, open and honest communication, and opportunities to establish rapport.

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"The One Number You Need to Grow"

Frederick Reichheld

Harvard Business Review

December 2002, pp. 46-54

After reviewing the pitfalls of customer retention scores and customer satisfaction surveys, the author describes a research study conducted to determine what customer survey questions most effectively predict customer behavior and company growth.

The approach started with roughly 20 questions on the Loyalty Acid Test, which was designed by the author about 4 years ago. The test was administered to thousands of customers in six industries: financial services, cable and telephony, personal computers, e-commerce, auto insurance, and internet service providers. Information was subsequently gathered on survey-participant purchases and referrals. Purchases and referrals are postulated to be two behaviors that can drive company growth.

The question (from among the aforementioned 20) that was far and away the most effective across industries for predicting purchases and referrals was:

"How likely is it that you would recommend [company X] to a friend or colleague?"

The above question used a 10-point response scale, with 10 meaning "extremely likely", 5 meaning "neutral" and zero meaning "not at all likely." Customers with score of 9 or 10 were labeled as "Promoters." Those with a score of 7 or 8 were labeled "Passively Satisfied." Those who scored zero through 6 were labeled "Detractors." A "net promoters" score was computed by assessing the percentage of Promoters minus the percentage of Detractors. It was found that the "net promoters" score clearly predicted a company's growth rate over a 3-year period.

Two other questions that were effective predictors in certain industries were:

• "How strongly do you agree that [company X] deserves your loyalty?"
• "How likely is it that you will continue to purchase products/services from [company X]?"

Additional questions that had some limited usefulness in a particular industry, but little general applicability, were:

• "How strongly do you agree that [company X] sets the standard for excellence in its industry?"
• "How strongly do you agree that [company X] makes it easy for you to do business with it?"
• "If you were selecting a similar provider for the first time, how likely is it that you would choose [company X]?"
• "How strongly do you agree that [company X] creates innovative solutions that make your life easier?"
• "How satisfied are you with [company X's] overall performance?"

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"Lean Manufacturing: Designing the Cell"

Steve Hunter

FDM

October 2003, pp. 26-29

This article provides a short introduction to designing manufacturing cells. Some of the key points of the article are:

• Cells should be designed around similar products that define a sequence of processes.
• Cells may be all manual operations, part manual and part machine processing, all machining or even all robotic. Most cells are part manual and part processing.
• Cells are often arranged into a U-shape, but they have also been designed into different arrays.
• The Lean Production system is made of manufacturing and subassembly cells and final assembly, linked by a pull kanban system that holds and physically controls in-process inventory between cells.
• Involve cell operators in the early stage of designing the cell. Otherwise, they may not take ownership of the operation.
• Machines and processes in a cell are usually single-cycle automatics that complete the desired processing untended and then turn themselves off automatically after the processing cycle.
• Normally, in assembly or sub-assembly and in some labor-intensive machining cells, the worker moves from process to process or workstation to workstation completing each step of the assembly process.
• All the cells in the plant are designed to produce parts as needed, when needed, by the downstream processes and assembly lines.
• Piece parts are fabricated by the cells and flow lines at the rate needed in accordance with the system takt time.

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"The Limits of Structural Change"

Jeffrey Oxman and Brian Smith

MIT Sloan Management Review

Fall 2003, pp. 77-82

This article contends that many of the initial rationales for giving primacy to organization structure no longer apply. Though the types of structures have changed (hierarchical, flat, matrix, etc.), some leaders are now recognizing the inherent limitations of structural change itself. Instead of attempting to spark change with organizational redesign, some companies are focusing on nonstructural issues such as people, processes, and rewards.

A very interesting chart in the article identifies initial rationales for formalizing organizational hierarchies, and then briefly discusses how the bases for those rationales have changed and what the implications for evolution are. Below are the initial rationales and evolutionary implications:

• Control and separation of duties—"Job requirements are likely to be increasingly embedded in processes and work-;flow systems and become even more dynamic;"
• Top-down resource allocation—"Processes will be driven by advocacy of need, not positional authority; 'allocation of fixed resources' planning will be replaced;"
• Ownership of knowledge—"Broader sharing of information will only accelerate this phenomenon;"
• Cascading of communications—"increasingly open information sharing will better enable people closest to each issue to make informed decisions;"
• Performance management—"Performance will likely become increasingly self—managed, with people choosing with whom they will work and skill replacing position as the criterion for assignments;
• Compensation management—less long-term loyalty means more prenegotiated contracts and fewer long-term plans;
• Career management—"People seek out roles that are comfortable or challenging, depending on personal needs;"
• Need for organizational order—"Velocity of change requires more flexible, project-based structures."

Case studies are provided showing how organizations are moving beyond structure at BP, Duke Power, and W.L. Gore and Associates.

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"The Metrics Maze"

Steve Bates

HR Magazine

December 2003, pp. 51-55

The author of this article states that many HR leaders have moved beyond HR department metrics (such as cost to hire a new individual) to explore "the exciting frontier of how their workforce, and each division or team of employees, contributes to their organization's financial goals."

The path to implementation of HR metrics that measure human capital is not easy however. Some companies have had partial success and other companies have invested large amount of money only to later pause and consider whether it is all worth it.

The article does provide several clear tips for getting started in measuring human capital:

• From the outset, don't be shy about seeking help from industrial/organizational psychologists and other experts, either in-house or from outside the organization.
• Identify precisely what you want to measure and why. It should be something that is appropriate for and important to your organization.
• Go beyond measures of how HR does its job. Focus on what drives people to generate business success.
• Make sure that senior management buys into your plans.
• Make sure that your results will be practical enough to drive action.
• Don't try to measure too much, especially at first.
• Make sure that you can find and collect the right data when you need it. Some operations are difficult to measure objectively, and different parts of the organization might measure the same factor differently.
• Interpret and present statistics in a way that will be easy for employees and managers to understand.
• If you get stuck or are not confident about the results, step back and reconsider your goals and how to reach them.

Five case studies illustrate how some companies have fared in their efforts to measure human capital contributions—Ford Motor Company; National City Corporation (financial services); ArvinMeritor (vehicle parts); Whirlpool Corporation; and Dow Chemical.

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Metrics That Drive World Class Performance

John McNeil, GP Deltapoint

As shown in the Bates article summary, many departments and functions are working on improving their ability to measure their direct contribution to company performance. In our work with clients we emphasize this very effort: cascading organization goals to the departmental (and eventually individual) level; linking the goals to specific measures; setting standards for work to hold and improve those measures and then monitoring for deviation from those standards.

As indicated by Bates, a normal place to start the search for metrics is the financial statements. We agree, but only to a point. Measures that emphasize flow and waste are often more productive and more actionable too. This is particularly true for "service" departments or functions within a business. Take HR for example, or the maintenance function in a manufacturing organization. Financial improvement for these folks tends to drive in one direction: reduction in headcount. While improved productivity in HR or maintenance is clearly a laudable goal, a simple focus on headcount and costs will lead to a diminished functionality and at some point, a reduced ability of the organization to function properly at the operational level. What is needed is a counterbalancing metric so that the cost for unit improvement can be optimized. In the case of HR, a simple flow metric might be time to hire, or training throughput. In the case of Maintenance, a waste-reduction metric might be operational uptime for the production department and a flow metric might be time to return production to full speed after breakdowns. Because money is lost and made in operations, this linkage provides a better business rationale than HR cost or maintenance cost alone.

Bates' article would not be insightful or necessary if non-financial measures were easy to develop, implement and improve. But the fact is that companies find it much easier to manage direct, functional measures than the cross-functional metrics described above. Don't underestimate the amount of groundbreaking political work that will be required for you to negotiate the metrics maze yourself. This is a case where only a clear vision of your cheese will produce the amazing results you deserve.

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