The Right Measures

The Story of a Company's Journey to Find the True Indicators of Its Success and Values

Mark A. Nash, Sheila R. Poling

• Publisher: Productivity Press
• Year: 2017
• Print ISBN: 9781138464087
• eBook ISBN: 9781466575806
• Topic: Negocios y empresa
• Subtopic: Negocios en general

Organizational measures are the foundational building blocks that shape an organization's vision and action. All too often however, these measures do not receive the attention they deserve. In addition, it is common for organizations to overact and measure too much, resulting in the same results as when you don't measure at all a lack of understand

Chapter 1

A New Job

September 8

“Wake up, Narvell!”

Narvell opened his eyes and looked around. Had someone really shouted at him or had he been dreaming? As he searched the faces in the room, it appeared as though no one was looking at him, so Narvell straightened himself in the chair and hoped it had just been a dream. But was this meeting a dream? Or was his new career choice turning out to be one really bad and boring, not to mention confusing, reality?

Narvell T. Mann had been sitting in the corporate conference center now for more than four hours. He had listened, or mostly listened, to three different vice presidents and two directors explain to him and the other twenty-six people in the room about the financial health of the company. Narvell’s boss, the director of engineering, was now going into great detail about numerous engineering projects. He appeared to be well equipped with enough charts, graphs, and data to make any engineer proud. After another twenty minutes of long-winded and quite detailed answers that Narvell thought to be mainly hot air, his new boss, Bill Cooke, finally came to a close. Looking around the room, Bill asked, “Does anyone have any questions?” Then, not really waiting for anyone to raise their hand, or open their mouth, Bill continued, “Great. Mr. Schmidt, I believe that’s all we have for you today.” With that, Bill took his seat on the front row of the conference center.

As Fred Schmidt, the CEO of M.E. Burdette Co., came to the podium, Narvell begin to think about this first big meeting. He realized that he knew very little about the company where he had just come to work, and had learned nothing from today’s experience. Panic began to set in as Narvell quietly beat himself up for not understanding anything that had been presented during the previous four hours. Thinking to himself, he asked, “What am I doing here? Why was I invited to this meeting? Am I stupid? What am I missing?” Just then, Mr. Schmidt began to speak, snapping Narvell back to reality.

“Now, if someone would like to explain to me what in the world is going on, maybe we can get somewhere. Each and every one of you who presented this morning gave us a very detailed explanation of what is going on in your area. Yet, I still have no more idea about why we’re losing money than I did when the meeting started. Sales claims they are making their goals. Manufacturing is saying the same thing about meeting the production schedule. Purchasing showed us data that supports their primary objective of the year to lower the cost of purchased materials by 3.5%. And now, Engineering tells us we are on target on all but one project. So, if everyone of you is doing so well this year, why are we not making any money?” Narvell sat there dumbfounded at what he had just heard come out of the mouth of their CEO.

Mr. Schmidt continued, “I want Bill, Dane, and Allyson to review this entire packet of information and see what, if anything, can be used to help us turn this situation around.”

After sitting through four hours of nothing but charts, graphs, explanations, excuses, and finger pointing, Narvell was suddenly beginning to wonder if he had made the right choice in accepting this position. On the job for just under three weeks, he still felt like a fish out of water. He took this job as a cost analyst expecting to learn a great deal about engineering, manufacturing, costing, and corporate management. And now, here he was sitting in a meeting listening to the president ask the same questions he was thinking. Of course, Narvell hadn’t known the company was losing money at the beginning of the day. Now he did, and he was beginning to worry.

He began to reflect on his life since joining the company. In his short time here, he had learned very little, if anything at all, about the company. His first day on the job, he had been given a stack of reports to read. When he finished reading through the reports, he went to his new boss, Bill Cooke, and asked what he should do next. Bill’s response was simple and somewhat short, “I’m too busy to get with you right now. I’ll have one of the engineers get with you after lunch.” After lunch never came, and he wound up sitting around for several days doing nothing. Narvell finally took it upon himself to ask one of the friendlier engineers, Jimbo Chisholm, if he had anything he could do. Jimbo told him to grab a notepad and join him in Conference Room C. For the next two weeks, Narvell had shadowed Jimbo’s team working on a project for one of M.E. Burdette Co.’s largest customers. During that entire time, not only did he never receive any instruction from Bill, he never saw him. And now, here he was sitting in the corporate conference center totally confused and wondering if he had made the biggest mistake of his life.

Mr. Schmidt’s continued monologue caught Narvell’s attention once more. “The board of directors has stated very clearly that they want to know why profits are down and why we’re losing market share. I called this meeting expecting someone to give me something I could tell to the board. However, what I heard contradicts the financials and the board’s feelings. Does anyone have anything I can take back to the board?” When no one responded, Mr. Schmidt picked up his notebook and walked out of the room. Apparently, this meeting was over.

Just as Narvell started to get up out of his chair, Jimbo leaned over and said, “Welcome to M.E. Burdette Co.” He then quickly stood up and headed out of the room. Narvell quickly caught up with Jimbo and they headed down the hall towards Engineering. Narvell asked Jimbo, “What was that meeting all about? What did Mr. Schmidt mean about not learning anything? Wasn’t that good information? And by the way, why the heck was I even invited to this meeting? I’m just a cost analyst. I’m not even an engineer, much less a manager or director.”

Jimbo replied without thinking or even really hesitating. “The entire engineering staff goes to every one of these goals and objectives update meetings. No questions asked. Mr. Schmidt requires it. And just like every other meeting, we usually leave the meeting with more questions than answers.”

“Why?” asked Narvell looking around as if he expected someone else to walk up and answer the question.

“Why do we all go? Or why do we always leave with more questions than answers?” asked Jimbo.

“Both,” responded Narvell, with a bit of agitation now in his voice. “If we are the biggest manufacturing company in town, and we have the biggest market share in our industry, why is everyone so confused about what’s going on?”

“Look, Narvell, I don’t pretend to understand what goes on with anything in this company except in my little corner of Engineering. What I do know is that no one in our department questions the big dogs upstairs. If you do, Bill will make sure you aren’t around to ask a second question.”

“Bill?” asked Narvell, beginning to feel confused again.

“Your boss, Bill Cooke. You remember him?”

“Jimbo, you say that as if someone is hiding something. Why can no one ask questions?” Narvell was beginning to really doubt his career decision now.

“Okay, I’ll say this one more time and hopefully this will be simple enough to get through that thick head of yours. Don’t ask questions about our metrics. Apparently, Bill and his buddies upstairs are very proud of the way we report success, and I suppose the way they explain the occasional failure. It doesn’t seem to really matter if you, me, anyone else in Engineering, or even anyone on the manufacturing floor can understand the big picture from these charts and graphs that get posted on the wall. It doesn’t matter how many people read or don’t read the wall of lame … uh …. I did not just say that …. What is important is that all of the different areas are meeting their goals. They’ll all get together tomorrow and create a report for Mr. Schmidt and his vice presidents to deliver to the board. Then the world will be great for another ninety days or so.” And with that one last comment, Jimbo slipped into his office leaving Narvell standing alone in the hall.

As he headed back to his cubicle in the Engineering department’s maze of partitions, Narvell tried to replay the entire meeting in his mind. With each bit of information he could recall, he tried to tie it to something, anything for that matter, which he could remember from his research about M.E. Burdette Co. and his job interviews when he was searching for a job. Something didn’t add up here, yet Narvell couldn’t quite put his finger on it.

Sitting down at his cubicle desk, Narvell woke his computer up and logged into the network. Without really thinking about it, he navigated his way through the list of virtual drives and opened the Y: drive where the company metrics were housed. Each division of the company had its own folder. Within each folder were subfolders for each department. In these department folders were the tables and charts that numerous managers, directors, and vice presidents had reported on earlier, and, apparently, their careers hung on the results that were kept in these folders. Narvell started to look through the folder labeled Finance. When he opened the folder, he saw subfolders for Accounts Payable, Accounts Receivable, Benefits Administration, Budget, Financial Analysis, Payroll, and Warranty Service. Narvell double-clicked on Accounts Payable and was immediately met with a pop-up window that informed him he did not have authorization to access the folder. He repeated this for each of the other folders and was met with the exact same message. “So much for that idea,” thought Narvell as he hit the Back button and returned to the root directory of the Y: drive and clicked into the folder marked Engineering. “Okay, let’s see what our own department has to say.”

Narvell wasn’t sure if he was shocked, stunned, or frustrated at what happened next. The Engineering folder opened and it was empty. No subfolders; no files; nothing. Narvell sat and stared at the computer screen for several minutes in silence. When he finally regained his thoughts from what was in front of him, or more correctly, what was not in front of him, he returned to the root directory and quickly opened the Manufacturing folder. This time he found a long list of subfolders; one for each work center on the manufacturing floor. Problem was, just like Finance, he couldn’t open a single subfolder. Same problem existed when he tried to look through Sales and Marketing; and, then again, when he took a shot at both Facilities and Quality Assurance.

Narvell finally thought he had found some data to answer his curiosity when he opened the Human Resources folder. There were only three subfolders located here. Narvell double-clicked to open the first folder titled Environmental. It opened in a new window and a single file was sitting in this subfolder. Half expecting a message to pop up saying the file was not accessible, Narvell clicked on the file, and it opened. What he saw prompted a guttural sound much like getting hit in the stomach, that in hindsight, Narvell was sure could be heard throughout the department. The screen in front of him simply said:

TO VIEW THIS METRIC, SEE THE EMPLOYEE INFORMATION BOARD OUTSIDE THE MAIN BREAK ROOM IN MANUFACTURING

Narvell backed up in the network again and opened the subfolder called HR. Once again, he found a single file, and when opened, had the exact same message. Without even bothering to go into the Safety subfolder, Narvell closed his browser and tossed his cordless mouse into the far corner of the desk. He leaned back and stared at the framed poster with the single word Teamwork on the wall outside his cubicle.

“Yeah, right. Teamwork. Where? Not in this company,” Narvell said quietly.

All he was trying to do was understand a single management meeting that included every upper-level manager in the company plus the entire engineering team. What makes this company tick? Where did the reports that were presented come from? How does an employee review this information and gain knowledge? And the one person Narvell felt comfortable with in asking about what was going on had already told him not to ask questions!

“Well, I guess I’ll head out to the break room,” Narvell announced as he stood up. Then he realized that no one was listening, or probably even cared, and he began to feel a little bit silly.

***

Narvell appeared in front of the giant metrics board, which consisted of an entire wall outside the main manufacturing break room just as the afternoon bell sounded announcing the end of the afternoon break. He stood and looked over this incredibly large wall of information, nearly six feet tall by more than fifteen feet wide, while the production employees streamed by on their way back to the manufacturing floor. As the last employee slowly walked past him, it occurred to Narvell that not one person seemed to look at the wall or him as they had passed by. It was almost as if he and the metrics board were invisible. Walking to the left side of the board, Narvell began to study the data in front of him. The wall was divided into sections; one each for the various divisions of the company. Much of the information he had heard this morning was posted here. The Sales division was the subject of the first column. The tables and graphs here appeared to be very thorough: Actual Total Sales; Revenue versus Forecast; Actual Sales by Region versus Forecast; Margin versus Goal for Past 12 Months; Margin by Region versus Goal for Past 12 Months; # of New Accounts by Region; # of New Contacts by Sales Rep—the charts and graphs went on and on. Narvell counted twenty different metrics for Sales.

Moving over to look at the Manufacturing Team, as they called themselves, Narvell was even more impressed. There were charts showing the number of jobs produced by month, week, and day; charts showing number and percentage of jobs completed on time; graphs showing the breakdown of parts produced by product family, top ten parts by quantity; productivity tables for each manufacturing cell on the floor, as well as a table showing the productivity rating for each employee; and, scrap and defect charts by part, manufacturing cell, and supplier. Narvell began to realize just how much data was being tracked throughout the company, and he was barely halfway through the second set of metrics posted on the wall.

After stopping his count in the manufacturing section at forty-seven different sets of data, Narvell thought he would take a look at Engineering. A sense of pride began to creep over Narvell as he looked at the engineering department’s set of metrics. There was a graph showing number of projects started by month with a bold red line showing the goal per month; a chart showing hours worked per project versus budget; and, a chart showing how each project was progressing against milestone dates. Each of these charts and graphs showed just how well the department was doing against the goals that had been set for them. Narvell then noticed that there was a series of charts showing the number of products that had been modified. These charts showed the number of product revisions by month, hours put into the revisions, and expected cost savings from changes and/or improved margins.

“This is good stuff,” Narvell said quietly to himself as he continued to look through the remaining metrics on the board for Engineering. After studying the remaining data for his own department, Narvell spent the next forty-five minutes going over the Quality Assurance, Human Resources, Finance, and finally, Marketing’s metrics. Narvell looked down at his watch and realized he had just spent the entire afternoon, nearly two and a half hours, reviewing the information on this wall.

As he stood there in front of the massively detailed wall of measurements, Narvell began to think about what Mr. Schmidt had said at the meeting this morning. So, why did he not know the answers to his questions? It appeared that there was more than enough data here to run the company. Why was the M.E. Burdette Co. losing money? Narvell rescanned the charts for Sales, Marketing, and Manufacturing. If everyone was hitting their goals as these charts showed, then what was the problem?

Pulling his smartphone out of its holder on his belt, Narvell began to take pictures of the wall. Breaking it down by division, Narvell shot three or four photos of each section. He really didn’t know why he did this; it just seemed like the right thing to do. Perhaps he would have a brilliant thought in the middle of the night, review the data in the photos, and then answer all of his questions, and maybe Mr. Schmidt’s as well.

***

Sitting down at his desk, Narvell woke up his personal computer and checked his e-mail. Looking at his inbox, Narvell saw yet another e-mail from Chris Anselmo. Chris had been Narvell’s roommate his junior year in college, and as Narvell recalled, it had not been a very pleasant experience. Thankfully, Chris had been a senior, took a j...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Contents
• Prologue
• 1 A New Job
• 2 What a Day!
• 3 More Questions Than Answers
• 4 What Are We Doing Wrong?
• 5 The Tape Measure
• 6 Finding Your Tape Measure
• 7 Just Follow the Rules
• 8 Don’t Rock the Boat
• 9 Asking the Right Questions
• 10 The Journey for Answers
• 11 A Career Cut Short
• 12 A Game Changer
• 13 Creating the Plan
• 14 Help from Others
• 15 Measurements with Meaning
• 16 A Time to Start Over
• 17 Take 2
• 18 It Does Not Happen Overnight
• 19 The Journey Continues
• Epilogue
• Appendix
• The Right Measures Glossary
• About the Authors