It is an accepted management principle that if you can’t measure something, you can’t manage it. One of the main tools business coaches push clients to use in order to improve their businesses is to “test and measure”.
This is nothing new. The Economist published an article on September 12 2015, about Frederick Taylor, the most influential management guru of the early
20th century. In his “Principles of Scientific Management”, he proposed that management could be made into a science, and workers into mere cogs in the industrial machine. His idea was to break complex jobs into simple ones, measure everything that workers do, and reward them according to performance.
His ideas were well accepted, and adopted by, among others, Henry Ford, in his car plant. The way in which scientific management was implemented caused something of a backlash, and Charlie Chaplin was one who satirized the automated assembly line, and the dehumanization of the workers, in the movie “Modern Times” in 1936. At the time, there was a suggestion that workers would be more productive if they were treated as human beings, rather than as robots.
The Economist points out that a recent article in the New York Times about Amazon.com suggests that scientific management, or “Taylorism”, is alive and well. According to the article (New York Times August 15 2015), it is a tough gig to work at Amazon. If you want to progress, you have to be prepared to work insanely long hours, give secret feedback to one another’s bosses, and, if you hit the wall, says the article, the only solution is to climb it. Ex–employees mention frequently seeing people crying at their desks from the pressure. Workers in the warehouses are monitored by sophisticated electronic devices, to ensure that they are packing enough boxes each hour. In the offices, the negative feedback from co-workers can end a career, even if it is incorrect. Each year there is what the article calls “an extended semi-open tournament called an Organization Level Review”, where subordinates are debated, ranked and reassigned. And then there is what The Economist refers to as the “rank and yank” process, where the weakest workers are regularly culled. Anyone who is not prepared to work 80 hours a week is seen as ‘weak”.
The fact that Amazon is a tough place to work for hasn’t stopped the queues of people wanting to join the company, nor has it stopped Amazon from being amazingly successful and innovative. In fact, some company veterans say that the genius of Amazon, and the reason it is so successful, is the way it drives its people to drive themselves. Their very rigorous system ensures that they retain only the highest quality of people – even if only for one year, on average.
Major organisations take a lot of trouble to test and measure the performance of their teams. So, is it as important for SME’s to do the same? After all, it’s surely not necessary for an SME with a dozen team members to go the same kind of trouble as a major organization with hundreds, or thousands, of team members?
In fact, just the opposite applies. If a major organization with 50,000 employees (like Amazon) has one or two, or even 10 or 20, poorly performing team members, it won’t make much of a difference. On the other hand, if an SME, with a team of only 12, has one or two under-performers, it can make the difference between success and failure. So the need to test and measure, and ensure that only the best people are on board, is, if anything, even greater.
Treating team members like Amazon treats theirs, while great for Amazon, may well not work in an SME. Creating an atmosphere of distrust between team members could be pretty destructive. Measuring every activity can be soul-destroying, and, while people are prepared to take a lot of abuse to work for Amazon, the same probably won’t apply to your business.
So, how can you achieve the right balance between testing and measuring, on the one hand, and treating your team like robots, and dehumanizing them, on the other?
An SME would be able to implement a pretty effective testing and measuring regime if it incorporated these elements:
- An organizational chart, so that everyone understands how each team member fits in to the structure of the business;
- Some form of employment contract for each team member, clearly setting out their responsibilities, so that there is no doubt in their minds as to what is expected of them;
- A full set of key performance indicators (KPI’s) for each team member, so that both they and the owner will have an objective way of knowing how they are measuring up to expectations;
- A regular (6-monthly or annual) performance review session. Team members often see review sessions in a negative light, as they are too often used only to pick on non-performers. However, used correctly, review sessions can not only help owners and managers counsel the poor performers, but also identify impediments to better performance by team members, help even the good performers achieve more, and get the 100% involvement from the team that is the ideal.
- Team conferences, preferably facilitated, where team members are kept informed about the state of the business, the business goals and the progress to the achievement of those goals. At these conferences, owners should actively encourage team members to contribute ideas for the improvement and growth of the business.
Many owners of many small businesses make the argument that it is unnecessary to formalize the process. After all, with a small team, there is constant contact, and everyone knows what’s going on. However, if a proper system is not put into place, there is bound to be a breakdown in the process.
- If there is no employment contract, and proper KPI’s are not agreed, how will the owner be able to show the team member that he/she is not performing according to expectations?
- If there are no regular reviews, except for the exceptions, every review will, of necessity, be a negative, and unpleasant, experience. Most SME owners avoid confrontation, and poor performance is, all too often, allowed to continue unchallenged. A regular review process will ensure that poor performance will be discussed.
- If team members are not exposed to the state of the business, and encouraged to make suggestions for the further progress of the business, how will the owner be able to identify the shining stars, and demand 100% involvement?
A test and measure process helps to identify the bad apples on an objective basis, which, in this climate of workplace relations, is essential, if they are to be managed out if they don’t respond to counseling. But it also identifies the superstars, allowing the owner to make sure that they are looked after, and not lost to the opposition.
The team is a key resource of any SME, and managing the team is essential. Therefore, measurement of the team is necessary. Major organizations take the matter really seriously. SME’s may need to do it differently, but they need to take it just as seriously.