Let people add value to the process

An agricultural product company that sells seeds, plants, flowers, etc. is growing rapidly, so there is not much time for training newly recruited salespeople. Soon, sales growth stalled. Company management dug into the sales department to understand the problem, and the answer was that half the reason was that there were too many newbies, and the other half was that the sales force had little information on inventory and delivery.

Success Stories

The full story goes like this:

Once, a company salesperson visited a customer who provided flowers for a football match. The client used ribbons to tie large chrysanthemums in the colors of the participating teams and sold them at the stadium. The customer made an order request: "My original supplier's ground is flooded and can no longer supply me with chrysanthemums. But I have to order 10,000 chrysanthemums before Wednesday, because it will take a few days to get them Tie up. Can your company supply this shipment, and what is the price?"

The salesperson told the customer that he would first contact the company to check the stock count. But by the time the company's inventory controller is finally able to answer questions on the phone, it may be hours or even the next day. Finally, the salesperson finally checked the inventory of chrysanthemums and informed the customer of the results: "We have 6,000 chrysanthemums in our warehouse, and 15,000 chrysanthemums will arrive on Thursday morning. So I can give you on Wednesday. 6,000 pieces were delivered, and the remaining 4,000 pieces will be delivered at noon on Thursday. How do you feel about this arrangement?"

The customer replied, "Thank you very much, but I have already contacted another supplier this morning. , and have given the order to him. I'm so sorry I can't take the risk that you won't be able to supply."

The sales manager's view on this matter is that with a little training, there may be another result. , at least that salesperson should try to keep that customer promise to wait an hour or so to find out if it is available. As a result, the sales manager decided to start from both technical and informational aspects. First, all salespeople, whether novice or veteran, are required to participate in marketing training to update their knowledge. Second, all salespeople are equipped with laptops with modems. Inventory data is entered into a computer, so that if a salesperson has a question about an item in stock when visiting a customer, he or she can keep track of what's in stock online.

Improvements have been implemented with good results. Sales rose in the first month and continued to trend upward for the remaining two months of the quarter. The sales manager and training manager then report the measures and the results achieved to the CEO. When the CEO learned that the two-pronged approach was going well, he didn't ask, "By how many percentage points did the access to inventory data and the improvement of marketing skills each increase sales?" He shook hands with the two managers. , said: "Keep working hard."

The reason is very simple, the manager does not need, and does not need to know too much. In fact, most managers are still sceptical about statistics. What they really need to know is how much human capital affects outcomes. They need to know to what extent employees will utilize capital investments such as computerization. The most basic question is, "If a company invests in office automation, how will employees maximize the effect of the investment?"

The following "Process Value Analysis" method can be used to discover the role of human factors. The steps are: scenario analysis, intervention, decision impact and value measurement.

Identifying the problem

The first step is the most important. If you know the area to intervene well, it's not hard to spot the final incremental value in the end. Most mistakes originate from this stage. Without adequate knowledge of the environment, it is difficult to answer the specific value-added questions that follow:

What is the business problem, service, quality, or productivity (ie, SQP)? Start by identifying which of these three basic areas is the problem. In many cases more than one. The solution to the problem can only be found if the problem is identified first.

What is the current performance level of the company based on the SQP indicator? Once the specific problem is identified, find evidence of both "soft" and "hard". Is it a cost, time, yield, defect, or human resource issue? Try to explore historical data, you can trace how the problems accumulated.

Does current performance affect competitive advantage? Find out where the company is losing ground in the market. For example, if the problem continues, will it affect competitiveness? Can competitors offer higher quality products at lower prices? Or do they deliver faster? Why can't you match your competitor's SQP? The answers to these questions allow you to find some solutions to the problem.

What is the most critical workflow in this situation? First, is it a production, service, or administrative process? Are you providing your customers with goods, services, or both? What kind of customer or object are you dealing with - front-line employees, engineers, supervisors, materials, or equipment? Can you briefly outline the process itself?

Selection

With these questions, you should be able to grasp all the important factors. Then comes an important step: intervention. If you take a closer look at these factors and see how they work together, it becomes clear why your work is going wrong or not progressing. The cause of the problem can come from several aspects: people, equipment, raw materials, and the process itself.

Generally speaking, there is always a breakthrough that opens up a difficult problem. In practice, people will identify all possible causes and rank solutions in order of importance. Sometimes, you can't figure out whether an event is part of a problem or a possibility of one of them. At this time, you need to send technical personnel to investigate the problem process in depth. Before taking action, you'd better stay outside the company and rethink the process from an outsider's perspective. You'll develop solutions that are part of training, consulting, redesign, or the creation of incentive programs.

Take time and wait for the solution to work. Analyze how the solution works. If nothing works, then no further analysis is necessary.

In order to determine the scope and degree of effectiveness, we need to go back to the basic metrics: cost, time, yield, defects and human response. You have probably discovered that such a process makes value analysis so easy. The key is the first step of analysis. Through analysis, you can get a complete grasp of the situation and can easily grasp any possibility of the development of the situation in terms of cause, direction and quantity. You end up finding that companies are saving money or time, increasing output, reducing mistakes, or making people happier for the same or less inputs.

Using these five metrics, you can identify improvements in service, quality, and productivity of your target business unit—how, where, when, and to what extent. You can also help other stakeholders identify changes and improvements outside the unit. Will you make any changes in terms of input? Can you improve in terms of output?

In all cases, most indicators can be quantified. Some changes can be felt, for example, employees will complain less about stress and fatigue, and work attitudes will change as a result. In this case, just remember where the improvement comes from and decide if it's worth the investment.

Multiplying

Value is everywhere. Every time you find added value, ask the following two questions: Is the added value generated by employees improving performance through training or other human input? Is the value added by employees using the various equipment provided by the company? After a little pondering, the answer is there.

Improving a process often brings multiple values. This is because by saving time, you save money; when you reduce or eliminate flaws, you reduce expenses. If the output is increased under the given input, it is equivalent to reducing the cost per unit of product or service. When customers come back from you satisfied, you have them, they will buy more products, and they will refer you to more customers.

Improving a process will generally add value in two or more of the above-mentioned areas. Process value analysis methods help you find the root cause of problems and then propose logical solutions that add value. It shows how internal factors of the process affect and improve service, quality or productivity and translate into external market and financial value. Regular inspections of factors such as cost, time, yield, defects and human response help identify problems early and identify the cause behind them.

It's not a mystery to find out the role of human capital, as long as you believe that people are the first influence of profit.

This is an excerpt from The ROI of Human Capital: Measuring the Economic Value of Employee Performance by Jack Fitz-enz. The book is published by AMACOM, a branch of the American Management Association, International Association, and the author registered the copyright in 2000. Translated by Guo Yanhang.

The English version of this book is published by McGraw-Hill Book Co. Singapore.

Dr. Jack Fitz-enz is a recognized founder of human capital standards and performance measurement theory, and founder and president of the Saratoga Institute.