HOP - Return on Investment
As you might expect, one of the first questions we are asked by a new client is "What will the Return On Investment (ROI) be for my Human and Organisational Performance Improvement Programme?"
Unlike buying a new piece of equipment, adding a new line of stock for resale, or tendering a Construction or Engineering project or Framework Agreement, the ROI into a general performance improvement programme is often much less tangible and much less demonstrable!
So, how do you make a good business case for investing in the type of services we provide here at Paradigm Human Performance?
It is extremely challenging when you are simply looking to reduce an unwanted output, especially if you didn't have a particularly accurate way of measuring the size of the unwanted output in the first place!
How do you measure what is no longer there and how do you compare it to what went before if you never measured that? It's a conundrum!
I have seen numbers bandied around which range from 30% to 330% and whilst, far be it for me to cast doubt on anyone else's estimates, I suggest there is probably a lot of what we call S&M behind these numbers, No, not the "50 Shades" variety of S&M, I'm talking Smoke and Mirrors!
It is important to us that our clients are not mislead when they first start working with us. We CANNOT guarantee ANY return on your investment. With the best will in the world, we can (and we will) provide you with the best advice, support, training, implementation, tools, techniques and consultants in the world but if you take all of that and screw it up, ignore our advice or fail to follow up on your actions and commitments, the chances are you will just lose money! OK, so now that's out of the way, let's look at what we measure, how we measure it and why we measure it!
The answer to this varies from client to client and service to service; as you can imagine a client who wants to improve safety critical communication among Ground Crew at an International Airport needs a different service to the client who wants to reduce rework in their small Mechanical Maintenance Department. Consequently the objectives and implementation strategy will differ, as will the way the programme is measured and success determined!
The key thing for you as a client is to decide what improvement you are looking for and why and then develop a clear understanding of the current situation. This should be at as detailed a level as you can get.
Your Pain Points
It is extremely important that you (and we) understand what you want to achieve by working with us. (Yes, we know we are just really great people who are fun to have around so why the hell not!) There is probably a specific or general issue that needs addressing, a pain point that you have been unable to resolve, a performance gap that you can't get to the bottom of or a safety or quality anomaly that keeps repeating or perhaps you have recently encountered a new problem of significance that requires specialist skills to investigate and resolve? When we have a clear understanding of the 'pain point' we can then determine what success looks like for you and develop some solid measures which helps you to demonstrate when and how success was achieved and the result and size of the success, hence the ROI!
General Performance Improvement
If you are looking for a general improvement of performance across your organisation but don't really know where to start we can help you here too.
Often our first step for a new client is to establish the status quo.
Er No - not that Status Quo!
Where is the business when compared to an existing measure of maturity, for example? How does it compare with the competition? Where are the areas for improvement? What do the staff think about their employer? What is the Leadership, Safety, Human Performance or General Culture of the organisation?
We offer a range of culture assessment, audit, observation, gap analysis and diagnostic tools to help you determine your current position and to identify areas for improvement. Yes, this does take time at the front end of your programme but the long-term savings in both time and money, are well worth the effort! This 'deep-dive' review of your business also helps us to develop a suite of solid performance indicators, specific to your pain points, which enable you to measure actual ROI in these areas.
For example, we recently worked with a medium sized Organisation that was suffering from a drop in productivity; this had been 'investigated' internally and put down to lack of competence and skill among the workforce. The workers were subsequently 're-trained' at considerable expense but the productivity levels continued to fall.
In a very short space of time, using observations 'in the field', interviews with staff and a review of some key company processes we identified that there was a quality issue with a specific key supplier, which the workforce had been overcoming by 'modifying' the supplied component in their workshop before installing it into their own product; why had this not been reported to management? The supplier was a local supplier, well-known to the workforce, who was suffering financial difficulties resulting in the reduction of his own workforce and our clients' workers were compensating at his expense.
The workforce wholeheartedly believed they were doing the right thing for their employer by modifying the product rather than return it to an already over-burdened supplier who would be unable to fulfill the re-order and would potentially be put out of business by accepting the returned products.
Once we had established the facts and importantly the context of the issue we learned that both organisations were heavily reliant on each other and so on our Clients' instruction, we were able to help both organisations resolve their respective issues.
Our client resolved his productivity issues, improving on his previous high performance and his supplier was able to remain in business thanks to a new financial operating model and partnering arrangement between the 2 companies. The introduction of some Human and Organisational Performance Improvement tools and improved communication links and techniques mean that both organisations are set up for future success where issues of this nature will be identified at an early stage so they can be dealt with at the appropriate level and avoided.
So, how do you measure what is no longer there?
"So the question, "How do you measure what is no longer there?" has still not been answered!" I hear you saying! Yes I know - I'm getting there!
Quite simply, in my humble opinion, you can't! Now I'm not a Statistician (I even had to look up how to spell that!) and so I am happy to be proven wrong by someone more brainy than 'what I am' but I am always reluctant to get too excited when a client tells me that he has reduced his 'Accident Frequency Rate' or his 'Total Record-able Injury Rate' thanks solely to his HOP programme.
AFR & TRIR are not good measures of success
Why? Because I am a lifelong student at the school of 'accidents happen' and 'human error cannot be eliminated' and I don't want my clients banging on my door in one or three years time complaining that their AFR or TRIR has gone back up and so "What am I going to do about it?"
Let's be clear - Human and Organisational Performance Improvement isn't a Safety Initiative! There, I said it - phew!
If all you want to do is reduce your AFRs and your TRIRs then save your money, here's a quick guide:
- Employ a load of Safety Police straight out of NEBOSH school, to spy on people and report them to their supervisor;
- Punish everyone who breaks a Safety Rule, preferably by making them tell their story in the canteen or other common area before sacking them;
- Issue a decree - try a benign and meaningless one like 'This year we will achieve zero accidents and injuries!';
- Communicate that anyone involved in an incident, accident or injured at work will be interviewed by the CEO personally, just because he or she cares so god-darned much;
- Ask every member of staff and contractor to 'report at least one near hit' a week and then ask them what they did about it! Punish them if they did nothing;
- Finally stick a bloody big sign at the entrance to your building or premises boasting about how many minutes, hours, days, weeks and eventually years it's been since your last accident and reminding everyone that the first person to reset the clock will be sacked, or worst - publicly flogged!
Yes, I am being provocative (well you know me!) but this is the reality. if you don't believe me please pick up and read virtually anything by Todd Conklin, Erik Hollnagel or James Reason! Safety focus never stops, should never go away and doesn't end because you've just finished implementing a new 'Initiative', the very reason we call new safety programmes 'Initiatives' is because in order to improve safety you continually need to remind people of the changing and developing hazards associated with their work and determine how new technology, techniques and thinking, etc. can impact your workers' safety.
In other words, someone has to constantly be taking the initiative to do something new if we want to keep out-running the 'Safety Spectre' or 'Inspector' dependent on your preference! It's exhausting and that is why Safety People are so bloody amazing because just like Dory in 'Finding Nemo' - they 'Just Keep Swimming!'
Celebrate the Journey, not just the Destination!
Yes, I know this sounds a bit 'whoo whoo' and 'new agey' but the first, most important and measurable thing you will see (if you are implementing your Performance Improvement strategy effectively) is a change in behaviours, attitudes, discretionary effort, communications, story telling, organisational learning, a common understanding of corporate and departmental values and objectives, an improved organisation and safety culture, increased emotional intelligence - particularly among leaders, individuals with a better understanding of their role in achieving objectives and targets.
Yes the most obvious initial changes are what I like to refer to as the organisational inputs, the things that will eventually drive improved outputs!
These are not as difficult to measure as you might think and identifying one or two new 'measures' in each department, business unit or organisation will enable you to see just how far your people have come, after all isn't that the whole point of 'Human Performance'.
I promise you that your existing KPIs and metrics don't need to be altered (unless they are already absolute rubbish, then they do need to be altered!), the change in behaviours and culture will drive improvements across your organisation and this will positively impact your KPI's.
No, it's not the overnight success or quick-fix that some of you are looking for, but it is the most sustainable way to achieve very specific improvements in some areas at the same time as driving wholesale performance improvement across your organisation.
So when it comes to Return on Investment and KPI's for your HOP programme:
- Don't expect miracles!
- Identify your pain points
- Get down to the detail
- Celebrate the journey
- Be in it for the long haul!
More insights coming soon.