Friday, May 24, 2013

Driving operational excellence and employee pride

Would I hire a CFO to help drive branding of my company?
photo of Joe Knight, CFO at Setpoint Systems in Ogden, Utah.
Launch Joe Knight's LinkedIn
Typically, the answer would be no. But if we are talking about Joe Knight, then all general rules go out the window. He is doing some really good brand building stuff at Setpoint Systems, a custom maker of automated manufacturing equipment in Ogden, Utah. The interesting part is that he is also helping drive operational productivity throughout the company while not forgetting to do the typical CFO job. Unlike most CFO's who shun interaction with others and prefer to collect and redistribute data, this is one who's truly engaged with the business.
That Joe finds time to share value with others is even more impressive. Recently, Joe wrote two books narrating his successful work. Financial Intelligence - A guide to knowing what the numbers really mean and Profit Management for Profit - A Failsafe Guide to Keeping Projects on Track and on Budget. These help employees and managers improve both their financial literacy and operational effectiveness in a simple and approachable fashion. The well tested methods that he now shares, have served to improve corporate performance at Setpoint already.
I strongly suggest that you view the various videos that Setpoint Systems has created in YouTube. As a B2B supplier, Setpoint benefits quite a bit by sharing these videos with its customers. By opening the kimono and showing how much Setpoint cares about what they do and how well they do it, Joe helps build strong customer loyalty while creating a robust image of their products. Who said that a CFO could not do great marketing?
image of two books by Joe Knight. "Project Management for Profit" and "Financial Intelligence"
Launch Business Literacy Institute
There are several aspects of Joe's work that I really like. First, he operates with transparency. The fact that many managers refuse to share critical financial performance data with their employees spells a high degree of emotional insecurity, as in feeling that a well informed and smart employee could take their job. It also implies that the manager thinks that the employee would be incompetent and immature at properly handling such information. I have zero tolerance for either prejudice because they create glass ceilings that become impenetrable over time. Simply, data empowers, as Joe has proven.
Second, I like that he communicates clearly. We have grown so accustomed to speak gibberish in business that we forget that, in order to fully include everybody within the company, we must fist communicate in a simple and succinct way. Joe takes the dark and cryptic world of finance and democratizes it by simplifying the terminology and by focusing on what is important. He clears the noise.
Third, Joe developed a simple system called Profit Based Project Management that allows employee's to improve company performance in a way that creates employee pride, easily connects actions with results, publicly acknowledges great work and creates a simple way to improve everybody's decision making process.
On a public board, employees keep track of costs incurred during the day; they account for hours of labor and the amount of materials used. They also note the percentage of project completion. The latter gives a value to the output created. With these statistics, they can calculate return on investment in real time. Rather than waiting for the bureaucratic system of the company to give employees feed back months after any changes would have mattered, each worker can see how much value they are creating immediately and can thus deploy all necessary improvements to their work. Because they are being measure not on units nor in revenue but on return on capital, they are better aligned with the company's goals.
Don't be misled by the simplicity of his system. You could conclude that there is less value in Joe's work because of how simple it is to implement. You may even fear that outcomes could be trivial. But you would be wrong. The opposite is true. A simple system has a better chance of improving performance everywhere in your company.
I am a strong believer in transparency with employees. I feel that only through clear and available data can employees be made accountable. While I just now discovered Joe's system. I have deployed many similar systems in the past where employees are given the tools to control the directions of the metrics used to evaluate them. In this way, there are never any performance surprises and metrics are not used to punish anybody. On the contrary, they serve to highlight to \others the great work being done by any one member of the team. Even when problems arise, these systems create early warning signals of trouble for managers to solve when employees are unable to create the value desired. In a nutshell, everybody wins.
screen shot image of Setpoint System's YouTube page
Watch Setpoint's Videos on Youtube
What Joe Knight has built will have such a great impact in your company that you just can't afford to miss it. Follow his videos and read his books. You will find his approach to be very valuable.

No comments:

Post a Comment