Managing work vs. adding resources

Citation

Eaton, J.L. (2000), "Managing work vs. adding resources", Strategy & Leadership, Vol. 28 No. 1. https://doi.org/10.1108/sl.2000.26128aab.001

Managing work vs. adding resources

John L. Eaton

Abstract The author proposes a way of improving the productivity of the existing workforce while keeping costs down. The solution involves limiting the amount of work funneled into each process to match the capacity of that process. Even the most efficient process, one that has been optimized for maximum output, will revert to chaos if the flow of work into that process is not controlled. By assuming that the flow of work into a process can be managed, that not all work is value added, and all work does not need to be accomplished, task control management (TCM) can result in a realizable improvement in productivity of 25 percent in addition to whatever gains may be achieved by redesigning the process. Several real-life case studies are offered.

Keywords BPR, Process management, Process control, Productivity management, Task analysis

The June 12, 1999, issue of Fortune contained a cover story entitled, "Why CEOs fail." The author points out that poor execution is the common thread in the failure of these executives. Do you wonder if you or your CEO might be added to that list someday? Is your company facing increasing pressure from its board of directors to improve the financial performance of the company, while at the same time management is asking for more resources to accomplish the workload?

Under these conditions, senior management seems to have three options, each with an accompanying dilemma:

1. 1.

   If you cut available resources, you decrease output.

2. 2.

   If you increase resources, you increase costs.

3. 3.

   If you maintain the status quo, you haven't addressed the issue.

So, what do you do? How do you improve the productivity of the existing workforce while keeping costs down?

The answer requires a paradigm shift in thinking about the operations of your business. This new paradigm presents a fourth option: limit the amount of work funneled into each process to match the capacity of that process. Even the most efficient process, one that has been optimized for maximum output, will revert to chaos if the flow of work into that process is not controlled. In its annual report of the most commonly used management tools, Bain & Company states that process improvement has been consistently one the most effective tools in improving the financial performance of a company. However, every process has a capacity limit – an issue often overlooked during process improvement initiatives.

Doesn't all work have to be done? The answer is, no! Tor Dahl, chairman of the World Confederation of Productivity Science, indicates that 92 percent of all work is in some form or fashion wasted time. The average US business wastes or misdirects work time in the following ways:

• •

  Waiting for approvals, materials, or support – 23 percent.

• •

  Doing things that shouldn't be done – 20 percent.

• •

  Doing things wrong – 18 percent.

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  Failure to do the right things – 16 percent.

• •

  Doing things that should be done by someone else – 15 percent.

Assume that Mr Dahl is half right: that means there is at least a 46 percent opportunity for improvement in productivity by eliminating non-value-added activities. Assume that through various initiatives of process improvement you could realize half of the 46 percent. A 23 percent improvement in productivity is significant in any business if such an improvement could be accomplished in one year.

The TCM solution

Through a process called task control management (TCM), there can be a realizable improvement in productivity of 25 percent to 30 percent in addition to whatever gains may be achieved by redesigning the process. TCM is based on the notion that there is an improvement in productivity when the flow of work into a process is balanced with the capacity of the process – even without redesigning the process. Therefore, the paradigm shift is this: assume that the flow of work into a process can be managed, that not all work is value added (because it is not), and do not assume that all work needs to be accomplished (because it does not).

Every client I have ever worked with has had too many strategic initiatives, tactical initiatives, special projects, and/or CEO-generated staffing tasks actively being pursued concurrently. One major client had 33 tactical initiatives underway that were expected to be accomplished by the end of the year. This was a company with $6 billion in annual revenues. Every initiative was behind schedule. Year after year, this company would successfully execute only 35 percent to 40 percent of its tactical initiatives by year-end. Projects that were supposed to take 10-12 months were taking 24-36 months. Why? The organization was trying to work on too many initiatives at once. Everyone would work on the hottest project of the moment switching to the next hottest project when an executive would redirect the focus. Today this same corporation has a list of about 33 tactical initiatives to complete per year, but it only has three being worked on at a time. When one initiative is completed, another is started. The average execution cycle time is well below the planned times, and by year-end the company has consistently completed over 95 percent of that year's tactical initiatives.

How do you know you have the problem of too much work or lack of workflow control? Watch for the following symptoms:

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  Excessive amounts of rework.

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  Problem resolution takes too long.

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  Lots of fire fighting and expediting.

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  Missed deadlines on staff work.

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  Processes are unpredictable; you never know how long it will take to get something out.

• •

  Priorities keep changing.

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  Major projects in design/development consistently miss planned time-to-market objectives.

• •

  Major IT projects rarely are accomplished on time.

"...Every process has a capacity limit ­ an issue often over looked during process improvement initiatives..."

These symptoms apply to every process, whether it is the strategic-planning process, the accounts-receivable process, the product or service design-development process, or management processes. These symptoms also apply to all levels of the company's hierarchical structure – the individual, the department, the functional organization, and the company as a unit.

Through TCM, tasks are prioritized, filtered for value, and then assigned, based on the skills and capacity of the resources within the process. Low value and non-value items are eliminated. High value items are worked on immediately, while lesser value items remain in abeyance.

Have you ever tried to improve your own productivity by practicing the rule of "Handle every piece of mail in your in-box only once?" Well, the same concept applies to all work. Give the department, the function, or the individual a limited number of tasks to complete and do not assign a new task until the resources are available to complete the new task from beginning to end. Filter out the non-value-added tasks just as you do with your mail. Not all work is essential to the success of the business.

Prioritize with FOM. The engineering department of a major medical-equipment manufacturer had 13 projects being worked on concurrently. Every project was behind schedule. An analysis of the situation determined that not only were the projects behind schedule, but the priorities of the projects were incorrect. Prioritization of projects had been left to the vice president of engineering, who made decisions based on informal input from various departments.

To match the number of projects to the capacity of the department, we needed to identify the projects that would generate the greatest value to the company in the shortest period of time and then schedule those projects to be completed first. We created a figure-of-merit (FOM) to prioritize the projects. The FOM comprised four elements: newly generated revenues during the first 18 months after the product is introduced into the market, cost of development, time to market, and strategic value. After this exercise, two projects were identified that would quickly generate significant benefit to the company. Both projects had previously been low items on the original priority list. By devoting and focusing the efforts of the engineering department on completion of the top priority projects using the revised priority list, the company increased its revenues by 8 percent over plan in the following 12 months.

Monitor the work. The next step is executing and identifying the skills that will need to be applied. Limiting the amount of work being done by a process is very difficult in processes that deal with intangibles such as software development, staff assignments, and engineering initiatives. However, it can be done through close monitoring of the work in progress to determine subjectively the capacity of the function to assume more work, and to know when resources become available as work is completed. Staying attuned to the activities that employees are working on is only one aspect of the puzzle. Sometimes, first-line managers need to coach employees on how to perform their work differently.

Measuring the results

Working with a software development company that had over 600 programmers working on many different but interrelated programs, we were having difficulty getting the programmers to accept and implement TCM. We set up a test to demonstrate the advantages of controlling workflow. We gave five programmers five programs each to complete in five weeks. All 25 programs were somewhat homogenous in scope. In the first situation the programmers were told to write the programs as they normally do. At the end of the five weeks, all five programmers had completed their programs. We tested the programs and had an average success rate of 62 percent on the first test run.

"...Task control management is based on the notion that there is an improvement in productivity when the flow of work into a process is balanced with the capacity of the process ­ even without redesigning the process..."

In the second test, we again gave each of the five programmers five programs to write with an assigned completion date of five weeks. We asked them to work on program No. 1 only on Monday, program No. 2 only on Tuesday, and so forth. By the end of the fifth week, the five programmers had completed all the programs. The test results jumped to an 80 percent success rate. In addition, many of the programmers finished their projects before the end of the assigned days in the fifth week.

In the third situation, we again gave all five programmers five programs each and asked them to complete all the programs by the end of week five. However, this time we asked each programmer to start work on program No. 1 and work on it until completed, then move to program No. 2 and complete it before starting program No. 3, and so on. All five programmers completed their fifth programs during week four. The test results showed a first pass success rate of 95 percent, significantly higher than in the previous situations. The fact that all of the programmers finished during the fourth week generated a productivity improvement of almost 28 percent.

During the test, none of the programmers changed the way they wrote software. They used the same tools, the same inherent skills, the same desktop procedures, and maintained the same reporting relationship with their peers and management. The improvement in time between situations one and two was the number of times each programmer changed priorities during situation one versus situation two. The significant improvement in situation three over situation two was the recovery time. In situation two, the programmers took between 2 and 2.5 hours each in weeks two, three, four, and five to determine where they had left off the previous week. In situation three, the recovery time was less than 15 minutes every morning.

Not only did the productivity improve, but also the time-to-market cycle time. The actual time to complete each of the five tasks was significantly shorter in situation three than in either of the other situations. The significant improvement in the initial test results created less rework, which generated additional cycle-time improvement and additional productivity improvements beyond those measured in the demonstration. Additionally, the organization's ability to meet targeted completion dates was improved by the shorter cycle time, and the predictability of completion became more reliable.

By using workflow control, significant operational and competitive improvement can be accomplished without adding capital or human resources. Workflow control must be the first step of any process-improvement initiative. The second step is process redesign. If you manage the work, the people will manage themselves. If you do not manage and control the flow of work, you will have chaos, regardless of how well you redesign the process.

Workflow management is not a simple process. Uncomplicated tasks and projects can be managed on an 8.5 x 11 inch tablet. But in some cases, long and/or complex projects must be managed using structured, work-breakdown project plans. TCM can focus an entire company. It takes a great deal of discipline, but the rewards can be tremendous. TCM can convert companies from an activity-based orientation to a results-based orientation. It creates an atmosphere of drive, focus, improved morale, better financial performance, and heightened competitiveness. But above all, TCM gets tactical plans implemented, generates results, and, in turn, helps CEOs – and their companies – succeed.