Recently I held an interview with a prospective client who is the Senior VP of Operations for an $8B corporation.

An associate and I were trying to convince him that even though we were small, we could give them the service to help them meet their goals quicker than doing it with their current tools. After sharing our success with him, he very adamantly stated that the results were in manufacturing and what did that have to do with their business?

He was quick to tell us how busy he was that they were engaged in the annual capital plan meeting and was not in a very good mood. Since Cost of Poor quality was only good for manufacturing, how could that metric be useful to them?

What are your goals for next year? To double the stock price, he answered.

How do the employees impact the stock price?

How does this capital plan meeting impact the stock price?

How do you measure the success of the meeting?

How do you accomplish the goals of the meeting without rework, waste and downtime?

What are the critical four to six measures that all capital spending should be measured against? Were you using a Priortization matrix (also known as a Cause and Effect Matrix or Decision Matrix) to decide which projects to fund?

Did everyone in the meeting understand what these critical few were?

After we had prioritized the list of capital appropriations, did we know how to use a FMEA (Failure Modes and Effects Analysis) to see how likely we were to accomplish the goals of the appropriations?

No, the goal is not to spend all the money on time and account for all of it!

If we were not going to meet the financials promised by the job, did we have an alternate plan to make the numbers with other capital opportunities? Was someone accountable for the results? Was it baked into the operations plan?

After hearing the questions, the VP could only respond. The Prioritization matrix and FMEA do not apply to a non manufactureing environment.

Believe it or not sometimes a project has more than one goal.

Sometimes they even have three Goals!

Consider this quick example… you can either have:
Something Quick, or
Something Cheap, or
Something with High Quality.

You can’t have all three.
Want it Quick? Then you better expect to pay for it!

So what do you do?

Sacrifice one and measure the other two? No, you should actually measure all three. And optimize the result.

Even if you can only maintain one of the three at the current level and improve the other two… that is a win! But you need to make sure that you at least measure all three if they are important.

Chart, compare, monitor all three.

Now, there is one assumption made during all of this… and it is probably a wrong assumption.

All three metrics are weighted equally.

Now… tune in for the next post to figure out how to weigh these goals out.

It is a pretty slick and easy tool to use.

Prioritization Matrix

During my senior year in college, each of us had to work with a team to complete an engineering project. Finally, we got to move from the books to real world applications.

I can still remember one of the design projects - Reduce the Noise pollution in the Courtyard.

Some background…
There was a nice courtyard surrounded by three walls of the engineering building. There were flowers and a couple benches in this courtyard. It was well manicured and had the ivy league look with the bricks and coloring.

The issue was that few people enjoyed the patio because the air conditioning vents which were on top of the building caused a “low frequency hum’ (sorry for getting technical!) whenever they were operational. Eventually people got irritated enough that they stopped using the courtyard.

Anyway… a design team was put forth to solve this real world problem. The Design Team used all of the great tools necessary to come up with their design. They used customer interviews, QFDs for ranking and prioritizing these inputs, etc.

They verified the customer inputs by collecting some field noise data.

They translated this information into a METRIC. The metric was to get ‘X’ frequency eliminated from the courtyard (where X is the ‘low frequency hum’)

So many countless engineering hours passed. Multiple calculations, cad drawings, customer reviews, management reviews, and further modifications until they unveiled the final result.

They built a noise dampener for X frequency… and guess what happened…

They eliminated the X frequency. High 5’s were handed out to all involved. The team was ecstatic.

They invited their customers to lunch in the courtyard the day after the dampener was installed.

And the result…

The customers were not exactly happy.

The low hum turned into a ‘medium hum’ and oh by the way it was now louder.

So… if you judged them by their self-imposed translated metric.
They were a success.
If you asked the customer… they created a worse problem.

During their final presentation, they showed how their design eliminated ‘the problem’. Once again their were high 5s at the presentation.

The judges did not buy it.

The students did not understand why.

We wonder why we have so many problems with people not hitting their goals… maybe it was because we set and/or approved the wrong (translated) goal.

Give people the right goal and they will be successful.

Next up… competing metrics… sort of like dueling banjo’s for all your Southerners.