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Media Reviews

On-line interview on "Common Traps of Performance Management" with Channel Nine News reporter Brett McLeod.


 

 

BRW Article: Workplace Realities by David James


 

 

Increasing Productivity and Profitability (The Corporate Manager)

 

 A Common Sense Approach


It's not hard to improve productivity, according to business performance guru, Harold Monty Sacher. Get the basics right and the rest will follow. First step, measure your existing performance - because you can't improve what you have not ensured. Sacher uses rugby as an example of how to integrate the different steps which lead to business success. Rugby players know where the goal posts are. They know what they have to do to score points and how many points are awarded depending on whether they score a try or kick a goal. They also know how they are doing in relation to the opposition. Even the players in the engine room of the scrum know what is expected of them. Win a game and everyone celebrates. Win the championship and not only do you celebrate but you also get a trophy.

But in business it is too often only the senior management who know what is going on. Workers on the shop floor, the ones who are really adding value, are frequently ignored. Time and time again they are not told what is expected of them. They don't even get relevant feedback. Compare that with the financial and other information that goes to the Managing Director.No New Zealand rugby coach in his right mind would contemplate telling only the captain the game plan.

You don't even have to be a rugby player to know this. Common sense tells us, confirmed by experts, that it is on the shop floor where it is most valuable to have performance measured.
Sacher uses this approach. And it works. Sacher does a lot better than just improving the performance of organisations he works with by a few percentage points. And he publishes case studies to prove it. Dennis Sparrow of G.H. Michell, the world's largest Producer of carbonised wool, has this to say: "Generally, our department has a much more unified sense of direction and purpose which is a vast improvement on the way things used to be. It is now very easy to measure, plot and graph our performance by individual teams and the section as a whole."

"We all work smarter. We discuss things more. More operators want to be developed and show commitment and enthusiasm - a new level of consciousness has developed."

The results:
· Production at all time record levels - and being maintained!
· Quality as measured by average reject per month has been trending down significantly.
· Attendance up by 33%.
· Communication up by 217%.
· Job satisfaction up by 75%.
· A survey conducted by management showed that 96% of the workforce thought the project was a success and should be maintained. John Grundy of South Eastern Power, one of the most successful electricity distribution businesses in the Southern Hemisphere, says "the business had been set a difficult profit target and the continuing economic downturn, resulting in reduced revenue, reinforced this situation. The business was able to meet its profit target and return an 11 per cent improvement on this target which, in financial terms, amounts to several millions of dollars."

The results:
Technical improvements -
· Connection of Domestic Customers, 200% (customer electricity connection times were reduced from five days to 0.7 days).
· Time of Customers off supply 260% (slashed from 325 to 89 minutes average per customer per year).
· Accounts rendered on schedule 10%.
· Time to connect business customers 200%.
Culture change -
· Sick leave - 30% improvement.
· Time lost due to accidents down from 322 days to 33 days.
· Time lost in industrial disputes, down from 250 days to 15 days.
Financial improvements -
· Improvements in workforce availability, $368,000.
· Improvement in pole replacement times, $272,000.
· Reduced collection times for accounts, $200,000.
· Reduced grid fees, $2,700,000.

Overall, business profitability improved by $3m against budget in a year when the economy was declining and customer demand for electricity dropped by 10%. Results like this underline the fact that there are obvious significant benefits for big business. And in New Zealand many large organisations like Fletcher Challenge, Carter Holt Harvey, ECNZ, Goodman Fielder, and more, have been quick to recognise the potential of Sacher's approach. They, and many other large organisations, have bought the manuals developed by Sacher titled "Performance Measures Applied" and "A Commonsense Approach to Business Planning". It is important to note though that Sacher's approach to improving productivity and profitability is just as readily applicable to medium to small sized business.And you don't need big dollars to be let in on the secrets. Sacher developed the manuals specifically to help companies which did not have a lot of money to spend on consultancy fees.

One of the reasons why Sacher has been so successful with these publications is because he decided to publish information often kept secret and jealously guarded by other consultants.
Sacher is now considered one of the world's leading lights when it comes to managing performance in organisations. Performance Measures Applied is designed to give everyone from the Managing Director to the Worker on the shop floor the big picture In his early days at University when developing his theories on measurement and performance he analysed one company a week. "To me, they all had the same fundamental problem - there was no unified sense of direction and there was an inability to translate the strategic plan into the everyday activities of the people doing the work." Sacher explains in more detail in "Performance Measures Applied" why performance measures should be developed. He helps everyone to identify just who their customers are, and they could be inside or outside the company.He then gets into the practicalities of the process, noting "how to" develop outputs and "how to" develop performance measures. Targets are set and feedback is given on performance.Finally, he explains the implementation process outlining guidelines and pitfalls.And then to back up the theory he publishes case studies.

Buyers of Performance Measures Applied get all of this for a few hundred dollars.
Struggling companies which would have found it difficult to afford consultancy fees can take advantage of the years of practical experience and knowledge.But as noted above, it is not only fledgling companies which have turned to the manual. Many organisations which are household names in New Zealand also rely on it. Based on practical experience, Performance Measures Applied is considered essential reading for organisations tackling total quality management, gainsharing agreements, customer service, and more, with a view to improving productivity and profitability.

Performance Measures Applied is not an academic treatise, it is a jargon-free practical guide co-authored by Sacher. The list of organisations which have bought their manual reads like a "Who's Who" of the business world.
Sacher says that the demand is there from Board level downwards to make sure organisations perform better by empowering the workforce, putting in place targets, developing feedback strategies, and implementing strategic planning. Organisations distills the latest thinking captured in the manual and apply it to their own situation.

Originally Sacher decided to develop the manual to help organisations which could otherwise not afford his services. It contains expert knowledge based on 10 years experience of working with workers, team leaders, and managers. In writing the manual, he reveals how to apply basic principles to any situation requiring measurement of performance in organisations that are both product and service related.
It is a practical approach that capitalized on the detailed knowledge of workers and managers at every level.The case studies in the manual are based on organisations, large and small, which have worked with Sacher to develop and implement strategies on how to reduce costs and increase job satisfaction and the profit line.The studies underline the importance of communication and team building for those organisations seeking to attain higher profit margins.

Sacher says that Performance Measures Applied cuts through the rhetoric, and shows organisations and individuals a wide range of techniques needed in learning how to develop and implement strategic plans, contract out services and empower the workforce.The manual's "how to" approach takes readers through each process, step by step. In Australia the manual has been particularly popular with local government, hospitals, technical institutes, as well as companies such QANTAS, Telecom, Elders, BHP and Shell. It has also sold very well in New Zealand.

Says Sacher: "We've been overwhelmed by the response. Everyone, from Managing Directors down, appear to be buying the manual. It demonstrates that people really are looking for ways to help institute change, but have not known where to go for help."

The manual is made up of nine modules, with each containing examples, summaries, checklists, glossaries, and quality standards. There are two modules dedicated to guidelines for implementing a performance measurement system, the most common pitfalls, and case studies. Published case studies cover a range of industries and organisational levels.
All of them are based on Sacher's practical approach to improving productivity and performance. Joe Allen, Mossman Central Mill Co., says, "This is what we need: consultants who can tell us how to solve our problems."

 

 

A manual way to measure performance (BRW MAGAZINE)

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Companies Line Up For "How to" Guide (The Australian)


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Firms' productivity measures based on work of wrong people

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