Don’t Look Now!

Posted on March 12, 2011 by Chris Niccolls

One final lesson from “Freakonomics”, and then we’re done with Sumo wrestling. In the last post, we chatted about Sumo wrestlers who lost matches to help fellow wrestlers. The Japanese didn’t believe that Sumo wrestlers could cheat. Betraying their profession, their religion and their nation just didn’t seem possible. Yet, the Freakonomics staff provided a compelling analysis showing that once wrestlers won enough matches to secure their own ranking, in the late season they could strategically “give” matches to an underperforming wrestler, allowing them to maintain their rank and status. But data analysis, insider leaks, whistle-blowers, even murders to prevent further investigations all failed to change public opinion..

Wait a minute! Isn’t crime in Japan almost non-existent and the police force nearly 100% effective in arresting criminals? Shouldn’t the police be interested in what whistle blowers had to say? In fact, we learn that a documentary was produced, with testimonies from Sumo managers that cheating was widespread; this led to a public outcry… that the whistle blowers should be jailed for slandering Sumo. Hmmm… tough crowd. Then, two of the most prominent whistle blowers scheduled a press conference, but were both murdered the day before. Any interest by the police now? Nope, none at all. Now, in the past I’ve had to work with groups that are just a wee bit resistant to self-examination, but this is ridiculous! How could the most effective police force on the planet not see that something was wrong?

Of course they could. It all goes back to incentives. One former police officer, summed it up for the Freakonomics staff. Japanese police only open a case if they know who committed the crime; this is partially because of the demand for success, but the more important police need to maintain law AND order (the same as in the US). However, the Japanese uniquely interpret this to mean that taking on problematic cases will leave criminals at large, undermining the public’s confidence in the law, eventually undermining the public order. By not prosecuting all cases the arrest rate is nearly 100%, assuring the public that no one can escape the law, making crime an undesirable proposition, preventing crime from being committed in the first place. Crime prevention trumps crime resolution. Strange thinking, but I’ve heard an echo of the same logic from QC and reporting groups that want to protect the firm from bad statistics, don’t want to find problems that they won’t be able to fix, etc. Almost any group that collects and reports metrics has more than one directive. In fact we’re all eternally trying to solve the old Good /Fast / Cheap puzzle, which means focusing on different elements. You may have even had some frustrating meetings where you’re staff eventually says, “Can’t you just choose one?”

These are all foundational issues. We all find (or should find) strange anomalies in our numbers, different interpretations of our goals, and moments when it looks like your managers were asleep at the wheel. But more often than not, the correlations that you see are results of incentives that were accidentally put in place. Causality is usually more complicated than what you see on the surface.  And that is definitely, my Niccolls worth for today!

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Win, Lose or Cheat!

Posted on March 9, 2011 by Chris Niccolls

If you’re setting up a system to track metrics, a big question is, “Will the people who are responsible for collecting the numbers do the job honestly and competently?” It’s a good question. I think in almost any situation, especially if you set up some sort of checks and balances, it will be done honestly. If you can’t depend on your staff to give you real data, then you have a bigger problem to deal with. It’s the second part of the question that really matters. What are the instructions and incentives you’ve provided? Once you start getting reports, will you be able to check the data to be sure that it’s right? Let’s take a look at how the incentives we set up today affect the way our numbers will look tomorrow.    

The documentary Freakonomics, is a collection of short stories that take about incentives and how to make them work. An ongoing thread is how we often confuse correlation (the things we see) and causality (why the things we see happen).  I thought that the most interesting story was about Sumo wrestlers. Americans think Sumo is a bunch of really big guys who are not wearing a lot, slamming and slapping each other until one is thrown out of a circle. But if you’re Japanese, you see an essential piece of your culture, the world’s oldest martial art, a 1,500 year old sport, and the core ritual of the Shinto religion. Cheating at Sumo is a combination of crime, blasphemy, and just really bad taste that would get you tarred and feathered in the US. Sumo cheating is viewed so negatively that it’s not a subject that is even open for public discussion… especially when there are, AH, certain discrepancies.

Apparently, the game of Sumo sets up some very peculiar incentives. Wrestlers are divided into ranks, with most of the rewards going to the top ranks. Wrestlers who win all of their early season matches are guaranteed to maintain their rank, even if they lose late season games. A top ranked wrestler could throw the end of season games… which have the greatest attendance… and they would still retain their champion status. Then again, a champion who performed flawlessly in early rounds might be tired, injured, or just burned out by the end of the competition.  We have incentive and correlation, but we’re missing a theory of causality to tell us which games have been thrown. For that, Freakonomics looked at who won these bouts. Overwhelmingly, wrestlers who would otherwise be demoted to a lower rank won. So, the big winners, once their rankings are safe, are in a position to strategically lose matches, to help friends in need. Oh, there could be additional incentives (bribes, orders from your manager, etc.), but this alone is enough to explain the excessive number of lost games.

Why is this important in managing big operations in a Fortune 500 firm? Well, if you allow ranges for time (rather than a set time for an activity), the number that will help a shift meet its goals is likely to be selected. If time can be renegotiated (and a record is not kept of renegotiations), then the number that meets required metrics tends to be kept. If time is manually entered, the most beneficial number will generally be used (rounding to a later time, choosing different clocks for different work, etc.). Of course, there are some others that will “cheat” in the opposite direction, and move the numbers against your staff… because they are adjusting for some real world event, such as giving less time to more experienced staff; the problem is that they may not understand that you have already allowed for these factors, and they are double counting.  It goes on and on, but these “cheats” are very hard to find and in the mind of the data gatherers, are not real cheats.  Your data guys are usually just trying to help make you (and your managers) look good.  It’s tricky when the data problems are coming from the people who want to help you the most, and are the last people you would think are the problem. More on this in my next posting… but that’s my Niccolls worth for today!

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Not All Numbers Are Equal!

Posted on March 7, 2011 by Chris Niccolls

Managers that have moved away from management by instinct to management by metrics are often frustrated by the strange quirks and illogical results they get from their management reports. This can be terribly frustrating, because it takes a lot of energy and a lot of meetings to get a management team onto the path of metrics. So, what’s going on?  Generally, you’re dealing with one of two problems. The first problem is that your staff is lying to you. When you and your team have invested a lot of time into a project, and you have a lot of pressure on you, there is always going to be a voice in the back of your mind that says, “SOMEBODY is responsible for these wrong numbers, and it can’t be an accident!”   PLEASE, Please, please resist the urge to listen to this voice. Sure, you will have some people who have torn loyalties, and some who have so much pride in their work that they have a bias, and there may even be the very, very rare individual that is trying to hide something embarrassing. But overall, everyone is trying to do what they THINK you want them to do.  Which leads us to the second problem, the instructions on how to collect metrics is less than clear.

First generation metrics are rarely as clear as they need to be. But there’s nothing wrong with that.  You don’t go from 0% right  to 100% right in one step. You probably left in some latitude in interpretation.  For example, in telling a research group that they can take 15 to 30 minutes for a certain type of report. Then you find that one person interprets this one way and other interprets it a different way. If you have multiple shifts, then you will probably find that different shifts have ENTIRELY different interpretations. When you look at this you’ll probably think, “This is hopeless! How do I get past this?” Actually it’s pretty easy. Just remember that everyone that came before you went through this, and they got out of it the same way you will.. by leveraging experience  or you can try trial and error. Either way, you’ll get there. It’s just a matter of how much time you want to devote to this project.

Let’s try the experience route. Bookstores are filled with management books that can tell you how to do this… in about 400 pages. Or you can hire a consultant, which can be quicker but is a lot more expensive, or you can follow these steps:

  1. Apply what you’ve learned: After about 30 days, you will probably have some idea of what needs to be tightened up in your original metrics and instructions.
  2. Reduce interpretation: Focus on any numbers you’re collecting that allows for interpretation. As in the example above if a report could take 15 or 30 minutes, either redefine this as 2 (or 3 or 4?) types of reports, each with a specific amount of time (10, 15, 25 minutes, etc.) or just split the difference and make it 22.5 minutes for all work (or a better number if you have one).
  3. Spread the message: Go back to everyone who collects data and let them know you want honest numbers, and you expect that some numbers will look bad… but it’s OK; until you find the problems you can’t be successful. Make sure that they understand that finding a problem is not a problem in itself. Being able to identify problems is a step towards being successful.
  4. Calibrate: Once you’ve made your adjustments, have everyone who collects numbers tested on the same work to see that they come out with the same numbers,  give or take 5%. Then collect  data for another 30 days.
  5. Repeat: And then repeat the process. Keep repeating until the numbers start making sense.

Taking this one step at a time, this can be pretty easy. Try it, you’ll see that it works. And that’s my Niccolls worth for today!

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The Game Of Numbers

Posted on March 3, 2011 by Chris Niccolls

A lot of managers I speak with tell me that they haven’t yet set up the metrics and tracking systems that they need. Have you developed all the metrics you need? Does every product and service you produce have numbers that explain cost, utilization, efficiency, etc.? No? Are you finding that your biggest barrier is, “My services can’t be quantified!” While I’ve run into services that are more challenging to quantify, I’ve never run into services that cannot be measured. The confusion, most of the time, is that too many dissimilar things are being treated as the same. Of course solving that issue creates others. So, I thought I would spend some time over the next few Blogs to talk about the number side of management.

If the groups you manage work on documents, or deliver research reports, or answer IT service calls… all of these services can be quantified. True, a specific service might take 10 minutes sometimes and 30 minutes other times, but an average amount of time can be determined. When you first setting up a new metric, it really doesn’t matter if every single case exactly fits every time. You just need to be right on average. In the real world, whatever service you manage, you’ll find that some services are easier to quantify and some are harder. Seek out the easiest metrics and get them out of the way first. You are probably able to describe the time it takes to perform 70% or 80% of your work. Get this out of the way and it not only gets you ahead in reporting on your operations, but it then gives you less to focus on for your next set of metrics. You might be left with 25% of your work product that lacks meaningful time metrics. However, if you take a further look into this unclassified work, you will probably find that you can break it into two further categories: products that are easy to quantify (within a wide range), and products that are very difficult to quantify. Tackle the “wide range” issue first.

To see how this would work, let’s assume that a type of work may almost always take 10-30 minutes, but infrequently (3-5% of the time) it takes much longer, up to two hours. If you use the two hour example, you will allow far too much time for the average job, but you will almost never be late and can earn a score of 100% for “on time completion” if all work is allowed a maximum of two hours. Unfortunately, this is the method some service groups choose. It’s not the right choice, because it hides jobs with problems that should have taken less than 30 minutes, but were still “OK” if they took two hours. Always make sure that whatever metrics you use allow for a small number of late jobs. If nothing takes more time than you thought, you’re using an estimation process that is too generous and allows for a significant amount of overestimation. If your organization has complaints about work being late or taking too long, but your own metrics say you are on time and working efficiently… this is probably happening in your organization.

So, let’s ignore the outliers… for now. Tell your data collectors to tag the 5% as “special” that doesn’t require any quantification. Instead, focus on the larger minority that take longer, but not terribly longer than the majority. That now gives you three populations. The majority that takes 10-30 minutes (let’s say they are all given 20 minutes), a second group that takes longer than the average (let’s say 40 minutes) and then the third group that isn’t tracked. Over the next few weeks you will tighten up the definitions for the first and second groups (maybe they will become 17 minutes and 42 minutes), and filter the “special” group again. The combination of a second filtering process and applying what you’ve learned about the first and second groups will let you reduce the “special” group to 2% or 3%. As this group becomes smaller and smaller, it will eventually either be a number so small that you may want to leave it as “special” or once you eliminate the “noise” (cases that should be in the first or second group, or somewhere else) will be much easier to quantify.

That’s really it. When you’re told a service cannot be quantified: deal with the majority of simple cases first, break the remainder into a couple of simple “buckets” and then keep mining the most difficult bucket until it either goes away or becomes more definable. And avoid the temptation to create metrics that allows you 100% on time, 100% quality, 100% anything important… always have a few percent of error that you can mine for information on how to be more efficient. More on numbers in my next Blog… but for now, that my Niccolls worth!

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German & NYSE Exchanges to Merge, Will It Be Successful?

Posted on February 23, 2011 by Chris Niccolls

According to the Financial Times, the upcoming merger between the NYSE and German’s Bourse is expected to yield $400 million in merger, lower operating costs, cross selling, etc. Will they ever achieve their goal? More importantly, are they putting anything in place so that they can measure if they achieve their goals? Surprisingly, I’ve found that most projects, even projects costing hundreds of millions of dollars or more, rarely measure where they are today, set target goals for where they need to be, and they agree to a time when they will look at the results.

Years ago, when I worked in Investment Banking, I asked a top M&A banker if he knew of any reports that showed how corporate mergers performed against their goals when they agreed to a merger or acquisition. If there were lists of agreed actions and tracking of whether the actions were performed. I was told that I wouldn’t find much out there because deals rarely delivered on all synergies. Some firms didn’t bother to agree to a list of actions, some didn’t track their actions, some only tracked some actions (usually ONLY the ones that were successful), and some stopped tracking when the results were negative. Does this sound like any project that you’ve run? After getting funding during your budget period, or as a special project, you have to make promises and representations as to what the results you expect. However, a year or two later when the project is over does anyone go back and measure the results?

We all live in a complicated world, with all sorts of unexpected things poping up all the time. If we don’t set a baseline (however a project is performing today), then set a target (the goal you are is trying to achieve) and put a process in place that tells us if we moved from our baseline to our target, we really can’t tell what’s going on. For a truly rare project that delivers a very big change in a very short time, we might convince ourselves that we can measure success by gut instinct alone. … do we think we can track that project over the coming years to tell if it remains at the target performance level? Probably not. So (one more time!) baseline your current services at the start of a project, have a measurable target and track the results. And that’s a Niccolls worth for today.

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God Bless You…Google?

Posted on February 21, 2011 by Chris Niccolls

Over the last decade or more, there was a big movement towards capturing and standardizing internal data in all service groups. As professional managers, we’re all learning to make better use of data to manage our workers and their work product. Some firms have been more effective at this, but everyone produces some numbers. What do we do with these numbers? We produce reports: hours worked, productivity, utilization levels, client feedback, and all of the metrics we see in our management reports. If your reports are reliable, and you’ve been clever, rather than just reporting what happened you may be able to report what will happen. If you can predict the future, you may be able to control the future. For example, running without enough capacity will lead to increased mistakes, which leads to a rise in client complaints. If you knew that you in 90 days you would have a four week period where you were short of staff, you would be able to build a plan.

But for most of us, it doesn’t quite work that way. You think you have a reliable map of the future, but just one “outside” event and everything changes. Perhaps an unplanned burst of work occurs during what should be a slow period and you don’t have the contingency staff to handle the work. In CIO INSIDER, David Daw’s “The Mad Science at Google Labs”, gives you a peek at how to plan for the unknown. the future. Google Earth which has been legendary in providing for customization and collaboration, has mapped data from the Centers for Disease Control and released: Google Flu at http://www.google.org/flutrends. inter time sickness one of the biggest “unknown’s” that we have to manage for every year. This is still a basic tool, but its open ended enough so that your IT department could incorporate data into your reports. Because it is a world-wide system, this not only shows trends in New York and London, it can provide data even if your centers are in the mid-west, India, the Philippines, or anywhere else in the world. Perhaps a report that mixed health trends, weather and transit data, and was reported by city, would be very helpful in managing contingency staff.

Too much to expect from your IT department? Well, you may have an alternative. If you have outsourced any part of your firm’s services, ask your vendor, “How can you use this information to improve my reporting?” If the management reports from your vendor only tell you what happened and not what will happen, ask for more! My colleagues often complain that when they talk to an outsourcer’s sales rep they’re only interested in selling the next seat, or increasing the number of hours. Why not challenge them? List some external factors you think influence your permanent or contingency needs. Remind the sales reps that if they can develop these reports from Google data, other clients would also be interested. The outsourcer is in a better position to sell you more hours, and you are start nailing down the unknowns in your operations. And that’s my Niccolls worth for today!

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MyTouch Me Not!

Posted on February 15, 2011 by Chris Niccolls

A friend of mine launched the bricks-and-mortar part of her cupcake business on this Valentine’s day. The brand, Mrs. Cupcake, is selling out of an Irish bar on Murray Street, near City Hall. Cupcakes and an Irish bar are an unusual combination, but one that seems to work.  At least quite a few of the customers that day were intrigued enough by the combination to come in and comment about it. And those who tried the cupcakes, really liked them.  But who doesn’t like cupcakes?  Wouldn’t it be nice if other combinations worked together? 

While cupcake induced happiness bloomed on Murray Street, I remained stranded in the dreary little neighborhood of mis-cooperation that lies between Microsoft and Google streets. Here you don’t get cupcakes, and you don’t get synergy between these two tech giants. In fact, they make it very clear that their interests are more important than your happiness.  The battle over the “cloud”, and ownership of your data, is playing out on our phones. I just want to download my Outlook contacts to a MyTouch phone.  My recently purchased T-Mobile 4G is impressive. Just the right size, with HD video, and a 1Ghz processor… very impressive. Importing contacts from the world’s most often used application should be a snap, right? Apparently not! I’ve called T-Moble, looked around their web site and checked out blogs and other independent websites for a hint. It can’t be done.  Oh, you can buy a third party tool. Or convert your contacts to CSV format, get a GMAIL account, upload the data to GMAIL and then download it again to your phone (if you wanted GMAIL as your primary mail and repository of your contacts, this could be acceptable). Shouldn’t there be a single button option for this? It’s hard to imagine that any legitimate technology issue is at fault. We just have two big companies that don’t want to admit they are in a relationship that they need to make work better. These little frustrations with the Android won’t make you a bigger Microsoft or Google lover; it just gives you another reason to look wistfully at the i-Phone.

It’s just a small thing, something we can all work around, but it does offer a little insight about the upcoming battles we will see between Microsoft and Google.  A bit of foot dragging here, a strategically missing tool there, and the continuing push to move everyone to my cloud, or my servers. Integration and competition have always been at odds, but Microsoft and Google have uniquely entrenched positions in our tech lives and are likely to push technology managers into making uniquely unhappy decisions. Perhaps by next Valentine’s day, Cupid will have worked his magic on this  grumpy, but co-dependent couple. I’ll bring the cupcakes! And that’s my Niccolls worth for today!

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Tales From The Vault…

Posted on February 2, 2011 by Chris Niccolls

Tales from the Vault…

Over at the Vault.com, there was an interesting write-up this week… “The Five Fastest Declining Industries for 2011”.  What interested me the most was the decline in ”Office and Administrative Support”.  OK, technically this is probably a job function rather than an Industry, but it takes a long time for these categories to catch up with the real world.  Whatever we call it, this is important information for most corporations, since all corporations have secretaries and admins. This decline has been going on for a very long time. Back in 2001 an article in Barron’s showed how secretarial positions (which later morphed into “administrative support”) had been on the decline since 1987. 

Because  titles (few firms still have “secretary” positions) and functions have changed, it’s difficult to track the exact decline. Barron’s did make one other thing clear.  Every downturn in the economy leads to a permanent decline in the number of secretaries. As the economy slowly picks up, the support staff for our knowledge workers… the lawyers, bankers, accountants and other professionals… that traditionally get secretarial support will have less and less in the future.  In some firms, this is the result of a plan with some automation, some transfer of functions to new staff, and even some outsourcing.  What about your firm and your professionals…. Is there a plan?  

Maybe it’s time to start thinking about a plan.  One reason that I brought up this topic was that 2011 is a special date, the 100th anniversary of the secretarial school.  In order to get more women involved in corporate work, Katherine Gibbs set up the world’s first secretarial school in 1911.  Where are we 100 years later?  Dictation, short hand, and many of the traditional skills of the secretary have not been taught in the last two decades. The last practitioners of these skills are slowly aging out of the work force. Voice mail, cheap digital voice recorders, and even Optical Character Recognition have eased some of the transition pain.  But there’s a lot more pain to come as the number of secretaries and the quality of traditional secretarial skills declines. If the economy recovers as expected, 2011 could be a very difficult year for managing secretarial functions.  We’ll talk more about this later, but for now… that’s more than a Niccolls’ worth for now!

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Starting up “niccollsanddimes”

Posted on February 2, 2011 by Chris Niccolls

This is my first post on “niccollsanddimes”… or is it?  Truthfully, it’s more of an extended introduction. I thought that before I jumped into things, I owed everyone an explanation as to why I’m setting off on this path. After all, some of you might be on the same path or at least intending to follow a similar path.

For most of my professional career, I’ve been involved in projects as much as operations. By this I mean that some of the time I manage day to day functions or services, and some of the time I take on projects, which are usually to fix, improve, develop or bring about some sort of change in a service. While I always wore many hats, years ago most of the time, managers of operations and the managers of projects were separate people. Operations manager had occasional projects, but they weren’t that frequent. Today, in a world of continuous improvement and Six Sigma management, every manager in a large corporation needs to know all about project management… how to identify potential projects, create consensus, develop achievable objectives, understand the metrics of success, introduce meaningful reporting, install a governance process, and repeat, repeat, repeat.

In the posts that will follow, we’re going to focus on how to find important management lessons in major cultural and business events, and we will sift through business events to find the simple rules on how to bring about change. Which brings us back to the title, “niccollsanddimes”. Originally, I thought I’d use a title like “Change Makers”, but there were just too many sites (and copyrights!) for any title like that. To me “Niccolls AND Dimes” means, “How I (Niccolls) can help you bring about a small change (Dimes)”. I hope that it also means that we’ll have a bit of humor along the way.  

So, for all my colleagues out there… and especially for any new managers looking for simple answers to complex problems… drop by, read a few posts and let’s see if we can all help each other!

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