Framing an Engagement - 4 of 4
I’ve helped several businesses implement configurable software to streamline and scale home renovation projects. While the needs of every client are different, there are a few big decisions to land in framing an engagement to make sure we deliver the most business value as quickly and consistently as possible. These articles steps through the four big points to scope before we build or implement new tools:
Clarify the Exam Question
Work Backward from “Done”
Walk & Document the Gemba
Set the Leading and Lagging Indicators
Leading and Lagging Indicators: What Do You Really Need To Track?
Once we have a clear picture of the real problem, how the finished product should look, and an understanding of how the team should hand things off along the way, we can double click on the metrics. They’ll likely revolve around a mix of speed, cost, and quality, but they’ll only work well when you surface the right handful of metrics, likely the metrics you want to improve.
Start by tracking the most important metrics that augur success: profitability per project, time to start, and time to finish. These are lagging indicators that can tell you how well you have been doing on completed projects, but it may take a while before a problem that your team is facing today shakes out as poor performance on completed jobs.
Some leading indicators that might let you stay more nimble in seeing and addressing problems with active jobs would be top-of funnel activity like offer acceptance rate, consults per sales person, estimates processed per day, or even field capacity–if a Superintendent is expected to oversee 7 jobs well, and the Supers in one market have 12 jobs each, you can be pretty sure they won’t be delivering at the same $/day rate that you’ll be proud of.
In many cases these metrics aren’t totally visible, so before setting goals it’s important to get proper visibility into the numbers and how they are calculated, and to let people know how they’re performing. Often the act of surfacing stack-ranked reporting on how teams or managers are doing on overall speed, profitability or quality is a kick in the rear–excuses about limited resources dry up when everyone can see how well Jim’s regional team is doing and how much success is possible. Also, no one likes seeing their name next to the last-place marker, even if bonus money isn’t on the line.
I had the opportunity to champion Operation: Full House, an incentive program at American Homes 4 Rent during the peak leasing season of 2016, and we put equal weight behind celebrating market teams that performed the best at economic occupancy, and market teams that made the most progress over the four-month program. The small Las Vegas market maintained a lead wire-to-wire, but some of our larger markets in Ohio, Texas and Florida made huge gains when they had a weekly opportunity to see how they performed, and how much tighter they could run their collections process.
If you try to measure everything, you will invariably spend time trying to measure things that don’t truly move the needle, and you’ll likely build in administrative steps that call for a busy person in the field to click a button just to let you know they took an action. To the extent you can, the tools you use should capture the data natively to track the current state of the job, what the next step is, and who’s responsible for it. It’s icing on the cake if the in-system data can tell you how long the last step took. If employees have to jump over to a logging system to tell a tool “this took me 2 hours,” you have an inefficient system, and a system riddled with inaccurate data.
Pick a handful of metrics and get crystal clear about how they are calculated. If the calculations are new, surface the metrics for a while before setting any goals to make sure you don’t incentivize the wrong behavior. Then implement a change so you can keep an eye on how much the new tool helped improve efficiency, or whether the sheer act of surfacing metrics brought the best out of people by itself.
Conclusion
I’m very passionate about helping companies solve the right problems and create business value. With a clear understanding of the root problem, a view of the finished product we want to deliver hundreds or thousands of times a year, an understanding of the workflow we’ll follow to get there, and the top 3-4 metrics to track, then it’s time to roll up our sleeves and build or deploy a solution. There are a number of factors that will influence how we architect the right platform–how much do we need to track? How many handoffs are we looking to have between the central and field roles? Where is the company on its roadmap toward centralizing purchasing and procurement? Do the cost codes and trade categories match the right granularity needed to report on projects and project spend? But first comes the understanding of the problem that needs to be fixed.
In product management, it’s said you’ll have more success offering something that addresses a pain point for your customers over something that takes a good experience and makes it better. I’ve definitely found that to be the case–it’s rare that I’ve pitched implementing a new platform to take a process that is working well and will maybe make it a bit faster; but processes that are slow, expensive, or inaccurate call out for a solution, as long as we can take a moment to clarify the real problem, and chart a course for how we can solve it for sustainable success.