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Visual Management - What Get's Measured Gets Improved

Guest post by: John Stepleton

Article Overview: A great "how to" article on implementing visual management systems in your business.

Visual Management - What Get's Measured Gets Improved

I was first introduced to the idea of Visual Management while attending the Birthing of Giants program - an executive educational program jointly sponsored by the MIT Enterprise Forum and Entrepreneurs Organization (EO) - during the summer of 2001. At the time, my company had experienced rapid growth and I was dealing with the typical issues related to fast growth companies. We were struggling to deliver the quality of service that we had become known for. But the more we grew, the less we were able to control and predict. It was then, sitting on the lawn at the Endicott House at MIT, that I learned the importance of implementing visual systems in the business.

Visual Management is any system, process or tool that provides real-time information and feedback about the status of the organization, departments and job functions. Think of it as the organizational nervous system that connects employees to the critical activities needed to achieve the goals of the business. It’s also what many refer to as KPI’s (Key Performance Indicators). Visual Management systems can take on a number of different forms from sophisticated database applications to simple white boards mounted on a conference room wall. Over the years, I’ve learned a tremendous amount through trial and error as to what seems to work best and what doesn’t. Here are a few tips that might help.

Think of a visual management system as the scoreboard for your business. At a minimum it should communicate:

* What are the goals the organization, department or job function is trying to achieve?
* What are the key measures or units of work?
* How are we performing in relation to our goals?
* What prevents us from reaching our goals?
* And, most importantly…what are we doing to contribute to reaching our goals?

Now, here are a few things to consider when you are either add or modify your huddle boards within your business.

First, make sure your visual management board is broken down into three specific sections - “how”, “why” and “what”.

The “HOW” should illustrate the performance (daily) with daily metrics that are critical to your business. This could include things such as “number of calls”, “conversion rates”, etc. They are the activities that matter to your financial or customer service performance. Be sure to include the “goal” rate for performance within the graph.

The “WHY” should be a metric that is related to the “HOW.” e.g., if you were tracking your turn-over, the “WHY” metric would be results from the exit interviews you conducted as to why the employee was leaving the company.

Finally, the “WHAT” should chart what corrective “actions” need to be taken, who is responsible, when it will be done, and what resources will be needed.

Use graphs, pictures and diagrams whenever possible. There’s a reason for the saying “a picture’s worth a thousand words.” Display “expected” performance levels whenever possible.

Don’t sweat it if your board doesn’t look polished. It needs to be adaptable to your market and industry’s changing environment.
Be sure to require your people interact with the data. A simple way to do this is to NOT use computer programs to generate fancy graphs (e.g., Excel) but rather to make them draw the results on a white board. When they interact manually with the data they will have to “think” about it - which in turn will help them see when something needs their attention.

Finally, include as many employees in the process whenever possible - this includes the design on your boards, deciding where to post them, and how to communicate the information.

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Article Tags: critical activities, database applications, educational program, enterprise forum, giants, huddle, key performance indicators, kpi, management board, management system, management systems, nervous system, quality of service, rapid growth, scoreboard, sophisticated database, trial and error, typical issues, units of work, visual management



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