Sitting in Perry’s Los Angeles office was a humbling experience. The mahogany walls, teak boardroom table and leather-bound engineering manuals made me feel like I was on a Hollywood movie set. But I felt right at home when I walked up to the white board and started doing the math. Marker in hand, I asked Perry a series of questions aimed at quantifying the cost of the delays in the Smith project.
First we talked about the basics-number of people working on the project (80), how late the project was (32 days), the average hourly wage of the people dedicated to the project ($33.10). Here’s the math:
80 people x 8 hours a day = 640 hours per day
640 hours per day x 32 days = 20,480 hours
20,480 hours x $33.10 per hour = $677,888.00
Perry sighed. “The number doesn’t surprise me,” he said. “I calculated this setback at about a half-million dollar loss. But what does this have to do with a measurement system? We already measure plenty of things around here.”
“It’s true that you already have a balanced scorecard that measures your operational effectiveness,” I said. “But what about your human effectiveness? Tell me about the human part of this equation. What’s causing the delay?”
“A variety of issues,” said Perry. “But I would say the biggest delay was caused by a misunderstanding between engineering and production. Sales was very specific about the customer’s specifications, but our production process needed to be modified to increase the number of pixels in the screen. This misunderstanding required retooling the production line, which created hard feelings between engineering, production and sales. Everybody was pointing fingers at everyone else. Even worse, the customer caught wind of the problems. Now our credibility has been threatened.”
I asked Perry if this ‘misunderstanding’ was the result of miscommunication or outright conflict and he said a little of both.
“If we could enhance your employee’s communication skills and reduced the amount of time it takes to resolve conflicts, what would that be worth?” I asked.
I could see Perry was thinking. “If improved communication and conflict resolution skills could have cut this project delay time in half we would have saved over $300,000,” he said. “Not to mention sparing us getting a negative perception of our company.”
I waited for the “yeah, but” and Perry didn’t disappoint. “Yeah,” he said. “But how do we measure it?”
Partnering Measurement System
Each of the Six Partnering Attributes can be measured based on your organization’s perception of its current level of competency. For example, if you believe there is a lack of trust in your business, you can measure your employees’ perception of trust with a simple survey. By administering multiple surveys over time you can determine if trust improves, stays the same or decreases.
In Perry’s case, the two main issues were communication and resolving conflict. We needed to measure the ability to self-disclose and provide feedback, and the ability to create a win-win orientation. And since Perry was skeptical, we also wanted to make sure we had secondary indicators of growth and change.
Self-Disclosure and Feedback
When communication improves it’s usually the result of more self-disclosure and the ability to give and receive feedback. But how do you know? For one, more accurate and frequent communications result in fewer mistakes. Thus, if you want to measure whether or not your teams are communicating better, you look at the amount of rework they have to do. The hypothesis is that the better the communication, the fewer the mistakes.
Furthermore, better communication means quicker decisions. If employees are exchanging information more effectively-in other words if people are freely giving each other the information they need to do their jobs-then everyone is in a better position to make decisions quicker.
You must, of course, establish some kind of baseline, but once you start measuring how quickly your organization makes decisions, you can begin to see how more self-disclosure and the ability to give and receive feedback will, in time, improve the decision-making process.
While the direct benefits such as less rework, increased customer satisfaction and accelerated products to market are obvious, there are important intangible benefits that cannot be overlooked. And even a bottom liner like Perry can see that improved communications enhances clarity of vision, increased ownership and encourages a new focus on the companys long-term goals.
Win-Win Orientation
Everyone can agree that collaboration is critical, but how do you measure something as intangible as collaboration?
Again, the most direct method is to simply ask people. Survey employees about how well they collaborate with others and how well others collaborate with them. Once you have the baseline measurement, you can then find out how these skills improve over time.
However, having a win-win orientation is so important that looking at secondary indicators becomes essential. The best secondary indicator in this case is to measure how many conflicts escalate to the point where they need to be resolved at the executive level. People who are using a win-win orientation tend to solve their own problems. But if problems keep getting passed up the chain of command for resolution, then you know that people aren’t collaborating.
These are just two examples of how you can turn the Partnering Attributes into quantifiable measurements that show an impact on the bottom line. In fact, each of the Six Partnering Attributes can be used in this way.
For companies who depend on the excellence of their human capital, partnering intelligence is more than good training. It’s good business.
Stephen M. Dent, founding partner of the consulting firm Partnership Continuum, Inc., is an award-winning organizational consultant working with such clients as USWEST, Inc. Northwest Airlines, AT&T, GE Capital Services, the U.S. Postal Service, NASA, Bank of America and Exult. He lives in Minneapolis MN.
Stephen M. Dent
Partnership Continuum, Inc. www.partneringintelligence.com
1201 Yale Place Suite 1908
Minneapolis, MN
e-mail Sdent@partneringintelligence.com phone 612.375.0323
