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Using the Internet of Things as a Performance Management Tool [part 1 of 4]

This is the first in a four-part series.  View part 2  –  part 3  –  part 4

By Bruce Tulgan

Even with direct reports who are mostly on time, well-organized, and regularly following good standard operating procedures, the goal is increasingly “more, faster, better.” That’s just another way of saying “constantly increase productivity and quality.” These are the mantras of continuous improvement. That is the order of the day and will be for the foreseeable future.

Particularly in manufacturing, workplaces are becoming more and more focused on ways to remove waste of all forms and increase productive capacity. The Internet of Things is one way that manufacturers are automating everything, reducing down-time in processes, and gathering the data they need to continue this constant improvement.

But don’t be lulled into thinking that continuous improvement is only about driving more profits and staying ahead (or afloat) in today’s fiercely competitive marketplace. Yes, you do need to keep increasing productivity and quality to survive and keep winning. But there are even more compelling reasons to stay focused on continuous improvement with not just your devices, but your people.

Research demonstrates that practicing to get better at something (just about anything) is actually the key to not getting worse. That stands to reason, as human beings are not static creatures. It turns out, if you are not improving at a skill or task, then you are almost surely declining in productivity and/or quality, however slow and imperceptible the decline might be.

The classic case in the workplace is average employees doing routine recurring tasks. The employee, team, or department seems to be running just fine without much oversight. The employees in question may have been handling the same basic responsibilities for a long time. The work may be low profile, with a relatively small impact on the bottom line. Often for the supervisor, the neglect is inadvertent, like so much undermanagement.

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There was a large billing group in a medium-sized company with just such a manager. I’ll call him “Bill.” Every time I asked Bill about the performance of his team, he came back at me with, “over one thousand transactions a day.” That was his key performance indicator. It seemed painfully opaque to me. So I pushed.

When I asked about the accuracy rate on inputting new customer information or updating existing customer information, he told me, “A lot of times sales will send over incomplete information, so that’s a problem with sales.” What about new customer records that come from internet sales? “Yeah, those come over incomplete too a lot of times. The web team needs to make it so that customers can’t complete the transaction without filling in all the information.” What about broad measures of billing such as credit cards successfully processed per incoming call? Bill’s answer: “We don’t track that sort of thing.” What about average time to payment? Bill says, “That’s accounts receivable.” What about the number of customers who go into collection? Bill: “That’s collections.” What about expired or canceled credit cards successfully replaced? Bill: “That’s customer service.” And that’s how the whole conversation went.

As it happens, I already knew that the billing department had been causing headaches for their colleagues in other departments. Ask just about anyone in any of those groups where there were problems that affected them, and every one of them said, “Billing!”

Billing controlled the secure, proprietary customer database. So whenever billing made a mistake in information transfer, problems would cascade. Don’t get me wrong, Bill was not sitting on his hands doing nothing. On the contrary, he was running around like crazy, troubleshooting problems that were constantly being brought to his attention. Meanwhile, he remained incredibly protective of his team.

On the surface, the reported output of his team was fine and the error rates were quite low. But as soon as we looked under the hood, it turned out that the only thing being measured was whether a transaction was successfully completed or a bill successfully sent. There was no meaningful tracking of the true error rate, because nearly all of those errors came on the back end of the process.

The problem was a fundamental lack of performance management. All the billing department needed was good metrics and regular performance coaching from a highly-engaged manager.

Employees need to know exactly what is expected and required of them. They also need to know that their performance will be measured based on those expectations and requirements that were spelled out up front – nothing else. The key is to always frame expectations in terms of concrete actions the employee can control.

The manager needs to monitor and measure every step of the way:

  • Expectations. Goals and requirements that were spelled out. Instructions given or to-do lists assigned. Standard operating procedures, rules, or guidelines reviewed. Timelines defined. Deadlines met.
  • Concrete actions. Track each employee’s actual performance: What data is tracked automatically? What have you observed the employee doing while watching? What does the employee say when asked about his actual performance? What do his self-monitoring tools reveal? What does your ongoing review of work product tell you? What do you learn about the employee’s actions when you ask around?
  • Measurements. How are the actions matching up against the expectations? Has the employee met requirements? Did she follow instructions, standard operating procedures, and rules? Did she meet her goals on time?

You need a performance tracking process that is simple and easy to use. Figure out what data is being gathered in your IoT environment, and whether that data is useful to you, or not. How can you use this data in your ongoing performance management? What strategies can you employ to ensure you and your team don’t start going on auto-pilot? But don’t get too bogged down in the details or flooded with unnecessary metrics – simple and easy is the key to making this an ongoing management habit.

This is the first in a four-part series.  View part 2  –  part 3  –  part 4


About the Author

Bruce Tulgan is an adviser to business leaders all over the world and a sought-after keynote speaker and seminar leader. He is the founder and CEO of RainmakerThinking, Inc., a management research and training firm, as well as RainmakerThinking.Training, an online training company. Bruce is the best-selling author of numerous books including Not Everyone Gets a Trophy (Revised & Updated, 2016), Bridging the Soft Skills Gap (2015), The 27 Challenges Managers Face (2014), and It’s Okay to be the Boss (Revised & Updated, 2014). He has written for the New York Times, the Harvard Business Review, HR Magazine, Training Magazine, and the Huffington Post. Bruce can be reached by e-mail at brucet@rainmakerthinking.com, you can follow him on Twitter @BruceTulgan, or visit his website www.rainmakerthinking.com.

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