• Measure Results
• Provide a Leading Indicator
• Identify Operational Weaknesses
• Reveal Investment Opportunites
• Drive Individual Accountability
• Measure Change

In this webinar, we will discuss Financial Metrics as well as Personnel Metrics and Operational Metrics. The Operational Metrics will include both the Sales and Delivery Model. Once the right metrics portfolio is in place, the metrics can help quantify change, determine if change is feasible, provide data for effective change management and hold all levels of the organization accountable.

I look forward to having you join us on this Metrics Webinar.

Mike Cleland

President, Charted Path

Why is the impact of improving operations so significant? Well, because delivery issues are oftentimes driven by self imposed process inefficiencies. Yes, the talent pool may be tightening, but don’t fool yourself that the lack of productivity is out of your control. Spend the time to drill down into your delivery organization and honestly evaluate whether it is truly aligned with your current client base. I have worked with client’s who are married to old processes because they worked in the past. However, this is an expensive mistake.

Managers must look at their processes in relation to their account base and customize their delivery accordingly. The good news is that these types of improvements can lead to stunning results. I have seen results increase by over 40% and will present these case studies during my presentation at the SIA Executive Forum.

In contrast, addressing bottlenecks in the sales strategy takes longer and typically requires more investment. Sales simply doesn’t benefit as much from repeatable and scalable processes. Instead, sales processes must be joined with marketing efforts and extensive training of sales personnel which takes both time as well as additional expertise. In addition, clients will often wait months or years before agreeing to work with a new staffing firm. Keep in mind that the sales strategy must be continually improved and evaluated, but be prepared to wait at least six to nine months before you see a return.

For the quickest return, it may make sense for you to focus on aligning your operations versus improving your sales strategy, especially if you see the following trends:

• Declining Job Order Close Rates
• Increasing Submittal to Hire Ratios
• Large Fluctuations in Job Order Volume
• Increases in Time to First Submit
• Large Variance of Close Rates Between Client Types

If you are short on job orders, then you should definitely focus on shoring up your sales strategy. But if you believe you are leaving business on the table because of poor alignment, then I encourage you evaluate closely the three key processes that define delivery:

• Job Order Management
• Sourcing
• Submittal Management

I will go into greater detail of the roles of each process and how they must interact with one another during the presentation. If you are not able to attend or would like to discuss these concepts in further detail, please email me at mcleland@chartedpath.com to schedule a time to discuss.

But what happens when a staffing company grows and decision making becomes more and more complex? Can intuition effectively guide decision making? While I don’t completely disregard the role of intuition, a common mistake I see owners make is to believe that their intuition is a unique gift that shouldn’t be challenged even as their operational knowledge wanes.

This perspective is often justified by the book Blink by Malcom Gladwell. In this book, Gladwell discusses rapid cognition or the thinking that happens in the first two seconds when placed in a new situation. Many people walk away from Blink with a higher regard for instincts as the key driver of decision making rather than fact based management. This is an understandable misinterpretation of Gladwell’s premise. Below is a description of the book’s premise in Malcom Gladwell’s own words.

“You could also say that it’s a book about intuition, except that I don’t like that word. In fact it never appears in Blink. Intuition strikes me as a concept we use to describe emotional reactions, gut feelings–thoughts and impressions that don’t seem entirely rational. But I think that what goes on in that first two seconds is perfectly rational. It’s thinking – it’s just thinking that moves a little faster and operates a little more mysteriously than the kind of deliberate, conscious decision-making that we usually associate with “thinking.” In Blink I’m trying to understand those two seconds. What is going on inside our heads when we engage in rapid cognition? When are snap judgments good and when are they not? What kinds of things can we do to make our powers of rapid cognition better?”

The foundation of Gladwell’s premise is not that some of us have innate abilities to make the right decision independent of facts. Instead, the premise is founded on our cognitive ability to combine our experiences and critical data to inform our immediate judgment. However, the idea that rapid cognition is independent of facts and experience is a seductive trap that is both stubborn and dangerous. For executives to avoid this trap, they must improve the effectiveness of their line level management team and provide executive management the operational insight they need to make the right decisions. Below are ideas how to make both those success factors a reality.

Manage from a Balanced Metrics Portfolio: Managers who rely on their business instincts to address business problems can spend a lot of time fixing minor problems, or providing solutions that can make matters worse. This is especially true in this rapidly changing marketplace where business practices can quickly become outdated. A balanced portfolio of metrics provides critical data to management on where the company is and where it is headed. This situational awareness combined with management expertise empowers leaders to focus on the right issues and not be distracted by ancillary problems.

Define Management Roles: Management roles are too often defined by reporting structure and not the business drivers of the role. This approach limits both direction and accountability by not defining the three key management responsibilities: Personnel (hiring, coaching, and performance management), operational improvements (process and tools), and the identification of supply and demand trends (contractor pool and buyers).

Hire and Develop Strong Managers: One of the most underestimated factors of a productive company is the strength of the line level management team. Strong managers impact all critical success factors of your operation through effective decision making, innovative solutions and motivational leadership. In addition, strong managers can provide critical insight on the feasibility of long term strategic growth plans. However, while some managers may have talent in all the above, it is executive leadership’s responsibility to encourage the development of these skills.

Make Management Meetings Meaningful: A common mistake executive’s make is to limit management meetings to a discussion around results. While discussing results is critical in driving accountability, it does little to improve operations, encourage collaboration, or provide meaningful coaching for line level managers. Management meetings are the best method to identify potential growth bottlenecks, inform executives on operational trends, and assess and develop the knowledgebase of the line level management team.

Stay Informed: From my experience, great ideas oftentimes lie dormant in manager’s minds and require challenging discussions to be clearly defined and vetted. However, staying informed on industry trends through continuous reading and active involvement in industry associations will provide additional insight to help drive effective decision making. For additional insight on how industry associations can improve management decision making, visit my blog on the importance of having a balanced perspective.

Regardless of the company size and complexity, executives can get the information they need if they are looking at the right data, driving effective collaboration with line level managers, and making an effort to stay informed of industry trends. This information empowers executive decision making and avoids mistakes that are commonly linked to uninformed intuition.

Article Two in a Five Part Series:

Several years ago I had a new recruiting manager come to me complaining that they couldn’t get their work done because they kept getting interrupted. In an attempt to learn more about the predicament, I asked for more details. He then began to craft for me a laundry list of fires he had to put out from addressing conflicts between team members to listening to employees discuss personal issues. Of course, he was disappointed to hear that addressing these daily interruptions is part of management.

Too often, however, these interruptions can drive a manager to only think reflexively, to only worry about the next immediate problem and forget about one of the most important responsibilities of the job: Improving the Organization. This limited perspective of the job responsibilities is completely natural for a manager who must constantly address internal issues that come to their desk day in and day out. However, the question remains if management is solely focused on the present, then who is preparing for the future? The answer is “no one”.

It is for this reason that managers must work to pull themselves out of the day-to-day and become more externally focused. To gain an understanding of how buyers, competitors and the industry as a whole are changing and threatening the long term sustainability of their business. Unlike the reactive nature of firefighting, the manager must proactively decide that they need to educate themselves to gain perspective on how they must improve their organization.

The staffing industry is fortunate to have industry associations that provide important perspectives on industry trends, management best practices, and benchmarking. Through these three organizations and others, managers can focus on the broader trends within staffing and how they apply to their competitive situation.

TechServe Alliance: TechServe focuses on the IT staffing and professional services space but can provide interesting insight for other professional staffing sectors through their operational best practices report. Some Resources TechServe provides includes:

• TechServe Alliance Connect: Information sharing network that allows the 350 members to share business solutions as well as have access to a library of shared documents and an eLearning center.
• Benchmarking: Detailed operational and financial benchmarking data for overall operations as well as specific reporting for sales and recruiting.
• Best Practice Webinars: Monthly webinars given by guest speakers including economist and industry experts.
• Annual Conference: Three day conference focusing on industry trends, operational best practices, and networking. The only conference solely focusing on the IT sector.
• Local Chapters: Local meetings that allow you to network with other local staffing firms and discuss industry trends.
• Membership Information: Contact Julie Price at price@techservealliance.org

Staffing Industry Analyst: Staffing Industry Analysts is the only independent provider of research, analytics and data on the global contingent workforce. It provides objective data and resources on a global scale for both buyers of staffing services and staffing firms. Staffing Industry Analysts doesn’t specialize in a specific staffing vertical, but instead offers strategic insight on the industry as a whole. Some Staffing Industry Analysts resources include:

• Conferences: Staffing Industry Analysts Executive Forum; Staffing Industry Analysts Healthcare Summit for staffing firms; Contingent Workforce Strategies Summit; CW Risk Forum for buyers of staffing services
• Webinars: Hosts the SI Report Webinar a monthly webinar for staffing members and monthly webinars for buyers of staffing services
• Publications: SI Report for Corporate Members and Staffing Industry Review for staffing owners, executives and managers.
• Membership Information: Membership is available for staffing companies and buyers of staffing services. Please contact Staffing Industry Analysts member services either by calling 800-950-9496 or via email memberservices@staffingindustry.com

American Staffing Association: ASA members include a substantial diversity of staffing vendors including temp, professional contract, as well as direct hire services. ASA provides industry trending reporting, best practice training, as well as a strong networking community through their local chapters. Some ASA resources include:

• Annual Conference: ASA three day conference provides a wide variety of workshops tailored to different audiences with a wide variety of workshops and presentations.
• Local Chapters: ASA local chapters facilitate discussions on best practices and local market trends with other staffing leaders
• Certifications: ASA offers certification programs on a wide range of topics, such as recruiting, sales, employment law, operations, and best practices.
• Publications: ASA offers a wide variety of tools and publications that discuss best practices and legal issues impacting the staffing industry.
• Benchmarking: ASA provides benchmarking from multiple angles including operational numbers, market trends, and client surveys.
• Membership Information: Contact Simone Bielsker at sbielsker@americanstaffing.net

Leaders who wish to broaden their perspective on the industry would do well to further their research on these organizations and choose to join one or more depending on their needs. However, in order to benefit from associations, leaders must be committed to be actively involved and willing to implement new ideas to their business in the ongoing effort to increase its competitiveness.

Leaders who choose to not participate in industry associations must find alternatives to stay informed on this rapidly changing industry. Leaders that choose to do neither run the risk of becoming more and more removed from industry trends and more likely to make decisions that can threaten the long term sustainability of their business.

Mike Cleland

President, Charted Path

An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.
Jack Welch

The majority of people hate change.  Change increases uncertainty, impacts trust, challenges relationships, and if poorly implemented can make people fearful of the future.  It is these potential consequences that make managers advocate the status quo, and look at change and innovation with a skeptical eye.  When you consider the potential negative consequences along with the amount of work necessary to define and implement change initiatives, it is no wonder that many managers opt for the status quo.

However, the staffing industry is continuously changing and if managers do not learn to adapt to those changes, their company will invariably become less and less competitive.  Take for example the continuous improvements of applicant tracking systems.  From social media integration to more effective CRM capabilities, these directly impact the productivity of the production team as well as management assuming effective implementation.  It does not stretch the imagination to realize that managers who enable their team to leverage these capabilities will have a competitive advantage over ones who choose to simply embrace the status quo.

The continual and rapid improvement of applicant tracking systems represents a small example compared to other forces that driving change in the staffing industry. A few months ago I wrote an article for the SI Review on Understanding the Competitive Forces of IT staffing. The article focuses on three of the five of Michael Porter’s competitive forces and how they will continually challenge staffing firms to identify and implement meaningful improvements.  These forces include the Bargaining Power of Buyers, the Threat of Substitutes and Rivalry among Competitors.  Additional forces include increased visibility of the candidate pool along with legislative and regulatory changes.  All these forces thrust the status quo into irrelevancy and justify this basic premise:

In order to ensure long term sustainability, staffing executives and managers must dedicate time and resources to identify and effectively implement high impact improvements that are tailored to the company’s sales strategy, operations, and performance culture.

It is important to remember that change is disruptive, so managers must be selective on the improvements they choose and how they implement them.  Below are success factors that will ensure the management team is able to break through the status quo and prepare the company to reach the next level of performance.  There will be a further drilldown into each one of these factors over the next four newsletters.

Ensure Management is Not Too Internally Focused: Management must be aware of how the industry is evolving and how well the company matches up versus the competition.   How strong are their hiring practices?  How competitive are our compensation plans?  Can critical process be automated?  How effective is the sales strategy?  Are we effectively servicing our clients?  Is our team motivated and focused?   Managers with a balanced perspective on the above questions are able to objectively evaluate the strengths and weaknesses of their operation and effectively prioritize what improvements will have the biggest impact.

Dedicate Time to Challenge the Status Quo: It is important to remember that the status quo has momentum and management must actively intervene to challenge it and implement improvements. Continuous improvement workshops provide an excellent forum to pull key employees, managers, and executives together in a room and answer a simple question.  Where do we need to improve in the next six to twelve months in order to remain competitive?

Develop a Plan with Clear Accountabilities: Oftentimes after workshops are completed management feels a sense of accomplishment.  These premature feelings of accomplishment oftentimes lay the ground work for ineffective implementation.  It is important to understand that even the best solutions poorly implemented can weaken an organization while average solutions properly implemented can still make an organization stronger.  Elements of a strong implementation plan include ownership, clear milestones, and frequent collaboration between key stakeholders to ensure the changes are producing the desired improvements.

Measure your Progress: Most companies have performance and operational metrics that provide visibility into how an organization is doing at any point in time.  However, progress needs to be measured as well in order to ensure that the improvements are being implemented properly and if so are producing the desired results.  Measuring progress requires dedicated metrics that are compared over a period of time.

In the end, it is management’s responsibility to rise above the day to day business issues, periodically challenge how the business is currently conducted, identify improvements, and implement solutions.    While the above may seem like a lot of work, organizations that do not dedicate time and resources to drive continuous improvement run the risk of becoming less and less competitive and more and more irrelevant. So while embracing the status quo may be the easiest path, doing so is equivalent to management malpractice.

The metrics we use act as the lens in which we view the business, so it’s important to ask ourselves does the lens we use accurately represent reality?  Too often the answer is no. Of all the assessments I have done there is always one common theme, the problems I am asked to evaluate are often not the key issues that need to be addressed.  These disconnects between perceived and real problems stem from either a lack of correct metrics or inaccurate interpretation of what the metrics are saying.  Common sources of a poor metrics portfolio include:

Not Aligning Metrics to the Company Strategy:  Many companies use standardized metrics they may get from industry associations or create their own metrics without considering the unique needs of their organization.  Metrics need to be customized based on key success factors of the company’s growth strategy.  While staffing companies all provide the same service, how they sell, deliver, and choose to expand varies widely from company to company.  Customized metrics need to capture and measure the effectiveness of that uniqueness to ensure the growth strategy is effectively executed.

Metrics Portfolio Lacks Balance:  Most staffing companies have some type of metrics they measure the company against.  However, oftentimes the metrics do not provide a complete picture of the organization.  A balanced portfolio consists of metrics that measure overall financial results, the effectiveness of sales and recruiting processes, and the performance level for production personnel and line level management.

Data is Inaccurate:  While Applicant Tracking Systems have come a long way in process efficiencies, they lag behind when it comes to effective CRM capabilities and linking financial and operational numbers.  To work around these inefficiencies, many companies ask employees to self report metrics instead of reporting them out of their systems.  This is a risky practice in that it can provide inaccurate data leading to bad assumptions and bad solutions.  Whenever possible, metrics need to be pulled out of a system that accurately captures activity as it occurs in the field.

Data Isn’t Reviewed Regularly:  Part of managing to data is becoming familiar with the data and being able to identify trends versus one off events.  This familiarity comes from frequently reviewing metrics with the management team and having significant business discussions around their meaning and potential adjustments.  When this is done on a monthly basis managers become more comfortable with the metrics, more skilled at identifying causes of non performance as well as better at distinguishing between a problematic trend vs a one off event.  When metrics are not reviewed frequently, the ability for management to evaluate them in the proper context suffers which negatively impacts decision making.

Metrics Become Outdated:  Since metrics portfolios can become outdated, companies need to challenge the metrics that they use at least on an annual basis to ensure they are still relevant.  Metrics can lose their relevance for many reasons, but some of the most common ones include:

• Company has reached another stage of growth
• Company has significantly changed its sales strategy
• Delivery model changes to meet client needs
• Company changes hiring profiles for key positions

Building and managing to the right portfolio of metrics is a critical success factor for staffing companies that are continually facing multiple obstacles to growth.  Spending time creating and managing to the right metrics empowers management with the information they need to make the right decisions in order to maneuver through an increasingly competitive business environment.

Some of the topics covered in the Metrics that Matter presentation are:

• The role of metrics in managing a high performance organization
• The different types of metrics that provide a properly balanced perspective
• The role of company strategy in effectively defining your metrics

You can also view two TechServe Alliance webinars on our website as well.

• Strategy Simplified : Understanding strategy and its role in building an exceptional staffing organization. This presentation is tailored to the executive who must define and implement the company’s long term growth strategy.
• Drivers of a Successful Sales Organization : Building and managing a strong sales organization includes mastering these drivers. This presentation is a must for executives and line level sales managers

Upcoming: For IT staffing companies I also encourage you to sign up for the SIA webinar “Making IT Solutions Work for your IT Staffing Firm” on May 24, 2011. I will be presenting the key success factors to consider before starting a solutions practice. Gary Wood Executive Vice President of Matrix Resources will also be sharing lessons Matrix has learned on building a successful IT solutions organization. The webinar is free to SIA members and is $199 for non members. For more information, please click here.

Charted Path provides management consulting services for staffing organizations. Services include but are not limited to:

• On Site Assessments
• Sales Management Consulting
• Recruiting Process Improvement
• Metrics Management
• Effective Hiring and On boarding
• Strategic Planning

To learn more visit our website at www.chartedpath.com or contact Mike at mcleland@chartedpath.com.

Developing Internal Talent:  Companies are frustrated by the inability to hire qualified sales and recruiting talent.  Relying on hiring experienced and qualified talent that are willing to leave their current position has become exceedingly difficult for a variety of reasons.  The alternative is to hire less experienced people and train them.  However, most companies are ill prepared to hire and develop inexperienced talent, but you don’t have to look far to see the return on such an approach. It’s no coincidence that the top staffing firms are also the ones that invest heavily in hiring and developing inexperienced internal talent.  Lessons: Hire for drive, invest in your talent.

Data Management:  It used to be that a key success factor for a recruiter was being the first to the thermal fax in the morning.  Now recruiters are deluged with data from a wide range of sources, but it doesn’t end there.  More sales people are trying to master vetting through large numbers of automated job orders and submittals than learning how to sit down with managers to understand requirements.   Possessing the ability to process and manage data is no longer optional and Staffing companies must understand that they either learn to manage their data effectively or be buried underneath it.  This is the new normal that will be with us for the foreseeable future.  Lessons:  Continually strengthen your processes and tools, know your metrics.

Focus on the Core:   Cloud Computing, MSP/VMS services, Off Shoring, Job Boards, Social Media and low barriers to entry are only a few of the factors that contribute to an increasingly competitive future in the staffing industry.  This competitive landscape requires staffing firms to better define their plan of attack that will maximize their return on investment dollars and effectively leverage their strengths.  This focus is best achieved through a strong strategic plan that builds on the core of the current business.  Strategy should be a practical planning exercise that can bring needed focus and rigor to an organization.  Key principles around this approach to strategy can be found in books such as Good to Great and Profit from the Core.  You can also review my August webinar on the subject here.  Lessons: Focus your team, leverage your strengths.

It’s important to keep in mind that the factors above are independent of poor market conditions and that all of them could potentially become bigger factors as the market rebounds.  There are more success factors that could be listed, but these three are consistent reoccurring themes in the companies I encounter.

Effective business planning requires a more holistic approach where management not only is aware of the financials, but also will evaluate each core driver of the business to identify areas of improvement for the upcoming year.  The three core drivers that need to be reviewed and challenged include your sales strategy, operational effectiveness, and the performance driven culture.  You can find more information on those drivers and how they drive your overall business strategy here.

Some questions to get you started are listed below.

Sales Strategy: Is defined by your value proposition, the buyers you are targeting, and the sales process you have to execute.

• What accounts provide the best opportunity for growth?
• Do we have the right/enough resources allocated to those accounts?
• How healthy is the target account funnel?
• What parts of the sales process need to be strengthened to remain competitive?

Operational Effectiveness:  Increasing competitiveness by improving productivity and driving out waste.

• How can we improve recruiting responsiveness?
• How can we lower the cost per submittal without significantly impacting quality?
• How profitable are our accounts? Are there some that are unprofitable?
• Are there any processes or tools that must be improved in order to remain competitive?

Performance Culture:  Ensuring that the company has the right policies and techniques to drive individual and team performance.

• Is the compensation plan driving the right behavior?
• Are we effectively communicating with the team?
• Do we need to add/modify non-monetary incentives?
• What training/coaching do we need to provide to drive the right behavior?
• Do we have the right people in the right roles?

Contemplating these questions will give some insight into how the core drivers can greatly impact the priorities for the upcoming year.  While the questions above are by no means comprehensive, they give clarity to the nature of each driver, and the types of challenges that are appropriate.

It’s also important to keep in mind that many of these questions provide the framework for the type of metrics that a company should be utilizing.  The development of those metrics will be the topic for the next newsletter.

People love lists.  You see them everywhere on the internet from major news organizations to everyday blogs.  Lists suggest both a level of research and authority.  Initially, many lists were around interesting facts or well researched theory.  Lists are easy to digest, make for good trivia and provide a level of entertainment.  Lists can also provide important structure around management issues that can be difficult to define.  My upcoming webinar incorporates “Five Sales Drivers” is one example of that technique.

However, reading these lists on management practices gives me cause for concern.  Lists that make sweeping generalizations are more about elevating the writer than trying to convey knowledge.  This approach tends to simplify the complex and allow cynicism to masquerade as wisdom.  The lack of real substance can also discourage existing and aspiring managers from improving their craft through real study of more helpful and serious material.

Most managers I know were thrown into their roles, with little, if any training.  They learn how to manage through baptism by fire, relying on trial and error as their primary learning tool.  This method of learning will always be with us and provides valuable insight on how to become a better manager.  But mistakes can carry with them significant costs and consequences.   Managers must do what they can to limit those costs by learning as much as they can from their mistakes or to avoid mistakes altogether.  This is where the study of management can have the greatest impact.

Managers that are committed to their craft understand the crucial role study plays to their ongoing development.  They commit their personal time to challenge their own assumptions and actively apply new approaches to improve team performance.  They also understand that regardless of how compelling an article or book may be, that any new approach must be met with healthy skepticism.  Managers must use discernment to determine what principles are relevant and how they should be leveraged.

It is this discernment that represents the real wisdom of management.  Discernment is a skill that many managers are born with, but is only perfected through a combination of experience and study.  So the next time you see a top ten list on management principles, use healthy skepticism armed with the understanding that simplifying the complex typically values style over substance.  Instead, use more substantive material to study your craft and leave the cynical top ten lists to late night comedians.

I have compiled a list of materials that I have found particularly valuable on my website on the resource page , but I am always looking for new books and articles.  Feel free to recommend books that have impacted your view of management here.