As an IBM Futurist, I’ve had the opportunity to get an inside of view of the fantastic work IBM is doing with analytics, big data, cognitive computing, machine learning and AI, all encompassed in the wonderful world of Watson. These capabilities frankly are mind blowing.
One significant take-away from my exposure has been the role numbers play in our everyday lives and particularly in our businesses. I wrote about this in the post entitled Have You Experienced The Power of Numbers?
I shared: “Numbers can tell a story. Numbers can amplify a need. Numbers can help us see truth. Numbers are a reality check.”
In fact numbers “inform”…they give form to what initially cannot be seen or difficult to identify — they can make tangible, the intangible.
I’ll admit in the past I’ve taken numbers and the value they offer forgranted. Mostly recently I’ve tried to bring that value to my clients through my latest exeuctive briefing Show Me The Money!
My journey with numbers has lead me to conclude that numbers are an non-negotiable partner to any leader. In the most obvious ways, its through accounting and yet there are many other ways numbers are not being acknowledged or utilized.
I love the story in my post, referenced above, about the tech firm’s response to their recruiting numbers. The numbers motivated them to creatively act.
In my executive briefing, Show Me The Money! , I help decision-makers apply numbers to employee performance so that they can create profitable strategies to grow their companies by way of improving employee performance and growing their capabilities. I call it “strategic talent development”.
Many leaders hesitate to invest in this way because they don’t know how to calculate or apply relevant numbers to performance or determine ROI, even when they do begrundingly decide to invest.
In fact, many make decisions against their own self interest and that of their company because effective use of numbers is not in their toolkit.
So, what’s the point of this post? After my completing my recent briefing, I felt compelled to ask again, “Have you experienced the power of numbers in your leadership and for your organization?”
Beyond accounting, ask yourself…
What numbers am I using to run my business?
What numbers do I need?
What systems or tools do I need acquire them?
How can and will my decision-making change with better numbers?
How can and what numbers will help me grow my business?
In the arena I work (business growth through effective talent mangement), for sure quantitating employee performance should be one of them.
For example, a common challenge for many organizations is underperforming managers. As the discussion begins with a potential client, to determine how much to invest to address the concern, I ask, “How much is this costing you?” I’ve rarely had a client know the answer. 99% say and then ask, “I dont’ know.” “How would you determine that?”
Being able to answer that question is a capability essential for every decision-maker.
How to determine the impact of an employee’s performance to profit/loss is both a human resource and finanical resource competency.
If that’s not present, it will adversely affect their management of their talent (which really is business management) — beginning with how they frame and diagnose issues and the subsequent decisions made.
For this post, let’s look at the power of numbers through a common business example:
A 100 employee company is growing rapidly. More employees are needed to take on increasing business. But before that is done, (and because strategic planning was done vs. a rush to hire) current employees could “grow their capabilities and capacity” with some development, some could be assigned to different positions and new roles could be created to leverage capabilities not being used. (By the way, this strategic plan has already saved money while positioning their “human” resource to accommodate more growth.
Related to growing capacity, let’s use the operational strategy of improving time management as one element of development. Time management/productivity training and coaching (which I see as process improvement by the way) can get tangible results quickly.
Note: The kind of thinking that sees employee training as just that and not connected to operational improvement to serve the greater goals, really undermines the ever-present opportunity to leverage the human side of the enterprise.
So with a small investment, let’s say each employee comfortably improves capacity by 1 hour a day. For 100 employees that’s 100 hours in a day for that company.
Think about that for a minute. It’s one thing to think,”Oh 1 employee improved by 1 hour a day.” That, perhaps, doesn’t sound like a big deal. Yet, the cumulative number sounds impressive and this is where we begin to experience the power of numbers.
Now, add the multiplier effect. Let’s take 100 hours a day x 5 days = 500 hours for the week for the company as a whole, and 2,000 for the month (considering 20 business work days).
Again, stop and think about how those hours can now be recaptured and reallocated (terms I use in the workshop).
Now let’s add perspective. Let’s translate these numbers into days and weeks.
We’ll use 8 hours:
Day # => 100 hours / 8 = 12.5 days (2 1/2 weeks) gained from 1 hour per employee
Week # => 500 hours / 8 = 62.5 days (12.5 weeks) gained
Month # => 2,000 hours / 8 = 250 days (50 weeks or 12.5 mths)
That’s appx. 1 year of increased capacity! What could that mean for opportunties to increase profits?
Now let’s translate those hours into dollars. You can simply average, by hour, the total compensation of the 100 employees. Let’s say $ 15.00 (totally random here and for many reading this, the number is probably low).
Day # $ 1,500 (100 x $ 15.00/hr)
Week # $ 7,500
Month# $ 30,000
Quarter# $ 90,000
1 Year $ 360,000
Now…when someone tells me they can’t afford a time management workshop or productivity coaching for key leaders…all one can say is, “Are you kidding me?” And this spotlights a very important point – decisions surrounding employee performance and development tend to be very short-sighted — long term impact or ripple effect are generally not considered.
This is a very simple example of the power of numbers. Numbers are an essential business partner! Consider, what numbers can do for you?… for your business? Also consider what competitive advantage other companies have that have and are better utilizing numbers.Business & Finance Articles on Business 2 Community