There exists a commonly-referenced business axiom which states, \u201cWhatever is measured improves.\u201d In other words, if you desire improvement, employ one or more metrics. Simply by tracking and reporting results, performance improves.<\/p>\n
How might this rule apply to an interiorscape business? Let\u2019s look at the operational performance of a technician.<\/p>\n
When it comes to measuring operational results, there are three metrics that form the foundation. Think of them as a three-legged stool. These are: productivity, efficiency, and quality.<\/p>\n
Productivity may be measured by dividing the tech\u2019s time spent working onsite by their paid time. For example, if a tech works a total of 6 hours onsite but is paid 8 hours, their productivity for this particular day is 75% (6 divided by 8). The six hours spent onsite are considered \u201cproductive\u201d because they were devoted to billable work.<\/p>\n
The remaining two hours of paid time are deemed \u201cunproductive\u201d because they were not spent on billable work. Instead, these \u201cunbillable\u201d hours were probably spent driving, parking, loading, unloading, attending meetings, or paid breaks. These are all acceptable and necessary activities but they don\u2019t directly produce revenue.<\/p>\n
A perfect productivity rating of 100% is achievable by having techs report directly to large job sites where their paid time is all billable. However, in situations where techs are paid by the hour and travel from site to site, a score of 100% is impossible. In all cases, the goal is to increase productivity ratings as high as possible through route density and striving to eliminate other causes of non-billable time.<\/p>\n
When managers begin to measure and report productivity scores, techs will quickly point out that productivity has more to with the company\u2019s ability to sell larger jobs in closer proximity to each other, and to create tight routes. These are all true statements. Nevertheless, productivity ratings are a key operational metric.<\/p>\n
The second leg of the stool is efficiency. Unlike productivity, efficiency is controllable by the tech. It is a measure of speed. Efficiency may be measured by dividing actual time by budgeted time. For example, if a job task has a budget of 4 hours and the tech actually takes 5 hours, the efficiency rating is 125% (5 divided by 4). An efficiency rating over 100% means the job came in over budget and vice-versa.<\/p>\n
Techs are able to control their efficiency ratings in most cases by working smart and hustling. In my company, we used to be amazed at the efficiency ratings for jobs scheduled on Friday. We could take any job, move it to Friday, and the efficiency would increase by 25-50% every time. People can pick up the pace whenever they want to. Of course, the opposite is true as well.<\/p>\n
When managers begin to measure and report efficiency, techs will quickly point out that some of the budgets are unrealistic. This may be true and an analysis of these jobs may ensue, which is a good thing.<\/p>\n
When managers begin to measure and report efficiency ratings along with productivity ratings, quality will suffer unless it, too, is measured. Quality is the third leg of the stool.<\/p>\n
Quality may be measured in a variety of ways. The ultimate measure of quality is customer retention. However, proactive management requires more of a leading indicator to measure quality. Customer satisfaction surveys may be utilized to gauge quality. Routine inspections may also be implemented to ensure consistency and standards being met. My preference is to use all three methods.<\/p>\n
To get the most from inspections, segregate your customers into two or more groups. Place your largest and most profitable customers into one group. Think of the 80-20 rule, which says that 80% of profits come from 20% of your customers. Make sure that these customers are receiving inspections at a higher frequency than the remaining group(s). If there is a slight quality slip, let it be on a less important account.<\/p>\n
Mobile applications tied to software programs make inspections easy and systematic. Simple paper-based inspection forms work well also.<\/p>\n
As you consider your operational performance, what are you measuring? Is there a metric you wish to employ after reading this post? Which one? What about measuring results in other areas of your business, such as with marketing, sales, account management, administration, or financial management?<\/p>\n
Remember, whatever you measure improves.<\/p>\n
Now go forth.<\/p>\n