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More on Providing Feedback

Over a century ago, Andrew Carnegie (or likely one of his managers) came up with an idea: using chalk to scribble each shift's daily steel tonnage output on the concrete floor. With results prominently displayed, production ended up doubling. As discussed in Management Matters in the past, providing feedback on results is an effective and usually economical way to impact performance.

When results are easily compiled on a real time basis, this performance management method is relatively simple to implement as long as it is true to three critical features: meaningfulness, visibility and high frequency. But what about when results are not as amenable to real time measurement? Managers should STILL figure out how to provide frequent feedback on results.

Several years ago, Emery Freight was consistently underperforming on fill rates of its shipping containers. Only about 45% of the containers shipped were actually full. After considering several options, the company implemented a simple solution: managers would post fill rate results several times a day. Providing this feedback on an hourly basis required a tradeoff: precise accuracy for timeliness. There was no real-time computer system that tracked the precise bin fill rates, no monitors stationed at every truck; just timely approximations based on self-report checklist data that every worker filled out. In a matter of weeks, a full performance audit confirmed that fill rates had increased from 45% to 95%.1

This example should help managers accept the idea that feedback on results does not always have to be based on precise data. First, the feedback puts the focus on results that matter. That is, the positive effect comes from placing a specific and clear focus on the required results, which trumps any benefit from having precisely accurate measures. In the case of Emery Freight, the hourly feedback numbers were credible enough; the very fact that management placed importance on this metric helped focus workers' attention on loading full containers.

Also, managers should seek ways to present feedback of more than one group. At Emery, the bin fill rates "scores" were prominently posted for all the crews filling trucks on the floor. With computer technology, feedback now can often be shared in real time through computer screens (making sure not to violate the principle of visibility by cluttering screens with extraneous data).

Even without multiple groups who can benchmark off one another, managers can set up feedback systems that make clear, simple comparisons to past results, or they can create comparison groups at other places where results data can be acquired. In this way benchmarks can keep raising the bar for results.

Providing feedback may require an investment of time and effort by management especially if the performance area requires an immediate turnaround. Consider customer service. Jan Carlzon turned around Scandinavian Airlines (SAS) in the 1980s in part because he was relentless in pushing relevant information down to the people who needed it.2 A critical area the airline had to improve quickly was customer service especially punctuality of flight departures. Early in the campaign to improve punctuality, staff installed a data terminal in Carlzon's office so he could track the status of all flights. The data was updated every five minutes. When a flight was delayed, Carlzon could call the service manager to ask why the flight departed late. While Carlzon could not sustain this kind of attention over a long time, such focused feedback coming from the president made a dramatic impression on the importance of punctuality.

Feedback on critical business metrics not only allows people to change their own performance, but often leads to systemic change initiatives that improve overall processes and systems. For example, the customer surveys now required by HIPAA in health care have fueled many change initiatives that executives never would have thought about. Sometimes senior executives will call the top 50-100 customers to get real customer feedback (a process requiring some forethought on how to conduct the interviews and how to present the feedback). Carlzon says that the SAS turnaround was mostly a matter of turning over information to those who could use it.

But beware: information and feedback can be misused if tied to rewards or evaluation. Simply knowing the information specific to results allows workers to evaluate themselves. Reward systems tied to feedback can easily become "gotcha systems" that are intent on punishing bad behavior. Instead, the focus should be on providing feedback pertinent to key results. Rarely does it need to be more complicated than that.

1"Michael McGill, American Business and the Great Fix (1991). Henry Holt

2Jan Carlzon, Moments of Truth (1987). Harper Collins Publishers

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