What is Visual Management? Management by looking around? Like the old MBWA (management by walking around) of the 80’s? Well not really, but how often do you see in the workplace various signs and compliance notices put up by owners and managers that nobody ever pays attention to? How many of them do people read and what purpose do they really serve?
Taking lessons from the Japanese specialists in Kaizen, continuous improvement, I learned the true power of visual management. Putting KPIs (Key Performance Indicators) in a place where all the team can see them, results in significant performance improvements, without making any other changes. In Kaizen it’s called ‘Visual Management’ and it’s a key part of the success of the famous Toyota ‘Just in Time’ Production System.
At Toyota they post at notice board at each workstation in the factory. The board is regularly updated with the team’s performance targets, their current performance against these measures, and other critical team KPIs including customer satisfaction metrics. Updated daily – sometimes even hourly – the team can see exactly how their work is contributing to the overall production efficiency and the part they play in helping the company and its customers. They even display progress towards personal bonuses.
I’ve applied these same principles to many different types of businesses and it’s amazing to see how people respond once they know what the target goals are, and how they’re doing against those goals. For instance, in sales offices when we displayed the number and names of customers each salesperson was currently working with, and when they should be contacted next, it dramatically improved the sales team’s performance. Just knowing that they were going to be asked about their activities, and the visibility of their activity to everyone else caused them to up their game.
Similarly in a mechanical workshop, showing the technicians on a daily basis the hours sold, hours worked, and parts sales against the team’s target and bonus, had a massive effect on the team achieving its monthly goals. We also tracked the number of jobs coming back into the shop for re-work, which focused everyone on driving that number down.
In ActionCOACH we work with business owners to track their key numbers, Average Dollar Sale, Conversion Rate, Number of Leads, Transactions and Margins. What can you measure in your business? Coming up with your own set of metrics to drive your team’s performance, and making those numbers highly visual, makes an amazing impact on performance.