No shortage of productivity assessments

There are numerous productivity assessment tools in use across North America, however there is no generally accepted standard and each tool tends to be biased by its developer towards a particular use or desired outcome. Consequently, there is no consistency in what is measured by the various tools used by industry in Alberta, and there are many gaps between each tool’s coverage.

Many assessments commonly used by North American industry are focused on one aspect of productivity, typically operational performance and usually with a slant towards lean, six sigma, combined lean six sigma, or a variation thereof. What differentiates our assessment tool is that it is practice- and method-agnostic – it is not just about the hard numbers, rather it is about assessing the behaviours of the people within the company and its systems.

In 2009, we undertook the development of an assessment tool that addressed the integrated impact on firm-level productivity of innovation, leadership and management, and operational productivity. The productivity assessment tool (PAT) was designed to provide small- and medium-sized enterprises (SMEs) with a means to self-evaluate and provide a deeper understanding of key issues and problem areas within their company so they can then link to potential solutions.

The productivity assessment tool

The PAT was developed based on the results of a gap analysis study, interviews with representatives from various industry sectors within Alberta, and research on tools in use in North America and Europe by academics, institutions, private consulting groups, and industry associations.

Several models of tools are in use around the world, and selected components of these were integrated into ours. A concept version, which focused on three key elements (leadership and management, innovation and operations), was then vetted through industry focus groups. The tool design consists of a series of behavioural questions in each of the elements that are further broken down into a number of key categories for measuring and reporting purposes. To expedite the use of the tool, it is available to the user in both a short version and a long version, which typically take up to 45 minutes and two hours respectively to complete.

The results of the gap analysis and industry interviews indicated an alarming number of SMEs had limited or no knowledge of productivity issues and opportunities. This lack of awareness has manifested itself in a very poor growth rate in productivity in recent years in Alberta, and highlighted the real need to provide SMEs with a self-assessment tool focused on productivity.

The fundamentals

The fundamental principle behind this tool, and other similar tools, is based on the work of Dr. Robert S. Hartman in the science of axiology. Axiology is a mathematically accurate science that objectively identifies how one’s mind analyses and interprets experiences. It identifies how people are most likely to react in any given situation and helps us understand the patterns people use to make judgements. These patterns allow for the translation of the results into quantitative measurements and scores that, in turn, can be applied to the daily business. Based on this principle, a series of behavioural traits were selected as the method of measuring impact on productivity as influenced by leadership actions, application of innovation, and actual operational processes and actions.

Productivity in three dimensions

The PAT, as noted above, was established as a three-dimensional model. The leadership and management component is founded conceptually in Target Training International’s Personal Talent Skills Inventory that translates scores into capacities related to the business environment. Innovation analysis is based on research work conducted by Robert Porter Lynch and The Warren Company over the past 15 years, supplemented with numerous other research initiatives from academic institutions and consulting groups. Establishing the model for operations was a result of selecting and synthesising work and examples from academia, industry associations and consulting groups in North America and Europe.

The scoring system for our tool is a 10-point scale that provides a greater range of selectivity for the user. A common survey scoring system is the 5-point scale, but it was important to distinguish the tool from a survey by providing a greater range of performance selection so the 10-point system was adopted. Scoring each of the questions is subjective, particularly when used most commonly as a self-assessment tool. However, this is compensated for with the total number of questions in the tool. Each of the questions in each of the elements is linked to a recognized category for which all answers are scored and averaged, in turn providing a score for that particular category of behaviour.

The effect of this approach is to provide a measurement of relative strengths and weaknesses in specific areas within each of the three key elements of leadership, innovation and operational productivity. The absolute numerical score is not what is critical, rather it is the relative strength or weakness of the score in relation to all other categories within each element that is important.

Industry focus

Two industry focus group sessions were held in Edmonton and Calgary to examine the concept of the tool and the approaches being considered for its design and use. The focus groups’ feedback was that leadership and management was the most important issue in determining organisational productive capability, but all three elements were critical to
measuring productivity.

Participants agreed that organisations that were driven to continuously improve their productivity would use the tool to help their management teams identify areas of strength and weakness so that they could focus on the most beneficial areas of improvement. They also saw it as a management skills development tool.

Leaders at the focus group sessions said that they would be willing to invest one to four hours in the tool to help them focus their continuous improvement efforts and help with the productivity strategic planning process used by their management team. It was even suggested that the tool would be used to “survey” all staff to gain a better perspective on how staff view the organisation’s operations and overall productivity.

Use of the productivity assessment tool

This tool has been designed for use not only as an organisation’s self-assessment tool, but also as a tool that businesses can use to aid in their strategic management and work plans. It can be used by individuals, teams, or as an in-depth survey instrument of selected groups. It can be used in its short or long version. It can also be used on a regular basis to monitor a company’s progress on its continuous improvement journey. While actual scoring numbers will vary based on each individual’s opinion and perception from their position within the organisation, the impact of the tool and exercise rests in the identification of relative strengths and weaknesses.

The PAT can be used to measure departmental and divisional value streams and overall corporate performance. If used regularly, improvements, stagnation, and regression within the company or sub-group become obvious. The long version has been used, on an annual basis, by the senior management or divisional management teams of organisations to focus discussion, identify direction for strategic improvements, and stimulate discussions around practical opportunities of strengths and weakness within the organisation and amongst its leadership. One organisation has implemented a quarterly review of its continuous improvement journey by having its branch, division, and operational leadership complete the short version and compare the results with prior reviews. Once a year they conduct a similar review using the long version of the tool as an aid to their corporate strategic planning process.

Other organisations have had their management team complete the short version of the tool on an individual basis. They then review each individual’s perceptions to determine why they rated various aspects/elements of the productivity set in the manner that they did, taking the average of the management team’s scoring to look for consensus on the most critical areas for improvement. This is used to determine the teams’ and the company’s continuous improvement action plans for the next three to six months.

We have found our tool can also be used to effectively define an enterprise’s strengths and weaknesses. Once defined, a business can then develop strategic plans to maintain its strengths and address its weaknesses. There is also the benefit of being able to identify easily where members of the company’s management team disagree on how well the organisation performs. These differences need to be explored and resolved as the company’s productivity journey continues.

Connections to lean

The PAT is a wide-ranging, comprehensive analysis of an organisation’s productivity behaviours and, as such, is not a replacement for an on-site walkthrough and assessment. Rather, the tool can start a company down the path of looking at the behaviour and thinking of its people that directly and indirectly impact operational productivity performance.

Lean can be seen as a deeper dive into the organisation’s processes and systems that the PAT simply cannot provide. But the tool often serves as a catalyst for the company to see the potential for improvement and help lean practitioners identify issues beyond the shop floor or front office that will affect the performance and results of process improvements. By opening the mind of the company and its management, the tool is a way to accelerate the productivity conversation and prepare the company to discuss and prepare to make changes to its business.

An internal culture shift is required to introduce, implement, and sustain lean and six sigma improvements in an organisation successfully. The PAT can provide the lean practitioner with deep insight into the culture, thinking, and priorities for the company as it implements change.