Management by Numbers

As a business owner, manager, or “team leader,” to invoke the parlance of the day, how successful your management endeavors will be depends on the combination of resources–human and monetary–and how few barriers to their effectiveness you place in their way.

Many companies have a lot of resources–often more than they realize. Yet some managers are constantly amazed at the inability of their staff to get things done on occasion, or to get projects that look good on paper to fly in the real world.

Perhaps there are barriers that you aren’t aware of or have learned to accept. There are ways to remove them. Some are technological, like employing effective computer cataloging. I know it takes an investment, but you can’t complain about not being able to find enough really knowledgeable people and then ignore the benefits that electronic cataloging can offer to less experienced counterpeople.

The most important issues, though, are about people. I am continually amazed at how the handling of accounts–both receivable and payable–continues to be such a tremendous source of friction between customers and staff. Anyone with profit and loss statement responsibilities knows what I’m talking about here. How many times do you have to spend so much time getting an extraordinary arrangement with a customer shoehorned into an inflexible accounting system that it hardly seems worth it? Have you ever turned business away because it was too much trouble?

Ultimately, business is a pretty simple thing: I give you something, you give me money for it or vice versa. Staff at all levels of a company need to feel the buzz of this simplicity, and they need to feel the rewards when it goes well. If they have to jump through hoops to get even well-deserved rewards, it simply drives them to ignore the opportunity the next time.

Then there are the poor misguided managers who seek to motivate exclusively through compensation. They look at giving special rewards for performing the tougher jobs, or the monotonous ones, or the high margin ones, or the corporately motivated ones. I heard of one machine shop that paid a piecework bonus for every connecting rod that was resized. The staff spent every free minute zipping off one after another until the shop ended up with more than they could sell in a decade, literally. No doubt half the stuff that didn’t have a bonus attached to it at the shop didn’t get done, like cleaning up or tool maintenance.

Still other managers offer full bonus programs to be shared among all employees. It sounds like a good idea in one way (non-sales staff can share in the good times), but if you’re working from the same pot and split it many more ways, someone is coming up shorter than they did before. This is exactly what happened at our company years ago under previous ownership. The downside in morale for people who saw their over-achievement bonuses drop from thousands to hundreds was unmistakable, but perhaps that’s another story.

The point is that motivation is tough, and any manager who thinks that he can dictate the behavior and performance of staff strictly through a system of monetary rewards is in for a big surprise. The risks of a simplistic reward system to a business are great. People are complex beings and the ways they interact and react are complex.

Rewards are great, and well executed they can really drive a business to success, but a compensation package is not a substitute for management and neither is technology. You can’t manage people the way you manage inventory. Try and you’ll find that you end up with a bunch of stuff sitting on a shelf without a clue as to why, and you’ll have no one to blame but yourself.–Andrew Ross, Editor

Next Month

Light Truck Service Parts continue to be a strong market. We’ll look at opportunities from top to bottom, inside and out. Plus more, of course. In the meantime, stay tuned at www.autoserviceworld.com.