We’ve shared Ahlrichs’ truck loader story before but it’s worth repeating as it clearly illustrates what can happen when different parts of the team are using different metrics.
Ahlrich, who is owner of ExpertSpeaks, and a consultant and business developer for Gregory & Appel. offered his tips at a recent webinar sponsored by BLR and HRHero.
Ahlrich tells of a trucking outfit where the CFO was concerned about productivity of truck loaders. Ahlrich did some investigating and discovered the following:
- Truck loader turnover was 35 percent annually.
- Typical cycle time for a truck-loading crew of two was 7 hours.
- High-performing crews could cycle a truck in 4.5 hours.
- High-performing crews tended to be recent graduates who left after 12-18 months, contributing to the high turnover numbers.
Ahlrich asked HR, can’t we get more of those high-performing crews?
HR said, Our key metric is turnover. Those high-performing crews, we hate them. We avoid hiring them because they skew our turnover numbers and make us look bad.
So the situation was this: HR was actively undermining productivity by rejecting the high performers. But HR was doing it for a “good” reason—to manage the metric on which their evaluation was based.
The company revised the system, put the focus on the productivity number, and walked away from the turnover metric, says Ahlrich.
Talking to CFOs
It’s often easier to talk the CEO into something than the CFO, but the CFO’s opinion will often hold sway, says Alhlrich. His tips:
- Talk EBITDA when talking to the CFO. That’s a clear number to CFOs, unlike “profit” which can mean different things to different people.
- Figure out what the C-suite values. What is the next big thing? Drill into what the CFO is working on.
- Now is a good time. Don’t waste a good crisis.
- Understand the organization’s growth plan and write to it.
- CFOs like a case study and a guarantee that it will work.
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Final Questions
Hable usted finance? When the “numbers people” are in charge, everything has to look like a number, Ahlrichs says.
And he closes with a zen question: If someone enhances turnover using an approach that cannot be quantified, did the improvement take place?
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