Management by Statistics

Management by Statistics

Although I’ve delivered hundreds of management seminars through Sterling’s1 30+year history, I am always amazed that no matter what the theme of my seminar, I invariably end up answering questions about managing staff. Managing personnel can be, by far, the most demanding and, at times, the most worrisome subject for anyone running a business.

So what are the issues that keep business owners awake at night? A key one is personnel; how do you make each individual staff member accountable for their own productivity? Along these lines, how do you motivate the staff so that they care about the business and their own job performance? How do you handle them without breaking them or being too soft on them? How do you quantify their production?

I’ve seen various staff productivity philosophies through the years, ranging from good old-fashioned cheerleading to “team-building” exercises. While such fads continue to come and go, the one system that will always be with us, the one that is proven to work, is Management by Statistics, the heart and soul of the Hubbard Management System.

Here is what L. Ron Hubbard had to say about managing by statistics:

“Statistics are the only sound measure of any production or any job or any activity.

“The moment that one goes into any dependence on opinion he goes into quicksand and will see too late, the fatal flaw in restoring anything.

“If the fact that anything can be given production statistics seems too far out, it is visible that even a guard, who would at first glance seem to be producing nothing but giving only security, is actually producing minutes, hours, weeks, years of continued production TIME.

“Probably the most thoughtful exercise is not conceiving the ideal scene but working out what the production statistic of it is.”2

 

SEEING PRODUCTIVITY AT A GLANCE

A statistic is “a number or amount compared to an earlier number or amount of the same thing.”3 Proper statistics measure the amount of work done compared to an earlier amount of work done.

Here’s an example: Let’s say you have a social media expert employed in your marketing area. You might want to give him a statistic that measures the amount of people that follow you on some social media site like Facebook or LinkedIn. But to demonstrate the value of that person’s daily and weekly production to your company, a more ideal statistic might be “revenue generated from social media sites each week” or at least “inquiries for products or services from social media weekly.”

So you assign that your “Social Media Officer” (or whatever the title might be) this statistic. You ask that these figures be plotted on a graph. Looking at the graph, then, you can see at a glance how much that employee is producing now and relative to previous weeks.

Each of your staff’s performance can be measured by a statistic. That statistic can be graphed, monitored and controlled by the staff member, and monitored also by your executives and you.

But Management by Statistics extends far beyond measuring the productivity of each staff. With this system, you can define key statistics for your overall business such as revenues, profitability, number of new clients, total dollar value of services delivered, number of products (cars, houses, pizzas—whatever) into public hands, and so on. You can graph these and review them individually and against one another—such as comparing the “value of services delivered” to the “revenue.”

Overall, you end up with an objective, fact-based picture of how your business and staff are doing, which areas need attention and which need to be strengthened to maintain increasing production.

PAYING STAFF BASED ON PERFORMANCE

Once you have implemented statistics, you can institute a pay plan based on performance. There are many ways to accomplish this. Here is one example:

One Sterling client in Las Vegas put in a bonus plan based on his firm’s performance. He sets monthly quotas and if the quotas are met, he gives 1% of gross sales to the staff. He also sets a quota for each third of a year and gives another bonus if those quotas are met based on the individual productivity—as measured by the statistics—of each staff member. This business professional’s staff now feel they have a stake in the business. Since they know they get bonuses if the business is doing well, they not only make sure they are productive, they make sure everyone else is too.

HOW TO HANDLE RISING AND DECLINING STATISTICS

Having and using statistics is only half of the Management by Statistics system. Let’s say you are faced with long-term declining statistics; how do you reverse them? Or better yet, what if you have rising statistics? How do you keep them going up?

L. Ron Hubbard codified specific formulas for the handling of rising and declining statistics. These formulas have exact steps, done in proper sequence for addressing both the up and the down statistic. They are referred to as “formulas for success.” They are vital for any business wishing to overcome the obstacles in any economy. They are vital to know in a difficult economy. They are the difference between success and failure, for any business.

If you manage by statistics and not rumor, whim or hoping for the best, all will work out.

Kevin Wilson

o0o

To learn more about the formulas for success, go to www.hubbardcollegepress.org.

1 Sterling Management Systems is one of the oldest and most successful management consulting firms which specializes in the Hubbard Management System.

2 Article of 5 July 1970, How to Find and Establish an Ideal Scene

3 Quote from L. Ron Hubbard, article of 31 July 1983, Basic Management Tools



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