Todd Herman Associates e-Update — November 2008

What About the People?

You may have seen one of our marketing pieces — a Venn Diagram having three overlapping squares, each representing People, Process, and Technology — and their intersecting area labeled ROI, for Return On Investment. The idea? The better the alignment of a business's key assets — its People, Process, and Technology — the better its business results.

I write mostly about Process and Technology, and only occasionally about People. So, a natural question to ask is — What about the People? How are they involved in aligning a business' key assets for results?

Going into a project, we assume the client's People are capable and competent, and will perform better, once they have better Process and Technology. Our assumptions of capability and competency have largely been true, and improved performance does indeed occur.

Nonetheless, People are occasionally... well, people, and they need help adapting to change. Here are three effects I see in many of our projects.

The Pygmalion Effect refers to situations in which students (or staff) perform better because their teacher (or manager) expects them to do so. When we are retained, it is generally because managers want their staff to perform better. While we like to think our process and technology improvements were major factors in performance improvement, managers' expectations actually reinforce the effect of better tools.

The Hawthorne Effect reflects short-term improvements caused by observing worker performance. The underlying rationale — employees equate observation with appreciation, and appreciation improves performance. During a project, we see a deeper application of this effect — we don't merely observe people performing processes and using technology, we also actively ask them "what" and "why" and "how" questions, causing them to deliberately think about their tasks. This question-and-answer process helps realign People, Process, and Technology, and thus improve employee performance.

The Herman Effect is something I formulated during one of my early projects. After deploying software to integrate shop floor transactions with the accounting records, I soon heard "the new application is causing problems." I investigated the reported problems and traced them not to the new application, but to eroded processes or technologies. These problems had always existed, but now the integrated system made them visible. Once visible, problems may cause People to play the "Blame Game," which does nothing to improve overall performance. Thus, the Herman Effect states, "Problems during a system project are typically not new — rather, they are existing problems brought to light." The remedy? Deal with the problems, rather than point fingers.

We have seen all these effects in a recent project — an application we developed to download and serve up various Receivables items to be researched and resolved. In under three months, 84 users have been trained and have used the application to process over 130,000 items.

• The Pygmalion Effect — Supervisors expected their staff to perform better — research more transactions, and do so more thoroughly — with the new tools, and they did!
• The Hawthorne Effect — During our business analysis phase, we asked lots of questions to understand what was being done manually, and why — and these interactions helped people understand both what was being done and how automation could do things better.
• The Herman Effect — Some persons believed the new system was slowing down processing. Data revealed more transactions were being worked, but many were being worked poorly, so problems recurred. Armed with this information — which was not available under the old manual processing — people were trained on appropriate steps to process the item correctly the first time, thus avoiding rework.

So, while our project descriptions, included in this newsletter, may not emphasize People, our Technology and Process improvements are always undertaken to benefit our clients' People — the most versatile, adaptable, and mobile assets of our clients.

As a manager or leader, your job is to get work done through your People — regardless of circumstances. Keep these effects in mind when you undertake any Process or Technology project. Our experience on many such projects helps us shepherd our clients through a complex project and its inevitable hiccups — and help their People work through these and embrace the new reality.

Todd L. Herman