What Are Your People Doing With Their Time?

Rarely do people document their time-consuming but non-value-added activities, such as walking around searching for a report or trying to contact someone (anyone!) who could answer a customer's question.

Conventional wisdom holds that people do not like being observed at work. This is false!

Most working people complain that management has no idea what they do. My teams have spent years following people and watching them, and the near universal reaction to our presence is: "Finally someone is paying attention to the important work I do and is interested in my problems."

The easy way to get this appreciation is to be honest and up-front. When we are with clients who face the good problem of capacity constraints then we can explain the situation simply: "Your employer wants to be able to write more policies with what they have." No one is threatened and no one objects.

When we are at clients with the bad problem of declining business, we are also always honest and up-front. "Is the employer considering reducing labor? Yes. They need to consider it because sales are down. Management wants to be smart about it so we do not create processing problems and lose the remaining customers' business."

No surprise here. Your workers are smart and know that management has to act.

Many people think about productivity only as it relates to manufacturers. Does it matter whether we are talking about productivity in an information-based company (e.g. insurance, finance) or in a factory with people in steel-toed boots? Certainly people are doing different tasks, but the "how" to look at their tasks, their barriers, and their supervision is similar.

You cannot follow everyone around, nor do you need to. Similarly, you could spend months following people, but you do not have to do that either. By following typical people in the common job functions for just a few days, you will have a representative sample. Why? Because most people face similar barriers both across jobs and across time.

Time-consuming barriers to output often include:

o Insufficient training

Have you seen multiple people gathered round trying to figure out a solution?

o No goals set for daily output, thus leaving the supervisor not knowing if something is hindering the worker

How does the supervisor know there is a problem if output variability is not measured or poorly understood?

o Lack of communication upon handoff of tasks to the next person in the chain, leaving the latest worker having to spend time figuring out the status

Do your people ever ask: "What is going on here?"

o Searching for data

Do your people ever go scrounging for data that should have been properly entered in the first place?

Your effort will be successful as long as your observer looks for the big chunks of waste. One example is the 20 minutes spent searching for the item that should have been with the policy application in the first place!

Observers get off track when they try to break down work into highly detailed components. Five overall categories commonly suffice:

1. Value-added work that moves the process forward
2. Non-value-added work that has to be done because of incompetent processes
3. Problem solving that could have been avoided if everything had been done correctly in the first place
4. Administrative time that is spent sustaining company processes
5. Non-value-added time caused by the individuals' lack of training or other personal issues

The observation process starts with having a manager identify an average worker on a usual day. Every day has atypical moments, but the key is to identify the large and common barriers to peoples' output.

Have the observer be introduced by the manager and their presence explained. "We are not here to judge you but to understand the experience of someone trying to do their job as best they can."

The observer will have a notebook in which to record activities and observations. The observer must tell the worker that he or she can read the notes anytime. It is important that workers and observers review the notes together to be sure that the process descriptions are correct and the observers' understanding makes sense.

The observer needs to keep detailed notes about what is being done and when it is being done. The easiest way is to describe the tasks at no more than five-minute intervals. What was being done in that chunk of time? It might be something such as trying to make sense of conflicting information on a customer service order followed by calls to talk with the salesperson.

How much time are your people spending on non-value-added tasks? You should not be paying for a process improvement program focused on irritants when it should be focused on the time-consuming problems.

Your process improvement programs should have a measurable payback. The benefit to the company may be reduced labor or increased output per worked hour.

Be sure any outside help is rewarded based on the approximately measured benefits you receive rather than the precisely measured hours the consultants spent.

You should be seeing a return on your process improvement projects like the one illustrated on the accompanying graph. Initially you have to spend time and money scoping the problem and planning the fix.

Your labor benefits start with the implementation of the new processes. Your improvement teams needs to continue working on the institutionalized changes or they will not be sustained. Once they are mostly done, then all the savings flow to your bottom line.

If your goal is to save people's time, then you need to focus on their time. Focusing on processes alone may not have your continuous improvement programs focusing on what impacts your bottom line.

Hugh D. Pinkus, CPA is the managing director of The Healthcare Operations Group. Mr. Pinkus has developed major process improvement and project management engagements with a variety of large and midsize insurance companies and claims processors. He may be reached at hugh.pinkus@healthcareoperationsgroup.com.