How To Measure Profitability Of Our Work?
In may this year Regional Executive HR Summit was organized by HR World Adria in Luštica Bay Montenegro. My main insight from this event is that regional HR professionals are ready to make a step towards better business understanding. If this intention turns into action, and through time develop into big wave, it might be really important shift for overall business development in the region.
HR is business, but impression is that HR is maximum strategic partner and in most cases just business support. Even we (Atria Group) as consultants have tools that we rarely present to HR professionals, not because tools are bad, but because most HR professionals (with rare exceptions) are either not interested in business tools or they don’t understand them. One of such tools is ValueView®.
Business people, company owners and C-level managers love it.
HR professionals dominantly ignore it.
What Is Valuable About ValueView®?
ValueView® is developed by Robert Reinfuss as a result of research work on improving the profitability of companies’ operations. In this research* Robert and his team found out that 20 to 40% of the activities performed on daily basis, in companies, are completely unprofitable! No one, internally or externally, has benefit from them.
Sometimes these activities are performed by people who are brilliant, motivated, dedicated and worthy. On the contrary, sometimes the profitable activities are performed by people who are “half-hearted and half-brain” in the company.
If we could identify not profitable activities and cut them of, the overall profitability of the company would increase without any drastic changes.
ValueView® measures profitability of activities per position. This awarded tool (Innovator 2018 by Business Academy WSB – Poland), gives management possibility to understand how to make better time and energy allocation.
How Does It Work?
The whole process has 3 phases. At the beginning, we define positions for which we want measure profitability.
We don’t assess profitability of someone’s work but the profitability of activities per position.
Once the positions are defined, through on-line questionnaire we ask executives (in these positions) to define what are they doing on daily basis and who are internal or external beneficiary of these activities? In other words, what positions in the company (or outside the company) might have a problem if they would stop doing those activities?
After collecting answers, consultant needs to sort out data and merge similar activities. The end of the first phase is the list of activities per position with list of beneficiaries for each activity.
In the second phase, attention is on beneficiaries. Through on-line questionnaires, beneficiaries answer to two questions: “Do I need this specified activity?” and “To what extent do I get it?” Based on the answers, software generates a profitability report, which is the basis for entering the third phase.
The third phase of the process implies restructuring of daily activities of each position, processes restructuring, proposal for changing the number of executors per position and proposals for development activities for each position.
What Did I Get From ValueView ?
The first important insight was that most of my colleagues as a beneficiary of their daily activities see only their direct superior. This should not be the case, as there many other beneficiaries inside and outside of the company.
It was interesting that some of my colleagues saw me as a beneficiary of their daily activities although I really don’t need those activities to successfully do my daily work.
The most important insight for me was that Senior Partner position is “bottle neck” at our company. The activities that Senior Partner carry out are very profitable (there is a big demand for them), which means that we need either to get one more Senior Partner on board or to transfer some of Senior Partner’s activities to other positions in the company.
* Research was done by Robert Reinfuss, Dr.Ewa Beck and associates, AGH University, Krakow