They could do it, but they don't
You know who they are - the people that your business literally depends on--your lead technicians or most experienced talent. They are your key producers and often your key trainers. They know they are important, and it can be nearly impossible to motivate them to train your new workers so you can grow your business. They could do it, but they don’t.
It is a common challenge – you feel like you’re being held hostage by your own employees.
I just completed a project to help a client overcome this challenge and improve his field team’s productivity.
Joe is the Master Installer who was assigned to train other technicians to develop their skills so they can work by themselves and complete projects in the allotted time without any errors.
Unfortunately, Joe really wasn’t motivated to train the junior team members. He was the top technician and he knew it. He had his own projects to work on and it was easier to do the work himself and just use the junior guys as gophers – sound familiar?
We calculated that an increase in the field team’s productivity of 23%, would increase gross profit dollars by 42%. How?
Revenue increased because they could take on more work with the same size team.
Cost of goods sold dropped as a percent of sales because it took less labor to complete a job—instead of sending two guys to a job they could send one. And fewer errors lowered the number of call-backs to fix quality issues.
Here is a simple graphic to illustrate what we are trying to do.
Now you might be saying, Thomas, 23% is a huge improvement in productivity. Well with this particular client, all it would take is to get two more field techs capable of working on their own without errors. Totally doable!
We created a Quarterly Bonus Incentive Plan for Joe that was linked to total company revenue and field productivity.
Tracking company revenue is easy.
But, to track field productivity, we created a new metric - Field Productivity Ratio
This ratio is simply the amount of revenue generated for every dollar spent in paying the field technicians. The goal is to maximize this number.
We modeled the company’s financial numbers and created the table below. Each column represents a combination of revenue and field productivity ratio and the resulting bonus Joe would receive.
When the business hits its $2.5M sales and 7.7 productivity ratio targets, the company would pay Joe $10K, or the equivalent of two additional months’ pay. Now that’s incentive!
We introduced the plan to Joe by showing him the above table. We explained how his work directly contributed to the two key numbers through the training of junior technicians and that he could potentially earn an additional two months’ pay.
Joe got it! The unmotivated was now motivated!
Now your situation might be different and require a different metric but hopefully this example inspires you to give some thought to what critical numbers you need to improve and who’s help you need to improve them. Then build your win-win plan.