Green Light or Traffic Cop?

In your company, are financial analytics, quality and human resources functions contributing to profit and growth, or are they creating roadblocks? In many companies these functions take one of two forms: they’re either traffic cops, measuring failure, erecting roadblocks to progress and slowing down profit production and customer satisfaction, or they contribute to continuous improvement, accelerate profit and growth and improve staff behavior at all levels. Do either of those roles sound familiar?

FP&A

A December 2015 article in the Wall Street Journal discusses the evolving role of metrics and the function known as Financial Planning & Analysis (FP&A). FP&A works on data analytics, forecasting revenue and earnings, budget analysis and even employee raises. Measuring the right things can have dramatic impact, like increasing foreign sales at GoDaddy and boosting same store sales by 2.2% at Dunkin Donuts. FP&A can accelerate execution benefit the company, but it can also be a wet blanket that smothers activities and damages results.

In some companies, FP&A measures only budget to actual performance and causes frustration at several levels in the organization. It can seem as of FP&A is trying to catch people failing and micro managing activities. According to the article, many FP&A departments have hazy mandates and lack influence with leaders. 61% of FP&A managers said their analyses were only used selectively.

Quality

One type of quality department focuses exclusively on preventing mistakes and avoiding substandard products. Many quality departments seem to stop more things than they enable, slowing momentum and growth. The other type creates competitive advantage by ensuring that products meet or exceed customer expectations.

For example, in one company, while the quality engineers measured incoming materials from suppliers and monitored the finished product quality, they also worked with suppliers to improve their processes and partnered with internal manufacturing engineers to improve productivity and reduce production cycle times. They focused on results, which encouraged profitability and growth.

Human Resources

Human resources has the potential to serve only what I call the “keep from being sued” function, spending a great deal of time ensuring that laws are upheld, drug tests are given and that people are hired and fired properly so the company doesn’t get in trouble. While all of these functions are certainly important, this is often where the activity ends.

More forward looking HR, exemplified by Xerox in the 1980s, takes care of all of the above as baseline activities and then focuses on developing people as company assets. HR leads the way in developing empowered teams and creating and administering training programs, not just for legal needs but also for team leadership, skills improvement, Lean, metrics, and more. HR can also develop incentive programs that yield results and develop hiring processes such as those used by Zappos to help support the organization’s culture. HR can play a significant role in accelerating profit and growth if they focus on these future-oriented areas rather than just the nuts and bolts.

From the Flight Deck

When financial analytics, quality and human resources focus on the overarching goal of process improvement, they become strategic resources for the company. Instead of playing the traffic cop, they become the green light for growth and profitability.

Does your company have strong, well-focused support services? Do they help accelerate profit and growth? When they partner with operations and supply chain and with the company as a whole, they help create an agile culture that will run way ahead of the competition.

© 2016 – Rick Pay – All Rights Reserved