I am a bit of a fan of Tim Ferris and his blog for the Four Hour Work Week. He is also one of the most listened to podcasters on the web. Tim’s specialty is deconstructing excellence. He has come up with a simple and straight forward methodology on how to learn something very quickly and become proficient at it. Using this method in high school, he learned Japanese in 6 months as an exchange student. Then over the years he has refined it and has been able to learn new languages to proficiency in as few as 6 weeks. Tim applies this method across all fields such as swimming, power lifting, chess, languages, etc. and is able to leap frog the learning curve.
Tim’s podcast on DSSS inspired me so I thought I would apply this methodology to change management in an organization. The specific area we will look at is employee productivity and labor cost savings, but in reality it can be applied to most any area.
DSSS stands for Deconstruction, Selection, Sequence and Stakes and each means the following.
Deconstruction – Take what you are learning or trying to accomplish and break it down into all its basic components.
Selection – use the 80/20 rule to select the components where you get the most value. 20% of those items create 80% of the value so a fast ROE (return on effort).
Sequence – what order should you then pursue those items selected for maximum results.
Stakes – what are the stakes that you use to measure your progression along the sequence.
Applying DSSS to Labor Management, lets look at an example approach. Keep in mind for each organization it is different and based on what the key value drivers in the business are.
Deconstruction – What are the key factors to measure and improve upon in Labor Management and employee cost savings? Possible measurements are: Units per hour, labor standard percentage, effectiveness, utilization, missing time, overtime, shipment accuracy, safety, attendance, employee turnover, labor standard metrics, handling cost, unit cost, on time shipment, breakage, forklift impacts, and countless more!
Selection – What are the key points to focus on to drive labor savings? The key ones for this example are Labor Standards and their respective metrics that compose them, direct labor %, indirect labor % and cost, overtime cost, and missing time % and cost.
Sequence – Trying to do it all at once is overwhelming, so what to focus on first to create the momentum of change in the organization. Most companies want to focus on productivity, ie the employee labor standard, first. The problem with this is if you do not control missing time and indirect time, any time saved from increases in productivity flows over to missing time and indirect time. So, for this example, we will follow the 30-60-90 Tempo mentioned in other blogs. For the first 30 days, focus on driving missing time lower. The second 30 days reduce your indirect labor time, then finally on the next 30 days you can focus on labor standards and employee productivity.
Stakes – For each stage, you should have goals and metrics in place to measure your progress. For this example, after the first 30 days, missing time should be under 5% and maintained below that going forward. After 60 days, indirect labor should be reduced by 5% from 30% to 25%. Then on the next 30 days, the goal will be to increase the employee’s average productivity score 5%. Each of these equates to measurable cost savings which reinforces the efforts by the whole organization to improve productivity. Adding up the percentages, if these results are achieved, labor costs would be reduced by 10-20% depending on how much missing time there is.
The above DSSS example has been simplified for brevity, but the basic approach is very effective and can help your organization with implementing new initiatives and managing change. I highly recommend listening to Tim’s podcast. It helps reduce you identify the key things to focus on to implement change.