How Do I Measure People Development?

Dear Gemba Coach,

What is the metric for people development?

I have to admit that I’m stumped on this one. It’s a very good question. We know that what gets measured gets done. So if we argue that developing people is a manager’s number one responsibility, it makes sense to have a metric.

On the other hand, we also know that metrics are good at measuring output, but not outcomes. Studies show that the best way to stop your kid from learning a second language is to reward them for good grades – being narrowly rewarded, people shift from deep interest in the subject to deep interest in getting the grade, never mind the topic. Should we have a metric for people development?

Personally, I’ve never worked with a metric as such. Yet in all companies I know working on a full lean transformation, we’ve established a regular (quarterly, or at least twice a year) review based on people development:

• Autonomy in problem solving: For each position, we try to list the key business problems people in that role are likely to face routinely and should be able to solve correctly without outside help.

• Leadership in dealing with others: We also list the key leadership issues they’re likely to have to deal with both in terms of managing their staff and working across functional barriers with their colleagues, customers, and suppliers.

Thinking Is the Goal

At review time, managers look at their n-1 and n-2 groups and assess them on these two dimensions. As a result, a plan is made to either try to develop the person where we see gaps, to promote them if we think they’re up for a challenge, or to limit their role when we see they’re drowning and their job is too demanding.

Clearly this is not physics, so the lists for every role are built as the reviews go, starting from very sketchy to progressively far more detailed. I’ve not yet seen any one actually create a metric out of these reviews and not sure how it could be done without biasing the process. The idea is not so much to do something to subordinates, but make managers think about how they develop their staff and how they could do it better. Managers themselves are the target of the exercise, not the people they manage.

Like most large companies, Toyota has a more formal appraisal system, which, from what I’ve seen, varies from site to site. One such score card shows:

1. Expected Role
2. Competency Improvement Focus (based on last year’s competency appraisal discussion: Toyota Way Competency, with the one or two specific behaviors the person has to focus their development efforts on.
3. Individual Objectives (up to 5) with a challenging target and a minimum target, which are weighted, such as:
   1. Reinforce safety awareness amongst members
   2. Achieve best quality at new vehicle start of production
   3. Improve efficiency of production
   4. Strengthen people development
   5. Cost control
   6. A mid-year review on the objectives
   7. A year-end performance appraisal, both by self and by the supervisor, and both are scored
   8. A year-end competency self-appraisal, with items such as:
4. Accurate information gathering and analysis
5. Creation of innovative visions
6. Communication and sharing of mid-to-long term action plans
7. Awareness of situations and decisiveness
8. Perseverance
9. Strategic reallocation of management resources and review of work methods
10. Establishing framework and systems for management
11. Suitable assignments and objective performance review
12. Feedback of evaluation results and long-term development of others
13. Realization of own mission
14. Technical knowledge and capability

Now, all of these items are scored, but I didn’t think of asking at the time it was explained to me whether there was a single metric coming out of it.

Two Types of Managers

And again, any Toyota example is interesting to see what they’re aiming for, but not particularly useful as a “best practice” – this is just what one Toyota plant was doing at one given point in time. Other plants will be doing it differently, and the same plant will have an evolving system. Looking at the topics and the structure of the evaluation is an illustration of how they look internally at their managers, not a guide to be copied.

Having said all lf this, there is a people metric I use to estimate the likelihood of success of a lean transformation. If you look at it from the CEO perspective, you can see two types of managers in the organization, let’s call them:

• D-types, for do: these are take charge and get it done types. Good managers who thrive on clear objectives and discipline. I’m not talking about martinets; they can be excellent people managers, but their main skill is execution. In lean, these are the managers who thrive on 5S programs, step-by-step roadmaps, and so on. If you can tell them clearly what you want done, they’ll get it done.
• L-type, for learn: less charismatic, often messier managers, you notice over time that whenever you give them a new team, the team somehow improves its performance and ways of working. They’re not afraid of exploring new issues, and not bothered about messy, inconclusive results, as long as things clarify over time. They seek continuous improvement rather than one shot make it good and move on to the next topic. These managers teach because they learn with their teams.

Any organization (Toyota included) has a mix of both, and I’m not arguing you should have only one type of on your staff. Still, my experience, for what it’s worth, is the ratio of Ls to Ds tells you how difficult the transformation is going to be and, to a large extent, how likely you are to succeed. As lean transformations progress, we tend to see a slow replacement of D-types with L-types, but of course, this can’t be done too brutally, or the reverse can happen. I guess that’s my metric.