ISO Re-Registration

To maintain ISO registration we are required to conduct ongoing internal and external audits throughout the year. Every three years we must submit our management system to a full re-registration audit. We are very pleased that we have successfully passed this audit without any non-conformance issues, and we will now retain our registration for another three years.

At this point it is worthwhile to consider what we have learned over the three years that we have run the system. There are three significant points:

Error tracking is a valuable input for system improvement.

When we first set up our processes, we determined the best practices for every activity and set these as standard procedures. We identified key control points and created checking and review steps to manage these procedures. We also instituted a fairly rigorous quality control process at the end of projects, and we established a central repository to record all of our 'non-conformances'. We used this list to investigate the root cause of problems. Was there a problem with training? Methodology? Or were there extra steps that could be taken to reduce the chance of errors? All of the problems that we have encountered during the three years that the system has been in place have contributed to the improvement of the system. We have tweaked the system not in a random or hap-hazard manner but in response to problems and opportunities for improvement that we have discovered through the course of running our systems. You can learn from your mistakes - but only if you have method to catch and analyze them in the first place.

ISO management processes can - and should - be applied beyond the scope of registration.

We originally set up ISO processes to improve the quality of products and services we provide to clients. This is still the scope of the registration. But, as we have been running our system, we have started to expand the management system to other areas. At first we applied it to IT, security and network management. These are routine, yet critical processes that support and protect our organization. We found that we could best manage them with documented procedures and controls very similar to our product and service control systems. We are now expanding these management concepts to more loosely defined activities such as sales. And this is also quite successful. The main lesson here is that an ISO registered management system is not designed just to satisfy ISO auditors - it is built to run a real business. It is not just the ISO management system, it is OUR management system.

An ISO registered management system is not just about quality control.

We have found that our ISO system has improved quality, but it has also given us additional, valuable insight into our business. A very basic quality control system would simply involve inspection. One would look at a product at the end of the process. Errors would be caught and fixed and rework would be done. ISO requires more than this. It mandates that we design processes to reduce or eliminate errors when the work is done. This makes a lot of sense. It costs less to prevent errors than to fix them. A stitch in time saves nine! By documenting our processes we get a much deeper understanding of our business. By recording data and setting measurable objectives, we get a clear sense of what is working and what is not. Besides improving quality, our management system has made our business more efficient, much easier to scale and easier to manage.

Holiday Traffic

If you ever wondered if the commercial real estate industry takes a break over the holidays, we have the answer for you! Over this past break we saw a dramatic drop in web traffic to our site. Starting on December 19th, traffic dropped to around half of the usual. During the time between Christmas Eve and New Year's Day the number of visitors never exceeded ten percent of what we normally get. Only on January 7th did the activity return to normal levels.

The Fragile Advantage of Technology

We have so many new tools to help us be productive. Cell phones, Blackberries and other PDAs, we have ever more powerful computers with increasingly sophisticated software tools. The internet itself has incredible capabilities to speed things up. And yet for every benefit there seems to be a number of risks and drawbacks that threaten to equal or outweigh any benefits. For example:

• Email is a great tool for communication. It lets us stay on top of many projects and maintain threads of communication with many more people than would be possible otherwise. The downside is that there may be too much communication. Overuse of the cc function and other junk clutter up mailboxes to the extent that important messages are missed. Email pop-ups also become a constant distraction. Responding quickly to messages interrupts our concentration which in turn dramatically reduces productivity. So does email make us more or less productive overall? (it's too late now - could you ever live without it?)
  
• Blackberries extend email to wherever we happen to be - and it leverages the benefits as well as the problems with email . The are called 'Crackberries' for a reason - they are very hard to ignore. And if other people know you have one, there is a sense of guilt in not responding quickly - they know that you seen the message! Focus and concentration is reduced even further. We've all been in meetings where several people are present but absent - in a Blackberry prayer!
  
• The internet is a powerful tool for business. For the delivery of our services it has become an essential tool to communicate with clients, to organize data and to manage thousands of update requests. For sales and business development it is a powerful tool to conduct research on clients and competitors. But the presence of a web browser on every desk is a great temptation for goofing off. Countless hours are lost to news - sites, weather, Facebook and various other interests.
  
• Technology itself can have huge hidden costs. Computer crashes, hardware and software problems, printer errors and network problems will bring work to a standstill. A few technical glitches can quickly wipe out all the marginal improvements in productivity that all this expensive technology was supposed to realize.
  
• Finally, just because we have the technology installed and working properly, there is no guarantee that we will actually use it to its full potential. Take AutoCAD for example. It used to be with the DOS version that commands were accessed through keyboard shortcuts. When the windows version came out, toolbar buttons were introduced. It turns out that the keyboard commands speed up drafting significantly - but new trainees aren't in the habit of using them. Another example is word processing and email. These tools can greatly boost productivity - but only if you know how to type at a reasonable speed. If you have to get others to do the typing for you, the benefits of technology are lost.
  

  If we are not careful , technology can significantly reduce productivity rather than improve it. But even if we felt that technology had no net benefits, we would still be compelled to use it. We really have no choice in the adoption of technology. Network effects cause the use of technology to be essential. We have to use it to be compatible with the rest of the economy. We have to use CAD and email for no other reason that everyone else is using it.
  

  Rather than seeing technology itself as a source of competitive advantage (which it is not if it is available to everyone else), we should see the appropriate management of these tools as something that can confer an advantage. The advantage then is really the avoidance of the traps that others fall into.
  

  The promise of technology is to automate drudgery - to do away with repetitive tasks. Technology should allow us all to focus on value creating activities and reduce administration and support costs. So how do we benefit from the upside and minimize the downside of technology? I think the only way is discipline. Discipline to manage our technology and network to minimize problems and downtime. Discipline to thoroughly learn the skills required to leverage technology. And finally, the self-discipline to avoid the temptations and distractions that are inevitably present.
  

   
   

Responsibility Virus (2)

We looked at some of the problems with responsibility - both in terms of how they are conceptualized in the book 'The Responsibility Virus' and in terms of our own experiences at Space Database. In this post we will examine some possible solutions and ways in which we are designing our organization to better deal with delegation and the assumption of responsibility at various levels.

A major problem that Martin points out is that we do not have a nuanced enough language to talk about responsibility. Either I'm in charge or you are. One or the other. A better approach would be to see responsibility as several shades of grey rather than black or white.

It seems to be human nature to go to one extreme or the other. But if we recognize that responsibility can be negotiated and shared, then there is an opportunity for the over-responsible to develop effective delegation and training by moving a few steps down the scale. There is opportunity for growth and development for the under-responsible to try to move up one or more steps.

How does this apply to the way that we manage projects? We have designed a system whereby there is a cascading set of decisions and responsibilities. We do not try to micromanage every individual on one hand and we do not expect each employee to be entirely autonomous on the other hand. We have tried to match responsibility with the level of information and the degree of control that each individual has.

Starting at the lowest level of detail, we have the consultant or surveyor who is working on one project. This consultant is responsible to fulfill a specific scope of work, but has the freedom to plan and schedule their own tasks. They are expected to report accurate projections on the completion of the work and to provide regular updates on their projects. We provide time management training and tools to help these individuals plan their time efficiently and calculate accurate expected durations.

Information from the consultant allows a project manager to plan and allocate resources for the production of many different jobs. With accurate projections and status information, the project manager can plan work in the most efficient way and allocate new work to consultants at a rate that will neither under or over utilize each consultants time.

With an accurate assessment of the status of all projects, our weekly production meetings gives us all a clear overview of what is happening in all areas of the company and we are able to do higher level reallocation and reprioritization of work based on client requirements and expectations. These meetings also provide valuable feedback to the sales teams not only on the performance and profitability of the various projects but also information on the production pipeline. When will we need more work? When are we available to start new projects? Based on discussions in the production meeting, project managers have a clear idea of what their production priorities have to be.

Effective production meetings provide essential information to plan the longer term strategy of the company. Which areas of the business should be expanded? Where do we need more resources? What direction should we go in. Formulation of a clear strategy provides a guideline for priorities and resource allocations that are made in the production meetings.

In this model choices are made at every level of the organization. People make decisions in the areas where they have the best information and are able to select the most efficient options. A good flow of accurate and meaningful information up through the organization supports decision making at higher levels. Responsibility is evenly distributed and people are empowered to act.

So this is our vision. As with any grand scheme, it is not yet perfect or fully implemented, but I believe we are all starting to see and feel the benefits.

I have developed a power point presentation on our decision making process that I would be happy to share with you. For further reading please refer to Martin's book. It also has a website:

http://www.responsibilityvirus.com/

Responsibility Virus

Do these scenarios sound familiar?

• You have a colleague who is a micro manager. This person tries to do everything themselves or tries to get others to do everything their way. They don't listen to advice. They overwork and complain that they get to help or support. They become increasingly stressed and finally burn out completely.


• You have a colleague who seems to avoid decisions. They seem to lack confidence and defer to others. They seem to be working below their potential and suffer from low self esteem.
  

It turns out that these behaviours are not only related but mutually support each other. There's a book written on the subject by Roger Martin, the dean of the business school at the University of Toronto.
There are a lot of problems described in this book that I recognize in our company. And there are several very good solutions suggested. I will outline the basic concepts here and then describe some of the ways we are implementing the ideas to be more effective and productive.

The book is based on concepts of psychology and clinical studies of human behaviour as well as the authors many years as both a manager and business consultant. The main problem is that when people are faced with problems - with the risk of failure, they will jump to one extreme behaviour or the other. On one hand they will try to take on too much responsibility and try to fix everything. On the other hand they may back off and take little or no responsibility and wait for someone else to fix the problem. The same person may act one way in one situation and another way the next.

Martin argues that the way we react to the threat of failure depends on our governing values. Our desire to maintain control, avoid embarrassment, stay rational and our need to win will drive us to respond in one of these extreme ways:

1. Assume minimal responsibility - avoid responsibility almost completely


2. Assume singular responsibility - take on all the responsibility
   

Both of these reactions eventually result in failure.
Under responsibility lets the situation slide out of control. Avoiding Responsibility assures failure.

1. Over responsibility eventually overwhelms the individual. Ironically, trying to avoid failure through assuming responsibility will lead to failure.


2. Wounded by the sting of failure, the common reaction is to apply the opposite strategy in the next situation - the behaviour becomes cyclical.
   

The situation works within one individual and also between individuals. People influence each other. If one individual takes on responsibility, others will immediately relinquish it. If someone steps back from responsibility, someone else will take over.

Conventional thinking tells us that we are either in charge or we are not. We are either leading or we are following. Conventional thinking leads to the disproportionate allocation of responsibility and inevitably to failure.

At Space Database we have struggled with this. How do we foster a sense of responsibility? As the company has grown it has been harder to 'manage' the work in the office. We tried implementing an additional level of management to oversee production. This lead to a classic example: a production manager took on more and more responsibility and work while other staff stepped back and allowed themselves to be micro managed. The manager burnt himself out while productivity fell and deadlines slipped. We all came down with a bad case of the Responsibility Virus.

In the next post I will outline some of the ways we are trying to manage differently and to delegate responsibility more effectively.

Economies of Scale

As some types of industrial buildings get bigger, there are economies of scale that make them more efficient to measure.

• A certain portion of the building will consist of corridors, doors, windows, stairs, washrooms, offices and other elements that are always of the same ‘scale’. The work to measure these areas will have a linear relationship to their area.


• Other areas such as warehouses and the factory floor will be very efficient to measure. The marginal cost of measuring bigger open spaces will decline as the areas increase.

Project Cost

Based on a statistical analysis of past projects, we found that the cost of measuring industrial buildings was approximately related to:

Cost = X * (Area ^ 0.7)

Where:

• Cost is in dollars


• Area is in square feet


• X is an adjustment factor for complexity. The value of X is affected by the building type, the amount of existing information, and the required degree of detail in the final drawings.

Intuitively this makes sense because the effort required to measure the office and support areas will increase in direct proportion to the area. The effort required to measure elements of the perimeter walls, in the large open areas, will increase only with about the increase in linear length of these walls. So the power should be between 0.5 and 1.

As a graph, this relationship is an upward sloping curve with decreasing slope. The curve shown is only an example. The position of the curve would depend on the components of X – the complexity factors.

Square Foot Rates

To get the square foot rate, we divide both sides by the area. The cost per square foot is therefore:

(Cost)/(Area) = X*(Area ^ 0.7)/(Area) = X*(Area ^ -0.3)

The rate to measure small buildings is high. Rates drop quickly at first and then more slowly – of course, the rate never reaches zero! Again, this particular curve is only an example to illustrate the effects of scale. The actual curve and the actual costs would depend on many other factors.

Application

In reality, all buildings are unique and there will never be a single rate or formula that can replace sound judgment and experience in terms of estimating project costs. But this model at least provides a framework for understanding how these economies of scale behave.