that the cost of building homes was reduced by $600. That may not seem like much, but it was accomplished exclusively by eliminating some unnecessary regulations. Part of the cost reduction came by reducing the time required to obtain building permits. When land has been purchased with loans, every day that a home has not been completed (and sold) adds cost in the form of interest. If the profit on a $95,000 starter home would be about $9,000, then $600 equals 6% of the total profit. That’s substantial. It takes time to come up with results and to quantify them, sometimes an hour or more. You may have the data necessary to quantify the result, but the information may be spread among several different sources. Of course sometimes the numbers are readily available and have already been calculated.
This should be a reminder to you for the future. As you start a project or look for a way to improve a particular process, figure out how you will measure your success. First you have to determine what you hope to accomplish. Then you have to determine what the current status is. If you are going to improve training in hopes of reducing turnover and errors, then you need to know what the current turnover and error rate is. If those rates are not currently being measured, then you’ll have to do it. This effort is worth it because you can obtain a great payoff: you can bring it to the attention of your boss through a memo. You don’t have to ask your boss to respond. As long as your boss does not dispute your results, it means he or she accepts them. Of course your results could help you get a raise, a promotion, or a bonus. But you have to let the key people know what you’ve done. Don’t let yourself be a well-kept secret.
Chapter 6
CALCULATING RESULTS
To make the most out of your results you need to know how to quantify them. One reason people rarely use statistics in their interviews is that they don’t know how to calculate results, and then don’t know how to use or describe them to their best effect. Usually all it takes is simple arithmetic and a little logic.
Suppose you know that an action you took improved something—sales, profits, productivity, turnover—but you don’t have documentation to prove it. Assume that the matter is turnover. When you came into the department morale was down, and people were continually leaving out of frustration. When you came into the department there were sixteen people. During the year you were assistant supervisor you saw five people leave and one get fired, for a total of six. That represents 38% turnover.
With a turnover rate that high, productivity is bound to be low because people don’t stay around long enough to really learn the job. In addition, the supervisor has to devote a lot of time to training new people and correcting their mistakes. Eventually your boss is fired and you are promoted into the position. According to your observation, your boss never adequately trained people, got angry at them when they made mistakes, and never supplied positive feedback. As a result, people quit out of frustration.
So when you became supervisor you worked closely with the core group. This took a lot of overtime on your part, but you made sure they knew what they were doing. You gave them strokes and they appreciated that. During your first year on the job four people quit, the next year two people quit, and the following year two people quit. Your turnover rate for the first year was 25% (4 divided by 16). The second and third years it was 12% (2 divided by 16). It appears that things have definitely stabilized.
Now you need to determine the percentage by which you reduced turnover, and what other benefits accrued as a result. The turnover rate has been reduced from 38% to 12%. Just an approximation will tell you that the reduction is almost two-thirds, or 67%. To get the actual figure you would subtract 12 from 38 to get 26. You would then divide 26 by 38 and get 68%. As valuable as reducing turnover is, that is still not the end result. Because your people are now better trained they make fewer mistakes, get more done in a day, and provide better customer service. So, next you would measure the quality, productivity, and customer service improvements. In an interview you might say, “I developed an effective training program which reduced turnover from 38% to 12%. As a result of the program, productivity increased over 14%, and we really improved the quality of customer service.” Such a statement will have real impact on employers.
In the process of calculating results, the first step is to identify all the benefits of an action you took. Start with the assumption that if you can identify it, you can quantify it. Quantifying results may require some guesstimating, but you can do it.
EXAMPLES
Determining An Average Annual Increase
Often a person will bring about improvements over a period of several years. A good way to express this figure is to show the annual increase. Selling something would be a typical example. The following example shows how one client used an increase in sales to its best effect.
John increased sales in his territory over a five-year period. Sales the year prior to his coming to the territory were $200,000. His first year he increased sales to $240,000, then $275,000, then $300,000, then $310,000, and finally $350,000. His first year increase was 20% since his increase of $40,000 is 20% of $200,000.
Mathematically it is figured this way:
$240,000 - 200,000 = $40,000
40,000 ÷ 200,000 = .20 or 20%
The second year his increase was 14%:
$275,000 - $240,000 = $35,000
35,000 ÷ 240,000 = 14%
The third year the increase was 9%, the fourth 3% (a recession year), and the fifth 13%.
Over the five years he increased sales 75%. To get the average annual increase add the increases from each year and total them (20+14+9+3+13 = 59). Then divide by the five years to get the figure (59 ÷ 5 years = 11.8%) of an 11.8% average annual increase. For a resume it would be rounded off to 12%. In an interview it could be stated, “I increased sales an average of 12% per year.” Although he increased sales a total of 75% you cannot divide 75 by 5 to get the average annual increase.
Once the figures have been determined, a decision has to be made as to the strongest way to present the information. Sometimes the best way is simply to present the raw figures. In this case it would be, “In five years I took sales in the territory from $200,000 to $350,000.” If those figures did not have the impact he wanted he could say, “I took over a mature territory and increased sales 75% in five years,” or “During a serious economic downturn in the region, I increased sales an average of 12% per year.”
Simple Increases
Simple increases might be figured according to the following method: In 1997 advertising revenue for a magazine had been $256,000. By the end of 1999 it had increased to $318,000. The percent of increase is 24% (318,000 - 256,000 = 62,000; 62,000 ÷ 256,000 = .242 or rounded off to 24%)
A formula for calculating increases is:
In the above example it would be $318,000 -$256,000 divided by $256,000 = .242 or 24%.
Simple Decreases
Simple decreases
