Work, by definition, is a conscious activity with a certain purpose. For example, a sales manager wanted to close his client on a deal for equipment supply, but instead spent his time educating the client in some technical issues. If his goal was to sell, then he was directing his efforts towards one result, but achieved a different one. Therefore, educating the customer was not a product, unless, of course, he had planned to engage in such educational activities.
If an executive created a pay system designed to improve productivity, but resulted in employee dissatisfaction and loss of personnel, then this system is not a product as it doesnt align with the set goals. The HR manager hires an employee who stays in the company for a week and then runs away this new employee is not a product as it deviated from the goal of hiring a new person. On the other hand, hiring an employee that improves the company's production, would be a product.
Any product must be completed to be considered a product. A salesman, whose goal is to close the deal, attracts a customer who demands discounts and special treatment, so that the executive winds up personally closing the sale, didnt get a product. If the companys goal setter conceives a brilliant plan, but does not describe it in sufficient enough detail so that it can be given to his executives to work on this is not a final product. If the person assigned to the product doesnt complete it in such a way that it can be used, someone will have to finalize it, which creates additional work for others.
Usually, having to finalize a product results in a lot of unnecessary and additional actions, and devours the production time of employees. If you examine some employees actions, you will see that most of their time is spent either completing other people's products or correcting the consequences of such incompleteness. For example, you ask an employee to pay a contractor for his work. Your Accounting Department starts working on it, but a week later the contractor is calling you, upset by the fact that he did not get paid. Now, youre taking the time to handle the contractor, re-issuing the order, and convincing the contractor to continue doing business with you despite the agreement violation. The contractor may cease doing business with your company, and youll have to find a new one. All the while, spend time restoring your reputation in the community. Youve wasted a lot of production time because of one very simple, but incomplete product of the Accounting Department. Why did the Account Department slack in this task? The accountant simply does not understand what his "final product" is.
I dont know if you are aware of the scope of this issue, but it is huge. In an article on management[3], I came across the idea that a person who doesnt understand his product, would not be able to produce it. As a practical man, I decided to check how well my executives understand their final products. I simply asked each of them, "What do you think is the primary result or product of your position?" The answers I got from interviewing a dozen of my executives were rather shocking. They were naming lots of things as their product, but not at all the product that I expected from them. When one of the executives told me, "My product is to have my manager help me, I quit surveying. After that I made a decision I am not going to ask any more questions, instead I will name the exact product for each of my subordinates and make sure that they fully understand it. And dont get the idea, by the way, that I got that answer from a totally useless executive or that the company was no good. The company was an industry leader and that executive was quite a good worker. The answer was so absurd, that it wouldnt have even occurred to me! If you have a strong stomach, try surveying your employees or co-workers. This will be an adventure! Ask them what they consider their main product to be and you will start understanding them better.
Another very important factor is how valuable is the product that a person produces. Value is the degree of importance, which can be often, but not always, expressed in monetary value. A glass of water, for example, will take on a completely different value to you depending on whether you are in the hot desert or sitting in a cool office. The value is not determined by the amount of labor or materials that went into it, but rather by the desire meaning, how badly others want to get this product and what they are willing to give in exchange. On a hot summer day the value of an ice cream cone is high while during a cold winter, it is low. And here's something important about this concept: you dont always view something useful as having a real value. For example, every mans future depends to a great extent on the kindergarten and school teachers they had when they were growing up. But the paradox is that in this society, it is not customary to pay a lot of money for the products of teachers
This is a very old and odd tradition, but it is nonetheless true. At the same time, people are willing to pay a considerable amount of money for the advice of a lawyer or stockbroker. Hard to believe? Take a look at how much people spend on designer clothes and beautiful cars, and how much they spend on education and upbringing of their children. How much effort and money they spend to kill themselves in various ways, and how much to promote their health. I'm not talking now about a special medical treatment when they are willing to give all they have, but about keeping a healthy lifestyle. Im not trying to give you a hard time, but just so you understand that the value of a product is not always logical, it depends on opinions of others. For a product to be called "valuable" other people have to want it and it needs to be valuable to them. Our civilization is neither perfectly fair nor balanced there are some odd values and you should be aware of that. Apparently, the ability to understand, and especially to predict, what would be valuable to people is one of the greatest components of an entrepreneur.
When we talk about the value of an employees product, we mean the degree in which what he produces is needed by the company. If the company wants HR to hire effective employees, then the value isnt how many people and how quickly HR fills the vacancies. Ultimately, it is how successful and productive the new hires are. If a leader creates inspiring goals and directs the team members towards these goals, this is valuable to each member of the group. This is why people will follow leaders, join their goals, and are willing to provide their own creativity and efforts in exchange for that value.
Each life role or job position has a certain Valuable Final Products (VFP). For example, the VFP of a salesperson is signed and paid contracts; the VFP of an HR manager is productive employees who are established on their jobs; the VFP of a CEO is an expanding and thriving company that produces a valuable product for its clients. The VFPs of a husband is a family that is safe, secure, and provided for financially. The conscious production of a product starts when a person understands exactly what their valuable final product is. If the person lacks that understanding, they will produce something that he personally considers valuable, or he will follow personal inclinations. When we carry out our consulting projects, we ask our business owners to conduct a survey with their key employees and managers to ask them what they consider their product to be. When the survey results are in, the executives clutch their heads in despair. The odd employee ideas that the survey reveals can be rather astounding. If you do the surveys, you will find out that no more than 10 % of the company's employees can accurately name their VFP. This is bad. If they can't properly identify it, they cannot focus their efforts on producing it. To compensate for it, youll give out individual orders and constantly direct the employee to produce his VFP. That is inefficient. The upside is that the productivity of employees can be significantly improved once you give them an accurate understanding of their VFP. This principle is also applicable outside of business; many couples could improve their marriage if they simply worked out with their partner the exact VFP they expect from each other.
An accountant who doesnt understand that one of their most important VFPs is securing the value of companys assets (money, property, materials and goods), will keep asset records as a formality and you will not be able to keep track of the actual condition of your assets. If a lawyer does not understand that his VFP is legal security of the company, he will not take the initiative to check over every agreement, to ensure that the company has sound employment contracts, and financial liability agreements for its employees. Instead, he will simply draft and check over the contracts that come his way, while legal security will be rest upon the shoulders of those who stick their nose into everyones business, i.e. the top executives.
"A Valuable Final Product something that can be exchanged with other activities in return for support. The support usually adds up to food, clothing, shelter, money, tolerance and cooperation (goodwill)". [4]
Give your employees a clear understanding of the VFP you expect from them and they will either greatly enhance their performance or refuse to do the work. Don't be surprised if you get a letter of resignation from an employee after youve defined his VPF. Perhaps, he never intended to produce this particular product, and the executives expectations were in vain. This rarely happens, as most people like working with awareness, purpose, and want to produce something truly valuable. Perhaps not everybody will like this, but what does that matter? There are lots of successful people who could work in your company.
When formulating a VFP, note that it should be: actual results of completed work, an item (perceived by the senses), should always be fully complete, and, above all, valuable to the company. The last thing to remember, before giving a person their VFP, is you must have a clear understanding of what exactly you want to get from him.
Try to formulate the VFPs for various employees that work near you and then watch what they are actually working on. For many of the posts, you will easily name their product but for some could be unclear. If youre finding it difficult to formulate these VFPs, I can assure you that your employees are even less clear on what should their work results. Its not at all surprising that most HR managers believe that their product is "hired employees", while executives expect them to provide "productive employees". While advertising specialists believe their product is creating a "memorable advertisement" rather than, "people who walk into the store as a result of the advertisement".
A VFP is applied to a particular position, but can also be applied to projects, a task or an order. Its quite appropriate to accurately define the VFP of a task you assign. Defining a VFP will result in less almost dones from your employees. Good production in any field starts with a clear understanding of the result that needs to be obtained.
Chapter 3
The product of a company
A professional in a specialized field, such as a chef or painter, can easily tell you their VFP. They would even be surprised you asked them about it. While with executives, you will often find that instead of their product, they list the actions they perform. Department heads will confidently tell you that their products are, "well-organized work", "high performance" or even "ensuring employees are provided with everything they need to do their jobs. But that is not it! The VFP of an executive is what his entire department produces.
Take a crew of house painters as an example. A foreman will plan, assign tasks, ensure that the work gets done, coordinate the actions of the team with other departments, and perform many other functions. This activity is the "doingness". The VFP of a worker in his crew is obvious: painted walls. He has several workers who produce this VFP and he, as manager, is running the activity. His own VFP is the VFP of all the workers as a whole, i.e. the VFP of the whole crew. Once this is understood, it is not difficult to formulate his VFP as, "professional quality painting jobs completed on time". The foremans customers are expecting this product and willingly pay specifically for that. If a foreman can't get that VFP through executive actions, such as orders or assigning tasks, he simply picks up a brush and begins to paint the walls himself. He could at least achieve the crews VFP in that fashion.
In a similar vein, if the head of a company cannot get the companys VFP produced through executive means, he rolls up the sleeves and finds customers, makes sales, creates advertisements, handles unhappy customers, etc. He does all this because he is responsible for the VFP of the company as a whole. Executives, as a rule, are responsible people, and, quite often, experts in the area they manage. Unfortunately, their expertise thwarts their ability to be good executives, and instead of learning and using management tools, they do the work of their juniors. It may seem very responsible to take the initiative and show an employee how to do the work. But in that moment when the executive demonstrates his wall-painting mastery, nobody is doing the job of the executive Usually, an executive can replace his juniors, but not vice versa.
Imagine the foreman of a crew of a couple dozen painters, and, instead of ensuring productive and well-coordinated work, he personally takes a brush to the wall. Good control of workers can significantly increase the crews performance, compared to simply being an extra pair of hands. A competent sales manager with five salespeople in his department can significantly increase the sales volume if he plans the work out, sets targets, supervises the work, corrects errors, and demands results rather than personally closing the sales.
If you understand this principle, you can even determine whether the person you want to hire would make a good executive. Just ask him what he thinks his VFP as an executive is, and find out how well he understands the tools he should use as an executive to produce that product.
If you are the owner or the CEO of a company, your product is the VFP of your entire company. And that helps assess your own performance. For example, my main VFP as the founder of Visotsky Consulting is management tools implemented in our clients enterprises. If my company implements them correctly, it leads to the expansion of their businesses, which means that I produce my product. If my company takes on a project and does not accomplish that result, I have not produced the VFP.
Determining the VFP of your business is quite simple. It's the specific product or service for which your customers pay you money. If the business deals with window manufacturing and installation, the CEOs VFP can be stated as, "windows of high-quality manufactured and installed". Of course, you need to clearly understand what the client is paying you money for. As an example, what do customers pay money for at a restaurant? Delicious food, atmosphere, speedy service, and a convenient location. Look at several restaurants, and you will find that they have completely different VFPs. There are restaurants that boast famous dishes where clients will travel great distances and reserve a table months prior just to eat there. There are restaurants known for their special ambiance, and restaurants where you expect to eat quickly.
Even in a relatively successful business, sometimes the executive does not understand the VFP of the company, and, therefore, his own VFP. Two years ago, I visited a restaurant that served Russian cuisine about 6 miles outside a small Russian town. The restaurant was unique because they grew their own delicious vegetables and herbs, and the interior of the restaurant consisted of separate rooms that emulated the rooms of an ordinary residential house from the Soviet period. No two rooms looked the same and each guest was greeted by the waiter who acted as the owner of the house. Having dinner there was more like visiting the house of your hospitable friends rather than a restaurant. Even though Id eaten in many Russian restaurants, I'd never tasted such delicious Russian cuisine. That restaurant became extremely popular and well known in the city, and generated a decent income for its owner. After several years of business success, the owner decided to expand the business and opened a restaurant in a resort town by the sea. She invested all her savings in this new restaurant that was completely different from the original. It had neither its own vegetable garden nor the unique rooms. She transferred the chef and the best waiters to the new restaurant, and within a year she experienced nothing but losses. Moreover, the lack of attention to running the first restaurant, loss of qualified staff, and cutting operating expenses resulted in a significant decline of the business.