A URO for Job Seekers?

If you find you need help finding a job, then maybe it's time to look at things differently. 

This TED (or TED-like) presentation shows the process one young guy went through. Job hunting as a college graduate looking for some decent employment in the 2008 economy was not easy. Hunting jobs was not easy for anyone at that time. The way he dealt with the situation was innovative and it led him to create, essentially, an URO (UnRefusable Offer) type of offer to present to employers he wanted to work with. Although he probably did not look at the situation through his customers' (the hiring organizations) eyes, he did realize how his offer greatly reduces their risk. Best of all - it worked.

Past thoughts about hiring

TOC hiring logic from Bill Rhind

Bill Rhind (see profile on linkedIn) of P3 Consulting has kindly prepared this overview of utilizing the Theory of Constraints logic in the employee recruitment process. I found it very clear if you think of a constrained resource group, but Bill pointed out to me that this logic stands for any hiring, not just within a constrained group.  In fact, he feels the real value is in the non-constraint since there are many more non-constrained resources than constrained resources and one often doesn't think of “exploiting” a non-constraint. To top it all off he even included a small and very thought provoking case review.

Thanks Bill!

"What intrigues me is that many HR decisions are still made utilizing "local" thinking. Each hiring decision is generally made in isolation… on an individual, functional, or divisional case by case based and on the merit of each request. In addition, the decision to hire (elevating the system) is often done prior to identifying the constraint, to exploiting the constraint or subordinating to the constraint.

Why do I believe this is generally the case within most organizations? Organizations which I have been part of or visited (and have not implemented TOC) have a FULL list of personnel requests with all functional managers stating that theirs is the most important, and the managers do not have a clear way to accept or reject them. Managers don’t have a value based way to determine the priority or explain why one group was able to hire while another may not (or they hire based upon “local” efficiencies and don’t realize they are actually hurting the system’s overall performance).

I would like to inject that hiring must be considered holistically. Looking at all requests in an organization and prioritizing them based on T, I and OE (T, or Throughput, is the money or goal units generated by the system, I, or Inventory, is the money invested in the system in order to generate T and OE, or Operating Expenses, is the money the system is working on in order to transform in to T) from a systems perspective. There truly can only be one (or very few) most important hire.

In order to tackle this question, I suggest breaking the answer into three parts

1. decision on hiring
2. who (which skill) should ultimately be hired
3. the hiring process

Decision on Hiring

One necessary condition in order to know what is the most important hire is the company knows their system’s constraint (the only true way to know the impact on T). If the constraint for a system is not known, the best one can hope for is impacting delta I and delta OE (which are also often from a local perspective). Of course there may be situations where this is not the case (e.g., a key skill is missing or lost, and without it, even if the position is a non-constraint, T goes to “0”).

I think a key faulty assumption made or a missing process step in hiring is the assumption that a company truly needs another person within the constrained resource group to add capacity. A step that I believe is fundamentally missing in most hiring processes is the step to ensure that we have fully exploited the current capacity of the skill prior to moving to the elevate step. I can think of a few observations/checks which can be made to test the current state:

- What is the level of bad multitasking occurring within the group?
- What percentage of the constrained group’s capacity is the constraint (or CCR) performing the task which only they can perform (e.g., have they off loaded Herbie)?
- Are they working on the most valuable work to the business?

Prior to even considering the hiring of any additional personnel (and adding OE), I would want to ensure that we have, at a minimum, fully exploited the current capacity (it is important to make sure that the measure is not activity based but truly value based, focused on measuring only the amount of capacity where the constraint is doing only the specific work that the resource/skill can provide) and subordinated all else to ensure that the company was not wasting any of it. As all of you know, these steps alone can bring significant increase of flow (25%...50%...or more) within an organization while having a very positive impact on all of the people.

Who (Which Skill) Should Ultimately be Hired

If it is determined that the currently available constrained resources have capacity which is being stolen doing “other” work (work which does not add value from the customers perspective), then I would suggest hiring a person to remove this more general work from constrained resources versus hiring another constrained resource. The benefit of this is many fold:

1. The hired person would cost less OE (I know this is an assumption, but I believe a pretty good one)
2. It would have a much bigger impact on T (and, therefore, NP)
3. Constrained resource generally happier and more satisfied in their work

Take for example a sales group. We have seen instances where a company was interested in increasing throughput and was considering adding additional sales people. It was obvious that the constraint was the market. In which I really mean, the company’s ability to sell more to the market (the market by itself was not the constraint since the company only had about 10% of the market). To check whether hiring sales people was the right decision, we analyzed the sales process and were looking for overall effectiveness. The key here is how does one define effectiveness.

It became quickly apparent that the sales people were always busy (and one might say efficient); many working non-stop for 50-60 hours per week. Their days were filled with meetings (both internal and external), report writing, following up on sales orders, logging their sales calls, obtaining marketing materials, driving between calls, trainings and, of course, sales calls. Since sales generally are going to be made during sales calls, we asked how much of the day is spent with customers. The general answer for this client (and many others) was 25-50%. As we peel back the activities within the call itself, we asked one more question: “how much time are you spending with the decision makers?” The answer was enlightening, only 5-10%.
Would adding another sales person have an impact…of course, but, in this case, adding a person who’s responsibility would be to provide support to the entire sales organization would be much bigger. In this case, adding one support person provided for an absolute increase of 15% to EACH sales person. This is the equivalent to a doubling or tripling of the SALES FORCE. While I know that there are other possible levers for improving the T, no one of them could deliver more impact on T (while minimizing impact on OE) in the time it took to implement this improvement.

The Hiring Process

A key improvement is to consider the multitude of hiring’s as a multi-project environment. Ensuring that the hiring projects are being released in such a way as to ensure bad multitasking is minimized. Ensuring that Full Kit (strong job description is developed, availability of resources, clear end date, etc.) is fully developed prior to starting the recruiting process. Ensure that the hires are prioritized and released into the hiring process based upon their impact on T, I and OE.

I think by breaking the solution down, a company can now focus and improve the process to deliver value to the business at a global versus a local perspective. The organization can now make much better and quicker decisions on hiring and the hiring will happen at a much faster rate."

Using TOC while seeking a new job (part 2)

(Part 1)
When a system goes through a TOC process it defines its goal (what it wants more of) and the necessary conditions (what can't be done in order to get more of the goal units). Once this is in place every part of the system can be graded as supporting the effort to reach the goal, not supporting the effort to reach the goal or limiting the effort to reach the goal. If one was part of such a system – which type of position (regardless of performance in said position) would one want?

This is a point to contemplate as we move through the process of finding and getting a new job, in my opinion. At each step of the hiring process it is a good idea to stop and review the possible grade this position has in the organization.

Admittedly, most systems now days have yet to define their goal the TOC way.  When the hiring organization is a for profit company, this is not a major issue as we know the goal. If the organization is not for profit, it is a bit trickier but I suspect most people will have the necessary intuition to run the analysis even without a clearly defined goal and measuring system.

Instinctively, one would probably consider a position with a "limiting the effort" grade a bad choice, but I think this deserves a second thought. If the insight gained shows one can help turn around this position to make it "support the effort" one can create value to the organization, maybe even major value which will, probably, lead to positive results for the individual as well. Tread with caution, though, and make as sure as possible the chance does exist at the position level (the position can be turned around), at the environment level (peers and managers will support and can be moved to support the change) and at the personal level (the effort needed is within one's current capabilities or within reach).

Here is an idea for creating a URO for employers....

Using TOC while seeking a new job

After looking at the hiring process in the last 2 posts, I'd like to change my view point and look at the process from the other side. When a person is looking for a job – can TOC be of assistance?

First up is the realization that seeking a new position is a process of change and as such it would probably be beneficial to consider the 4 quadrants of change. Using the matrix can help a job seeker understand what special needs must be addressed during the process. Generically speaking these are the needs to reduce the risks inherent to the change and the needs to minimize or mitigate losses of parting with the current situation (losing the "mermaid"). It is important to remember that even when this change looks very appealing, an example could be a case of someone unemployed and in need of an income, the change does bring with it risks and losses which should not be ignored. Also make sure to consider both the employment side and the personal side of the change. Looking at the risk quadrant as an example – employment side risks may be "I will not succeed and this position will create a bad impression in my CV", personal side risks may be "I will have less available time to contribute at home which might create friction".

(continued)

TOC for hiring part 2 - Sorting through the CVs

From a TOC point of view handling the classical hiring process (advertise opening, get CVS, sort, interview, hire) is entirely an operating expense (OE), it does not create any throughput, even though the end goal of the process is, indeed, an increased throughput. Then at the end of the process what you get is "marriage after a blind date", with neither sides really sure if the right decision is being made. Taking that into consideration – perhaps there is place for paradigm shift in hiring.

But assuming we have to use the current process – how can we minimize the impact it has on out throughput? As always – it is done step by step.

So, once a company announces an opening it will receive candidate CVs and most of the times it will receive a lot of CVs, much more than needed to create a meaningful selection. We can divide these CVs into three basic groups:

• The "No-s" – these CVs present candidates that are clearly not relevant when compared to the defined characteristics for a good enough candidate (as discussed here)
• The "Yes-s" – CVs that represent candidates with good fit to the defined characteristics
• The "Maybe-s" – CVs that are not clear cut, perhaps there is great fit in some of the defined characteristics but not in others, perhaps something else is creating doubt

How to treat the "No-s" and the "Yes-s" is clear, assuming there are enough CVs that are not "No-s". So the only problem is the "Maybe-s". This should not be a problem, if we look at the situation from a satisficer point of view. First these should only be considered after the "Yes-s" have been exhausted.

Once it is clear that there is need to go into the "Maybe-s" pool, the first step would be to re-analyze them. There is more data and knowledge in the system now, so perhaps some of these are actually "Yes-s" or "No-s" and should be treated accordingly. Then process them in order from the most promising to the least promising. Stopping as soon as possible (when the position has been manned, there are enough eligible candidates to move to next phase etc.)

One point to keep in mind is that often times bias leads to wrong decisions in hiring. This does not have to be the "regular suspects" of bias such as gender, race, religion and so on. There can be many hidden assumptions about the position, the appropriate candidate and so on that will lead to bias.

Using TOC for a hiring process

Let us begin by defining the goal of the process as finding a good enough candidate for the job. This is how a "Satisficer" would look at this. An "optimizer" will look for the best candidate possible and thus will take much more time and effort to fill up the opening – is this beneficial for the organization? I dare say it is not, since not only is the job open for a longer time, meaning that required output is delayed, the recruiting team also spends more time on this task and thus is not available for other tasks.

To recruit a good enough candidate you first must define the characteristics of a good enough candidate. It is important to keep some slack in these definitions to allow for variability between candidates, so recruiters have a real choice. In order to get a good understanding of necessary characteristics, just get a good understanding of the job this candidate will be doing.

Adding a person to the company's staff is a process of change and should be handled like such (as discussed here). Hiring managers should consider all 4 quadrants of this change first at the general level of hiring someone and then at the specific level of hiring a certain candidate. Throughput considerations should be used.

At the general level consider:

	+	-
Hire new person (change)	"Pot of Gold" - increased throughput by manning position	"Pain" – losing throughput by paying more salaries (increasing OE) without sufficient return
Don't hire (don't change)	"Mermaid" – low OE, business as usual, no need to train and bring someone up to speed….	"Alligator" – overloaded workers, missing capabilities….

This would be valid even when the manager leading the process is very willing to hire the new person. Also notice that these are very generic possibilities and should be replaced with the specifics of each situation in real life.

At the specific level each candidate is different so a generic analysis is not relevant. One point to consider, though, is how would the analyses differ between a candidate that is an acceptable fit on all parameters and one that is a very good fit on some parameters but poor on others. Which parameters are the most important to your throughput?

Continued here