Blood dripping from the knife

With blood Dripping from the knife in his hand, and looking at the lifeless body on the table. The man came to a sad realization there were not going to be any more golden eggs.

Too often managers, like the man with the knife, kill the goose laying the golden eggs before they realize their greed.

Working in South Carolina I had an office that was running pretty smooth. There were about 35 employees and things were going pretty good. We even had the prospect of more work getting shipped our way. We had three Kodak high speed document scanners. They could scan, according to kodak, 120 pages a minute. In a perfect world maybe, but in truth we could only average about half that speed. Even with averaging half the speed the person scanning could make about $12 dollars an hour in the pay-per-performance strategy we had setup. It was okay but some of the people that were preparing the documents for scanning were making more more money. I believed it was a bit unfair to the scan operator because they were limited by the speed of the machine.
Kirk Kirpatrick, an other manager in the office, who was older and wiser than me had identified them as the bottle neck in our operation. He determined we needed to do everything we could to keep those running. This made me aware I needed my best most reliable people running those machines. I didn’t realize it at the time but I needed a way to make that the best job in the office.

Then it happened, one of the scan operators came in and told me he was quitting, he was working two jobs and he just wasn’t getting enough sleep. After he left the office, before it really hit me the impact it was going to have, the other two operators, Jim and Brad came in and wanted to talk. They told me they didn’t want me to hire a new scan operator. They figured they could run two machines at once. I was skeptical but I was willing to give it a try. I found out they knew he was going to quit, and may have even encouraged it.

What they realized was that if they could share the other scanner they could effectively get a 50% increase in pay up to $18 dollars an hour. This helped me solve two problems: First, I didn’t have to hire a new employee and. Second, this made the scanner operator job one of the highest paying in the office.

Jim and Brad also knew we were getting more work and another scanner in a couple of months and the would effectively get another raise to $24 dollars an hour where both of them could run two scanners all the time.

Another huge issue for site was deadlines. We were recieving about 75,000 documents a day and we had about a 7 hour window to get all those scanned. if you do the math average 60 documents per minute, per scanner you can get about 3600 an hour times 7 hours is 25200 per scanner times 3 scanners is 75600 documents scanned per day. we really didn’t have much time to spare.

Having Brad and Jim use two scanners had a few unforeseen positive effects. First, because Jim and Brad needed all the document counts of the bundles to be perfect to make the most amount of money, they quickly identified people that were counting poorly. I realized the more work that had to be rescanned because of poor counting decreased our efficiency and put us in greater jeopardy of missing our deadlines. So I realized that our counting accuracy needed to be watched like a hawk. We put rules in place for counting quality.
So as a result of focusing on the quality our office had the best record for not missing deadlines.
Because of our efficiency we were able to have the people start later in the morning. We originally began work at 3:00 AM. Because of our efficiency we soon moved the start time to 4:00 AM. Eventually when we got the fourth scanner we were able to push the start time back to 5:00 AM, even though our work load had increased to 125,000 documents a day.

We had discovered our golden goose and it was giving us a golden eggs pretty consistently. We had changed the thinking of the employees and now they were thinking and acting like owners. The scan operators were now consistently making $24 dollars an hour.

One day I got a call from boss with a concern. He said “I see you have a couple of guys that are making close to $25 dollars an hour.” “So What?” I asked. He said one of the most ridiculous things I have ever heard. “We can’t have employee making that kind of money.” He asked how they were doing it. I explained they were using two scanners instead of just one. He said “we need to make a new rate so if people start using two scanners the get a different rate.”

Knowing what had gotten us to this point I was angry with the greed I was hearing. My boss was standing there with his knife greedily ready to cut open the golden goose looking for more gold. Luckily for me I said to him “So we are going to punish our best people for having a good idea and working hard?” You paying the same thing you are paying everywhere else but getting better results. He realized what he was doing and put away the knife. I convinced the managers in other offices to follow my lead to do the same thing with two scanners per operator. Efficiency and quality increased through out the company.

I have several other stories that do not end so well. I had a friend who was working as a consultant for a small firm. The firm had setup a bonus structure so that consultants made more money by being efficient, working hard and making sure their clients were happy. Many of the top consultants quickly figured this out quickly and started working very hard. Many of them were making close to $200,000 a year. As a result of thinking like owners the company as a whole was out performing it’s competition. This attracted the attention of a larger company and they wanted to gain some of gold that this company was producing. So they acquired the smaller consulting firm. The first thing they did was changed all the compensation packages and took away the bonuses and incentives that motivated the consultants to think like owner. They had basically gotten out there knives and when hunting for gold. All the top performing most intelligent consultants stopped producing the gold. The immediately started looking for better opportunities, and with the reputation of their former company, there were all able to get jobs at other firms quickly. Within one year all the top consultants had left the company. The bigger firm’s management was probably standing around, holding their blood stained knives, wondering what happened to all the golden eggs, probably thinking that smaller company pulled a fast one.

Another story was a construction company Las Vegas Nevada, during the housing bubble of the mid nineties. One of the tasks they needed done was trash hauled away from sites. They were paying drivers by the load. However, they were getting behind and were looking for better ways to get the job done. They gave the drivers an insentive. They would pay them more if they filed a trailer and towed that behind their truck. The trailers held the same amount of stuff as the dump truck. One of the drivers caught the vision and started thinking like an owner. He had to work harder, but he figured out ways to be more efficient and pretty soon he was making lots more than any other driver. He was also moving more trash than any other driver. The company he was working for got out their knife looking for more gold. They changed the way they were paying the double drivers. The really efficient driver realize he was now getting penalized for doing all that extra work and stopped doing the extra work to load the trailer. They had killed their golden goose.

I am always looking for more stories like this. I have heard this is a common occurrence in sales departments. If you have a story like this. I look forward to hearing your story.

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