In our last WorkPuzzle, we learned that business processes with low variability are inherently more valuable.
If your company’s recruiting process produces a consistent and reliable flow of high-quality hires it’s, by nature, more valuable. This is tangible value and translates directly to real revenue and profits.
If you’re contributing to the reliable nature of your company’s recruiting process, you’re creating value. In turn, you’re also making yourself valuable to your company.
This all sounds great, but how do you get there? To answer this question, we’ll take a page from history and retell a story of great achievement.
The Birth of the Continuous Improvement Movement
As a result of World War II, the Japanese economy was completely destroyed (along with most other economies around the world). During the ensuing Allied Forces occupation, Japan made progress toward recovery, but had a long way to go at the start of the new decade.
And then something remarkable happened.
A middle-aged engineer arrived in Japan to help the US government conduct a census. In the process of conducting his work, he started teaching Japanese business leaders to use statistical sampling to improve manufacturing quality and success.
The man was W. Edwards Deming. Between 1950 and 1960, Japan sky-rocketed to become the second most powerful economy in the world by applying Deming’s theories. It’s a great story. The continuous improvement was born.
Continuous Improvement and Recruiting
By 1980, the Japanese manufacturing methodologies were so dominant, the Untied States and other industrialized nations started to adopt them. Today, the competitive advantage Japan once enjoyed has diminished because most industrialized economies have also applied these principles.
Here’s the good news. While the use of continuous improvement principles is ubiquitous among manufacturing companies, their application among service businesses is more sporadic.
In the real estate industry, some business processes have been touched by these principles (i.e. transaction processing and escrow) while other processes have been ignored. The real estate recruiting process is one of those processes generally untouched by the continuous improvement principles.
Those who learn to apply these ideas could experience a significant competitive advantage over their competitors.
The General Framework of Continuous Improvement
The framework for continuous improvement is based on what Deming called a system of profound knowledge. This system has four components:
Appreciation of a System: An understanding that all businesses are made up of systems. You can’t improve a system (like recruiting) if you don’t realize it exists and treat it as something that can be improved.
Knowledge of Variation: An understanding that all systems have variation. Variations have causes and those causes can often be controlled. As we discussed last week, systems with reliable outputs and low variation are the most valuable.
Theory of Knowledge: An understanding there are limits to what can be known. Measurement activities must be focused on knowable things. There are some things that cannot be reliably known.
Knowledge of Psychology: An understanding that most systems involve people and you’ll never escape the human component and its influence. Understanding how people process information, make decisions, and interact with their environment is a critical component of success.
In our next WorkPuzzle, we’ll discuss how to use this framework to create actionable business rules for the purpose of improving recruiting execution in your company.
Until then, do a quick self–inventory of the recruiting system in your office/company.
Do you treat recruiting as a business system?
Does your recruiting system produce variable results? What are the causes of the variations?
Do you know what can be reliably measured in this system? Are these measurements being conducted and documented?
Do you know what causes your candidates and others in your recruiting process to do the things they do?
If you’ve been reading WorkPuzzle for a while, you should have a leg up on the last one! The others we’ll work on in our next post.
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