The org board. How to develop a company structure. Александр Высоцкий

his "final product" is.

      I don’t 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 doesn’t 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 don’t 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 wouldn’t 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 don’t always view something useful as having a real value. For example, every man’s 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. I’m 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 employee’s 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 isn’t 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, you’ll 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 doesn’t understand that one of their most important VFPs is securing the value of company’s 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 everyone’s 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 you’ve defined his VPF. Perhaps, he never intended to produce this particular product, and the executive’s 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 you’re finding it difficult to formulate these VFPs, I can assure you that your employees are even less clear on what should their work results. It’s 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. It’s 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

3

L. Ron Hubbard’s article Product-Org Officer System, Name Your Product, written on August 7, 1976.

4

L. Ron Hubbard's article Valuable Final Products, written on March 25, 1971.