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No matter your position at Richter, there are key operating principles that we work with each and every day that help keep all staff operating as a cohesive, aligned unit.
VALUABLE FINAL PRODUCTS
Any person or group working is naturally engaged in a myriad of different actions, with tasks completed and “products” produced all the time. While these may be valid, an organization only works if each person or area in it knows their VALUABLE FINAL PRODUCT, or VFP.
A VFP is the final, exchangeable product that a post, area or entire organization puts out.
By “product” is meant something produced, created, made or done; a completed instance of producing something.
By “exchangeable” is meant just that; that it has value to the public or another area of the organization and therefore has exchange value.
It is absolutely vital that every person know the VFP of their post and the area in which they’re working cold, for once it is known it becomes a stable goal to align all other actions toward.
For example, let us say a salesman has the VFP of, “money brought into the company from enthusiastic, qualified clients”. Knowing this, he could align his actions toward that goal, as well as get a very accurate idea of how well he was doing on his job.
In the same example, if the salesman does not know his VFP perfectly and fully, he may just assume it is, “lots of money in the door”. From actual experience, this leads to upset and liability for Richter as unqualified clients are accepted. Thus, even though he may “close lots of deals” or “get lots of money in the door”, his product is not exchangeable with the remainder of the company as it causes problems rather than smooth delivery.
A key element to being successful in consistently delivering your VFP is to know where you stand. If you do not keep track and instead make decisions on what actions to take on a “vague idea that things are going ok” or “something not feeling right” you cannot causatively improve your output.
Conversely, if you know how you’re doing by the numbers, you can see exactly where things went right and keep doing those actions, as well as precisely when you experienced a decline and spot what to correct.
It is for this reason that every staff member measures their VFPs with a numerical value and plots that information on a graph at the end of each week.
To illustrate how this works, let’s say your job was to act as a bricklayer. Every week, your production would be measured by how many bricks you lay. One week, you lay 100 bricks. The next week you lay 150 bricks. Your production would be up and would show this increase on a graph.
Richter is run on statistics, which allows individuals to take charge of their own area and executives to manage with hard facts, rather than guesses or assumptions.
At any time, every activity, person or thing could be said to be in a certain “condition”, such as being brand new, growing or expanding, shrinking or getting worse, or even not there at all.
A key element and breakthrough of Hubbard management technology is the delineation of all possible conditions for an activity, in order all the way from utter confusion at the bottom to power at the top, along with a formula of exact actions for each condition to raise that person or activity up to the next higher condition. By following the steps of the formula at each successive condition, one will eventually arrive at the top.
By viewing trends in production graphs, one can see the condition his area is in. Therefore, by correctly spotting these trends and applying the correct condition formula for that trend, one can always know what effective steps to take to raise their statistic.
An example of this would be a salesman who last week sold $25,000 worth of service. This week he sold $8,000, which would be represented by a steep decline on his graph. This situation is dangerous for him, so he would apply the steps for the condition of Danger as dictated by the statistical trend of his graph.
Another example would be an account rep who got 5 reaches last week and 7 this week. This represents a slight increase which is what should occur, so it represents normal operation. She would complete the steps for the condition of Normal as dictated by the statistical trend of her graph.
In light of this, it is expected that each staff member accurately graph their production and using the Conditions Formulas takes action each week to increase it. This doesn’t necessarily only mean to work harder, although that is a key element. It may also call for a handling of some area of difficulty they are continually running into, or more organization in order to streamline production.
Each production week ends on Friday at 2pm Pacific time, at which time all the staff log their production and update their graphs. At the end of your first week, you will be shown how to report your hours, condition, production numbers, number of sales, or anything else that relates to your pay to the finance department. From that point forward, it is your responsibility to submit this information every Friday after the production week has ended at 2pm Pacific time.
Since our week ends at 2pm on Friday, any production after 2pm on Friday would count on next week’s production log.
We get paid once per week, on Friday and are paid for the production reported for week 1 on the Friday of week 3 in order to give the finance department enough time to process all pay requests.