Coaching to the Bottom Line
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Coaching to the Bottom Line Presentation Transcript

  • 1. FitzGerald Associates www.ManagementConsultants.com Tom Horne & Tom FitzGerald Coaching To The Bottom Line Mobilizing In the Face of Recession Oct. 13, 2008
  • 2. FitzGerald Associates www.ManagementConsultants.com Since 1976
    • Introductions
  • 3. FitzGerald Associates www.ManagementConsultants.com
    • Investors, Managers, Coaches, Consultants
    • Objectives
        • How to increase profits NOW
        • How to increase competitiveness NOW - and for the long term
  • 4. FitzGerald Associates www.ManagementConsultants.com
    • Our Objectives
    • Have Fun
    • Answer Lots of Questions
  • 5.  
  • 6.
    • Longitudinal studies by
    • The London School of Economics (LSE)
    • and McKinsey & Co.
    Study
  • 7.
    • A 20% Improvement
    • In 3 Critical Functions
    • Generates a 42% Increase
    • in Financial Returns
    • (High performers as well as low)
    • (Reverse also true )
    Results
  • 8.
    • Equivalent to
    • Increase of 5% in ROCE
    • 25% increase in workforce
    • Going from 10 plants to 17
    • Increasing capital investment by 70%
    Results
  • 9. FitzGerald Associates www.ManagementConsultants.com
    • The Concepts
    • Will to Compete
    • The Operating Dynamic
    • Manage MENT Vs Managers
    • Intrinsic Trajectory
    • The company as living entity
  • 10. Business Processes Management Systems Corporate Will Origins of Performance
  • 11.
    • Corporate Culture
    Corporate Will Will to Combat Corporate Drive Business Motivation Corporate Energy Corporate Psychology
  • 12.
    • Will to Compete
    • (AKA The Operating Dynamic)
    • Root Cause
    • Of All Business Performance
    • If strong, company succeeds
    • If weak, the company falters
    Corporate Will
  • 13.
    • That complex of organizational and human factors that underlie, cause and impel all corporate performance
    • (~100)
    • (Entirely within the control of management)
    Corporate Will
  • 14. Origins of Performance Cost of Change Business Processes Management Systems Corporate Will
  • 15. FitzGerald Associates www.ManagementConsultants.com
    • The ROI
    • In changing Corporate Will
    • Can be extraordinary
    • (The McKinsey/LSE Studies)
  • 16.
    • Why Transform Corporate Will
    • Ambition (the 40%)
    • Recession (the 40%)
    • On-boarding New sr. execs have an 18 month, 50% retention rate
    • $1M per failure
    • M&A (pre- or post-acquisition)
    • 70% failure rate
    • Only 30% of reengineering programs work placebo effect and luck
    • Mobilizing the company
    • Other
    FitzGerald Associates www.ManagementConsultants.com
  • 17.
    • Where the Results Come From
    • Systemic Efficiencies
    • New Tactics
    • New Strategies
    • Reengineering
    FitzGerald Associates www.ManagementConsultants.com
  • 18.
    • Corporate Will
    • 6 Critical Functions
    • 9 Generators
    FitzGerald Associates www.ManagementConsultants.com
  • 19.
    • A small change In three
    • Critical Functions
    • Generates a large change in
    • Financial Returns
    FitzGerald Associates www.ManagementConsultants.com
  • 20. FitzGerald Associates www.ManagementConsultants.com These Drivers Are entirely within The control of Management!
  • 21.
    • Critical Functions
    • are changed by changing the
    • Generators
    FitzGerald Associates www.ManagementConsultants.com
  • 22.
    • 1 PERFORMANCE MANAGEMENT
    The 6 Critical Functions 6 Innovation / Creativity 5 Customer Orientation 4 Profitable Growth Orientation 3 LEAN OPERATIONS 2 TALENT MANAGEMENT
  • 23. The 9 Generators
      • CORPORATE DECISIVENESS
      • ACKNOWLEDGEMENT OF WORK
      • ACCOUNTABILITY
      • CORPORATE ASSERTIVENESS, ENERGY
      • COMMITMENT OF MANAGE- MENT
      • OPENESS OF MANAGE- MENT
      • ADAPTABILITY
      • EFFECTIVENESS
      • COOPERATION
  • 24. FitzGerald Associates www.ManagementConsultants.com
    • The Transformation Process
    • Measure the 15 drivers (Functions and Generators) of performance and their subsidiary functions – a profile of the causes of performance
    • Determine the desired profile – item by item
    • Cause the individual managers to commit to specific action steps, with dates, to fix or improve key drivers and subs
    • Cause the individuals to execute the action steps
  • 25. FitzGerald Associates www.ManagementConsultants.com
    • Measurement
    • +
    • How we do it
  • 26. FitzGerald Associates www.ManagementConsultants.com Since 1976
    • Coding Convention
    • All line items can have a + or – value
    • A, B, C, D are positive descending
    • E, F, G are negative
  • 27.
    • Consolidated Statements of Operating Dynamic
    • Gamma, Inc.
    • Balance Sheet
    • 06/2008 Score % Level
    • % of Max (Min) A - G
    • PERFORMANCE MANAGEMENT
    • Vision of Future 21.429 D
    • Goal Definition 42.857 C
    • Action Plans 7.143 D
    • Plans Communicated (14.286) E
    • Understanding Personal Contribution 64.286 B
    • Decisions Implemented 7.143 D
    • Decisions Followed Up 7.143 D
    • Planning/Envisioning Capability 85.714 A
    • Appropriate KPI's Measured 0.000 D Performance Management Balance 19.841 D
    • TALENT MANAGEMENT
    • Attracting / Hiring 7.143 D
    • Leadership Development 35.714 C
    • Retention 71.429 B
    • Out-Placement 28.571 C
    • Leadership Skills 28.571 C
    • Individual Development Plans 0.000 D
    • Talent Management Balance 35.714 C
    • LEAN OPERATIONS
    • Competitive Information 50.000 C
    • Efficiency Improvement Efforts 42.857 C
    • Implementation of Improvements 50.000 C
    • Lean Operations Balance 47.024 C
    • PROFITABILITY/GROWTH
    • Growth (14.286) E
    • Profitable Growth Focus 28.571 C
    • Profitability / Growth Balance 20.000 D
    • CUSTOMER ORIENTATION
    • Customer Communication 21.429 D
    • Enhancement of Customer Service 57.143 B
    • Customer Experience 42.857 C
    • Knowledge of Customer Wants 42.857 C
    • Customer Orientation Balance 47.321 C
    • INNOVATION
    • Innovation Encouraged 35.714 C
    • Purposeful Innovation 21.429 D
    • Innovation Balance 28.571 C
    • Total Assets (Liabilities) 29.993 C
  • 28. Consolidated Statements of Operating Dynamic Gamma, Inc. Balance Sheet 06/2008 Score % Level PERFORMANCE MANAGEMENT % of Max (Min) A – G Vision of Future 21.429 D Goal Definition 42.857 C Action Plans 7.143 D Plans Communicated (14.286) E Understanding Personal Contribution 64.286 B Decisions Implemented 7.143 D Decisions Followed Up 7.143 D Planning/Envisioning Capability 85.714 A Appropriate KPI's Measured 0.000 D Performance Management Balance 19.841 D
  • 29.
    • Consolidated Statements of Operating Dynamic Gamma, Inc. Profit (Loss)
    • Score Level
    • % of Max (Min) A – G
    • CORPORATE DECISIVENESS  
    • Need for Consensus 21.429 D 
    • Move to Decision 0.000 D 
    • Move to Action 28.571 C 
    • Manager Confidence 71.429 B
    • Net Corporate Decisiveness 27.679 C
    • ACKNOWLEDGEMENT OF WORK
    •   Communication Re Work 21.429 D 
    • Quality of Evaluations 64.286 B 
    • Appreciation 50.000 C
    • Net Acknowledgement of Work 44.048 C
    • ACCOUNTABILITY  
    • Peer Accountability 35.714 C 
    • Frequency of Reporting 64.286 B 
    • Deadline Enforcement 21.429 D
    • Net Accountability 38.571 C
    • CORPORATE ASSERTIVENESS, ENERGY  
    • Manager Assertiveness 7.143 D 
    • Manager Enthusiasm 7.143 D 
    • Manager Competitiveness 57.143 B
    • Net Corporate Assertiveness, Energy 27.976 C
    • COMMITMENT OF MANAGEMENT  
    • Manager Commitment 64.286 B 
    • Peer Commitment 28.571 C
    • Net Commitment of Management 46.429 C
    • OPENESS OF MANAGEMENT  
    • Worker Trust 42.857 C 
    • Worker Empowerment 57.143 B
    • Net Openness of Management 50.000 C
    • ADAPTABILITY  
    • Speed of Adaptation 0.000 D 
    • Willingness to Change 35.714 C
    • Net Adaptability 17.857 D
    • EFFECTIVENESS  
    • Success Momentum 0.000 D 
    • Schedule Consistency 14.286 D 
    • Focus on Issues (28.571) F
    • Net Effectiveness ( 4.762) E
    • COOPERATION / INTERNAL COMPETITION
    •   Manager Cooperation 42.857 C 
    • Conflict Resolution 50.000 C
    • Net Cooperation / Internal Competition 47.321 C
    • Net Gain (Loss) 34.841 C
  • 30. Consolidated Statements of Operating Dynamic Gamma, Inc. Gain (Loss) 06/2008 Score % Level CORPORATE DECISIVENESS % of Max (Min) A – G Need for Consensus 21.429 D Move to Decision 0.000 D Move to Action 28.571 C Manager Confidence 71.429 B Net Corporate Decisiveness 27.679 C
  • 31.
    • Consolidated Statements of Operating Dynamic
    • Alpha Detector
    • Balance Sheet
    • 06/2008 Score % Level
    • % of Max (Min) A - G
    • PERFORMANCE MANAGEMENT
    • Vision of Future (33.336) F
    • Goal Definition (41.669) F
    • Action Plans (50.000) F
    • Plans Communicated (54.169) G
    • Understanding Personal Contribution 33.333 C
    • Decisions Implemented (20.838) E
    • Decisions Followed Up (62.500) G
    • Planning/Envisioning Capability 20.825 D
    • Appropriate KPI's Measured (62.500) G Performance Management Balance (35.928) F
    • TALENT MANAGEMENT
    • Attracting / Hiring (66.667) G
    • Leadership Development (58.338) G
    • Retention (41.667) F
    • Out-Placement (29.167) F
    • Leadership Skills (33.350) F
    • Individual Development Plans (50.000) F
    • Talent Management Balance (46.414) F
    • LEAN OPERATIONS
    • Competitive Information (25.000) E
    • Efficiency Improvement Efforts ( 4.170) E
    • Implementation of Improvements (16.662) E
    • Lean Operations Balance (13.542) E
    • PROFITABILITY/GROWTH
    • Growth (58.350) G
    • Profitable Growth Focus (20.838) E
    • Profitability / Growth Balance (28.340) F
    • CUSTOMER ORIENTATION
    • Customer Communication (37.500) F
    • Enhancement of Customer Service 4.167 D
    • Customer Experience (45.829) F
    • Knowledge of Customer Wants (25.000) E
    • Customer Orientation Balance (18.054) E
    • INNOVATION
    • Innovation Encouraged (20.833) E
    • Purposeful Innovation (37.500) F
    • Innovation Balance (29.167) F
    • Total Assets (Liabilities) (31.633) F
  • 32. FitzGerald Associates www.ManagementConsultants.com
    • The Discovery Process
    • Feet to the Fire
  • 33.
    • Consolidated Statements of Operating Dynamic Beta Food Company Gain (Loss)
    • Score Level
    • % of Max (Min) A – G
    • CORPORATE DECISIVENESS  
    • Need for Consensus 16.670 D  C Move to Decision 25.000 D  C
    • Move to Action 33.335 C  B
    • Manager Confidence 41.670 C B
    • Net Corporate Decisiveness 29.168 C B
    • ACKNOWLEDGEMENT OF WORK
    •   Communication Re Work 33.337 C  B
    • Quality of Evaluations 58.333 B  C
    • Appreciation 50.000 C B
    • Net Acknowledgement of Work 46.529 C B
    • ACCOUNTABILITY  
    • Peer Accountability 41.666 C  B
    • Frequency of Reporting 0.000 D  B
    • Deadline Enforcement 83.333 A A
    • Net Accountability 44.443 C B Net Gain (Loss) 40.093 C B
  • 34. FitzGerald Associates www.ManagementConsultants.com
    • The Discovery
    • Process
    • &
    • Action Plans
  • 35. FitzGerald Associates www.ManagementConsultants.com
    • PERFORMANCE MANAGEMENT
    • The most important of the six Critical Functions. It is a complex function, comprised of more
    • than twenty elements, ranging from strategic vision to action plan development to follow up.
    • In this survey we address nine. This Function is driven primarily by the Corporate
    • Decisiveness component (generator) of the Gain and Loss statement (G&L). It has a possible range of 90.000 +/-.
    • The Overall score for this Critical Function is 17.857 This indicates a weak positive pressure
    • on the business.
    • Level D 19.841%
    • CEO:
    • 6/25/08 . - Create with senior managers a “business blueprint”. Issue to all management ranks for discussion.
    • 7/24/08 - Rank order all immediate reports (and theirs) and review with board in special session. Make hire and outplace decisions and implement.
    • COO – Incompetence is tolerated too long.
    • 7/24/08 - Rank order all immediate reports.
    • CMO
    • 7/24/08 - Rank order all immediate reports.
    • CFO
    • 7/01/08 – review report against financials and financial model and reconsider forecasts. Review with CEO and team.
    • 7/24/08 - Rank order all immediate reports
  • 36. FitzGerald Associates www.ManagementConsultants.com
    • Vision of Future: As acknowledged and bought into by managers and supervisors. It has a possible range of 11.000 +/-. The score for this element is 2.357.
    • LEVEL D 21.429%
    • CEO
    • 7/15/08 With team, create a business blueprint and action steps and discuss in detail with subordinates. Obtain their input and make changes as appropriate.
  • 37.
    • Questions?
  • 38. FitzGerald Associates www.ManagementConsultants.com
    • Wrap Up
  • 39.
    • The 6 CFs constitute the Balance Sheet
    • The 9 Generators constitute the G&L
    • Negatives are where you find the motivation to change
    Wrap Up I
  • 40.
    • The Balance Sheet and P&L Show
    • The Trajectory of the Company
    • The root causes of performance
    • What needs to be changed
    • Where to get the greatest return on effort
    Wrap Up II
  • 41.
    • The Rewards
    • An improvement of 25% in three Critical Functions
    • results in a 40% increase in financial returns. (LSE/McKinsey)
    • (High Performers as well as troubled)
    • The cost is virtually ZERO
    • The FIRST YEAR ROI extraordinary
    Wrap Up III
  • 42.
    • What would it mean to you
    • If your company /client
    • Increased profits by only 10%?
    Question
  • 43.  
  • 44.
    • FitzGerald Associates
    • www.ManagementConsultants.com
    • Since 1976
  • 45.  
  • 46.  
  • 47.