The Keys to Performance ManagementHow to Build and Sustain a HighlySuccessful Organization
I will not waste one minute of your time…• I have a ton to cover and I will go pretty fast.• I am happy to answer any of your questions, offer adviceand recommend books at any time after this session.• John@JohnSpence.comThe slides are already posted at:www.SlideShare.net/johnspence
What does this mean to me?How can I use this idea?What can I do right away?
Cecil Van Tuyl“It is all about people,people, people. Youcan kid yourselfabout a lot of thingsin your business, butat the end of the dayit will always comedown to people.”
The level of highly satisfied and engagedEMPLOYEES in your business.The number one factor in increasingthe level of highly satisfied andengaged CUSTOMERS in yourbusiness is…1
Key Drivers of Customer Satisfaction and LoyaltyFinancialPerformanceQuality P&S&Customer RelationshipEmployeeSatisfactionEmpowerment High StandardsLong-termOrientationEnthusiasm,Commitment,RespectTraining &DevelopmentFairCompensationCR= 104.12% increase in profitsCR= .404CR=.334CR=.277CR=.275CR=.249CR=.280CoachingCR=.285CR=.371CR=.365CR=.191CR=.247TolerateNothingLessFrom: Practice What You Preach by MaisterGlobal study:16 countries529 companies15,589 respondents1WorkshopPage 2
Actively disengaged employeescan reduce revenues by up to22%, while highly satisfied andengaged employees can driveprofits up by as much as…189%Culture = Cash
Key attributes of winning cultures• High aspirations and a desire to win• Extreme customer focus• A “think like owners” attitude• Bias to action• Individuals who team• Passion and energyBain & Company1 - 103
HUGE data set…• 600,000 employees at 500 companies.• 6,800 senior executives.• 900 books and academic articles.• 30 CEOs of Fortune 500.From: Beyond Performance by Keller and Price
Nine Elements of Organizational HealthFrom: Beyond Performance by Keller and Price
What do engaged employees look like?1. They give more discretionary effort.2. They consistently exceed expectations.3. They take more responsibility and initiative.4. They receive better customer service ratings.5. They offer more ideas for improvement.6. They promote and model teamwork.7. They volunteer more for extra assignments.8. They anticipate and adapt better to change.9. They persist at difficult work over time.10. They speak well of the organization.1 - 103What Do Engaged Employees Look Like?
E + E + E SBA PMAEEngagedEnabledEnergizedAttachment to thecompany andwillingness to giveextra effort.A work environmentthat supportsproductivity andperformance.Individual physical,social and emotionalwell-being at work.“All In” by Gostick and Elton4
Impact of the Three E’s• The research shows the cumulative effect of thethree Es at work. The engaged, enabled, andenergized cultures saw average annual operatingmargins of 27.4 percent during a period thatincluded a recession/economic downturn—twiceas high as organizations with just high employeeengagement and three times higher than thosewith low engagement.
1,300,000 interviews: Basic 4 + 1From: The Orange Revolution by Gostick and EltonThe Fundamental 4+141 - 10
The Six Universal Drivers of Engagement1. Caring, competent, and engaging leaders.2. Effective managers who keep employeesinformed, aligned and engaged.3. Effective teamwork at ALL levels.4. Job enrichment and professional growth.5. Valuing employee contributions.6. Concern for employee well being.1 - 105
How do you findthese people?In addition to ALL ofthe normal avenues…
Talent as a Strategic Objective• Do you have a list of 20 wildly talented people you have lunchwith every 60 days?• Are you the very first person that all of your associates call ifthey meet someone of towering competence?• Do you hang out with cool people and go to places where talentis abundant?• Do you have your sights set on another dozen super talentedpeople you’d like to poach from your competitors or otherindustries?• Are you reading, studying and learning everything you can aboutbest practices and benchmarking for finding and developingtalent?• Do you treat talent acquisition, development and maintenanceas THE most important aspect of your job?
Remember:• Talent Rules!!!!• You need to FIND talent• You need to GROW talent• You need to BE talent
Zappos Sales in 1998 = 0 Sales in 2008 = 1.2 BillionLooking back, a big reason we hit our goal earlywas that we decided to invest our time, moneyand resources into three key areas: customerservice (which would build our brand and drive word-of-mouth), culture (which would lead to the formation ofour core values), and employee training anddevelopment (which would eventually lead to thecreation of our Pipeline Team).Even today, our core belief is that our Brand,our Culture and our Pipeline are the onlycompetitive advantages we will have in the longrun. Everything else can and will be copied.
The Rules for Optimum Talent Management1. Start with Science.2. Eliminate Complexity3. Add New Value4. Create Transparency and Accountability
Stanford Talent Management ModelEstablish and Maintain AlignmentJob DescriptionsPerformance ManagementCompetency ModelsOn-boardingBuild on Organizational Strengths and Grow TalentIndividual Development PlansCoaching & MentoringLeadership Development ProgramsAnticipate & Plan for the FutureStaff Portfolio ManagementSuccession PlanningStrategic Planning
They are NOT all the same!Invest heavily inyour top “A”players
Use All of the Standard Talent Performance Tools• 360-degree feedback• Twice-yearly Formal Talent Review• Succession Planning• High Potentials Program• Engagement Surveys• Competency Modeling• Mentoring Program
To create a highly accountable culture… 1-10• Communicate clearly and relentlessly.• Set agreed-upon and highly specific metrics.• Focus on results – not personalities.• Force collaboration – teamwork is mandatorynot optional.• Question all activities that don’t contribute tothe company’s overall strategic goals.• Make sure that everyone in the organization –from top to bottom – focuses onaccountability. WS 5
TEC / Vistage / EO / YPO = 2,000 CEOs1. Lack of a well-communicatedvision and strategy for growth.2. Lack of courageouscommunication.3. Tolerating mediocrity.4. Lack of accountability anddisciplined execution.
1. There is a real void of clear,direct and understandablecommunication about thedirection of the organization.This results in people doingwhat they want to do, notwhat they need to do andbreeds a climate of not caringabout the customers/clientsor their colleagues.NITB
2. Dysfunctional behavior is accepted orignored and worse yet, colleagues,management reward it.NITB
3. There is no definition of what isacceptable and what is unacceptableperformanceExpectations x 3NITB
4. Management does not promote andconfirm that accountability is a key principlewithin the company.NITB
5. Good people may leavebecause of frustration thattheir employer is ignoringthe issue and is notproactive in seeking andimplementing a solution tochange the environment.NITB
Clarify Expectations Workshop Page 6 & 7Side 1- What you will focus on inthe business as yourmeasure of success.-Your expectations for everyemployee.Side 2-Your core leadershipvalues.-What your employees canexpect from you.WS 6 & 7
If you have any questions at all please do not hesitate to send a note or call.My email address is: firstname.lastname@example.orgMy twitter address is: @awesomelysimple*** Please connect with me on LinkedIn ***Also, you might find value in the ideas I share in my blog. You can sign up for it at:www.blog.johnspence.comMy “Top 50 Best Business Books” list and a link to my free business training channelon Vimeo are both on the front page of my website: www.johnspence.comLastly, these slides have already been uploaded to:www.slideshare.net/johnspence