The Building Blocks Of High Performing Organisations

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*Key characteristics and capabilities of high-performing organizations
*High performing organisations focus on achieving results and outcomes
*A clear, well articulated, and compelling mission
*Strategic use of partnerships
*Focus on needs of clients and customers
*Strategic management of people
*Steps to foster development of high-performing organisations

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  • The Building Blocks Of High Performing Organisations

    1. 1. THE BUILDING BLOCKS OF HIGH-PERFORMING ORGANISATIONS Case Study, Concepts and Debatable Ideas Kenny Ong CNI Holdings Berhad www.myCNI.com.my www.OOBEY.com
    2. 2. Intro: CNI <ul><li>19 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, Export/Trading, eCommerce, F&B Retail </li></ul><ul><li>Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan </li></ul><ul><li>Staff force: ± 500 </li></ul><ul><li>Distributors: 200,000 </li></ul><ul><li>Products: Consumer Goods and Services </li></ul>www.myCNI.com.my www.OOBEY.com
    3. 3. How do you recognize a high-performing organization? www.myCNI.com.my www.OOBEY.com
    4. 4. <ul><li>“… in the past 18 months, we have heard that profit is more important than revenue, quality is more important that profit, people are more important than profit, customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our performance is inconsistent&quot; </li></ul>CEO, Anonymous www.myCNI.com.my www.OOBEY.com
    5. 5. High-Performance Companies? <ul><li>Business is good? </li></ul><ul><li>People are good? </li></ul><ul><li>Everyone is good? </li></ul><ul><li>Mission is good? </li></ul><ul><li>Be very careful of your company’s definition of high-performance before you embark on anything </li></ul>www.myCNI.com.my www.OOBEY.com
    6. 6. Simple, selfish and debatable definition: <ul><li>What is a High-Performing Organization? </li></ul><ul><li>An organization that consistently achieves what it was created to do or what it set out to do </li></ul>www.myCNI.com.my www.OOBEY.com
    7. 7. High-Performing Organizations – The Building Blocks www.myCNI.com.my www.OOBEY.com
    8. 8. The Building Blocks - starting from HR Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model www.myCNI.com.my www.OOBEY.com
    9. 9. The Building Blocks - starting from HR Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model The Hardware The Software www.myCNI.com.my www.OOBEY.com
    10. 10. Summary: Today’s presentation 1. Business Model 2. Strategy 3. Resources www.myCNI.com.my www.OOBEY.com
    11. 11. 1. Building Block #1: Get the right Business Model first www.myCNI.com.my www.OOBEY.com
    12. 12. <ul><li>How to fail without trying </li></ul>1. Wrong Business Model www.myCNI.com.my www.OOBEY.com
    13. 13. The Roadmap to Failure Fred Wiersema and Mike Treacy Performance Time www.myCNI.com.my www.OOBEY.com Clear Sailing Today’s performance Ad-hoc Tactics Denial & Defense Doom Projections Overdue Failure The Moment of Truth X Performance Freefall Tomorrow’s actual performance Downpresure of Unclear Strategy
    14. 14. Denial and Defense <ul><li>“ It’s not really good value our competitor is offering, because it doesn’t include a lot of our features.” - ABC vs Air Asia </li></ul><ul><li>“ It’s good value but not in our preferred customer market.” - ABC vs Toyota </li></ul><ul><li>“ Sure they’re hurting us, but with their unfair advantage, what can we do?” – ABC vs MILO </li></ul><ul><li>“ The rules we are playing by have always worked before” – AMEX vs VISA </li></ul>www.myCNI.com.my www.OOBEY.com
    15. 15. The Roadmap to Failure Fred Wiersema and Mike Treacy Performance Time www.myCNI.com.my www.OOBEY.com Clear Sailing Today’s performance Ad-hoc Tactics Denial & Defense Doom Projections Overdue Failure The Moment of Truth X Performance Freefall Tomorrow’s actual performance Downpresure of Unclear Strategy
    16. 16. Ad Hoc Tactics <ul><li>Selectively hold discounts to hold business that has started to go elsewhere </li></ul><ul><li>Introduce new promotions, terms, conditions, and offers to confuse and cloud the market </li></ul><ul><li>Beef up customer service by adding people to fix mess-ups and quicken delayed shipments </li></ul><ul><li>Delay capital investments and adjust accounting methods to portray quarterly financial results more favorably </li></ul><ul><li>Introduce “new and improved” products that are new in form, but not in substantive ways that are of consequence to purchasers </li></ul><ul><li>Introduce Balanced Scorecards and Performance Management Systems </li></ul>www.myCNI.com.my www.OOBEY.com
    17. 17. The Roadmap to Failure Fred Wiersema and Mike Treacy Performance Time www.myCNI.com.my www.OOBEY.com Clear Sailing Today’s performance Ad-hoc Tactics Denial & Defense Doom Projections Overdue Failure The Moment of Truth X Performance Freefall Tomorrow’s actual performance Downpresure of Unclear Strategy
    18. 18. <ul><li>“ What is the moral of the story?” </li></ul>www.myCNI.com.my www.OOBEY.com
    19. 19. What is the Business Model? USP Market Discipline Profit Model www.myCNI.com.my www.OOBEY.com
    20. 20. Intro: Market Discipline <ul><li>Mamak stall </li></ul>www.myCNI.com.my www.OOBEY.com
    21. 21. Intro: Market Discipline <ul><li>&quot;Exactly what I need&quot; </li></ul><ul><li>Customized products </li></ul><ul><li>Personalized communications </li></ul><ul><li>&quot;They're very responsive&quot; </li></ul><ul><li>Preferential service and flexibility </li></ul><ul><li>Recommends what I need </li></ul><ul><li>&quot;I'm very loyal to them&quot; </li></ul><ul><li>Helps us to be a success </li></ul>&quot;They are the most innovative&quot; &quot;Constantly renewing and creative&quot; &quot;Always on the leading edge&quot; &quot;A great deal!&quot; Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership &quot;A no-hassles firm&quot; Convenience and speed Reliable product and service Product Leadership Operational Excellence Customer Intimacy www.myCNI.com.my www.OOBEY.com
    22. 22. Intro: Market Discipline * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes Relationship Image www.myCNI.com.my www.OOBEY.com
    23. 23. Intro: Market Discipline * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes Price Quality Time Selection √ √ Smart Shopper Relationship Image Operational Excellence : Quality and selection in key categories with unbeatable prices www.myCNI.com.my www.OOBEY.com
    24. 24. Intro: Market Discipline * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes √ Brand Time Function √ √ Best Product Relationship Image Product Leadership: Unique products and services that push the standards www.myCNI.com.my www.OOBEY.com
    25. 25. Intro: Market Discipline * Treacy & Wiersema, The Discipline of Market Leaders , 1995 Product/Service Attributes √ √ √ √ Service Trusted Brand Relationship Image Customer Intimacy: Personal service tailored to produce results for customer and build long-term relationships Relations www.myCNI.com.my www.OOBEY.com
    26. 26. Strategy: Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    27. 27. Summary: Today’s presentation 1. Business Model 2. Strategy 3. Resources  Done www.myCNI.com.my www.OOBEY.com
    28. 28. 2. Building Block #2: Set the Strategies Dangers of BSC, KPIs and other evils sold by Consultants www.myCNI.com.my www.OOBEY.com
    29. 29. <ul><li>“… in the past 18 months, we have heard that profit is more important than revenue, quality is more important that profit, people are more important than profit, customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our performance is inconsistent&quot; </li></ul>CEO, Anonymous www.myCNI.com.my www.OOBEY.com
    30. 30. Before we start… <ul><li>In the old days of HR… </li></ul><ul><li>Average training hours per staff </li></ul><ul><li>% of staff attending training </li></ul><ul><li># of training programs </li></ul><ul><li>% of training programs conducted </li></ul><ul><li>Training needs analysis conducted </li></ul><ul><li>Competency models developed </li></ul><ul><li>Training budget as % of payroll </li></ul>What’s wrong with this picture? www.myCNI.com.my www.OOBEY.com
    31. 31. Before we start… <ul><li>Moral of the story… </li></ul><ul><li>Innovation: </li></ul><ul><ul><li>Business models </li></ul></ul><ul><ul><li>Products </li></ul></ul><ul><ul><li>Services </li></ul></ul><ul><li>Market Leadership </li></ul><ul><li>Competitive differentiation </li></ul>Get the picture? www.myCNI.com.my www.OOBEY.com
    32. 32. <ul><li>“ What is the moral of the story?” </li></ul>www.myCNI.com.my www.OOBEY.com
    33. 33. What is Strategic Planning? Strategic Planning Variables: Research Growth Risks Stakeholders Constraints SWOT Misc. Output: Plans Priorities KPIs www.myCNI.com.my www.OOBEY.com
    34. 34. Before we start… <ul><li>Which comes first? </li></ul><ul><li>Strategies -> KPI? </li></ul><ul><li>KPI -> Strategies? </li></ul>www.myCNI.com.my www.OOBEY.com
    35. 35. Focus: Corporate Alignment Financial “ To satisfy our stakeholders, what Financial objectives must we accomplish?” www.myCNI.com.my www.OOBEY.com Internal Process “ To satisfy our customers, in which internal business processes must we excel?&quot; Customer “ Who are our target customers? What is our value proposition?” Learning & Growth “ What capabilities and tools do our employees require to help them execute our strategy?
    36. 36. Linking BSC to Strategy Revenue Growth Base Retention Share Gain Positioning Adjacent Market New Business Operational Excellence Product Leadership Customer Intimacy Competencies Information Systems Motivation, empowerment, alignment Financial Learning & Growth Internal Process Customers Investment Strategy Productivity Market Value www.myCNI.com.my www.OOBEY.com
    37. 37. Focus: Corporate Alignment Financial Learning & Growth Internal Process Customers / Distributors www.myCNI.com.my www.OOBEY.com Revenue Growth Productivity Market Value Department Operations Supplier & Alliances External Involvement Target Markets Products/ Services Channel Strategies Human Resources Technology Information & Intelligence Systems & Processes
    38. 38. Example: Selection of KPIs for BSC <ul><li>Customer satisfaction </li></ul><ul><li>Customer loyalty </li></ul><ul><li>Market share </li></ul><ul><li>Customer complaints </li></ul><ul><li>Complaints resolved on first contact </li></ul><ul><li>Return rates </li></ul><ul><li>Response time per customer request </li></ul><ul><li>Price relative to competition </li></ul><ul><li>Total cost to customer </li></ul><ul><li>Average duration of customer relationship </li></ul><ul><li>Customers lost </li></ul><ul><li>Customer retention </li></ul><ul><li>Customer acquisition rates </li></ul><ul><li>Percentage of revenue form new customers </li></ul><ul><li>Number of customers </li></ul><ul><li>Annual sales per turnover </li></ul><ul><li>Win rate (sales closed/sales contact) </li></ul><ul><li>Customer visits to the company </li></ul><ul><li>Hours spent with customers </li></ul><ul><li>Marketing cost as a percentage of sales </li></ul><ul><li>Number of ads placed </li></ul><ul><li>Number of proposals made </li></ul><ul><li>Brand recognition </li></ul><ul><li>Response rate </li></ul><ul><li>Number of trade shows attended </li></ul><ul><li>Sales volume </li></ul><ul><li>Share of target customer spending </li></ul><ul><li>Sales per channel </li></ul><ul><li>Average customer size </li></ul><ul><li>Customers per employee </li></ul><ul><li>Customer service expense per customer </li></ul><ul><li>Customer profitability </li></ul><ul><li>Frequency (number of sales transactions) </li></ul>www.myCNI.com.my www.OOBEY.com
    39. 39. Example: 1 st Level BSC & KPIs Financial Learning & Growth Internal Process Customers / Distributors Profit after Tax. Revenue. Cash-to-cash cycle. Operating cash flow Customer Complaints. Customer Acquisition Rate. Product Availability. Product Quality & Service. Renewal Annual Subscription. Distributor Rank Achievement. No. of Active Distributor. No. DC/Regional Sales. Distributor with commission Customer Database Availability. Accuracy of Forecast Planning. Continuous Improvement. Response Time to Customer Needs. Perfect Order Fulfillment. Inventory Turnover. Number of Effective Sponsoring Program. On Time Delivery. No. of Effective Training. Number of Effective A&P % of staff evaluated on Core Competency Framework. % of staff with Career Development Plans. No. of training hours completed per staff. % of staff with access to strategic information. Q12 Index. % staff evaluated on Culture alignment www.myCNI.com.my www.OOBEY.com
    40. 40. Sample: Other 1 st Level KPIs across industries… www.myCNI.com.my www.OOBEY.com <ul><li>Single view of customers across supply chain </li></ul><ul><li>Zero-error order capture </li></ul><ul><li>Streamline opportunity to cash processes </li></ul><ul><li>Leverage investment in ERP and backoffice systems </li></ul><ul><li>Increase customer loyalty and preference </li></ul><ul><li>Maximize customer revenue </li></ul><ul><li>Improve service quality and efficiency </li></ul><ul><li>Capture and close sales opportunities </li></ul><ul><li>Personalized customer experience </li></ul><ul><li>Maximize share of wallet </li></ul><ul><li>Player/customer loyalty </li></ul><ul><li>Multichannel customer service </li></ul>Manufacturing Travel & Leisure Hospitality <ul><li>Anticipate and prevent churn despite compensation </li></ul><ul><li>Increase number of products per customer </li></ul><ul><li>Turn call center information opportunity to up-sell and cross-sell </li></ul><ul><li>Increase customer satisfaction and loyalty </li></ul><ul><li>Understand customer behavior related to customer conversion, acquisition, and retention </li></ul><ul><li>Single view of customer </li></ul><ul><li>Multichannel customer experience </li></ul><ul><li>Personalized customer experience </li></ul><ul><li>Maximize ARPU </li></ul><ul><li>Minimize Churn </li></ul><ul><li>Mutichannel customer service </li></ul>Telecommunications Retail Financial Services
    41. 41. Lagging and Leading KPIs Historical, Outcome, Results, 1 st Level, Usually Financial or tangible, Quarterly and Annually Current, Indicators, Drivers, 2 nd Level onwards, usually non-financial or intangible, Weekly, Monthly and Quarterly www.myCNI.com.my www.OOBEY.com Leading Lagging
    42. 42. Developing ‘Driver’ KPIs www.myCNI.com.my www.OOBEY.com Customer Retention % Lagging, 1 st Level Customer Satisfaction Index Leading, 2 nd Level On time delivery Time to market for new products TNA % Defect levels, warranty claims Leading, 3 rd Level onwards
    43. 43. What is the Objective? <ul><li>‘ Do-or-Die’ KPIs for CNI </li></ul><ul><li>Revenue </li></ul><ul><li>ARPU </li></ul><ul><li>Sponsoring </li></ul><ul><li>Retention </li></ul><ul><li>Commission Plan (BDP) </li></ul><ul><li>Product </li></ul><ul><li>Corporate Image </li></ul>www.myCNI.com.my www.OOBEY.com
    44. 44. Strategy: Disciplines, Priorities, and KPIs Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    45. 45. The McPlaybook* <ul><li>Make it easy to eat </li></ul><ul><li>50% drive-thru </li></ul><ul><li>Meals held in one hand </li></ul><ul><li>Make it easy to prepare </li></ul><ul><li>High Turnover </li></ul><ul><li>Tasks simple to learn & repeat </li></ul><ul><li>Make it quick </li></ul><ul><li>“ Fast Food” </li></ul><ul><li>Tests new products for Cooking Times </li></ul><ul><li>Make what customers want </li></ul><ul><li>Prowls market for new products </li></ul><ul><li>Monitored field tests </li></ul>*Adapted from: Businessweek , Februrary 5 th 2007 www.myCNI.com.my www.OOBEY.com
    46. 46. <ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li></ul><ul><li>Meet volatile customer needs </li></ul><ul><li>Fast concept-to- counter </li></ul><ul><li>Never satisfied - obsolete own and competitors' products </li></ul><ul><li>Learning organization </li></ul>Strategy: Disciplines, Priorities, and KPIs <ul><li>Operational Excellence </li></ul><ul><li>Competitive price </li></ul><ul><li>Error free, reliable </li></ul><ul><li>Fast (on demand) </li></ul><ul><li>Simple </li></ul><ul><li>Responsive </li></ul><ul><li>Consistent information for all </li></ul><ul><li>Transactional </li></ul><ul><li>'Once and Done' </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Management by Fact </li></ul><ul><li>Easy to do business with </li></ul><ul><li>Have it your way (customization) </li></ul><ul><li>Market segments of one </li></ul><ul><li>Proactive, flexible </li></ul><ul><li>Relationship and consultative selling </li></ul><ul><li>Cross selling </li></ul>www.myCNI.com.my www.OOBEY.com
    47. 47. <ul><li>Operational Excellence </li></ul><ul><ul><ul><li>Move know-how from top performing units to others </li></ul></ul></ul><ul><ul><ul><li>Benchmark against best in class </li></ul></ul></ul><ul><ul><ul><li>Ensure operations training for all employees </li></ul></ul></ul><ul><ul><ul><li>Use disciplines like TQM for continuous learning to reduce costs and improve quality </li></ul></ul></ul>Strategy: Value Disciplines www.myCNI.com.my www.OOBEY.com
    48. 48. Strategy: Value Disciplines <ul><li>Customer Intimacy </li></ul><ul><ul><ul><li>Capture knowledge about customers </li></ul></ul></ul><ul><ul><ul><li>Understand customer needs </li></ul></ul></ul><ul><ul><ul><li>Empower front line employees </li></ul></ul></ul><ul><ul><ul><li>Ensure that everyone knows the customer </li></ul></ul></ul><ul><ul><ul><li>Make company knowledge available to customers </li></ul></ul></ul>www.myCNI.com.my www.OOBEY.com
    49. 49. <ul><li>Product Leadership </li></ul><ul><ul><ul><li>Reduce time to market </li></ul></ul></ul><ul><ul><ul><li>Commercialize new products fast </li></ul></ul></ul><ul><ul><ul><li>Ensure that ideas flow </li></ul></ul></ul><ul><ul><ul><li>Reuse what other parts of the company have already learned </li></ul></ul></ul><ul><ul><ul><li>Ensure there are multiple sources of funding </li></ul></ul></ul>Strategy: Value Disciplines www.myCNI.com.my www.OOBEY.com
    50. 50. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    51. 51. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    52. 52. Sample KPIs for Each Discipline <ul><li>Operational Excellence </li></ul><ul><li>Price </li></ul><ul><li>Selection </li></ul><ul><li>Convenience </li></ul><ul><li>Zero Defects </li></ul><ul><li>Growth </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Customer Knowledge </li></ul><ul><li>Solutions Offered </li></ul><ul><li>Penetration </li></ul><ul><li>Customer Data </li></ul><ul><li>Customer-success focus </li></ul><ul><li>Product Leadership </li></ul><ul><li>Marketing </li></ul><ul><li>Functionality </li></ul><ul><li># of Successes </li></ul><ul><li># of Failures </li></ul><ul><li>Learn from key users </li></ul><ul><li>Interdisciplinary teams </li></ul><ul><li>Pipeline </li></ul>www.myCNI.com.my www.OOBEY.com
    53. 53. MBO – Sources of KRAs and KPIs, Targets <ul><li>Department Scorecard [E3], </li></ul><ul><li>Employee’s Job Description, </li></ul><ul><li>Department SOP, </li></ul><ul><li>Department Quality Objectives, </li></ul><ul><li>Corrective Action Requests (CAR), </li></ul><ul><li>Preventive Action Requests (PAR), or </li></ul><ul><li>Special Projects relevant to the employee. </li></ul>www.myCNI.com.my www.OOBEY.com
    54. 54. E3 – Department BSC Financial Perspective Budgeting www.myCNI.com.my www.OOBEY.com On Time Delivery Innovation Quality OPEX CAPEX Targets Measures Goals
    55. 55. Individual Performance www.myCNI.com.my www.OOBEY.com 2.0 Goals and Targets for Q1 6.0 Appraiser Overall Comments/ Feedback 5.0 Rating (Merit x Weight) 4.0 Merit* 3.0 Achievements and Efforts for Q1 1.0 Key Results Area (Max 6)
    56. 56. Summary: Today’s presentation 1. Business Model 2. Strategy 3. Resources  Done  Done www.myCNI.com.my www.OOBEY.com
    57. 57. 3. Building Block #3: Resource Management The art and science of allocating, aligning, and managing Resources to strategic plans www.myCNI.com.my www.OOBEY.com
    58. 58. Resource Management: Some thoughts… <ul><li>Two major roles of Resource Management: </li></ul><ul><li>Provide real-life CONSTRAINTS to strategic planning </li></ul><ul><li>Provide RESOURCES to realize strategic plans </li></ul>www.myCNI.com.my www.OOBEY.com
    59. 59. Resource Management: Some thoughts… <ul><li>Resource Management = Performance Management </li></ul><ul><li>Performance Management = Resource Management </li></ul>www.myCNI.com.my www.OOBEY.com
    60. 60. Managing Performance www.myCNI.com.my www.OOBEY.com www.myCNI.com.my www.OOBEY.com Month 1 Performance Planning Month 12 Performance Appraisal Month 2-11 ?
    61. 61. <ul><li>Beating a Dead Horse </li></ul>www.myCNI.com.my www.OOBEY.com
    62. 62. Most Common Desperate Performance Improvement methods <ul><li>Send for more Training </li></ul><ul><li>Enforce more Incentives (positive/negative) </li></ul>www.myCNI.com.my www.OOBEY.com
    63. 63. Mager and Pipe <ul><li>Analyzing Performance Discrepancies </li></ul>www.myCNI.com.my www.OOBEY.com
    64. 64. Alignment: 4-Wheels Model Culture Business Model Strategic Planning www.myCNI.com.my www.OOBEY.com Structure Person Leadership Resources
    65. 65. Alignment: Framework <ul><li>Focus point </li></ul><ul><li>Alignment </li></ul><ul><li>Quality </li></ul><ul><li>Innovation & Differentiation </li></ul><ul><li>Risk taking </li></ul><ul><li>Performance Management </li></ul><ul><li>Corporate obsession </li></ul><ul><li>Decision making </li></ul>Culture www.myCNI.com.my www.OOBEY.com
    66. 66. Alignment: Framework <ul><li>Org Structure </li></ul><ul><li>Job Design </li></ul><ul><li>C&B </li></ul><ul><li>Policies & procedures </li></ul><ul><li>Decision making </li></ul><ul><li>Job fit </li></ul><ul><li>Management Systems </li></ul><ul><li>BSC and KPIs </li></ul><ul><li>Decentralized & Empower </li></ul>www.myCNI.com.my www.OOBEY.com Structure
    67. 67. Strategy: Framework <ul><li>Role modeling </li></ul><ul><li>Vision/Mission/Philosophy </li></ul><ul><li>Leadership Style </li></ul><ul><li>Delegation & Empowerment </li></ul><ul><li>C&B, Promotions </li></ul><ul><li>Sense of Urgency </li></ul><ul><li>Speak regularly about Performance </li></ul>www.myCNI.com.my www.OOBEY.com Leadership
    68. 68. Strategy: Framework <ul><li>Recognition </li></ul><ul><li>Recruitment </li></ul><ul><li>Training </li></ul><ul><li>Profit sharing </li></ul><ul><li>Values </li></ul><ul><li>Motivation </li></ul><ul><li>Self Efficacy </li></ul><ul><li>Awareness </li></ul><ul><li>Useful Competencies </li></ul><ul><li>Career aspirations </li></ul><ul><li>Attribution (control) </li></ul>www.myCNI.com.my www.OOBEY.com Person
    69. 69. Strategy: Framework <ul><li>Enablers </li></ul><ul><li>Technology </li></ul><ul><li>Equipment </li></ul><ul><li>Materials </li></ul><ul><li>Human </li></ul><ul><li>Intellectual Property </li></ul><ul><li>Partners </li></ul><ul><li>Property </li></ul><ul><li>Funding </li></ul><ul><li>CAPEX </li></ul><ul><li>OPEX </li></ul>www.myCNI.com.my www.OOBEY.com Resources
    70. 70. Alignment: 4-Wheels Model Culture Business Model Strategic Planning www.myCNI.com.my www.OOBEY.com Structure Person Leadership Resources
    71. 71. <ul><li>Product Leadership </li></ul>Each Discipline Requires Different Priorities & Resources Operational Excellence Customer Intimacy Organization, jobs, skills Management systems Information and systems Culture, values, norms www.myCNI.com.my www.OOBEY.com
    72. 72. Each Discipline Requires Different Priorities & Resources <ul><li>Operational Excellence </li></ul><ul><li>Central authority, low level of empowerment </li></ul><ul><li>High skills at the core of the organization </li></ul><ul><li>Disciplined Teamwork </li></ul><ul><li>Process, product- driven </li></ul><ul><li>Conformance, 'one size fits all' mindset </li></ul><ul><li>Integrated, low cost transaction systems </li></ul><ul><li>The system is the process </li></ul><ul><li>Command and control </li></ul><ul><li>Quality management </li></ul>Organization, jobs, skills Management systems Information and systems Culture, values, norms www.myCNI.com.my www.OOBEY.com
    73. 73. <ul><li>Product Leadership </li></ul><ul><li>Ad hoc, organic and cellular </li></ul><ul><li>High skills abound in loose-knit structures </li></ul><ul><li>Concept, future-driven </li></ul><ul><li>Experimentation and 'out of the box' mindset </li></ul><ul><li>Person-to-person communications systems </li></ul><ul><li>Technologies enabling cooperation </li></ul><ul><li>Rewarding individuals' innovative capacity </li></ul><ul><li>Risk and exposure management </li></ul><ul><li>Product Life Cycle profitability </li></ul>Each Discipline Requires Different Priorities & Resources Organization, jobs, skills Management systems Information and systems Culture, values, norms www.myCNI.com.my www.OOBEY.com
    74. 74. Each Discipline Requires Different Priorities & Resources Organization, jobs, skills Management systems Information and systems Culture, values, norms <ul><li>Customer Intimacy </li></ul><ul><li>Empowerment close to point of customer contact </li></ul><ul><li>High skills in the field and front-line </li></ul><ul><li>Customer-driven </li></ul><ul><li>Variation and 'have it your way' mindset </li></ul><ul><li>Strong customer databases, linking internal and external information </li></ul><ul><li>Strong analytical tools </li></ul><ul><li>Customer equity measures like life time value </li></ul><ul><li>Satisfaction and share management </li></ul><ul><li>Focus on ‘Share of Wallet’ </li></ul>www.myCNI.com.my www.OOBEY.com
    75. 75. Incentive Problems <ul><li>Problem with Incentives in managing performance: </li></ul><ul><li>Most people are confused or unsure about compensation tools </li></ul><ul><li>Some people misuse compensation tools </li></ul>www.myCNI.com.my www.OOBEY.com
    76. 76. What to Pay? <ul><li>Pay for Service </li></ul><ul><li>Pay for Job </li></ul><ul><li>Pay for Performance </li></ul><ul><li>Pay for Competency </li></ul>www.myCNI.com.my www.OOBEY.com
    77. 77. Performance and Incentives <ul><li>Internal Equity </li></ul><ul><ul><li>Internal Job Rates </li></ul></ul><ul><ul><li>Performance differentials </li></ul></ul><ul><li>External Competitiveness </li></ul><ul><ul><li>External Job Rates - Benchmarking </li></ul></ul><ul><ul><li>Demand & Supply </li></ul></ul>www.myCNI.com.my www.OOBEY.com
    78. 78. What’s the Difference? <ul><li>Increment </li></ul><ul><li>Bonus </li></ul><ul><li>Promotion </li></ul>www.myCNI.com.my www.OOBEY.com
    79. 79. Compa Ratio Table <ul><li>Use this if your company: </li></ul><ul><li>Pays for Performance , and </li></ul><ul><li>Pays for Job rates </li></ul><ul><li>Def: </li></ul><ul><li>Mid-Point = Mid Point of Pay Grade </li></ul>Grade E2 Min RM2,000 MID RM2,500 Max RM3,000 www.myCNI.com.my www.OOBEY.com
    80. 80. Compa Ratio Table www.myCNI.com.my www.OOBEY.com 1 2 3 4 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    81. 81. Compa Ratio Table www.myCNI.com.my www.OOBEY.com 1 2 5% 3 4 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    82. 82. Compa Ratio Table www.myCNI.com.my www.OOBEY.com 0 1 2 2 3 4 5% 7 9 3 7 4 9 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    83. 83. Compa Ratio Table www.myCNI.com.my www.OOBEY.com 0 0 0 2 4 1 0 1 2 4 6 2 3 4 5% 7 9 3 3 5 7 9 12 4 7 8 9 12 15 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    84. 84. Dangers of Direct Incentives <ul><li>lessen internal motivation, </li></ul><ul><li>switch to mercenary mode, </li></ul><ul><li>do something and do not do something else, </li></ul><ul><li>bribe and fraud culture, </li></ul><ul><li>easier for competitors to recruit, </li></ul><ul><li>lessen teamwork & helpful culture, </li></ul><ul><li>less and less impact for same value, </li></ul><ul><li>mockery of base salary and employment contract, </li></ul><ul><li>rebellion from non-incentivised staff, </li></ul><ul><li>end up incentivising everyone for everything?, </li></ul>www.myCNI.com.my www.OOBEY.com
    85. 85. Other Performance Review processes <ul><li>Result Planning schedule inc. BSC, Budget </li></ul><ul><li>Quarterly Performance Appraisals </li></ul><ul><li>EMC – sales performance </li></ul><ul><li>QMS – non-sales performance </li></ul><ul><li>Divisional meetings </li></ul><ul><li>Annual Appraisals </li></ul><ul><li>Specialized KPI committees </li></ul><ul><li>CAR, PAR, SCAR KPI improvements </li></ul><ul><li>Internal Audit & MSD – process problems </li></ul><ul><li>HRM & TND – people problems </li></ul><ul><li>Supervisor Induction – PM training </li></ul><ul><li>Talent Management </li></ul>www.myCNI.com.my www.OOBEY.com
    86. 86. Employee Distinction? www.myCNI.com.my www.OOBEY.com 1 2 3 4 5 1 2 3 4 5 6 2 3 4 5% 6 7 3 4 5 6 7 8 4 5 6 7 8 9 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    87. 87. Employee Distinction? www.myCNI.com.my www.OOBEY.com 0 0 0 0 0 1 0 0 1 1 1 2 3 4 5% 7 9 3 3 5 9 12 18 4 5 8 12 15 20 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    88. 88. Employee Distinction www.myCNI.com.my www.OOBEY.com 0% 1.0 0 1 ≤ 1.3 0.9% 1.8 0.5 2 > 1.3 – 2.3 2.1% 2.8 0.75 3 > 2.3 – 3.3 4.2% 3.5 1.2 4 > 3.3 – 4.1 8.4% 4.2 2 5 > 4.1 Example Increment Example Rating Multiply Factor Rating Average Rating
    89. 89. Employee Distinction Group I (Talent Pool) Group II (  Potential) Group III (  Performance) Group IV (Counseling) 2 3 4 5 2 3 4 5 PERFORMANCE POTENTIAL <ul><li>Identify </li></ul>www.myCNI.com.my www.OOBEY.com
    90. 90. Curse of the Bell Curve ‘ A’ Staff ‘ B’ Staff ‘ D’ Staff ‘ E’ Staff ‘ C’ Staff www.myCNI.com.my www.OOBEY.com
    91. 91. More Problems…. <ul><li>cost of evaluation vs. gains of evaluation </li></ul><ul><li>defer achievements of a good year to next </li></ul><ul><li>barely achieve so that next target is not high </li></ul><ul><li>spread improvements over several years </li></ul><ul><li>value reducing actions to increase performance </li></ul><ul><li>most ratings are 4 or 5, new people are 3 </li></ul>www.myCNI.com.my www.OOBEY.com
    92. 92. Before I forget… <ul><li>Re-train Appraisers </li></ul><ul><li>Train new Appraisers </li></ul>www.myCNI.com.my www.OOBEY.com
    93. 93. Business Situation vs. HR Upturn Flat Downturn Fight Complacency Sharpen Edge Keep Momentum Conquer ‘ Change’ mgmt Reduce Fat Continuity Everyone Happy Innovation Acquire Profits Build momentum Sales Cash Flow Talent Mgmt Stack R&D Slowdown Hiring Early wins Top Talent focus Stack Sales Increase attrition www.myCNI.com.my www.OOBEY.com
    94. 94. <ul><li>The Business of business is Business, not Human Resource </li></ul>www.myCNI.com.my www.OOBEY.com
    95. 95. Thank You. soft copy of slides: www.totallyunrelatedrandomanddebatable.blogspot.com

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