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Pulse Survey Action Plan
Hertz France
September 2008


Think Global, Act Local




                              Transforming Hertz Europe’s largest Airport hub
                           to better serve the internal customer – CDG employees




Think Local, Act Global
Making sense of 24 months of Projects Alpha and Genesis, numerous change initiatives, a dozen webcasts strategic communication
and then cascading the intended message in order that strategy be executed by employee eyes that look into the eyes of our
customers.
HERTZ, France Pulse Survey Action Plan
                              Septembre, 2008


                                                                Actual
“Think Global,                                                 European
  act Local”                                                  Organization

                                                             September 2008




                                                          Recommended
 “Think Local,                                              French &
  act Global”                                               European
                                                          Organization
                                                           With Global
                                                            Customer
                                                           Experience
                                                            Program
                                                          January 2009
Table of contents:

Executive Summary –What Hertz France intends to accomplish and why.

1. How Hertz France plans to realize the objective of transforming Charles De Gaulle Airport into an
  employer of choice.

2. The balanced scorecard concept

3. Making strategy everyone’s business at Charles De Gaulle Airport – “a 10 Step Process & and a
  “Change Management Toolkit”

4. Pulse Action plan ingredients.

5. What are the GPEC and the French law that obligate French companies to negotiate an “Accord
  GPEC”.

6. Hertz France’s current situation: “The State of the Union”.

7. What we need to measure and why we need to measure it.

8. The Performance Management Process cycle – how Hertz France intends to link CDG Airport
employee performance to local, regional, national and European Balanced Scorecard initiatives and
measures.
Executive Summary




Hertz France intends to transform Hertz Europe’s largest airport hub into an “Employer of Choice,” using innovation to fix
the basics at the same time as establishing Hertz France as “an employer of choice”. The first step towards this objective
will be to provide all Charles De Gaulle Airport employees –“those employees that have chosen Hertz France as their
employer” - with the same tools, training, development and career opportunities that the Corporation intends to implement
for it’s “future employees” worldwide . All local, regional and national activities and contributions will orchestrated to allow
Hertz France employees to align their daily activities in order to contribute to the pursuit of the European & Corporate
Balanced Scorecard objective of becoming an “employer of choice”.
Hertz France will accomplish this objective via the Pulse Survey action plan detailed in this presentation. This action plan intends to
address and transform low Pulse Survey scores (employee satisfaction) & lagging NPS scores (customer satisfaction) at the same
time as significantly reducing employee turnover and establishing CDG Airport, as the benchmark, for both Pulse Survey and NPS
scores in France.




Our objective is to make Hertz Europe’s biggest airport hub, an operation that stands out from the pack; an Airport that sets the
standards for everyone else. In so doing we will establish Hertz France as the benchmark for internal and external customer service in
the French car rental industry. We intend to accomplish this challenge by analyzing employee dissatisfaction starting with those
employees whose “eyes look into the eyes of our customers” – we’ll then work backwards up through the internal customer
hierarchy all the way to the Hertz France General Manager and his executive team. This process will allow Hertz France to involve and
mobilize all CDG Airport personnel (vehicle preparateurs, mechanics, CSRs, SM’s) and all the supporting and administrative staff
based at the “base arrière”. The Airport Manager and the Regional Director, responsible for CDG, will assure the link for the local to
regional aspect of our study. The regional Director, will in turn, provide the link from the regional to country level. The regional
Director will assure project coordination with the Hertz France Operations Director, based at Trappes, whose role will be to assure that
all support services – sales &, marketing, HR, quality, safety, finance, fleet, distribution, security, assurances, internal communication
IT support, business planning and, franchisees , ,- are totally aligned with, and whose actions contribute to, this process. In turn, the
Hertz France HR Business Partner will assure the communication and alignment of all outsourced Hertz France Service Level
Agreements, –training and development, facilities, purchasing, and support services. Equally, the Hertz France HIP Coordinator,
based at CDG, will guide us in our work and provide us with the information necessary to integrate and assure the necessary
coordination with the Talent Management COE, regarding the tools and training necessary to assure the long term success of all
implemented Hertz Improvement Programs.

European Pulse Survey Action Plan implemented following the results of the first European Pulse Survey of March 2007




We will correlate our results with Hertz France pulse survey results (both past and present) and reanalyze actions taken versus
progress attained following prior pulse survey actions. This step will enable us to prioritize our actions with regard to cost, impact and
desired result. This analysis will also provide Hertz France with a very comprehensive data base, indicating the problem areas we
need to action, what we need to change and why. Improving these identified problems permits a local, regional and national focus that
permits us to all Hertz France personnel to actively participate in the success of “their” Pulse Survey Action Plan. This national “team”
effort will provide the different information needed to orchestrate and implement of our Action Plan at CDG Airport as we work together
to leverage our employee Pulse Survey scores to “best in class” benchmarks.
We will then analyze this information internally with the various Centers of Expertise and their respective domain experts, in order to
prioritize actions and build “a common action plan”. The final plan will then be presented to the Hertz France General Manager and
executive committee for sponsorship, kick-off and execution. We will execute this action plan hand in hand with the different Centers
of Expertise that have been created to support us, and we will use the various tools that the Hertz Corporation has provided us.
Additionally Hertz France will use the Corporate Values supported by the Leadership and Competency models to guide and lead us in
our actions.
We will implement our action plan under the guidance of both the Talent Management Center of Expertise and the European HR
Business Partner team – both responsible for transforming Hertz Europe and the Corporation into an “Employer of Choice”. Our
objective here is to implement and adapt down to the operational level, “to those employees whose eyes look into our customer’s
eyes”, the various recruitment methods and tools, new hire induction materials, training & development programs and Learning
Management Systems that the Talent Management COE has been building for us, and is currently in the process of implementing
world-wide. If you can make it work t at CDG Airport you can implement the result in any other Hertz location in France, and “with
relative ease”. Our long term objective will be to successfully reproduce the resulting structures and identified best practices in all Hertz
France locations and for all of our employees.


The Hertz France Quality Director, responsible for Driving Hertz France’s Excellence will also play a key role in the successful
execution of our plan.
The projects that the Talent Management COE has been coordinating across the corporate world represent for Hertz France, the
cornerstones upon which we will successfully build the foundations necessary to execute our Pulse Survey action plan. We will also
build and establish in synergy, the KPI’s necessary to insure continuous progress on the various employee satisfaction improvement
measures that Hertz France has targeted. We will measure the success of our efforts by our capacity to align the execution of our
“action plan” on a local, regional, country, European and Corporate level. In doing so we will build, hand in hand, with the various
Centers of Expertise at our service, a structure that allows all Hertz France CDG Airport employees to have access to, and benefit
from, all Corporate, European and French employee satisfaction initiatives – of which individual training and development, career
planning and Performance Management programs are of greatest priority.
As we implement our Pulse Survey Action Plan we will find new and innovative ways to delight all of our customers…and always do
the basics much better than our competitors. This action plan is company wide and will be implemented in all Hertz Agencies, by
adapting and cascading throughout France, the results attained, the training and development methods and structures implemented
and the best practices initiated at CDG Airport,




This action plan concerns all Hertz France customers (internal and external) and is intended to be innovative, inspiring and engaging
for all French personnel. The Pulse Survey Action Plan is targeted at building a culture that provides a unique and differentiating
experience for both internal and external customers across France - at the same time as establishing Hertz France as an industry
benchmark for innovation, training & development, and most importantly for both “employee & customer satisfaction”.
With the various tools, Vision, Mission and Value toolkits, European and Corporate strategic architectures, Hoschin strategy maps,
Business Operating Systems, Mark Frissora and Michel Taride Webcast communications, Pulse survey data, strategic initiative
enablers, Improvement Processes and PMED programs provided to us by Hertz Corporate, the Université des Métiers, Hertz France
has created for all French managers a “Change Management Toolkit”.




This “Change Management Toolkit” has been engineered and constructed as a direct result of four, different day-long meetings, held
with employee elected French National Union Representatives. The objective, targeted by these meetings, was to provide a straight
forward and comprehensible explanation to our front line employee representatives, of the mechanics, initiatives and objectives of both
Hertz Corporate and European strategies. This communication, detailing the company’s strategy, is now a required process in French
labor law. The law has been implemented to mandate all French international and multi-national companies, to provide the necessary
structures to accompany the evolution and development of their workforces. This process places the responsibility on the employer to
assure the “employability” of French employees should they suffer job loss that is a direct result of a companies long term strategy or
reorganization. Hertz France intends to use to our advantage, the constructive relationship that we have built with our employee
elected National Union Representatives. This will enable both parties, to work hand in hand to achieve this objective together -
involving all Hertz France employees in the process

Another objective of the “Change Management Toolkit” is to provide all Hertz France managers , at the very least, the same
constructive and comprehensive understanding of Hertz Strategic architecture, as that given to our National Union Representatives..
In turn, managers will be expected to develop the competencies and skills that permit them to use this toolkit as an “innovative” means
to explain, bring to life and involve all team members in the execution of Hertz France, European and Corporate strategy locally,
regionally and nationally and in real-time.




The “Change Management Toolkit” is designed to evolve as corporate strategy evolves and changes - a never ending process of
taking the best of today to build the desired state of tomorrow. Hertz France intends to evolve thietoolkit and to communicate strategic
alignment measures to our management on a quarterly basis - in synergy with European and Corporate Webcasts and the various
messages diffused.


Hertz France’s internal communication has thus entered the information age, and by using today’s available technology, Corporate,
European and local strategy will be communicated, measured and adjusted in real time, everywhere and by everyone in Hertz
Agencies, Regional Offices and Head Quarters across France. All Hertz France employees will know exactly what is expected of them,
the means by which this expectation is to be achieved, as well as understand how they are measured and rewarded in terms of
objectives set versus performance attained.


The PMED initiative implemented world wide by the Talent Management COE in January 2008, has now been cascaded down to
middle management worldwide. The next step of the cascade process is planned in Q4 2008, and involves the station manager level
being integrated into the PMED process.




The PMED process will assure that all hertz France employees have a concrete understanding of the impact of how individual
employee actions on the local and regional level, impact the contribution that France Hertz makes on both the European and
Corporate stage – a virtual stage upon which Hertz stage managers around the world, orchestrate the cascade of Corporate strategy
to various, Hertz business divisions worldwide.
The “Change management” toolkit” integrates Corporate Vision, Mission & Values with the different elements of Corporate and
European strategy that Hertz France has succeeded in cascading down to the front-line. We have used the balanced scorecard
concept, introduced by Mark Frissora during his December 2006 inaugural employee webcast, as a means to vehicle our various
message and communications regarding our strategy. The BSC concept provides us with a structure to mobilize and align all
employee activities, and is used to provide Hertz France Managers with the methodology, information systems, and communication
structures, necessary to support continuous employee training and development measures. We will use the balance scorecard as a
social tool that generates synergy at all levels of our organization, as Hertz managers across France align local initiatives with both
individual and collective key performance indicators.

The BSC Concept permits Hertz France employees to successfully link French initiatives into the objectives detailed in the Hertz
Europe Balanced Scorecard. Our objective is to build a virtual bridge that aligns Hertz France employee’s daily objectives and
activities with the Hertz Europe Vision of tomorrow. It is via this process, in synergy with our various COE domain experts and HR
Business Partners, that Hertz France will transform CDG Airport into an “Employer of Choice”. We intend to achieve concrete results,
in-real-time, by translating Hertz’s Vision & Mission into goals and measures that are then cascaded and linked throughout our
organization by means of the balanced scorecard and our Hertz France strategy map.

Mark Frissora and his executive team have elaborated the Corporate Strategic Architecture around the balanced scorecard concept
and their definition of “focused performance”. The PMED process has been implemented to guide and develop all mangers in the
alignment and consequent implementation, cascade and achievement of both corporate and European strategy, at all levels of the
organization.
To focus on improvement, business concepts like strategy, value adding processes and performance measures must be connected
but remain flexible for custom design –“ focused performance is an approach that accomplishes this”.




General Human resource management and the accompanying soft competency skills required by managers, worldwide, are detailed
and brought to life by our corporate values. These values guide employee behaviors as they adapt to and implement the new Hertz
Leadership model, which in turn is supported by the Hertz Competency model. The PMED program, in turn, aligns and measures
employee performance against desired results, as strategy is cascaded down from the executive level down to those employees
whose eyes look into the eyes of our customer. In turn the results of the strategy need to be cascaded back up through the
organization in order to be constantly monitored, fine-tuned, as well as measured against Corporate desired results. Hoschin planning
and the PMED process provide us with the structures needed to accomplish this. Hertz France’s “Change Management Toolkit” is the
result of cascading strategy back up through the organization to the local executive level.


Hertz France has also created, in partnership with our National Union Representatives, a ten step process that uses the BSC as a tool
for creating a climate and common focus for change activities, at the same time as allowing Management to realign local objectives
with European strategy.




         .
The slide above illustrates the ten step process defined to explain how corporate and European strategies come together. As stated
the balanced scorecard is used as a “concept” to cascade downwards and link Corporate & European objectives into national, regional
and local organizations. The Balanced Scorecard provides the cog that makes all the wheels of the strategy turn. In reality, it is no
more than a carefully selected set of measures derived from Hertz France’s strategy and driven by European and Corporate strategic
initiatives.


The measures selected for the scorecard represent a tool for Hertz France leaders and managers to use in communicating to our
employees and external stakeholders (outsourced Service Partners), the service agreement levels, outcomes and performance
driver’s, key to Hertz France achieving both our mission and strategic objectives. The final result of these actions will represent Hertz
France’s contribute to the construction of the Corporate Vision.


Hertz France intends to use this ten step process to communicate the strategy to those whose role it is to execute strategy – “every
employee at every level of the company”. This comprehensive, yet straight forward, step-by-step communication approach is
designed to create awareness, for all employees, of the strategic “big picture” (vision) as well as the projects and initiatives that have to
be implemented, (mission) in order to build and attain this desired state – Our Vision. This process allows us to align goals, incentives
and resources on the local, regional and national levels as Hertz France aligns our country level actions with European balanced
scorecard objectives and corporate strategy. Hertz France will make sure that strategy becomes the job of every employee and that
every employee has access to the training and development necessary to learn their lines and bring to life Hertz’s’ exemplary service
standards, as they perform their role in the “World Wide Hertz Corporate Show”.
As the various Genesis reengineering work processes produce their desired fruit, Hertz France will use the Université des Métiers, to
create knowledge sharing networks; networks constructed with the objective of assisting employees navigate and understand the
strategy by training themselves and preparing themselves to understand, execute and actively participate in the continuous
improvement processes that are required. This process will enable Hertz France to unlock, detect, develop, use and maximize hidden
employee talents.
In June 2008, Hertz Corporation Senior Management from around the world, met for their now annual convention, in Las Vegas.
Following the work sessions that took place, a presentation, entitled “Speeding Our Transformation – A call to action”,
was sent to all participants. As illustrated below, the last slide of this presentation communicates to Hertz Corporation Management
Worldwide, that “Leadership is the key and that participants are Hertz leaders; leaders who should

passionately deploy the tools that they have been given”.




Hertz France has used the “Change Management Toolkit” to further develop this message and to present in detail the tools given to us
by our European and Corporate Executives.


In terms of employee satisfaction, which falls under the balanced scorecard perspective of “Learning and Growth”, Hertz France has
linked into the European and Corporate (Learning and Growth perspective -through the Hoschin planning process), the objective of
successfully negotiating and signing an “Accord GPEC” with our National Union Representatives (social partners). This action directly
contributes to the European and Corporate BSC objective that Hertz become an “Employer of Choice”. The GPEC and its obligations
are detailed later in the presentation, and in French in Appendix I.
This gives Hertz France the following scenario; Corporate and European strategy to be implemented on the local level via an “Accord
GPEC”. The implementation of the “accord”, once signed, will be accompanied by the PMED program providing Hertz France
management, from top down, with a system to connect measure and appraise individual employee objectives and the role they play
collectively in the realization of strategy on local, regional and country levels.




Originally built to successfully integrate and “bring to life” new training laws for all employees, the “University des Métiers” provides
Hertz France with a “foundation stone” which furnishes the solid base upon which we cascade and link Hertz corporate and European
strategic initiatives down to those Hertz France frontline employees, “whose eyes look into the eyes of our customers”.
The last and most strategic corporate ingredient that we need to integrate in to our Pulse Survey Action Plan is that of the Global
Customer Experience Program. The success of this program will be tightly linked to the successful implementation of the New Hertz
Leadership model and the Competency model that supports it. These models provide the bedrock upon which the Hertz Corporation
intends to conduct a cultural transformation that aligns all Hertz employee’s eyes worldwide, in order to better serve and support, those
Hertz employees whose eyes look into the eyes of our customers. These two models form the foundations for the different changes in
terms of human management that will be implemented and linked into the corporate values. The resulting behaviors will permit Hertz
France to align and target training and development investments with the building of the skills and competencies essential to the
pursuit of our objective of becoming an “Employer of Choice” and French rental car industry’s reference for Employee and Customer
Satisfaction.
1. How Hertz France plans to realize the objective of transforming CDG Airport into an employer of choice:

During the period 2004–2005, roughly a dozen managers from Hertz France participated in the European Performance Management
Program. As participants were instructed in this training class, managing performance, our own and others, is a key activity in
developing an organizational culture and in achieving the strategic business objectives that are being requested in today’s difficult
economic environment. As part of Hertz’s strategy of continuous improvement, the Hertz Corporation is asking Hertz France
Management to create a culture where we apply the appropriate skills and behaviors for managing and maximizing the performance of
others using Corporate Values as a guide.




The European Performance Management program was built with this objective in mind. This program was aimed at all Hertz
management levels and was designed to help managers Europe-wide, develop these skills and behaviors in their respective
management populations, adapting them culturally, and cascading them downwards to local management. The initial implementation
phase of this program focused on senior Hertz European management. To date, almost 200 of Hertz Europe’s Senior & Middle
Managers have completed this course. In 2006, all European training managers participated in a train-the-trainer course in view to
assisting local upper management implement and cascade these performance measures and values down through the organization, at
the same time as developing a new Hertz European management culture.
The Performance management program has given participating managers the tools that they need to:

      Ensure that the organization, and its individual components, meets its stated objectives by successfully managing the
       performance of its people.
      Provide support to managers in the increasingly complex role of managing people and their performance.
      Create a consistent standard and style of managing people and their performance across Europe and to share practice and
       experience in different contexts.

Participating European managers have also acquired:

      An understanding of how an integrated performance management system contributes to the success of the organization.
      An ability to consider the skills and knowledge required for an integrated performance management system.
      Have received feedback on their own style of managing performance.
      Have identified areas of strength and areas of development.
      An understanding the phases of performance management.
      Have considered their Myers Briggs Type Indicator (MBTI) and considered the implication of their personal
       preferences on how they manage performance.
      Have developed a positive and constructive understanding of differences between people and appreciated the importance of
       valuing and working with different approaches and perspectives.
      The ability to SMART objectives.
      Have understood and have practiced the skills of coaching using the GROW model.
      The ability to recognize the key principles of motivation and identify different sets of factors which tend to motivate and de-
       motivate different employees.
      An understanding of the principles of delegation.
      An experience relating to a variety of different learning methods
      An understanding of the importance of conducting effective appraisals and have practiced this skill.
The University des Métiers has been using the MBTI tool since 2005, to improve teamwork, communication, conflict management
and self-understanding. The questionnaire has been completed by more than 100 Hertz France HQ personnel, including all
Executive Committee members, the entire Finance, HR, IT and Fleet teams, various managers & supervisors as well as numerous
employees. The information furnished by the MBTI results, has allowed the University des Métiers to work on individual
development programs, as well as improving internal communication and increasing inter-service team work. Hertz France
intends to use this powerful, simple and non judgmental tool to provide the “human understanding” that will become the backbone
of our successful change management strategy; - important because change today is an eternal process that workforces worldwide
must constantly adapt to and evolve with. Hertz France will provide all employees with a framework to better understand human
behavior in the workplace –better understanding the behavior of others by first understanding ones own natural and inborn
preferences.
The MBTI uses a common and simple language that provides the foundation upon which all employees both collectively and at the
same time as developing future employee potential.




This understanding will rapidly become a strategic key competence for Hertz France Managers; a skill developed by managers to
align workforce skills and talents collectively, by managing individual training and development plans This methodology establishes
an important and individual relationship between the employee and the employer that he or she has chosen. This relationship
needs to be established during new hire induction for all future employees of an employer of choice.
2. The balanced scorecard concept
The balanced scorecard concept was first introduced to all Hertz European Station Managers in 2004-05 when European Training and
Development launched a “Managing Financial Performance” training program. This training program was completed by all European
Regional and Station Mangers and has provided a consistent approach to financial measurement across Europe




The training program has also provided local managers with strategic answers to such reoccurring questions as

      How do we decide what we should be doing?
      How do we balance our actions and allocate our resources over time?
      How can we confirm that our necessary actions are actually being taken?
      How do we determine if those actions are materializing into our expected improved results?
The balanced scorecard represents a carefully selected set of measures derived from an organization’s strategy.




Hertz France understands that the real concept of performance management is associated with an approach to creating a shared
vision of purpose and aims of the organization, helping each individual employee understand and recognize their part in contributing to
these aims, and in so doing manage and enhance the performance of both individuals and the organization.
The different local measures created by Hertz Europe’s balanced scorecard were as follows:




Organizations such as ours need a language for communicating strategy as well as clearly understood processes and systems that
guide employees as they implement the strategy and gain real-time feedback as to the results achieved. The BSC process helps
strategy to become everyone’s, everyday job. Every employee at every level of the Hertz France organization will understand his or
her role in the French Show.




Our Vision tells us where we are going. - “Hertz will be the first choice brand for vehicle and equipment rental and

total mobility solutions”.

Our strategy tells us what we want to achieve – “Corporate and European Strategic Architectures and their

initiatives.”

Our objectives tell us what actions we need to carry out. – “Strategy maps resulting form Hoschin planning sessions”.

The balanced scorecard tells us how we measure and communicate strategy implementation. “The “Change Management

Toolkit.
The balanced scorecard becomes the central organizational agenda for Hertz France, creating a credible force and mobilizing our
employees to behave in ways that create linkages and common decision templates.


The balanced scorecard concept is used as the catalyst that permits the real-time execution of the Hertz France Strategy map.




                                                                       .


As employees can effectively implement a strategy only when they clearly understand the strategy and see how their actions
contribute to its achievement, Hertz France will provide our employees and managers with the training and tools that we have been
given or that our employees have requested, to align local Hertz Agency daily activities with the execution of Hertz France’s strategy
both regionally and nationally. Equally, we will make it one of our primary objectives to insure that Hertz France employees at all levels
are recognized for their contribution to the organizations success. The benchmark for the aforementioned objectives will be
established through the implementation of our Pulse Survey Action Plan at CDG Airport.
Mark Frissora used the balance scorecard concept to illustrate his future vision of Hertz, detailed in his first employee communication
in August 2006.. As Mark stated the balanced scorecard provides us with a system for measuring focused performance, i.e.,
“managing things that really matter”




Mark Frissora has defined focused performance for us as:

      An approach for driving good trade-off decisions that balance share-holder, employee and customer requirements.
      A flexible framework that makes company objectives actionable at all levels of the organization.
      An approach for prioritizing improvement cross-functionally.
      An integrator of effort to capture the most significant opportunities.
The result of this local BSC (balanced scorecard) implementation strategy is to provide all employee teams with clear goals and
objectives and the strategic feedback that encourages both continual learning and most importantly of all the team work and synergy
necessary to achieve them.
3. Making strategy everyone’s business at Charles De Gaulle Airport – “a 10 Step Process & and a
“Change Management Toolkit
The result of the various exchanges that the University des Métiers has conducted this year with Hertz France’s social partners, has
allowed us to understand the importance of translating strategy, at all levels, into a set of action-orientated performance measures,
instead of using control to achieve them. This collective understanding was materialized into a “10 Step process for understanding
strategy”.




This approach has also enabled Hertz France to confirm that by translating strategy into a language that is more precise (“a 10 step
framework for understanding strategy”) we are better able to communicate to our employees what we really want. Instead of
saying “let’s improve customer satisfaction”, we now say, “what we mean by customer satisfaction at Hertz and how we define
and measure it?” This also forces us to ask, “What skills are required to improve our customer satisfaction……what skills do
our employees already have and what skills will be needed for the future?”.

By monitoring this index using the dashboards that the corporation is providing for us, we will be able materialize the execution of “Our
Mission” in real-time as well as monitor and adjust how far away we are from getting to where we want to be tomorrow - Our Vision.
Hertz France further developed this “10 Step process to understanding strategy into the “Change Management Toolkit”. The toolkit
provides the solid information base upon which Hertz France plans to train, develop and guide all employees as they contribute to the
successful realization of our HR Hoschin objective –‘ making Hertz Europe’s biggest European Hub an “Employer of Choice’.




As already mentioned the discussions, held earlier on in the year, were conducted to explain Hertz Corporate and European strategy
to our National Union Representatives. The objective obtained, was that of cascading the explained strategy down to the level of the
Hertz employee whose eyes look into the eyes of our customers - the cascade of strategy down to the frontline and to those
responsible for executing the strategy. “The Change management Toolkit” is representative of the manner in which Hertz France
has communicated strategy down to the front-line employee level. This toolkit is how Hertz France intends to execute both Corporate
and European strategy on a local level and in synergy with all Hertz Corporation employees. The cascade down to the front-line and
the consequent reassessment of the information materialized by our toolkit, will allow corporate Executives to visualize Hertz France’s
understanding of the way in which our strategy is both understood and executed in the field, by those employees whose eyes look into
eyes of our customers. This achievement will allow Hertz France to revise corporate and European strategy in real-time as it weathers
both current economic, social and international environmental challenges. The “Change Management Toolkit” is Hertz France’s

GOLD.




An additional advantage spawned by the “joint partnership” approach to explaining and cascading strategy down to those the front-line,
is that we have sold the idea to our Social Partners, of building together the virtual Hertz of tomorrow. In addition we have presented
they tools and programs; currently being constructed, and that are needed to drive the management cultural change essential to the
successful execution of our strategy. The different soft and hard competencies required, as well as the means by which they will be
acquired (by employees at all levels of the company), will be treated and negotiated as part of the GPEC process that Hertz France is
currently conducting with our Social Partners.


With this important step in the right direction behind us, Hertz France intends to make it our long term goal to cultivate relationship that
positions our Social Partners as strategic partners, working alongside our Business Partners. Partners with whom we build, and
transform in to activities and action, the various initiatives and changes necessary for Hertz France to bring CDG Airport Employee
Pulse survey scores to the benchmark standard of “best in class”
4. Pulse action plan ingredients


Here are the Corporate and Local ingredients that Hertz France will address in our employee Pulse Survey Action Plan:




Top down Initiatives                                             Bottom up Initiative
Strategy maps                                                    Accord GPEC

ACS Outsource – new Learning Management System                   Interface for decentralized learning strategy

Performance Management & Employee Development                    French training law reform

Cost Reduction initiatives                                       Lean Sigma & Hertz Improvement Process

10 Corporate tools furnished by Corporate                        D.I.F – Individual training hour rights (20 hours/year/employee)
To bring this action plan to fruition, the University des Métiers intends to use the GPEC negotiation to build an agreement that details
the various actions and investments that Hertz France will conduct over a three year period, as we transform CDG Airport into the
French Benchmark for both employee and customer satisfaction and implement the results across France.




The short term objective targeted would be to conduct an inventory with local Airport employees at all levels – vehicle attendants,
mechanics CSR’s SM’s etc. and every level up through to our various steering and executive committees at Trappes HQ. This project
would be conducted in partnership with the National French Union Representatives responsible for negotiating the GPEC accord. The
objective of this inventory would be to identify, list, plan correction and then resolve the basic problems identified, and for which
concrete, corrective actions are pre-cursor to achieving our Hoschin corporate objective of becoming an “Employer of Choice”.
We will first “fix the basics”, and will do so by being “innovative. This will be Hertz France’s plan to restore employee confidence in
management fulfilling its promises. We have previously made promises to the employees of CDG airport that we have not been able
to deliver. We failed because the new COE’s and structures were in their initial organizational stages at the time, thus were unable to
provide the concrete actions behind the promises made. This deception can be easily righted – this is our intention with this action
plan. Once we have succeeded here, we will have the credibility necessary to cascade concrete solutions and structures, to all Hertz
agencies in airports, stations, towns and cities across France.


Ever declining pulse survey results have indicated that the “top down actions” such as many of those listed below, have little effect on
increasing the satisfaction of the Corporations 30,000 front-line staff and 1600 plus station managers.


   Webcast                                                                             Genesis information cascades
   Ask Mark / Ask Michel                                                               Genesis section on website
   Launch of communications tool-kits for managers                                     Letters to employees
   Industry analyst presentations                                                      Eliminating procedures
   Global retention project                                                            Global talent acquisition
   Performance Management and Employee Development process                             High potential and succession process
   New organizational structure for Europe                                             Commercial and Operating Councils
   Launch of HIP, Hoschin, TVM, Six Sigma,                                             Launch Customer Experience program
   Major focus on reducing counter waiting times                                       HIP Kaizens, Six Sigma
   Continuous focus on NPS, including customer written feedback                        Hertz Gold locations extended in Europe
   Online Check-In available to all customers around the world                         New Refueling Program Check-In
   Introduction of Hoschin                                                             Introduction of PMED for 2009
   New Leadership Competency model under development                                   New Global HR organizational structure
   New VP of Global Talent Management                                                  Launch of Global Talent Management
   HIP training                                                                        Hoschin training
   Project management skills                                                           English language learning courses
   New LSO provider in Learning & Development                                              Employee Stock Purchase Scheme
   Global Leadership Awards                                                                Global retention project in development
   Flexible scheduling, where appropriate                                                  Global Leadership Awards
   Global Talent Succession Planning                                                       New Leadership Competency model
   Global retention project now in development                                             Global Talent Succession Planning
o Sigma/Kaizens/5S                                                                          BPR (reengineering processes)


Hertz France field based employees, have informed us that, employee satisfaction will be a long journey if we continue to only cascade
satisfaction measures top-down. What Hertz France employees want is additional bottom-up satisfaction measures. Measures that fix
the basics such as:

   40% of Gold customers shouldn't be Gold Customers - no improvement in this area despite many promises to take care of
    the problem
   Our systems are old fashioned and out of date, especially compared with out competitors such as Avis and Europe Car
    who are much faster than us in terms of service given the technology they have invested in, in terms of such things as
    Instant return
   Staff uniforms are "very often" out of stock - various sizes models not available
   Despite numerous promises by MPF to reduce the number of procedures governing our daily ops, nothing has really
    changed.
We must make our objective that of addressing & fixing these basics, as a precursor to improvement in both internal and external
customer satisfaction.

Hertz France’s Hoschin HR objective is to sign an agreement (accord) with our social partners before 31 12 2008. The GPEC will also
allow us to examine all current training methods, used at CDG, to integrate new hires, develop and prepare existing employees as well
as the methods and tools used to select, train and develop different Airport management personnel. The means of accessing and
tracking both individually and collectively the existing training offer and the tools already in place will also be examined in detail.
4. What is the « GPEC » – (Gestion ¨Prévisionnelle des Emplois et des Compétences?)

In a nutshell, the GPEC requires all French companies to reinforce their capability to better manage and prepare for evolutions in the
workplace resulting from international corporate strategies. This is achieved by negotiating the implementation of the Human
Resource structures necessary to develop, train and accompany the employees in teal-time and as their tasks and activities evolve. It
is as if the French Government has said, “Here you go Mr. Frissora and Mr. Taride, we would like for you to negotiate and come up
with an agreement that provides a satisfactory answer for both your company, your employees and your shareholders concerning the
following subjects, and, by the way, we expect this agreement to be negotiated and re-negotiated on a triennial basis”:




      The way in which Hertz France will adjust its human resources in real time, as France initiates both corporate and European
       objectives.
      The different analyses and employee training and development necessary to develop and maintain employee versatility and
       employability should their current employment disappear following evolution in the workplace.
      Reinforce the customer experience by giving Hertz France employees, the competences and technical skills necessary to
       provide the levels of service expected in today’s global, consumer world.
      To conserve and mobilize collective employee skills and competencies for the benefit of Hertz France by providing all
       employees with “life-long” training, development and career opportunities.
The GPEC law is thus “a Gold Mine” for Hertz France and we intend to use this “Gold Mine” to the advantage of all Hertz
France personnel, at the same time as transforming CDG airport into an employer of choice. Hertz France intends to do so by first
satisfying existing employees. We will do so by building the communication and training structures necessary to provide Hertz CDG
employees with the tools and competencies necessary to transform CDG airport into the benchmark for internal customer satisfaction
and an employer of choice in the French car rental industry.




The Hertz Corporation in implementing its Corporate Strategy must remain sensitive to Division cultural differences, especially at the
individual country level where laws and legislation often require Hertz France to creatively adapt strategy to local legislation. A “think

global, act local and think local, act global” approach should be encouraged whenever possible. An example of this kind of
“constraint” is the legislative obligation imposed on all French companies to negotiate, every three years, an “Accord GPEC”. Hertz
France plans on transforming this obligation into a strategic advantage.
This agreement (accord) once signed will outline the various recruitment, employee induction, and training and development structures,
agreed upon as necessary, for Hertz France to implement European and Corporate strategy over a three year period. Again, the
objective of this accord is to identify, prepare and accompany employees at all levels to the various technological and social evolutions,
necessary to take the company and its workforce from where it is today to its vision of tomorrow. A kind of imaginary bridge that
allows a company to provide structure and guidance to employees as they execute those strategic initiatives essential to building, in
synergy, the bridge that connects Hertz France today with Hertz Europe’s desired state of tomorrow. Such evolution often involves
existing jobs becoming redundant as well as the emergence of new job types or even new fields.
The slide below illustrates from a global point of view the objective sought after by the French Government in implementing the “Borloo
Law” on social cohesion (GPEC). As in the illustration we have to take the European strategic architecture and explain and negotiate,
with our Social Partners, where we are today as a company & where we want to be tomorrow as a company and most importantly how
we plan to get there. The resulting “Accord GPEC” details exactly what we need to build together in order to accompany our
employees both individually and collectively as the workforce implements the corporations strategic objectives.




The French Governments’ objective with the “Law Borloo on social cohesion” is to avoid, in the future, exactly what is happening at
Hertz France at present – restructuring and reorganization that has a detrimental effect on local employment - and for which many of
our employees have not been sufficiently prepared to reintegrate the French workforce. The negotiation process undertaken by the
GPEC is targeted at developing the employability of all employees, both collectively and individually, thus preparing them, for the
different evolutions and reorganizations that are constantly appearing in conjunction within today’s rapidly changing and global
economy.
The GPEC accord details the different structures and means that the company agrees to put into place to accompany employees
concerning the following points.


1. The company strategy and the manner in which this strategy and the changes or evolutions that it entails, are communicated in
real-time to the elected employee company representatives – Employee Work Council. The object of this point of the negotiation is to
agree on a temporal communications framework that allows the company to communicate, share and execute her strategy in real-time
and with the coordination and support of both employee company representatives (the Work Council) and the Company’s employee
elected Social Partners (Union Representatives).


Given the numerous work sessions that have taken place in 2008 and the resulting “10 Step Framework for understanding strategy”,”
which is the fruit of this joint effort, Hertz France considers that we have reached a point where the strategy is now being
communicated to our Social Partners as new information becomes available. At the last GPEC meeting, which took place at the end
of June, each participant received a CD Rom with key information from the webcasts of February, April and June of this year. Hertz
France has thus accomplished the objective outlined in point 1 above – it rests just to finalize the temporal structure that details the
manner in which evolving European and Corporate strategy will be communicated to the French Work Council and Social Partners.
This information will be detailed in the final accord that we intend to sign before 31 12 08.


2. With both the Company and her employee representatives now working now from the same “10 Step Strategy Framework” to
collectively understand Hertz France Strategy, the next step of the GPEC is to negotiate the different recruitment, training and
development structures and systems that must be put into place in order to successfully support, accompany and coach employees
through the different changes or evolutions provoked by the company’s long-term strategy.
3. The process requires a diagnostic of current job roles (activities performed) and the determining of the respective employee skills
and competencies necessary to accompany the company’s long term strategy. This diagnostic is the foundation upon which the
GPEC is built. We reconstruct all employee job descriptions using the activities performed on the job to determine the competences,
knowledge and skills necessary for the employee to do the job, and this for both today and tomorrow’s skill needs. The two illustrations
above illustrate this link.

It is in this sense that our GPEC obligation presents a real advantage to the Direction of Hertz France. A real advantage because, in
its own way, the GPEC mandates Hertz France to do exactly what Mark Frissora and Michel Taride are requesting on the corporate
and European levels, that is to say:


“Adapt Hertz Corporate & European Strategy locally, preparing employees by providing them with the tools and training
necessary to develop the professional skills, competencies and versatility required by current corporate values and culture
changes”.
6. Hertz France’s current situation: the “State of the Union”.

             Thinking locally, acting global.                                            Thinking global, acting locally




Hertz France has, through the use of the “Ten Step Framework for understanding strategy”, cascaded Corporate and European
strategic architecture to those employees whose eyes look into the eye of our customers. The result of this process is the construction
of the ”Change Management Toolkit” This toolkit combines the expected manager role directives, (communicated in March
2008 during the manager’s webcast) and the objectives and tools that the Hertz Corporation has made available to all management.
This is achieved in the form of an interactive PowerPoint presentation. Using our University des Métiers and the existing training
structure in place, we will assure the communication, cascade and the measure linkage necessary to align the execution of this
strategy locally across France.

Hertz France will take her current training structure materialized by the University des Métiers and build a recipe that uses the
corporate architecture in service of internal employee customer satisfaction. A service that will ensure that wherever in France there
are Hertz employees looking into the customers eyes, they are professional, well trained and “exemplary” in the level of service they
deliver- we all have customers wherever we are based or whatever our role is in the Hertz France show.
If we look at the illustration below you will note that with the Global COE for Talent Management Hertz has decided to take a top down
approach; an approach labeled “Best Practice” in the retail industry.




The objective of this top down training strategy is to engage field leadership in the training process while reaching for a broader
audience more consistently. This will shift ILT (Individual Learning Time) from front-line employees to Management, thus reducing
costs. This approach also leverages creative delivery methods such as e-learning, OTJ tools, mentoring and coaching to cascade
training across the organization.

This slide below illustrates the current situation from both a French corporate and local standpoint. Corporate initiatives are
represented at the top of the pyramid with Hertz Europe’s new interim structure supported by two corporate, top-down initiatives - the
new Hertz Leadership model and the Performance Management and Employee Development Process. The desired management
style is then expected to cascade down the organization from the top until its effects are experience by those Hertz employees whose
eyes look into our customer’s eyes.
The “Managers Change Communication Toolkit, will allow Hertz France to insure that our lower, middle and upper management have,
at the very least, access to the comprehensive understanding of this ten step process that we have cascaded down to the frontline.




The “Change Management Toolkit”, which is currently under finalization, was presented to our Social Partners during June’s GPEC
meeting and in turn to the HR Business Partner and his direct reports at the beginning of July. The HR Business Partner decided that
this toolkit should be sent to every Hertz France manager. Proposed next step was to furnish each member of French HR
management with a copy of the Toolkit for validation of information, copyright, structure and message. This step is still pending.
If we look at our current situation with all of the above mentioned rolled into one. This slide illustrates how our company is currently set
up to become an “employer of choice” and build, implement, and provide the Global Customer Experience that will differentiate Hertz
from her competitors – the little difference that makes all the difference and which gives the Hertz Corporation the merited acclamation
of Leader in her Industry




Going even further………….the above slide illustrates that with our current organization’s top-down approach, the greatest number of
eyes that look into our customer eyes are those eyes of our 30,000 frontline employees supported by the 1600 plus Location
Managers. These eyes are currently at the bottom of our organization.
Surely it makes more sense to reverse the situation in order to make, the final objective sought after in terms of the Customer
Experience, that of improving the service at the level of the employee that looks into the customers eyes. The slide below clearly
indicates the competitive advantage obtained, when we inverse our current structure with the objective of placing the organizations
focus on those eyes that look into the eyes of our customer’s – those of our thirty thousand plus front line employees and managers.
By turning the structure up-side down, we see that Hertz France has already transmitted the Corporate Balanced Scorecard tools and
measures to our front-line staff by providing them with a toolkit that unites all corporate communication to date, and presents French
corporate and local strategy in an innovative, interactive and dynamic real-timer basis.
The Four Customer promises illustrated in the slide below must first be applied and brought to life for Hertz’s internal customers, our
“employees of choice” – this includes everyone that directly or indirectly supports or comes into contact with frontline employees and
their managers – every Hertz France employee.
7. What we need to measure and why we need to measure it:

Measurements or Key Performance Indicators (KPI’s) need to be driven by the Hertz strategy and should cover all critical aspects of
performance and, should be specific for each level and type of position. Achievement of excellence on the performance measures
should result in excellent company performance.
In April 2008 Hertz France middle and upper Management from head office, field operations & sales met for a two day Hoschin
planning seminar. The objective of this work session was to use Hoschin planning to link Hertz France objectives into European BSC
objectives. The objective was to link Hertz France objectives in to the Four Perspectives of European Balanced scorecard and to
cascade these objectives throughout the organization using the resulting strategy map (see below).




The results have allowed Hertz France to translate corporate strategy into operational terms, ensuring clarity of the strategy across the
organization, at the same time as communicating through measurement. In so doing Hertz France will create a consensus and
reinforced teamwork through the process of developing the measures.


 The balanced scorecard will allow Hertz France to communicate the multiple linked objectives that must be achieved to compete and
lead the market. The scorecard translates Hertz Mission and Strategy into tangible goals and measures.
7. Performance Management Process Cycle – How Hertz France intends to link CDG Airport employee
Performance to Local, Regional, Country and European Balanced Scorecard Initiatives and Measures

      Figure A.1. Depicts a performance management process wheel with three elements, or arcs: focus,
        communicate, and collaborate.




     As previously stated, employees can effectively implement a strategy only when they clearly understand it
     and can see how they contribute to its achievement. Employees and managers should be provided with
     tools to align their work with the strategy, and should be recognized for their contribution to the organization’s
     success.

      A strategy-focused organization enables targeted feedback on strategic performance to specific employee
        teams in order to effect continual strategy and implementation improvements.
      Performance management involves people knowing that all members of their organization are focusing,
        communicating, and collaborating on strategy from a single vantage point.
The performance management process contains three elements of an interactive cycle:




1. Focus.
 The process of managing strategy begins with making choices and focus.
 There will never be enough money or resources to chase every opportunity or market on the planet.
 We are continually limited by scarce and precious resources and time, so focus is key — and strategy yields
    focus.

    In this important initial step, senior management defines and continuously adjusts its strategy.
     Next, by mapping cause-and-effect relationships, management selects and defines strategic objectives
      and higher-impact action steps and projects that will achieve those objectives.
 Strategy maps are the key tools for developing focus.




 Do not underestimate the importance of strategy maps.
 They have been overshadowed by the popular “scorecard” that stars in arc number two; but those in the
    know place far greater respect and emphasis on strategy maps compared to scorecards as the key to
    successfully executing strategy.

Companies can ideally turn big goals into small, manageable projects that can be accomplished.
The first step in this translation is to create a set of strategic themes that will bridge the gap between the
existing state of operations and the desired state.




 These themes then organize the work of the company and can be used to subdivide work among various
   operating divisions, departments, and employees.
 Whether you base your strategy on a balanced scorecard, the Malcolm Baldrige Award criteria, six sigma,
   total quality management (TQM), or the lean management framework, an organization should define and
   use clear, concise performance indicators that help its workers see the causes and effects of its strategy.
 Strategy maps begin that process.
 By focusing on critical areas, everyone can identify the true sources of business failure, as well as the best
   practices that lead to future success.
 This is also a logical place to link the strategy to the budgeting process.
2. Communicate with Feedback.

 The process of managing strategy continues with communication.
 This context is reserved for senior management articulating its strategy to its employees. (Webcasts)
 Along with articulating strategy comes the all-important feedback to employee teams. (Pulse & PMED)
 Remember the mantra, “How am I doing on what is important?”
 A scorecard is the key tool for reinforcing communication of the strategy and for navigating the steps outlined
  in the strategy map.
 A scorecard has carefully selected and defined indicators and measures, each weighted to reflect its relative
  level of importance, which is then weighted in the strategy map.
 Think of a scorecard as a set of chain links of the strategy map’s strategic objectives, where each chain link
  uses if-then relationships with leading and lagging measures to drive work efforts to align with the
  organization’s mission and vision.




 By integrating, distributing, and analyzing enterprise-wide information, an organization gains the power to act
  on this information—ahead of its competitors.
 The goal is to communicate a strategic vision to the entire workforce and empower employees to execute its
  strategy proactively, before events occur that demand a reaction.
 To stay ahead, individuals must draw on their organization’s business intelligence to make decisions based
  on hard facts that are timely, not on assumptions and late news.
 And when it is too late, sufficient enterprise intelligence should be accessible to conduct root-cause analysis
  to fix the situation and get back on track.
3. Collaborate.
 The process cycle of managing strategy continues with collaboration.
 (The cycle never actually ends; it is a continuous iterative loop.)
 By aligning various strategies among business units, the organization taps into the collective knowledge of its
   employees and unleashes each person’s potential.
 From the top desk to the desk top, e-mail discussion threads, based on feedback from key performance
   indicator (KPI) scores from the scorecard, can be created for faster problem solving and consensus.
 The performance management (PM) process truly makes executing strategy everyone’s job.
 Collaboration, in this sense, is all about collective dialogue.
 Management is not equivalent to control—management is coaching people for continuous improvement.
 Strategy maps transcend time.
 They will change as the executives adjust the mission and strategies.
 In contrast, the scorecard will change periodically because the weightings for emphasis will be altered and
   KPI’s will be added and removed to maintain focus and speed.
A simple way to think about the PM process cycle designed to manage strategies is that it embraces both
planning and the execution of the plan.




  However, PM is greatly aided when managers and employee teams have access to and visibility of fact-based
   intelligence so that the correct strategies are formulated and so that employee teams can analyze what is
   happening in order to make better decisions. (Dashboards)
  What happens when an organization’s strategy is unclear?     It results in wasted energy.   Most organizations
   typically focus on their own crude version of the second two elements of the PM process wheel. This involves
   monitoring and managing activities by focusing on completed actions, particularly when results are different
   from those expected. This can be an ineffective exercise when wrong performance measures are examined.
 To complicate matters, too many measures are usually reported, rather than the vital and relevant few, thus
  leading to a “monitor everything” style without the organization really knowing in which direction it should be
  going.




 Management’s core shortcoming is they do not invest time in the first arc of the PM process wheel – to decide
  what their strategic objectives are (ideally formulated with business intelligence) and then communicate them to
  employees.
Let’s now discuss in greater depth the three arcs of the PM process wheel and the steps involved in constructing
this type of system. There are eight fundamental steps:




1. First, agree on the vision, mission, and strategic intent of the enterprise. Define the strategies.

2. Define the strategic objectives that support step 1.

3. Map the interrelated strategic objectives with their cause-and-effect linkages.

4. Define initiatives, projects, programs, and actions to close the performance gap for each strategic objective.

   Scale back or terminate ongoing projects that do not support strategic objectives.
5. For each strategic objective, select appropriate strategic KPI’s (strategic measures). Cascade these strategic

   measures to relevant parts of the organization, allowing them to define their own KPI’s (tactical and
   operational measures) aimed at supporting the strategic KPI’s and maintaining a common and shared focus on
   the strategy.
6. Select the target levels for each KPI for relevant time periods. Identify the performance deficiency gap.

7. Collect the actual KPI’s, display the scores, and compare to the targets.
8. Manage eventual performance gaps to steer the organization by interpreting and reacting to the score, and then

  revise the actions plans.
                                    Focus: Starting Point of the Performance




Management Process
 The PM process begins with arc 1, “Focus.”
 It is here that organizations, as previously mentioned, can turn big strategic objectives into smaller, manageable
  projects and initiatives that can be accomplished.
 These initiatives are the main way performance gaps are closed between the current state and the strategic
  destinations.
 Each initiative involves focusing and may result in upgrading or creating new capabilities, skills, and
   technologies.
 If the projects are linked to the correct strategic objectives that, in turn, support the mission and vision, then work
   behavior is aligning with the overall strategy.
 After the strategy is translated into a portfolio of initiatives and operational projects, then those can be reflected
   in the annual budget, thus linking strategy to budgeting (or to rolling financial forecasts,).

This all sounds so logical. But how do we identify what the strategic objectives should be and,
subsequently, what to measure?
 There are many methods and books devoted to defining strategies.
 Let’s now explore the steps to develop an effective PM system.

Agree on the Vision and Mission, and then Define the Strategies
o At the risk of trivializing the critical and important defining of strategies, here is a straightforward
         approach to constructing the strategy map.
     o The initial exercise is to define your organization’s mission and vision statements.
     o These two statements are not the same, and their definition must precede the construction of strategy
         maps or scorecards because they serve as signposts.




 The vision statement answers the question, “Where do we want to go?” in terms that describe a highly
  desirable future state for the organization.
 It says it all concisely, as these examples demonstrate:
        USA President John F. Kennedy: “We will put a man on the moon.”
        Microsoft Corporation (1990s): “A computer on every desk top.”
        Microsoft Corporation (21st Century): “Information anywhere, anytime.”
        SAS Institute, Inc.: “The Power to Know”
        The Hertz Corporation (2008) “Hertz will be the first choice brand for vehicle and equipment rental and total
         mobility solutions”.
 The mission statement provides all employees, the answer to the question, “Why are we here?” in terms of
  desirable impacts to gain a competitive edge, such as:




        To exceed customer needs well ahead of their realization that they even have the need
        To leverage technology capabilities in fulfilling customer needs.
        To leverage employee capabilities for whatever we excel at.
   Once the vision and mission statements are defined, the construction of the strategy map begins.




   Its initial purpose is to serve as a framework in the form of a network connecting strategic objectives—
    hence the name strategy map.
The strategic objectives collectively act like a pump system to push employee work efforts toward top
objectives.




     Figure A.2 reveals that strategy maps and scorecards are born from the vision and mission statements;
      help reinforce each other, as noted by the two-way arrow and are driven by the myriad of proven
      improvement programs and initiatives both from the past and emerging now for the future.
The scorecard, serves to constantly remind the organization of the strategic plan.
However, don’t confuse the scorecard with improvement programs.
        o The scorecard is an instrument for measurement and communication, whereas as the
          improvement programs help change the “scores” in the scorecard to meet or exceed the KPI
          target measures.
        o Given that vision and mission statements exist, the next step is to construct the strategy map
          itself.
Define the Hierarchy of Strategies and Their Underlying Strategic Objectives
 Strategy maps (sometimes referred to as value driver trees) are used to communicate a unified view of the
  overarching strategy to the organization.
 A strategy map defines corporate direction and aligns internal processes, strategic objectives, initiatives; KPI
       measures, and target scores. (KPI measures and target scores are more prominent in the scorecard)
                                                       
 One of the reasons was because the balanced scorecard was receiving inordinate attention, as if the
  scorecard were the answer, when in fact it is the strategy map that serves as a builder’s blueprint for the
  scorecard.
 The strategy maps are like the secret sauce in this, recipe because their straightforward logic becomes so
  compelling.
 A study by Hewitt Associates estimated that companies who use strategy maps and scorecards
          perform with 40% better results compared to companies that do not.1




       One of the difficult challenges for executive management is defining its organization’s strategic objectives.
       A popular, logical, and swift way to construct the strategy map that contains the strategic objectives is to
          apply the strategic planning methodology SWOT (strengths, weaknesses, opportunities, and threats).

1
    Brett Knowles, “Building Your Balanced Scorecard in Just Five Days,” presentation given on December 13, 2003; www.BetterManagement.com
 SWOT is a brainstorming exercise that rapidly gathers the executive team’s thoughts about issues.
 The information derived from a SWOT exercise becomes the raw material to form the strategic components
   of the strategy maps.
 (If a thoroughly documented strategy already exists, then you can go directly to step 3, but it is useful to read
   how SWOT issues provide the building blocks for strategy maps and scorecards.) The SWOT exercise to
   construct a strategy map has three phases:




1. Describe the SWOTs.
 In only one day, a management team can write each SWOT on a note card.
 Each SWOT should ideally be written with a consistent format: describing it as a fact, followed by it’s so-what
   consequences that describe the future outcome or impact from the fact.
 As an example, “Our competitor is now opening stores in the Southwest USA, which could adversely affect
   our desire to attract the sizable retiree market that is growing there.”
 Strength issues point to future outcomes as their so-what’s.
 Weaknesses point to a so-what that prevents an organization from advancing.




 Opportunities are things you are not now doing that would take you closer to the vision and mission.
 Threats are usually external factors or risks that can derail your plans.
2. Group the SWOTs by common themes.
 Regardless of whether the description is an S, W, O, or T, the hundred or so SWOT note cards can be
  naturally clustered into themes such as “penetrate new markets” or “build alliances with consultants.”
 Each theme should ideally capture the essence of the SWOTs related to it, and each theme should be
  worded with a verb-noun format as the two examples just demonstrated.
 The clustering of themes should be based on the fact in each SWOT, rather than on its so-what.

3. Place these themes onto a strategy map.
 The themes have now blossomed into the strategic objectives—a metamorphosis.
 The strategic objectives now become the stepping stones in the strategy map.




 The elegance of the strategy map lies in the fact that important improvement projects and action programs
  will sprout from each strategic objective to reflect the SWOT issues, while some existing projects will be
  immediately abandoned because it becomes apparent they do not fit.
 A variation on the SWOT approach to define strategic objectives is for executive management to create a
    destination statement.
 This is a textual statement, requiring consensus that describes a common shared view of the organization’s
    future.
 A key element of the to-be future state document is to describe the consequences, both good and bad, of
    achieving the various aspects of their perceived destination.
 It involves listing the actions (e.g., projects and initiatives) required to realize this future state.




 It forces the executive team to create a vision of the results of achieving the destination.
 This method concludes by summarizing the proposed actions as strategic objectives – so it effectively works
    backward with the end in mind.
    At this point, these themes that have blossomed into strategic objectives, regardless of the method used to
    define strategic objectives, have yet to be organized or positioned among them. That now comes in the next
    step.
4. Map the Interrelated Strategic Objectives with Their Cause-and-Effect Linkages




 The strategic objectives are interrelated.
 The four perspectives originally proposed in Kaplan and Norton’s balanced scorecard book are very useful in
  simplifying what otherwise would be a difficult task.
 That task is to take each of the strategic objectives that were congealed from clustering the SWOTs into
  themes and slot it into whichever perspective it best fits.
 The sequence of the four perspectives makes very good sense.
 The top perspective (i.e., the financial perspective for commercial companies and the customer/stakeholder
  view for the public sector company) is the beneficiary of the strategic objectives in the three perspectives
  beneath it.
 The bottom perspective, the learning and growth (or enabling assets) perspective, is the most foundational,
  not unlike the foundation for a house.
 It may be useful to think about the learning and growth perspective as not exclusively referring to people.
 Expand your perception to include the following elements:




     Employee competencies: What are we good at?
     Culture: What is our climate to take action and our readiness for change?
     Technology capabilities: What technical assets give us an edge?
An effective way to understand a strategy map is to visualize an example of a hypothetical one.




 Figure A.3 illustrates a strategy map of a hypothetical XYZ Corporation, where each node in the
   network represents a strategic objective.
 It further adds if-then linkages where the paths drive, or at least contribute to, the outcome of the
   strategic objectives above them.
Note that the objectives are rarely linked more than one-to-one.
   A simple rule is that a linkage should be made only if there is an intended cause-and-desired-effect
     connection, rather than because there would be an inconsequential result anyway.
   An interesting question routinely asked is “Where is the organization’s strategy defined and located on
     the strategy map?”




   The simple answer it does not appear. Why not? Because the connected network of the strategic
     objectives is equivalent to the strategy!
Hertz Growth initiatives
 Strategic objectives are ideally worded in verb-noun format because these are the actions that an
  organization must complete—or at least make much progress toward—in order to achieve the
  organization’s mission, which in turn would realize its vision.




 The verb-noun wording of strategic objectives also clarifies to employees that the role of the strategy
  map is to tell employees and managers what the organization is looking for, rather than have the
  executives state what they want the employees to do.
 In short, the strategic objectives collectively are the strategy!
 Strategic objectives are not all created equal.
 The objectives located at the top of the strategy map are the primary ones that all of the other strategic
   objectives drive to support.
 Experience in constructing strategy maps has shown that the objectives in the top, second, and bottom
   perspectives are likely more similar than dissimilar for most organizations.
 These perspectives tend to contain universally popular strategic objectives. It is in the third perspective,
   the internal business processes that strategic objectives are unique to an organization, the way
   fingerprints are to a human being.
 This is where an organization differentiates itself from other organizations (i.e., competitors).
 The fact that the strategic objectives in the financial, customer, and learning and growth perspectives
   have a common and universal flavor does not trivialize the strategy map.
 It is the action steps and project initiatives, gleaned from the SWOT note cards that make the difference
   as they are managed in order to achieve the strategic objectives.
 Why should this make sense? The specific source of a scorecard’s elements—whether they come from
   the executive team or the employees—tells the story.
CONCLUSION   Hertz France -
             current situation.
             The “Change
             Management Toolkit”
             has been created to
             provide all managers
             with the real-time
             information necessary
             to execute and adjust
             European strategy in
             France in an ever
             changing economic
             environment.
This slide represents the
current strategic
architecture in place
with which the Hertz
Corporation intends to
launch its new Global
Customer Experience
Program.
If we turn our
strategic
architecture up
side down we
would have a
structure that
better supports
the Customer
Experience
Program and
assures that all
corporate and
division
strategies are
aligned towards
achieving the
final result
intended by the
initiatives
This would assure that all Hertz employees’
eyes are looking into their customer’s eyes and
that the organization evolves as a whole as it
communicates about and implements the new
Global Customer Experience Program. Every
employee has a role in this new show running
in Hertz Agencies worldwide.
“From there I am standing all of this is
possible”.
            Simon PENNY, Manager
       Université des Métiers, Hertz France

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Building an employer of choice

  • 1. Pulse Survey Action Plan Hertz France September 2008 Think Global, Act Local Transforming Hertz Europe’s largest Airport hub to better serve the internal customer – CDG employees Think Local, Act Global
  • 2. Making sense of 24 months of Projects Alpha and Genesis, numerous change initiatives, a dozen webcasts strategic communication and then cascading the intended message in order that strategy be executed by employee eyes that look into the eyes of our customers.
  • 3. HERTZ, France Pulse Survey Action Plan Septembre, 2008 Actual “Think Global, European act Local” Organization September 2008 Recommended “Think Local, French & act Global” European Organization With Global Customer Experience Program January 2009
  • 4. Table of contents: Executive Summary –What Hertz France intends to accomplish and why. 1. How Hertz France plans to realize the objective of transforming Charles De Gaulle Airport into an employer of choice. 2. The balanced scorecard concept 3. Making strategy everyone’s business at Charles De Gaulle Airport – “a 10 Step Process & and a “Change Management Toolkit” 4. Pulse Action plan ingredients. 5. What are the GPEC and the French law that obligate French companies to negotiate an “Accord GPEC”. 6. Hertz France’s current situation: “The State of the Union”. 7. What we need to measure and why we need to measure it. 8. The Performance Management Process cycle – how Hertz France intends to link CDG Airport employee performance to local, regional, national and European Balanced Scorecard initiatives and measures.
  • 5. Executive Summary Hertz France intends to transform Hertz Europe’s largest airport hub into an “Employer of Choice,” using innovation to fix the basics at the same time as establishing Hertz France as “an employer of choice”. The first step towards this objective will be to provide all Charles De Gaulle Airport employees –“those employees that have chosen Hertz France as their employer” - with the same tools, training, development and career opportunities that the Corporation intends to implement for it’s “future employees” worldwide . All local, regional and national activities and contributions will orchestrated to allow Hertz France employees to align their daily activities in order to contribute to the pursuit of the European & Corporate Balanced Scorecard objective of becoming an “employer of choice”.
  • 6. Hertz France will accomplish this objective via the Pulse Survey action plan detailed in this presentation. This action plan intends to address and transform low Pulse Survey scores (employee satisfaction) & lagging NPS scores (customer satisfaction) at the same time as significantly reducing employee turnover and establishing CDG Airport, as the benchmark, for both Pulse Survey and NPS scores in France. Our objective is to make Hertz Europe’s biggest airport hub, an operation that stands out from the pack; an Airport that sets the standards for everyone else. In so doing we will establish Hertz France as the benchmark for internal and external customer service in the French car rental industry. We intend to accomplish this challenge by analyzing employee dissatisfaction starting with those employees whose “eyes look into the eyes of our customers” – we’ll then work backwards up through the internal customer hierarchy all the way to the Hertz France General Manager and his executive team. This process will allow Hertz France to involve and mobilize all CDG Airport personnel (vehicle preparateurs, mechanics, CSRs, SM’s) and all the supporting and administrative staff based at the “base arrière”. The Airport Manager and the Regional Director, responsible for CDG, will assure the link for the local to regional aspect of our study. The regional Director, will in turn, provide the link from the regional to country level. The regional Director will assure project coordination with the Hertz France Operations Director, based at Trappes, whose role will be to assure that all support services – sales &, marketing, HR, quality, safety, finance, fleet, distribution, security, assurances, internal communication
  • 7. IT support, business planning and, franchisees , ,- are totally aligned with, and whose actions contribute to, this process. In turn, the Hertz France HR Business Partner will assure the communication and alignment of all outsourced Hertz France Service Level Agreements, –training and development, facilities, purchasing, and support services. Equally, the Hertz France HIP Coordinator, based at CDG, will guide us in our work and provide us with the information necessary to integrate and assure the necessary coordination with the Talent Management COE, regarding the tools and training necessary to assure the long term success of all implemented Hertz Improvement Programs. European Pulse Survey Action Plan implemented following the results of the first European Pulse Survey of March 2007 We will correlate our results with Hertz France pulse survey results (both past and present) and reanalyze actions taken versus progress attained following prior pulse survey actions. This step will enable us to prioritize our actions with regard to cost, impact and desired result. This analysis will also provide Hertz France with a very comprehensive data base, indicating the problem areas we need to action, what we need to change and why. Improving these identified problems permits a local, regional and national focus that permits us to all Hertz France personnel to actively participate in the success of “their” Pulse Survey Action Plan. This national “team” effort will provide the different information needed to orchestrate and implement of our Action Plan at CDG Airport as we work together to leverage our employee Pulse Survey scores to “best in class” benchmarks.
  • 8. We will then analyze this information internally with the various Centers of Expertise and their respective domain experts, in order to prioritize actions and build “a common action plan”. The final plan will then be presented to the Hertz France General Manager and executive committee for sponsorship, kick-off and execution. We will execute this action plan hand in hand with the different Centers of Expertise that have been created to support us, and we will use the various tools that the Hertz Corporation has provided us. Additionally Hertz France will use the Corporate Values supported by the Leadership and Competency models to guide and lead us in our actions.
  • 9. We will implement our action plan under the guidance of both the Talent Management Center of Expertise and the European HR Business Partner team – both responsible for transforming Hertz Europe and the Corporation into an “Employer of Choice”. Our objective here is to implement and adapt down to the operational level, “to those employees whose eyes look into our customer’s eyes”, the various recruitment methods and tools, new hire induction materials, training & development programs and Learning Management Systems that the Talent Management COE has been building for us, and is currently in the process of implementing world-wide. If you can make it work t at CDG Airport you can implement the result in any other Hertz location in France, and “with relative ease”. Our long term objective will be to successfully reproduce the resulting structures and identified best practices in all Hertz France locations and for all of our employees. The Hertz France Quality Director, responsible for Driving Hertz France’s Excellence will also play a key role in the successful execution of our plan.
  • 10. The projects that the Talent Management COE has been coordinating across the corporate world represent for Hertz France, the cornerstones upon which we will successfully build the foundations necessary to execute our Pulse Survey action plan. We will also build and establish in synergy, the KPI’s necessary to insure continuous progress on the various employee satisfaction improvement measures that Hertz France has targeted. We will measure the success of our efforts by our capacity to align the execution of our “action plan” on a local, regional, country, European and Corporate level. In doing so we will build, hand in hand, with the various Centers of Expertise at our service, a structure that allows all Hertz France CDG Airport employees to have access to, and benefit from, all Corporate, European and French employee satisfaction initiatives – of which individual training and development, career planning and Performance Management programs are of greatest priority.
  • 11. As we implement our Pulse Survey Action Plan we will find new and innovative ways to delight all of our customers…and always do the basics much better than our competitors. This action plan is company wide and will be implemented in all Hertz Agencies, by adapting and cascading throughout France, the results attained, the training and development methods and structures implemented and the best practices initiated at CDG Airport, This action plan concerns all Hertz France customers (internal and external) and is intended to be innovative, inspiring and engaging for all French personnel. The Pulse Survey Action Plan is targeted at building a culture that provides a unique and differentiating experience for both internal and external customers across France - at the same time as establishing Hertz France as an industry benchmark for innovation, training & development, and most importantly for both “employee & customer satisfaction”.
  • 12. With the various tools, Vision, Mission and Value toolkits, European and Corporate strategic architectures, Hoschin strategy maps, Business Operating Systems, Mark Frissora and Michel Taride Webcast communications, Pulse survey data, strategic initiative enablers, Improvement Processes and PMED programs provided to us by Hertz Corporate, the Université des Métiers, Hertz France has created for all French managers a “Change Management Toolkit”. This “Change Management Toolkit” has been engineered and constructed as a direct result of four, different day-long meetings, held with employee elected French National Union Representatives. The objective, targeted by these meetings, was to provide a straight forward and comprehensible explanation to our front line employee representatives, of the mechanics, initiatives and objectives of both Hertz Corporate and European strategies. This communication, detailing the company’s strategy, is now a required process in French labor law. The law has been implemented to mandate all French international and multi-national companies, to provide the necessary
  • 13. structures to accompany the evolution and development of their workforces. This process places the responsibility on the employer to assure the “employability” of French employees should they suffer job loss that is a direct result of a companies long term strategy or reorganization. Hertz France intends to use to our advantage, the constructive relationship that we have built with our employee elected National Union Representatives. This will enable both parties, to work hand in hand to achieve this objective together - involving all Hertz France employees in the process Another objective of the “Change Management Toolkit” is to provide all Hertz France managers , at the very least, the same constructive and comprehensive understanding of Hertz Strategic architecture, as that given to our National Union Representatives.. In turn, managers will be expected to develop the competencies and skills that permit them to use this toolkit as an “innovative” means to explain, bring to life and involve all team members in the execution of Hertz France, European and Corporate strategy locally, regionally and nationally and in real-time. The “Change Management Toolkit” is designed to evolve as corporate strategy evolves and changes - a never ending process of taking the best of today to build the desired state of tomorrow. Hertz France intends to evolve thietoolkit and to communicate strategic
  • 14. alignment measures to our management on a quarterly basis - in synergy with European and Corporate Webcasts and the various messages diffused. Hertz France’s internal communication has thus entered the information age, and by using today’s available technology, Corporate, European and local strategy will be communicated, measured and adjusted in real time, everywhere and by everyone in Hertz Agencies, Regional Offices and Head Quarters across France. All Hertz France employees will know exactly what is expected of them, the means by which this expectation is to be achieved, as well as understand how they are measured and rewarded in terms of objectives set versus performance attained. The PMED initiative implemented world wide by the Talent Management COE in January 2008, has now been cascaded down to middle management worldwide. The next step of the cascade process is planned in Q4 2008, and involves the station manager level being integrated into the PMED process. The PMED process will assure that all hertz France employees have a concrete understanding of the impact of how individual employee actions on the local and regional level, impact the contribution that France Hertz makes on both the European and Corporate stage – a virtual stage upon which Hertz stage managers around the world, orchestrate the cascade of Corporate strategy to various, Hertz business divisions worldwide.
  • 15. The “Change management” toolkit” integrates Corporate Vision, Mission & Values with the different elements of Corporate and European strategy that Hertz France has succeeded in cascading down to the front-line. We have used the balanced scorecard concept, introduced by Mark Frissora during his December 2006 inaugural employee webcast, as a means to vehicle our various message and communications regarding our strategy. The BSC concept provides us with a structure to mobilize and align all employee activities, and is used to provide Hertz France Managers with the methodology, information systems, and communication structures, necessary to support continuous employee training and development measures. We will use the balance scorecard as a social tool that generates synergy at all levels of our organization, as Hertz managers across France align local initiatives with both individual and collective key performance indicators. The BSC Concept permits Hertz France employees to successfully link French initiatives into the objectives detailed in the Hertz Europe Balanced Scorecard. Our objective is to build a virtual bridge that aligns Hertz France employee’s daily objectives and activities with the Hertz Europe Vision of tomorrow. It is via this process, in synergy with our various COE domain experts and HR Business Partners, that Hertz France will transform CDG Airport into an “Employer of Choice”. We intend to achieve concrete results, in-real-time, by translating Hertz’s Vision & Mission into goals and measures that are then cascaded and linked throughout our organization by means of the balanced scorecard and our Hertz France strategy map. Mark Frissora and his executive team have elaborated the Corporate Strategic Architecture around the balanced scorecard concept and their definition of “focused performance”. The PMED process has been implemented to guide and develop all mangers in the alignment and consequent implementation, cascade and achievement of both corporate and European strategy, at all levels of the organization.
  • 16. To focus on improvement, business concepts like strategy, value adding processes and performance measures must be connected but remain flexible for custom design –“ focused performance is an approach that accomplishes this”. General Human resource management and the accompanying soft competency skills required by managers, worldwide, are detailed and brought to life by our corporate values. These values guide employee behaviors as they adapt to and implement the new Hertz Leadership model, which in turn is supported by the Hertz Competency model. The PMED program, in turn, aligns and measures employee performance against desired results, as strategy is cascaded down from the executive level down to those employees whose eyes look into the eyes of our customer. In turn the results of the strategy need to be cascaded back up through the organization in order to be constantly monitored, fine-tuned, as well as measured against Corporate desired results. Hoschin planning
  • 17. and the PMED process provide us with the structures needed to accomplish this. Hertz France’s “Change Management Toolkit” is the result of cascading strategy back up through the organization to the local executive level. Hertz France has also created, in partnership with our National Union Representatives, a ten step process that uses the BSC as a tool for creating a climate and common focus for change activities, at the same time as allowing Management to realign local objectives with European strategy. . The slide above illustrates the ten step process defined to explain how corporate and European strategies come together. As stated the balanced scorecard is used as a “concept” to cascade downwards and link Corporate & European objectives into national, regional
  • 18. and local organizations. The Balanced Scorecard provides the cog that makes all the wheels of the strategy turn. In reality, it is no more than a carefully selected set of measures derived from Hertz France’s strategy and driven by European and Corporate strategic initiatives. The measures selected for the scorecard represent a tool for Hertz France leaders and managers to use in communicating to our employees and external stakeholders (outsourced Service Partners), the service agreement levels, outcomes and performance driver’s, key to Hertz France achieving both our mission and strategic objectives. The final result of these actions will represent Hertz France’s contribute to the construction of the Corporate Vision. Hertz France intends to use this ten step process to communicate the strategy to those whose role it is to execute strategy – “every employee at every level of the company”. This comprehensive, yet straight forward, step-by-step communication approach is designed to create awareness, for all employees, of the strategic “big picture” (vision) as well as the projects and initiatives that have to be implemented, (mission) in order to build and attain this desired state – Our Vision. This process allows us to align goals, incentives and resources on the local, regional and national levels as Hertz France aligns our country level actions with European balanced scorecard objectives and corporate strategy. Hertz France will make sure that strategy becomes the job of every employee and that every employee has access to the training and development necessary to learn their lines and bring to life Hertz’s’ exemplary service standards, as they perform their role in the “World Wide Hertz Corporate Show”.
  • 19. As the various Genesis reengineering work processes produce their desired fruit, Hertz France will use the Université des Métiers, to create knowledge sharing networks; networks constructed with the objective of assisting employees navigate and understand the strategy by training themselves and preparing themselves to understand, execute and actively participate in the continuous improvement processes that are required. This process will enable Hertz France to unlock, detect, develop, use and maximize hidden employee talents.
  • 20. In June 2008, Hertz Corporation Senior Management from around the world, met for their now annual convention, in Las Vegas. Following the work sessions that took place, a presentation, entitled “Speeding Our Transformation – A call to action”, was sent to all participants. As illustrated below, the last slide of this presentation communicates to Hertz Corporation Management Worldwide, that “Leadership is the key and that participants are Hertz leaders; leaders who should passionately deploy the tools that they have been given”. Hertz France has used the “Change Management Toolkit” to further develop this message and to present in detail the tools given to us by our European and Corporate Executives. In terms of employee satisfaction, which falls under the balanced scorecard perspective of “Learning and Growth”, Hertz France has linked into the European and Corporate (Learning and Growth perspective -through the Hoschin planning process), the objective of successfully negotiating and signing an “Accord GPEC” with our National Union Representatives (social partners). This action directly contributes to the European and Corporate BSC objective that Hertz become an “Employer of Choice”. The GPEC and its obligations are detailed later in the presentation, and in French in Appendix I.
  • 21. This gives Hertz France the following scenario; Corporate and European strategy to be implemented on the local level via an “Accord GPEC”. The implementation of the “accord”, once signed, will be accompanied by the PMED program providing Hertz France management, from top down, with a system to connect measure and appraise individual employee objectives and the role they play collectively in the realization of strategy on local, regional and country levels. Originally built to successfully integrate and “bring to life” new training laws for all employees, the “University des Métiers” provides Hertz France with a “foundation stone” which furnishes the solid base upon which we cascade and link Hertz corporate and European strategic initiatives down to those Hertz France frontline employees, “whose eyes look into the eyes of our customers”.
  • 22. The last and most strategic corporate ingredient that we need to integrate in to our Pulse Survey Action Plan is that of the Global Customer Experience Program. The success of this program will be tightly linked to the successful implementation of the New Hertz Leadership model and the Competency model that supports it. These models provide the bedrock upon which the Hertz Corporation intends to conduct a cultural transformation that aligns all Hertz employee’s eyes worldwide, in order to better serve and support, those Hertz employees whose eyes look into the eyes of our customers. These two models form the foundations for the different changes in terms of human management that will be implemented and linked into the corporate values. The resulting behaviors will permit Hertz France to align and target training and development investments with the building of the skills and competencies essential to the pursuit of our objective of becoming an “Employer of Choice” and French rental car industry’s reference for Employee and Customer Satisfaction.
  • 23. 1. How Hertz France plans to realize the objective of transforming CDG Airport into an employer of choice: During the period 2004–2005, roughly a dozen managers from Hertz France participated in the European Performance Management Program. As participants were instructed in this training class, managing performance, our own and others, is a key activity in developing an organizational culture and in achieving the strategic business objectives that are being requested in today’s difficult economic environment. As part of Hertz’s strategy of continuous improvement, the Hertz Corporation is asking Hertz France Management to create a culture where we apply the appropriate skills and behaviors for managing and maximizing the performance of others using Corporate Values as a guide. The European Performance Management program was built with this objective in mind. This program was aimed at all Hertz management levels and was designed to help managers Europe-wide, develop these skills and behaviors in their respective management populations, adapting them culturally, and cascading them downwards to local management. The initial implementation phase of this program focused on senior Hertz European management. To date, almost 200 of Hertz Europe’s Senior & Middle Managers have completed this course. In 2006, all European training managers participated in a train-the-trainer course in view to assisting local upper management implement and cascade these performance measures and values down through the organization, at the same time as developing a new Hertz European management culture.
  • 24. The Performance management program has given participating managers the tools that they need to:  Ensure that the organization, and its individual components, meets its stated objectives by successfully managing the performance of its people.  Provide support to managers in the increasingly complex role of managing people and their performance.  Create a consistent standard and style of managing people and their performance across Europe and to share practice and experience in different contexts. Participating European managers have also acquired:  An understanding of how an integrated performance management system contributes to the success of the organization.  An ability to consider the skills and knowledge required for an integrated performance management system.  Have received feedback on their own style of managing performance.  Have identified areas of strength and areas of development.  An understanding the phases of performance management.  Have considered their Myers Briggs Type Indicator (MBTI) and considered the implication of their personal preferences on how they manage performance.  Have developed a positive and constructive understanding of differences between people and appreciated the importance of valuing and working with different approaches and perspectives.  The ability to SMART objectives.  Have understood and have practiced the skills of coaching using the GROW model.  The ability to recognize the key principles of motivation and identify different sets of factors which tend to motivate and de- motivate different employees.  An understanding of the principles of delegation.  An experience relating to a variety of different learning methods  An understanding of the importance of conducting effective appraisals and have practiced this skill.
  • 25. The University des Métiers has been using the MBTI tool since 2005, to improve teamwork, communication, conflict management and self-understanding. The questionnaire has been completed by more than 100 Hertz France HQ personnel, including all Executive Committee members, the entire Finance, HR, IT and Fleet teams, various managers & supervisors as well as numerous employees. The information furnished by the MBTI results, has allowed the University des Métiers to work on individual development programs, as well as improving internal communication and increasing inter-service team work. Hertz France intends to use this powerful, simple and non judgmental tool to provide the “human understanding” that will become the backbone of our successful change management strategy; - important because change today is an eternal process that workforces worldwide must constantly adapt to and evolve with. Hertz France will provide all employees with a framework to better understand human behavior in the workplace –better understanding the behavior of others by first understanding ones own natural and inborn preferences.
  • 26. The MBTI uses a common and simple language that provides the foundation upon which all employees both collectively and at the same time as developing future employee potential. This understanding will rapidly become a strategic key competence for Hertz France Managers; a skill developed by managers to align workforce skills and talents collectively, by managing individual training and development plans This methodology establishes an important and individual relationship between the employee and the employer that he or she has chosen. This relationship needs to be established during new hire induction for all future employees of an employer of choice.
  • 27. 2. The balanced scorecard concept The balanced scorecard concept was first introduced to all Hertz European Station Managers in 2004-05 when European Training and Development launched a “Managing Financial Performance” training program. This training program was completed by all European Regional and Station Mangers and has provided a consistent approach to financial measurement across Europe The training program has also provided local managers with strategic answers to such reoccurring questions as  How do we decide what we should be doing?  How do we balance our actions and allocate our resources over time?  How can we confirm that our necessary actions are actually being taken?  How do we determine if those actions are materializing into our expected improved results?
  • 28. The balanced scorecard represents a carefully selected set of measures derived from an organization’s strategy. Hertz France understands that the real concept of performance management is associated with an approach to creating a shared vision of purpose and aims of the organization, helping each individual employee understand and recognize their part in contributing to these aims, and in so doing manage and enhance the performance of both individuals and the organization.
  • 29. The different local measures created by Hertz Europe’s balanced scorecard were as follows: Organizations such as ours need a language for communicating strategy as well as clearly understood processes and systems that guide employees as they implement the strategy and gain real-time feedback as to the results achieved. The BSC process helps
  • 30. strategy to become everyone’s, everyday job. Every employee at every level of the Hertz France organization will understand his or her role in the French Show. Our Vision tells us where we are going. - “Hertz will be the first choice brand for vehicle and equipment rental and total mobility solutions”. Our strategy tells us what we want to achieve – “Corporate and European Strategic Architectures and their initiatives.” Our objectives tell us what actions we need to carry out. – “Strategy maps resulting form Hoschin planning sessions”. The balanced scorecard tells us how we measure and communicate strategy implementation. “The “Change Management Toolkit.
  • 31. The balanced scorecard becomes the central organizational agenda for Hertz France, creating a credible force and mobilizing our employees to behave in ways that create linkages and common decision templates. The balanced scorecard concept is used as the catalyst that permits the real-time execution of the Hertz France Strategy map. . As employees can effectively implement a strategy only when they clearly understand the strategy and see how their actions contribute to its achievement, Hertz France will provide our employees and managers with the training and tools that we have been given or that our employees have requested, to align local Hertz Agency daily activities with the execution of Hertz France’s strategy both regionally and nationally. Equally, we will make it one of our primary objectives to insure that Hertz France employees at all levels are recognized for their contribution to the organizations success. The benchmark for the aforementioned objectives will be established through the implementation of our Pulse Survey Action Plan at CDG Airport.
  • 32. Mark Frissora used the balance scorecard concept to illustrate his future vision of Hertz, detailed in his first employee communication in August 2006.. As Mark stated the balanced scorecard provides us with a system for measuring focused performance, i.e., “managing things that really matter” Mark Frissora has defined focused performance for us as:  An approach for driving good trade-off decisions that balance share-holder, employee and customer requirements.  A flexible framework that makes company objectives actionable at all levels of the organization.  An approach for prioritizing improvement cross-functionally.  An integrator of effort to capture the most significant opportunities.
  • 33. The result of this local BSC (balanced scorecard) implementation strategy is to provide all employee teams with clear goals and objectives and the strategic feedback that encourages both continual learning and most importantly of all the team work and synergy necessary to achieve them.
  • 34. 3. Making strategy everyone’s business at Charles De Gaulle Airport – “a 10 Step Process & and a “Change Management Toolkit The result of the various exchanges that the University des Métiers has conducted this year with Hertz France’s social partners, has allowed us to understand the importance of translating strategy, at all levels, into a set of action-orientated performance measures, instead of using control to achieve them. This collective understanding was materialized into a “10 Step process for understanding strategy”. This approach has also enabled Hertz France to confirm that by translating strategy into a language that is more precise (“a 10 step framework for understanding strategy”) we are better able to communicate to our employees what we really want. Instead of saying “let’s improve customer satisfaction”, we now say, “what we mean by customer satisfaction at Hertz and how we define and measure it?” This also forces us to ask, “What skills are required to improve our customer satisfaction……what skills do our employees already have and what skills will be needed for the future?”. By monitoring this index using the dashboards that the corporation is providing for us, we will be able materialize the execution of “Our Mission” in real-time as well as monitor and adjust how far away we are from getting to where we want to be tomorrow - Our Vision.
  • 35. Hertz France further developed this “10 Step process to understanding strategy into the “Change Management Toolkit”. The toolkit provides the solid information base upon which Hertz France plans to train, develop and guide all employees as they contribute to the successful realization of our HR Hoschin objective –‘ making Hertz Europe’s biggest European Hub an “Employer of Choice’. As already mentioned the discussions, held earlier on in the year, were conducted to explain Hertz Corporate and European strategy to our National Union Representatives. The objective obtained, was that of cascading the explained strategy down to the level of the Hertz employee whose eyes look into the eyes of our customers - the cascade of strategy down to the frontline and to those responsible for executing the strategy. “The Change management Toolkit” is representative of the manner in which Hertz France has communicated strategy down to the front-line employee level. This toolkit is how Hertz France intends to execute both Corporate and European strategy on a local level and in synergy with all Hertz Corporation employees. The cascade down to the front-line and
  • 36. the consequent reassessment of the information materialized by our toolkit, will allow corporate Executives to visualize Hertz France’s understanding of the way in which our strategy is both understood and executed in the field, by those employees whose eyes look into eyes of our customers. This achievement will allow Hertz France to revise corporate and European strategy in real-time as it weathers both current economic, social and international environmental challenges. The “Change Management Toolkit” is Hertz France’s GOLD. An additional advantage spawned by the “joint partnership” approach to explaining and cascading strategy down to those the front-line, is that we have sold the idea to our Social Partners, of building together the virtual Hertz of tomorrow. In addition we have presented they tools and programs; currently being constructed, and that are needed to drive the management cultural change essential to the successful execution of our strategy. The different soft and hard competencies required, as well as the means by which they will be acquired (by employees at all levels of the company), will be treated and negotiated as part of the GPEC process that Hertz France is currently conducting with our Social Partners. With this important step in the right direction behind us, Hertz France intends to make it our long term goal to cultivate relationship that positions our Social Partners as strategic partners, working alongside our Business Partners. Partners with whom we build, and transform in to activities and action, the various initiatives and changes necessary for Hertz France to bring CDG Airport Employee Pulse survey scores to the benchmark standard of “best in class”
  • 37. 4. Pulse action plan ingredients Here are the Corporate and Local ingredients that Hertz France will address in our employee Pulse Survey Action Plan: Top down Initiatives Bottom up Initiative Strategy maps Accord GPEC ACS Outsource – new Learning Management System Interface for decentralized learning strategy Performance Management & Employee Development French training law reform Cost Reduction initiatives Lean Sigma & Hertz Improvement Process 10 Corporate tools furnished by Corporate D.I.F – Individual training hour rights (20 hours/year/employee)
  • 38. To bring this action plan to fruition, the University des Métiers intends to use the GPEC negotiation to build an agreement that details the various actions and investments that Hertz France will conduct over a three year period, as we transform CDG Airport into the French Benchmark for both employee and customer satisfaction and implement the results across France. The short term objective targeted would be to conduct an inventory with local Airport employees at all levels – vehicle attendants, mechanics CSR’s SM’s etc. and every level up through to our various steering and executive committees at Trappes HQ. This project would be conducted in partnership with the National French Union Representatives responsible for negotiating the GPEC accord. The objective of this inventory would be to identify, list, plan correction and then resolve the basic problems identified, and for which concrete, corrective actions are pre-cursor to achieving our Hoschin corporate objective of becoming an “Employer of Choice”.
  • 39. We will first “fix the basics”, and will do so by being “innovative. This will be Hertz France’s plan to restore employee confidence in management fulfilling its promises. We have previously made promises to the employees of CDG airport that we have not been able to deliver. We failed because the new COE’s and structures were in their initial organizational stages at the time, thus were unable to provide the concrete actions behind the promises made. This deception can be easily righted – this is our intention with this action plan. Once we have succeeded here, we will have the credibility necessary to cascade concrete solutions and structures, to all Hertz agencies in airports, stations, towns and cities across France. Ever declining pulse survey results have indicated that the “top down actions” such as many of those listed below, have little effect on increasing the satisfaction of the Corporations 30,000 front-line staff and 1600 plus station managers.  Webcast Genesis information cascades  Ask Mark / Ask Michel Genesis section on website  Launch of communications tool-kits for managers Letters to employees  Industry analyst presentations Eliminating procedures  Global retention project Global talent acquisition  Performance Management and Employee Development process High potential and succession process  New organizational structure for Europe Commercial and Operating Councils  Launch of HIP, Hoschin, TVM, Six Sigma, Launch Customer Experience program  Major focus on reducing counter waiting times HIP Kaizens, Six Sigma  Continuous focus on NPS, including customer written feedback Hertz Gold locations extended in Europe  Online Check-In available to all customers around the world New Refueling Program Check-In  Introduction of Hoschin Introduction of PMED for 2009  New Leadership Competency model under development New Global HR organizational structure  New VP of Global Talent Management Launch of Global Talent Management  HIP training Hoschin training  Project management skills English language learning courses
  • 40. New LSO provider in Learning & Development Employee Stock Purchase Scheme  Global Leadership Awards Global retention project in development  Flexible scheduling, where appropriate Global Leadership Awards  Global Talent Succession Planning New Leadership Competency model  Global retention project now in development Global Talent Succession Planning o Sigma/Kaizens/5S BPR (reengineering processes) Hertz France field based employees, have informed us that, employee satisfaction will be a long journey if we continue to only cascade satisfaction measures top-down. What Hertz France employees want is additional bottom-up satisfaction measures. Measures that fix the basics such as:  40% of Gold customers shouldn't be Gold Customers - no improvement in this area despite many promises to take care of the problem  Our systems are old fashioned and out of date, especially compared with out competitors such as Avis and Europe Car who are much faster than us in terms of service given the technology they have invested in, in terms of such things as Instant return  Staff uniforms are "very often" out of stock - various sizes models not available  Despite numerous promises by MPF to reduce the number of procedures governing our daily ops, nothing has really changed. We must make our objective that of addressing & fixing these basics, as a precursor to improvement in both internal and external customer satisfaction. Hertz France’s Hoschin HR objective is to sign an agreement (accord) with our social partners before 31 12 2008. The GPEC will also allow us to examine all current training methods, used at CDG, to integrate new hires, develop and prepare existing employees as well as the methods and tools used to select, train and develop different Airport management personnel. The means of accessing and tracking both individually and collectively the existing training offer and the tools already in place will also be examined in detail.
  • 41. 4. What is the « GPEC » – (Gestion ¨Prévisionnelle des Emplois et des Compétences?) In a nutshell, the GPEC requires all French companies to reinforce their capability to better manage and prepare for evolutions in the workplace resulting from international corporate strategies. This is achieved by negotiating the implementation of the Human Resource structures necessary to develop, train and accompany the employees in teal-time and as their tasks and activities evolve. It is as if the French Government has said, “Here you go Mr. Frissora and Mr. Taride, we would like for you to negotiate and come up with an agreement that provides a satisfactory answer for both your company, your employees and your shareholders concerning the following subjects, and, by the way, we expect this agreement to be negotiated and re-negotiated on a triennial basis”:  The way in which Hertz France will adjust its human resources in real time, as France initiates both corporate and European objectives.  The different analyses and employee training and development necessary to develop and maintain employee versatility and employability should their current employment disappear following evolution in the workplace.  Reinforce the customer experience by giving Hertz France employees, the competences and technical skills necessary to provide the levels of service expected in today’s global, consumer world.  To conserve and mobilize collective employee skills and competencies for the benefit of Hertz France by providing all employees with “life-long” training, development and career opportunities.
  • 42. The GPEC law is thus “a Gold Mine” for Hertz France and we intend to use this “Gold Mine” to the advantage of all Hertz France personnel, at the same time as transforming CDG airport into an employer of choice. Hertz France intends to do so by first satisfying existing employees. We will do so by building the communication and training structures necessary to provide Hertz CDG employees with the tools and competencies necessary to transform CDG airport into the benchmark for internal customer satisfaction and an employer of choice in the French car rental industry. The Hertz Corporation in implementing its Corporate Strategy must remain sensitive to Division cultural differences, especially at the individual country level where laws and legislation often require Hertz France to creatively adapt strategy to local legislation. A “think global, act local and think local, act global” approach should be encouraged whenever possible. An example of this kind of “constraint” is the legislative obligation imposed on all French companies to negotiate, every three years, an “Accord GPEC”. Hertz France plans on transforming this obligation into a strategic advantage.
  • 43. This agreement (accord) once signed will outline the various recruitment, employee induction, and training and development structures, agreed upon as necessary, for Hertz France to implement European and Corporate strategy over a three year period. Again, the objective of this accord is to identify, prepare and accompany employees at all levels to the various technological and social evolutions, necessary to take the company and its workforce from where it is today to its vision of tomorrow. A kind of imaginary bridge that allows a company to provide structure and guidance to employees as they execute those strategic initiatives essential to building, in synergy, the bridge that connects Hertz France today with Hertz Europe’s desired state of tomorrow. Such evolution often involves existing jobs becoming redundant as well as the emergence of new job types or even new fields.
  • 44. The slide below illustrates from a global point of view the objective sought after by the French Government in implementing the “Borloo Law” on social cohesion (GPEC). As in the illustration we have to take the European strategic architecture and explain and negotiate, with our Social Partners, where we are today as a company & where we want to be tomorrow as a company and most importantly how we plan to get there. The resulting “Accord GPEC” details exactly what we need to build together in order to accompany our employees both individually and collectively as the workforce implements the corporations strategic objectives. The French Governments’ objective with the “Law Borloo on social cohesion” is to avoid, in the future, exactly what is happening at Hertz France at present – restructuring and reorganization that has a detrimental effect on local employment - and for which many of our employees have not been sufficiently prepared to reintegrate the French workforce. The negotiation process undertaken by the GPEC is targeted at developing the employability of all employees, both collectively and individually, thus preparing them, for the different evolutions and reorganizations that are constantly appearing in conjunction within today’s rapidly changing and global economy.
  • 45. The GPEC accord details the different structures and means that the company agrees to put into place to accompany employees concerning the following points. 1. The company strategy and the manner in which this strategy and the changes or evolutions that it entails, are communicated in real-time to the elected employee company representatives – Employee Work Council. The object of this point of the negotiation is to agree on a temporal communications framework that allows the company to communicate, share and execute her strategy in real-time and with the coordination and support of both employee company representatives (the Work Council) and the Company’s employee elected Social Partners (Union Representatives). Given the numerous work sessions that have taken place in 2008 and the resulting “10 Step Framework for understanding strategy”,” which is the fruit of this joint effort, Hertz France considers that we have reached a point where the strategy is now being communicated to our Social Partners as new information becomes available. At the last GPEC meeting, which took place at the end of June, each participant received a CD Rom with key information from the webcasts of February, April and June of this year. Hertz France has thus accomplished the objective outlined in point 1 above – it rests just to finalize the temporal structure that details the manner in which evolving European and Corporate strategy will be communicated to the French Work Council and Social Partners. This information will be detailed in the final accord that we intend to sign before 31 12 08. 2. With both the Company and her employee representatives now working now from the same “10 Step Strategy Framework” to collectively understand Hertz France Strategy, the next step of the GPEC is to negotiate the different recruitment, training and development structures and systems that must be put into place in order to successfully support, accompany and coach employees through the different changes or evolutions provoked by the company’s long-term strategy.
  • 46. 3. The process requires a diagnostic of current job roles (activities performed) and the determining of the respective employee skills and competencies necessary to accompany the company’s long term strategy. This diagnostic is the foundation upon which the GPEC is built. We reconstruct all employee job descriptions using the activities performed on the job to determine the competences, knowledge and skills necessary for the employee to do the job, and this for both today and tomorrow’s skill needs. The two illustrations above illustrate this link. It is in this sense that our GPEC obligation presents a real advantage to the Direction of Hertz France. A real advantage because, in its own way, the GPEC mandates Hertz France to do exactly what Mark Frissora and Michel Taride are requesting on the corporate and European levels, that is to say: “Adapt Hertz Corporate & European Strategy locally, preparing employees by providing them with the tools and training necessary to develop the professional skills, competencies and versatility required by current corporate values and culture changes”.
  • 47. 6. Hertz France’s current situation: the “State of the Union”. Thinking locally, acting global. Thinking global, acting locally Hertz France has, through the use of the “Ten Step Framework for understanding strategy”, cascaded Corporate and European strategic architecture to those employees whose eyes look into the eye of our customers. The result of this process is the construction of the ”Change Management Toolkit” This toolkit combines the expected manager role directives, (communicated in March 2008 during the manager’s webcast) and the objectives and tools that the Hertz Corporation has made available to all management. This is achieved in the form of an interactive PowerPoint presentation. Using our University des Métiers and the existing training structure in place, we will assure the communication, cascade and the measure linkage necessary to align the execution of this strategy locally across France. Hertz France will take her current training structure materialized by the University des Métiers and build a recipe that uses the corporate architecture in service of internal employee customer satisfaction. A service that will ensure that wherever in France there are Hertz employees looking into the customers eyes, they are professional, well trained and “exemplary” in the level of service they deliver- we all have customers wherever we are based or whatever our role is in the Hertz France show.
  • 48. If we look at the illustration below you will note that with the Global COE for Talent Management Hertz has decided to take a top down approach; an approach labeled “Best Practice” in the retail industry. The objective of this top down training strategy is to engage field leadership in the training process while reaching for a broader audience more consistently. This will shift ILT (Individual Learning Time) from front-line employees to Management, thus reducing costs. This approach also leverages creative delivery methods such as e-learning, OTJ tools, mentoring and coaching to cascade training across the organization. This slide below illustrates the current situation from both a French corporate and local standpoint. Corporate initiatives are represented at the top of the pyramid with Hertz Europe’s new interim structure supported by two corporate, top-down initiatives - the new Hertz Leadership model and the Performance Management and Employee Development Process. The desired management style is then expected to cascade down the organization from the top until its effects are experience by those Hertz employees whose eyes look into our customer’s eyes.
  • 49. The “Managers Change Communication Toolkit, will allow Hertz France to insure that our lower, middle and upper management have, at the very least, access to the comprehensive understanding of this ten step process that we have cascaded down to the frontline. The “Change Management Toolkit”, which is currently under finalization, was presented to our Social Partners during June’s GPEC meeting and in turn to the HR Business Partner and his direct reports at the beginning of July. The HR Business Partner decided that this toolkit should be sent to every Hertz France manager. Proposed next step was to furnish each member of French HR management with a copy of the Toolkit for validation of information, copyright, structure and message. This step is still pending.
  • 50. If we look at our current situation with all of the above mentioned rolled into one. This slide illustrates how our company is currently set up to become an “employer of choice” and build, implement, and provide the Global Customer Experience that will differentiate Hertz from her competitors – the little difference that makes all the difference and which gives the Hertz Corporation the merited acclamation of Leader in her Industry Going even further………….the above slide illustrates that with our current organization’s top-down approach, the greatest number of eyes that look into our customer eyes are those eyes of our 30,000 frontline employees supported by the 1600 plus Location Managers. These eyes are currently at the bottom of our organization.
  • 51. Surely it makes more sense to reverse the situation in order to make, the final objective sought after in terms of the Customer Experience, that of improving the service at the level of the employee that looks into the customers eyes. The slide below clearly indicates the competitive advantage obtained, when we inverse our current structure with the objective of placing the organizations focus on those eyes that look into the eyes of our customer’s – those of our thirty thousand plus front line employees and managers. By turning the structure up-side down, we see that Hertz France has already transmitted the Corporate Balanced Scorecard tools and measures to our front-line staff by providing them with a toolkit that unites all corporate communication to date, and presents French corporate and local strategy in an innovative, interactive and dynamic real-timer basis.
  • 52. The Four Customer promises illustrated in the slide below must first be applied and brought to life for Hertz’s internal customers, our “employees of choice” – this includes everyone that directly or indirectly supports or comes into contact with frontline employees and their managers – every Hertz France employee.
  • 53. 7. What we need to measure and why we need to measure it: Measurements or Key Performance Indicators (KPI’s) need to be driven by the Hertz strategy and should cover all critical aspects of performance and, should be specific for each level and type of position. Achievement of excellence on the performance measures should result in excellent company performance.
  • 54. In April 2008 Hertz France middle and upper Management from head office, field operations & sales met for a two day Hoschin planning seminar. The objective of this work session was to use Hoschin planning to link Hertz France objectives into European BSC objectives. The objective was to link Hertz France objectives in to the Four Perspectives of European Balanced scorecard and to cascade these objectives throughout the organization using the resulting strategy map (see below). The results have allowed Hertz France to translate corporate strategy into operational terms, ensuring clarity of the strategy across the organization, at the same time as communicating through measurement. In so doing Hertz France will create a consensus and reinforced teamwork through the process of developing the measures. The balanced scorecard will allow Hertz France to communicate the multiple linked objectives that must be achieved to compete and lead the market. The scorecard translates Hertz Mission and Strategy into tangible goals and measures.
  • 55. 7. Performance Management Process Cycle – How Hertz France intends to link CDG Airport employee Performance to Local, Regional, Country and European Balanced Scorecard Initiatives and Measures  Figure A.1. Depicts a performance management process wheel with three elements, or arcs: focus, communicate, and collaborate. As previously stated, employees can effectively implement a strategy only when they clearly understand it and can see how they contribute to its achievement. Employees and managers should be provided with tools to align their work with the strategy, and should be recognized for their contribution to the organization’s success.  A strategy-focused organization enables targeted feedback on strategic performance to specific employee teams in order to effect continual strategy and implementation improvements.  Performance management involves people knowing that all members of their organization are focusing, communicating, and collaborating on strategy from a single vantage point.
  • 56. The performance management process contains three elements of an interactive cycle: 1. Focus.  The process of managing strategy begins with making choices and focus.  There will never be enough money or resources to chase every opportunity or market on the planet.  We are continually limited by scarce and precious resources and time, so focus is key — and strategy yields focus.  In this important initial step, senior management defines and continuously adjusts its strategy.  Next, by mapping cause-and-effect relationships, management selects and defines strategic objectives and higher-impact action steps and projects that will achieve those objectives.
  • 57.  Strategy maps are the key tools for developing focus.  Do not underestimate the importance of strategy maps.  They have been overshadowed by the popular “scorecard” that stars in arc number two; but those in the know place far greater respect and emphasis on strategy maps compared to scorecards as the key to successfully executing strategy.  Companies can ideally turn big goals into small, manageable projects that can be accomplished.
  • 58. The first step in this translation is to create a set of strategic themes that will bridge the gap between the existing state of operations and the desired state.  These themes then organize the work of the company and can be used to subdivide work among various operating divisions, departments, and employees.  Whether you base your strategy on a balanced scorecard, the Malcolm Baldrige Award criteria, six sigma, total quality management (TQM), or the lean management framework, an organization should define and use clear, concise performance indicators that help its workers see the causes and effects of its strategy.  Strategy maps begin that process.  By focusing on critical areas, everyone can identify the true sources of business failure, as well as the best practices that lead to future success.  This is also a logical place to link the strategy to the budgeting process.
  • 59. 2. Communicate with Feedback.  The process of managing strategy continues with communication.  This context is reserved for senior management articulating its strategy to its employees. (Webcasts)  Along with articulating strategy comes the all-important feedback to employee teams. (Pulse & PMED)  Remember the mantra, “How am I doing on what is important?”  A scorecard is the key tool for reinforcing communication of the strategy and for navigating the steps outlined in the strategy map.  A scorecard has carefully selected and defined indicators and measures, each weighted to reflect its relative level of importance, which is then weighted in the strategy map.
  • 60.  Think of a scorecard as a set of chain links of the strategy map’s strategic objectives, where each chain link uses if-then relationships with leading and lagging measures to drive work efforts to align with the organization’s mission and vision.  By integrating, distributing, and analyzing enterprise-wide information, an organization gains the power to act on this information—ahead of its competitors.  The goal is to communicate a strategic vision to the entire workforce and empower employees to execute its strategy proactively, before events occur that demand a reaction.  To stay ahead, individuals must draw on their organization’s business intelligence to make decisions based on hard facts that are timely, not on assumptions and late news.  And when it is too late, sufficient enterprise intelligence should be accessible to conduct root-cause analysis to fix the situation and get back on track.
  • 61. 3. Collaborate.  The process cycle of managing strategy continues with collaboration.  (The cycle never actually ends; it is a continuous iterative loop.)  By aligning various strategies among business units, the organization taps into the collective knowledge of its employees and unleashes each person’s potential.  From the top desk to the desk top, e-mail discussion threads, based on feedback from key performance indicator (KPI) scores from the scorecard, can be created for faster problem solving and consensus.  The performance management (PM) process truly makes executing strategy everyone’s job.  Collaboration, in this sense, is all about collective dialogue.  Management is not equivalent to control—management is coaching people for continuous improvement.  Strategy maps transcend time.  They will change as the executives adjust the mission and strategies.  In contrast, the scorecard will change periodically because the weightings for emphasis will be altered and KPI’s will be added and removed to maintain focus and speed.
  • 62. A simple way to think about the PM process cycle designed to manage strategies is that it embraces both planning and the execution of the plan.  However, PM is greatly aided when managers and employee teams have access to and visibility of fact-based intelligence so that the correct strategies are formulated and so that employee teams can analyze what is happening in order to make better decisions. (Dashboards)  What happens when an organization’s strategy is unclear? It results in wasted energy. Most organizations typically focus on their own crude version of the second two elements of the PM process wheel. This involves monitoring and managing activities by focusing on completed actions, particularly when results are different from those expected. This can be an ineffective exercise when wrong performance measures are examined.
  • 63.  To complicate matters, too many measures are usually reported, rather than the vital and relevant few, thus leading to a “monitor everything” style without the organization really knowing in which direction it should be going.  Management’s core shortcoming is they do not invest time in the first arc of the PM process wheel – to decide what their strategic objectives are (ideally formulated with business intelligence) and then communicate them to employees.
  • 64. Let’s now discuss in greater depth the three arcs of the PM process wheel and the steps involved in constructing this type of system. There are eight fundamental steps: 1. First, agree on the vision, mission, and strategic intent of the enterprise. Define the strategies. 2. Define the strategic objectives that support step 1. 3. Map the interrelated strategic objectives with their cause-and-effect linkages. 4. Define initiatives, projects, programs, and actions to close the performance gap for each strategic objective. Scale back or terminate ongoing projects that do not support strategic objectives. 5. For each strategic objective, select appropriate strategic KPI’s (strategic measures). Cascade these strategic measures to relevant parts of the organization, allowing them to define their own KPI’s (tactical and operational measures) aimed at supporting the strategic KPI’s and maintaining a common and shared focus on the strategy. 6. Select the target levels for each KPI for relevant time periods. Identify the performance deficiency gap. 7. Collect the actual KPI’s, display the scores, and compare to the targets.
  • 65. 8. Manage eventual performance gaps to steer the organization by interpreting and reacting to the score, and then revise the actions plans. Focus: Starting Point of the Performance Management Process  The PM process begins with arc 1, “Focus.”  It is here that organizations, as previously mentioned, can turn big strategic objectives into smaller, manageable projects and initiatives that can be accomplished.  These initiatives are the main way performance gaps are closed between the current state and the strategic destinations.
  • 66.  Each initiative involves focusing and may result in upgrading or creating new capabilities, skills, and technologies.  If the projects are linked to the correct strategic objectives that, in turn, support the mission and vision, then work behavior is aligning with the overall strategy.  After the strategy is translated into a portfolio of initiatives and operational projects, then those can be reflected in the annual budget, thus linking strategy to budgeting (or to rolling financial forecasts,). This all sounds so logical. But how do we identify what the strategic objectives should be and, subsequently, what to measure?  There are many methods and books devoted to defining strategies.  Let’s now explore the steps to develop an effective PM system. Agree on the Vision and Mission, and then Define the Strategies
  • 67. o At the risk of trivializing the critical and important defining of strategies, here is a straightforward approach to constructing the strategy map. o The initial exercise is to define your organization’s mission and vision statements. o These two statements are not the same, and their definition must precede the construction of strategy maps or scorecards because they serve as signposts.  The vision statement answers the question, “Where do we want to go?” in terms that describe a highly desirable future state for the organization.  It says it all concisely, as these examples demonstrate:  USA President John F. Kennedy: “We will put a man on the moon.”  Microsoft Corporation (1990s): “A computer on every desk top.”  Microsoft Corporation (21st Century): “Information anywhere, anytime.”  SAS Institute, Inc.: “The Power to Know”  The Hertz Corporation (2008) “Hertz will be the first choice brand for vehicle and equipment rental and total mobility solutions”.
  • 68.  The mission statement provides all employees, the answer to the question, “Why are we here?” in terms of desirable impacts to gain a competitive edge, such as:  To exceed customer needs well ahead of their realization that they even have the need  To leverage technology capabilities in fulfilling customer needs.  To leverage employee capabilities for whatever we excel at.
  • 69. Once the vision and mission statements are defined, the construction of the strategy map begins.  Its initial purpose is to serve as a framework in the form of a network connecting strategic objectives— hence the name strategy map.
  • 70. The strategic objectives collectively act like a pump system to push employee work efforts toward top objectives.  Figure A.2 reveals that strategy maps and scorecards are born from the vision and mission statements; help reinforce each other, as noted by the two-way arrow and are driven by the myriad of proven improvement programs and initiatives both from the past and emerging now for the future.
  • 71. The scorecard, serves to constantly remind the organization of the strategic plan. However, don’t confuse the scorecard with improvement programs. o The scorecard is an instrument for measurement and communication, whereas as the improvement programs help change the “scores” in the scorecard to meet or exceed the KPI target measures. o Given that vision and mission statements exist, the next step is to construct the strategy map itself.
  • 72. Define the Hierarchy of Strategies and Their Underlying Strategic Objectives  Strategy maps (sometimes referred to as value driver trees) are used to communicate a unified view of the overarching strategy to the organization.  A strategy map defines corporate direction and aligns internal processes, strategic objectives, initiatives; KPI measures, and target scores. (KPI measures and target scores are more prominent in the scorecard)   One of the reasons was because the balanced scorecard was receiving inordinate attention, as if the scorecard were the answer, when in fact it is the strategy map that serves as a builder’s blueprint for the scorecard.  The strategy maps are like the secret sauce in this, recipe because their straightforward logic becomes so compelling.
  • 73.  A study by Hewitt Associates estimated that companies who use strategy maps and scorecards perform with 40% better results compared to companies that do not.1  One of the difficult challenges for executive management is defining its organization’s strategic objectives.  A popular, logical, and swift way to construct the strategy map that contains the strategic objectives is to apply the strategic planning methodology SWOT (strengths, weaknesses, opportunities, and threats). 1 Brett Knowles, “Building Your Balanced Scorecard in Just Five Days,” presentation given on December 13, 2003; www.BetterManagement.com
  • 74.  SWOT is a brainstorming exercise that rapidly gathers the executive team’s thoughts about issues.  The information derived from a SWOT exercise becomes the raw material to form the strategic components of the strategy maps.  (If a thoroughly documented strategy already exists, then you can go directly to step 3, but it is useful to read how SWOT issues provide the building blocks for strategy maps and scorecards.) The SWOT exercise to construct a strategy map has three phases: 1. Describe the SWOTs.  In only one day, a management team can write each SWOT on a note card.  Each SWOT should ideally be written with a consistent format: describing it as a fact, followed by it’s so-what consequences that describe the future outcome or impact from the fact.  As an example, “Our competitor is now opening stores in the Southwest USA, which could adversely affect our desire to attract the sizable retiree market that is growing there.”
  • 75.  Strength issues point to future outcomes as their so-what’s.
  • 76.  Weaknesses point to a so-what that prevents an organization from advancing.  Opportunities are things you are not now doing that would take you closer to the vision and mission.
  • 77.  Threats are usually external factors or risks that can derail your plans.
  • 78. 2. Group the SWOTs by common themes.  Regardless of whether the description is an S, W, O, or T, the hundred or so SWOT note cards can be naturally clustered into themes such as “penetrate new markets” or “build alliances with consultants.”  Each theme should ideally capture the essence of the SWOTs related to it, and each theme should be worded with a verb-noun format as the two examples just demonstrated.  The clustering of themes should be based on the fact in each SWOT, rather than on its so-what. 3. Place these themes onto a strategy map.
  • 79.  The themes have now blossomed into the strategic objectives—a metamorphosis.  The strategic objectives now become the stepping stones in the strategy map.  The elegance of the strategy map lies in the fact that important improvement projects and action programs will sprout from each strategic objective to reflect the SWOT issues, while some existing projects will be immediately abandoned because it becomes apparent they do not fit.
  • 80.  A variation on the SWOT approach to define strategic objectives is for executive management to create a destination statement.  This is a textual statement, requiring consensus that describes a common shared view of the organization’s future.  A key element of the to-be future state document is to describe the consequences, both good and bad, of achieving the various aspects of their perceived destination.  It involves listing the actions (e.g., projects and initiatives) required to realize this future state.  It forces the executive team to create a vision of the results of achieving the destination.  This method concludes by summarizing the proposed actions as strategic objectives – so it effectively works backward with the end in mind.  At this point, these themes that have blossomed into strategic objectives, regardless of the method used to define strategic objectives, have yet to be organized or positioned among them. That now comes in the next step.
  • 81. 4. Map the Interrelated Strategic Objectives with Their Cause-and-Effect Linkages  The strategic objectives are interrelated.  The four perspectives originally proposed in Kaplan and Norton’s balanced scorecard book are very useful in simplifying what otherwise would be a difficult task.  That task is to take each of the strategic objectives that were congealed from clustering the SWOTs into themes and slot it into whichever perspective it best fits.  The sequence of the four perspectives makes very good sense.  The top perspective (i.e., the financial perspective for commercial companies and the customer/stakeholder view for the public sector company) is the beneficiary of the strategic objectives in the three perspectives beneath it.
  • 82.  The bottom perspective, the learning and growth (or enabling assets) perspective, is the most foundational, not unlike the foundation for a house.  It may be useful to think about the learning and growth perspective as not exclusively referring to people.  Expand your perception to include the following elements:  Employee competencies: What are we good at?  Culture: What is our climate to take action and our readiness for change?  Technology capabilities: What technical assets give us an edge?
  • 83. An effective way to understand a strategy map is to visualize an example of a hypothetical one.  Figure A.3 illustrates a strategy map of a hypothetical XYZ Corporation, where each node in the network represents a strategic objective.  It further adds if-then linkages where the paths drive, or at least contribute to, the outcome of the strategic objectives above them.
  • 84. Note that the objectives are rarely linked more than one-to-one.  A simple rule is that a linkage should be made only if there is an intended cause-and-desired-effect connection, rather than because there would be an inconsequential result anyway.  An interesting question routinely asked is “Where is the organization’s strategy defined and located on the strategy map?”  The simple answer it does not appear. Why not? Because the connected network of the strategic objectives is equivalent to the strategy!
  • 86.  Strategic objectives are ideally worded in verb-noun format because these are the actions that an organization must complete—or at least make much progress toward—in order to achieve the organization’s mission, which in turn would realize its vision.  The verb-noun wording of strategic objectives also clarifies to employees that the role of the strategy map is to tell employees and managers what the organization is looking for, rather than have the executives state what they want the employees to do.
  • 87.  In short, the strategic objectives collectively are the strategy!
  • 88.  Strategic objectives are not all created equal.  The objectives located at the top of the strategy map are the primary ones that all of the other strategic objectives drive to support.  Experience in constructing strategy maps has shown that the objectives in the top, second, and bottom perspectives are likely more similar than dissimilar for most organizations.  These perspectives tend to contain universally popular strategic objectives. It is in the third perspective, the internal business processes that strategic objectives are unique to an organization, the way fingerprints are to a human being.
  • 89.  This is where an organization differentiates itself from other organizations (i.e., competitors).  The fact that the strategic objectives in the financial, customer, and learning and growth perspectives have a common and universal flavor does not trivialize the strategy map.  It is the action steps and project initiatives, gleaned from the SWOT note cards that make the difference as they are managed in order to achieve the strategic objectives.  Why should this make sense? The specific source of a scorecard’s elements—whether they come from the executive team or the employees—tells the story.
  • 90. CONCLUSION Hertz France - current situation. The “Change Management Toolkit” has been created to provide all managers with the real-time information necessary to execute and adjust European strategy in France in an ever changing economic environment.
  • 91. This slide represents the current strategic architecture in place with which the Hertz Corporation intends to launch its new Global Customer Experience Program.
  • 92. If we turn our strategic architecture up side down we would have a structure that better supports the Customer Experience Program and assures that all corporate and division strategies are aligned towards achieving the final result intended by the initiatives
  • 93. This would assure that all Hertz employees’ eyes are looking into their customer’s eyes and that the organization evolves as a whole as it communicates about and implements the new Global Customer Experience Program. Every employee has a role in this new show running in Hertz Agencies worldwide. “From there I am standing all of this is possible”. Simon PENNY, Manager Université des Métiers, Hertz France