The Keys to Performance ManagementHow to Build and Sustain a HighlySuccessful Organization
I will not waste one minute of your time…• I have a ton to cover and I will go pretty fast.• I am happy to answer any of your questions, offer advice and recommend books at any time after this session.• John@JohnSpence.com The slides are already posted at: www.SlideShare.net/johnspence
What does this mean to me?How can I use this idea?What can I do right away?
Cecil Van Tuyl “It is all about people, people, people. You can kid yourself about a lot of things in your business, but at the end of the day it will always come down to people.”
The number one factor in increasing the level of highly satisfied and engaged CUSTOMERS in your business is…The level of highly satisfied and engaged EMPLOYEES in your business. 1
Key Drivers of Customer Satisfaction and Loyalty Financial Performance CR= 104.12% increase in profits Global study: T olerate 16 countries Quality P&S & N othing 529 companies Customer Relationship 15,589 respondents L ess CR= .404 Employee CR=.277 Satisfaction CR=.275 CR=.249 CR=.334 CR=.280 Empowerment Coaching High Standards CR=.28 CR=.37 1 CR=.36 CR=.19 CR=.24 Workshop 5 5 1 Long-term Enthusiasm, Training & 7 Fair Page 2 Orientation Commitment, Development Compensation Respect 1From: Practice What You Preach by Maister
Culture = Cash Actively disengaged employees can reduce revenues by up to 22%, while highly satisfied and engaged employees can drive profits up by as much as… 189%
Key attributes of winning cultures • High aspirations and a desire to win • Extreme customer focus • A “think like owners” attitude • Bias to action • Individuals who team • Passion and energy 1 - 10Bain & Company 3
HUGE data set… • 600,000 employees at 500 companies. • 6,800 senior executives. • 900 books and academic articles. • 30 CEOs of Fortune 500.From: Beyond Performance by Keller and Price
Nine Elements of Organizational HealthFrom: Beyond Performance by Keller and Price
The Real Job of a CEO• Financial Performance• Growth – organic & acquisitions• Direction – vision (shared)• Pace – sense of urgency• Tone – values and culture
What Do Engaged Employees Look Like?What do engaged employees look like? 1. They give more discretionary effort. 2. They consistently exceed expectations. 3. They take more responsibility and initiative. 4. They receive better customer service ratings. 5. They offer more ideas for improvement. 6. They promote and model teamwork. 7. They volunteer more for extra assignments. 8. They anticipate and adapt better to change. 9. They persist at difficult work over time. 10. They speak well of the organization. 1 - 10 3
E E+E+E SBA PMA Attachment to the company and Engaged willingness to give extra effort. A work environment that supports Enabled productivity and performance. Individual physical, social and emotional Energized well-being at work.“All In” by Gostick and Elton 4
Impact of the Three E’s• The research shows the cumulative effect of the three Es at work. The engaged, enabled, and energized cultures saw average annual operating margins of 27.4 percent during a period that included a recession/economic downturn—twice as high as organizations with just high employee engagement and three times higher than those with low engagement.
The Fundamental 4+11,300,000 interviews: Basic 4 + 1 1 - 10From: The Orange Revolution by Gostick and Elton 4
The Six Universal Drivers of Engagement 1. Caring, competent, and engaging leaders. 2. Effective managers who keep employees informed, aligned and engaged. 3. Effective teamwork at ALL levels. 4. Job enrichment and professional growth. 5. Valuing employee contributions. 6. Concern for employee well being. 1 - 10 5
How do you findthese people?In addition to ALL ofthe normal avenues…
Talent as a Strategic Objective• Do you have a list of 20 wildly talented people you have lunch with every 60 days?• Are you the very first person that all of your associates call if they meet someone of towering competence?• Do you hang out with cool people and go to places where talent is abundant?• Do you have your sights set on another dozen super talented people you’d like to poach from your competitors or other industries?• Are you reading, studying and learning everything you can about best practices and benchmarking for finding and developing talent?• Do you treat talent acquisition, development and maintenance as THE most important aspect of your job?
Remember: • Talent Rules!!!! • You need to FIND talent • You need to GROW talent • You need to BE talent
Zappos Sales in 1998 = 0 Sales in 2008 = 1.2 Billion Looking back, a big reason we hit our goal early was that we decided to invest our time, money and resources into three key areas: customer service (which would build our brand and drive word-of- mouth), culture (which would lead to the formation of our core values), and employee training and development (which would eventually lead to the creation of our Pipeline Team). Even today, our core belief is that our Brand, our Culture and our Pipeline are the only competitive advantages we will have in the long run. Everything else can and will be copied.
The Rules for Optimum Talent Management1. Start with Science.2. Eliminate Complexity3. Add New Value4. Create Transparency and Accountability
Stanford Talent Management Model Anticipate & Plan for the FutureEstablish and Maintain Alignment Staff Portfolio ManagementJob Descriptions Succession PlanningOn-boarding Strategic PlanningPerformance ManagementCompetency Models Build on Organizational Strengths and Grow Talent Individual Development Plans Coaching & Mentoring Leadership Development Programs
They are NOT all the same!Invest heavily in your top “A” players
Use All of the Standard Talent Performance Tools• 360-degree feedback• Twice-yearly Formal Talent Review• Succession Planning• High Potentials Program• Engagement Surveys• Competency Modeling• Mentoring Program
To create a highly accountable culture… 1-10 • Communicate clearly and relentlessly. • Set agreed-upon and highly specific metrics. • Focus on results – not personalities. • Force collaboration – teamwork is mandatory not optional. • Question all activities that don’t contribute to the company’s overall strategic goals. • Make sure that everyone in the organization – from top to bottom – focuses on accountability. WS 5
TEC / Vistage / EO / YPO = 2,000 CEOs 1. Lack of a well-communicated vision and strategy for growth. 2. Lack of courageous communication. 3. Tolerating mediocrity. 4. Lack of accountability and disciplined execution.
1. There is a real void of clear,direct and understandablecommunication about thedirection of the organization.This results in people doingwhat they want to do, notwhat they need to do andbreeds a climate of not caringabout the customers/clientsor their colleagues. NITB
2. Dysfunctional behavior is accepted orignored and worse yet, colleagues,management reward it. NITB
Expectations x 33. There is no definition of what isacceptable and what is unacceptableperformance NITB
4. Management does not promote andconfirm that accountability is a key principlewithin the company. NITB
5. Good people may leavebecause of frustration thattheir employer is ignoringthe issue and is notproactive in seeking andimplementing a solution tochange the environment. NITB
Clarify Expectations Workshop Page 6 & 7Side 1 - What you will focus on inthe business as yourmeasure of success.-Your expectations for everyemployee.Side 2-Your core leadershipvalues.-What your employees canexpect from you. WS 6 & 7
If you have any questions at all please do not hesitate to send a note or call. My email address is: firstname.lastname@example.org My twitter address is: @awesomelysimple *** Please connect with me on LinkedIn *** Also, you might find value in the ideas I share in my blog. You can sign up for it at: www.blog.johnspence.comMy “Top 50 Best Business Books” list and a link to my free business training channel on Vimeo are both on the front page of my website: www.johnspence.com Lastly, these slides have already been uploaded to: www.slideshare.net/johnspence