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Building a Building a High-Performance High-Performance Organization Organization

Jay Jay J. Jamrog J. Jamrog Sr. VP Research, Sr. VP Research, i4cp i4cp

Enabling High-Performance Enabling High-Performance Organizations TM Organizations

Institute for Corporate Productivity


i4cp is the fastest growing and largest corporate network focused on the practices of high-performance organizations.

Market Performance Index (MPI)


High-Performance Organizations (HPO) outperform their competitors over time.

1. 2. 3. 4.

Revenue growth Market share Profitability Customer satisfaction

Building a High-Performance Organization

HR Programs and Activities Study


Maybe you know one of the following HR activites .....
HR activities

Decentralized HR generalist supports BUs Admin processes centralized in shared services There is a low HR / Employee ratio HR advise is available on-line

Maybe you think that these activities make the change and make you a better market performer ...
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HR Programs and Activities Study

But this is not true ...


... We found no significant correlation with market performance

HR Programs And Activities Study


These HR activities do not make you a better market performer These activities are your foundation You have to do them well in order to get to the next level They are your homework

This also means: If you dont do these activities well, this can have a negative impact on your market performance !!!
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HR Programs And Activities Study


Market performance Highest positive correlation with market performance
Provides HR Drives data to change support management change management

Decentralized HR generalist supports BUs

Admin processes centralized in shared services

There is a low HR / Employee ratio

HR advise is available on-line

Most important HR activites: - Drive data in order to make better decisions - Drive change management
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Move from Inside-out to Outside-in


The Common Approach to HR: Inside (HR) Out (business)
Traditional HR practices,
processes, and systems Articulate how

what we do adds value to the business

Communicate to the business what a good job we are doing

A Better Approach to HR: Outside (business) In (HR)


Identify the business model
components and areas to drive value Develop an HR strategy to execute the business model with relevant metrics Use the metrics to demonstrate or prove how we are driving business performance

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Source: Pat Wright, Cornell University

HR Programs and Activities Study


Lets remember what weve just learnt:

In other words... 1. Identify what the organization needs 2. Develop a strategy to execute on what the organization needs 3. Use the metrics to demonstrate or prove how we are driving Business performance

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HR Programs and Activities Study

What drives the value / What do organizations need based on our research?
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What Drives Value?


High Performance Organizations excel in:

1. Strategy 2. Leadership 3. Talent 4. Culture 5. Market


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Strategy
All employees need to understand...
the importance of the strategy

what it means for their job


and buy into the strategy
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Strategy
Rank
Corr. with market performance

Our Company strategy is


Consistent
Widely Understood

Highest

Higher

Higher

Aligned w/Exec Behavior Frequently Discussed Aligned w/our Structure

4 5

High

High

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According to the

Strategy Execution and Alignment Study


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High-Performance Organizations Execute the Strategy Faster

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Not easy!
it is not the lack of a strategy that causes [Senior Executives] to lose sleep, but rather their organizations inability to execute against a strategy Having a great strategy is no longer enough lots of companies can develop great strategies. To win, companies must be able to turn great strategy into great performance. In short, they must

be able to execute.

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Execution is about building Alignment


Strategy

Fast Logical !

Slow People Operations Fast And follows a Logical ! different logic High Performance depends on people alignment, Yet this is the hardest element to align!
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Alignment Requires Consistency


Consistency helps determine success. Clear visions supported by flexible and achievable
strategic plans. Clearly articulated philosophies that set standards for everyones behavior.

Everyone behaves consistently with the strategic


plan and the companys philosophy.

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Leadership
Leaders, at all levels, need to have the right

style and behaviors


to create alignment throughout the workforce.
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Leadership
Rank
Corr. with market performance

Our Leaders are good at


Communication of goals Culture Employee-Centric Innovation Decision-Making Customer Knowledge

Highest

Highest

Highest

4 5

Higher

High

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7 Keys to Leadership Development

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7 Keys to Successful Leadership Development

1. 2. 3. 4.

Senior Management involved Dedicated resources to LD Breadth and depth of talent reviews Transparency
Consistency and structure

5. Meaningful developmental experiences 6. Motivation and Retention 7. Accountability


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Keys for Effective Leadership

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Four Domains of Leadership Strength


The Four Domains of Leadership Strength Examples of each dominant strength Makes things happen disciplined, high achieving, deliberative and focused Reaches a broader audience, makes sure the group is heard self assured communicator, convinced of the significance of the teams goals Uses strengths of empathy, connectedness and individualization to create synergy within the group Focus on what could be, help the team make better decisions by synthesizing and analyzing information

Executing Influencing

Relationship Building Strategic Thinking

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Leadership Competencies
Leadership Success Index Market Performance Index (MPI)
13 of 46 standard Leadership Competencies were Only 5 of the competencies listed were found to found to be predictive of Leadership Success: be predictive of Market Performance:
Strategy development Business ethics Strategy execution Decision-making sciences Knowledge of the customer Creating an environment of trust and respect Coaching skills Community involvement Role model for organizational values Emotional intelligence Developing other leaders Change management skills Hiring talent Sales Role model for organizational values Negotiation skills Business writing skill Hiring talent

Data From: i4cp's Leadership Competencies Survey

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Leadership Competencies
Leadership Success Index Market Performance Index (MPI)
13 of 46 standard Leadership Competencies were Only 5 of the competencies listed were found to found to be predictive of Leadership Success: be predictive of Market Performance:
Strategy development Business ethics Strategy execution Decision-making sciences Knowledge of the customer Creating an environment of trust and respect Coaching skills Community involvement Sales

Role model for organizational values


Negotiation skills Business writing skill

Hiring talent
Only 2 Leadership Competencies studied were predictive of both Leadership Success and Market Performance :

Role model for organizational values


Emotional intelligence Developing other leaders Change management skills

Hiring talent

Role Model for Org Values Hiring Talent

Data From: i4cp's Leadership Competencies Survey

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Why Do People Follow?


The 4 Basic Needs of a Follower
Trust Compassion

Benefits
Engagement Speed and efficiency Retention Engagement
BOTH Customer and Employee

Individual productivity Profit Stability Hope Efficiency Engagement Engagement Confidence


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Talent
The right: People skills behaviors place things

Right?
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Market Performance Index (MPI)


High-Performance Organizations (HPO) outperform their competitors over time.
5 Years:

1. 2. 3. 4.

Revenue growth Market share Profitability Customer satisfaction


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Talent
Rank
Correlation with market performance

Our employees are


Highly Engaged

Highest

Higher

Here for a long time Compensated fairly and based on performance Supported in their Talent Development

Higher

High

High

Part of an Integrated TM System

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According to the

Integrated Talent Management Study


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The State of Talent Management Is Not Good To what extent does your organization have systematic Talent Management practices? Who answered
To a Very High Extent To a High Extent

25%
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But, Having an Integrated TM Process is Positively Correlated with Market Performance


I agree to a high or very high extent that
Percent indicating high or very high extent Correlation with MPI

Leaders see integrated talent management as vital to organizational success


We have processes in place to align talent

Higher

Higher

management to business goals


Our voluntary turnover rates among highperforming employees is lower than the industry standard Our processes and policies support integrated

High

Highest

talent management
We effectively integrate the components of

Highest

talent management
Market Performance Indicator Score (MPI)
Higher Performers Lower Performers

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But, Having an Integrated TM Process is Positively Correlated with Market Performance


I agree to a high or very high extent that
Percent indicating high or very high extent Correlation with MPI

Leaders see integrated talent management as vital to organizational success


We have processes in place to align talent

Higher

Higher

management to business goals


Our voluntary turnover rates among highperforming employees is lower than the industry standard Our processes and policies support integrated

High

Highest

talent management
We effectively integrate the components of

Highest

talent management
Market Performance Indicator Score (MPI)
Higher Performers Lower Performers

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How Do We Measure the Success of Integrated Talent Management Practices?


Correlation with Market Performance

High

Predictor!

Highest Higher

High

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18

so

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Integrated Talent Management Model


SWP provides direction and ensures alignment

The EVP serves as an anchor

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Which Components are most closely Integrated? (2-way measurement)


Talent Management Integration Scores *
Performance Management Performance Management Individual Leadership High Potential Learning Succession Management Compensation Engagement Recruitment
166.4 321.8 298.1 272.9 243.9 226.6 414.4 388.9 360.4

We compared High and Low Performers. The gap between how integrated they viewed PM was the highest for any component

419.8 350.1
Market Performance Indicator Score (MPI)
Higher Performers

* Please see the notes section for an explanation of how the Talent Management Integration Scores were calculated.

Lower Performers

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Performance Management is the Most Strongly Integrated Component


The Integration Scores illustrate how Performance Management feeds many other components of Talent Management.*
What does this mean?
An ineffective Performance Management process will impact (negatively!) other aspects of Talent Management. A Performance Management process that does not make effective use of data provided by other Talent Management processes will almost always be inferior.

* Please see the notes section for an explanation of how the Talent Management Integration Scores were calculated.

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and according to the

Performance Management Study


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High-Performance Organizations Understand the Power of Performance Management


At our company
Percent indicating high or very high extent Our leaders consider performance management to be vital to organizational success
52.2% 52%

Correlation with market performance

75%

Highest

Individual performance goals are aligned

61%
43.6% 44%

High

with organizational goals


Performance management has a

55%
36.3%

Higher

positive business impact


Performance management processes contribute to individual performance

36%

improvement
Our performance management processes

27.2%

52%

Higher

27%

promote the desired behaviors


Market Performance Indicator Score (MPI)
Higher Performers Lower Performers

25.6%

47%

Higher

26% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

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The Nine Keys to Effective PM


1. Includes developmental 2.

plans for the next period

Training is provided (for managers) on conducting a performance appraisal meeting and resolve poor performance

3. The quality of performance appraisals is measured 4. A system is in place to address 5. Information other

than that based solely on the judgment of

managers
6. Process is consistent across the organization 7. Feedback is provided more 8. 360 or multi-rater 9. Ongoing goal

often than once a year

feedback is used to support the process

review and feedback from managers


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According to the

Engagement Study
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Which Side Are You On?


Selection Criteria
1. 2. Has passion for work Has positive attitudes toward peers and customers Has desire to set and achieve goals Adaptable Intelligent Confident in work abilities Has excellent job skills 5. 6. 7. 1. 2. 3. 4. 4. 5. 6. 7. Intelligent Confident in work abilities Has excellent job skills Has positive attitudes toward peers and customers Emotionally mature Has passion for work Has desire to set and achieve goals

3.

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Engagement Starts With Recruitment


Selection Criteria

Engaged
1. 2. Has passion for work Has positive attitudes toward peers and customers Has desire to set and achieve goals Adaptable Intelligent Confident in work abilities Has excellent job skills 5. 6. 7. 1. 2. 3. 4. 4. 5. 6. 7.

Disengaged
Intelligent Confident in work abilities Has excellent job skills Has positive attitudes toward peers and customers Emotionally mature Has passion for work Has desire to set and achieve goals

3.

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Engagement Starts With Recruitment


Selection Criteria

Engaged

Disengaged

1. Has passion for work 1. Intelligent

5. Intelligent 6. Has passion for work

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Engagement Starts With Recruitment


Selection Criteria

Engaged
2. Has positive attitudes toward peers and customers Has desire to set and achieve goals Adaptable 2.

Disengaged
Confident in work abilities

1. Has passion for work 1. Intelligent

3.

3.

Has excellent job skills

4.

5. Intelligent 6. Has passion for work

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Five Keys to Building Engagement


1. Make engagement a leadership priority at all levels especially for supervisors

2. Actively promote engagement 3. Recognize and reward engagement 4. Build it into other talent management
practices 5. Build a learning culture
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Culture

Values and beliefs match the strategy

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Culture
Rank
Corr. with Market Performance

Our culture is
Responsive to the market

Highest

Higher

Ready for new challenges

Higher

Invested in talent management

4 5

High

This is a good place to work

High

Committed to Innovation

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According to the

Managing Corporate Culture Study


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What is a Pervasive Culture?


Consistent Porous Permeates the entire organization Brand identity the world sees is consistent

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4 Keys to Building a Pervasive Culture


1. Expect external challenges/drivers 2. Emphasize "this is a good place to work" 3. Work/life balance most linked attribute of a
pervasive culture 4. Leaders who use an empowerment style to direct employees Most often create both pervasive culture and high market performance.

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Market / Customer Focus


All employees: Support customer relationships Understand customer needs
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Market / Customer Focus


Rank
Corr. with Market Performance

At our company we
6.1

Highest

Try to exceed customers expectations Do a good job at assessing customers

5.0 5.5 4.1

Higher

future needs
Build processes and systems to best meet the needs of the customer Are organized in order to maximize

Higher

5.3
3.9 5.1 3.7 6.0

Average score of high performers


Average score of Low Performers

4 5

Higher

customer value
Strive to be best at providing value for our best customer

High

4.9

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Market Performance Index (MPI)


High-performance organizations (HPO) outperform their competitors over time.
5 Years:

1. 2. 3. 4.

Revenue growth Market share Profitability Customer satisfaction


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According to the

Innovation Study
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Growing Importance of Innovation

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6 Questions
1. What does innovation mean? 2. How do we identify and select the best new ideas and make a quick go/no-go decision? 3. How do we measure success? 4. Are leaders prepared to drive innovation within their
organizations?
5. What does talent with a propensity toward innovation look

like?
6. What does it take to recruit, retain and keep engaged

passionate, talented, innovative people?


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According to the

Customer Focus Study


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Build Customer Focus Into the Culture


Culture of accountability makes a good
organization great and a great organization unstoppable. Employees will take no better care of customers than they receive from leadership!

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Forge Strong Values and Beliefs


Internal beliefs make a difference because
such beliefs often correlate well with actual customer satisfaction. Get to know customers personally. You will begin to understand them and have a vested interest in that person and seeing that their needs are met.

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Conclusion
If your company displays...
1. 2. 3. 4. Strategy-

cohesiveness and consistency

Passionate leaders that walk the talk Talent aligned to the strategy A culture that is aligned with the strategy

5.

A strong external focus on the market

you will:

be a high performance organization execute strategy faster create a competitive advantage.


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Jay Jamrog
Jay.Jamrog@i4cp.com 727-345-2226

i4cp.com
2012 Institute for Corporate Productivity, Inc. Member companies may reproduce and distribute this file on an unlimited basis to their employees for internal management purposes only. Nonemployees may not be given copies of or access to i4cps reports, online services or conference materials.

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