PEOPLE
- Internal: Employees
- External: Customer / Supplier
- Culture and Leadership
Business is conducted by people, internally and externally with customers suppliers and other entities. Employees are one of our most expensive assets. Productivity and turnover should be a key indicator of health. Why then do we tend to ignore managing our most important assets?
The value of relationships, internal and external, is determined by their longevity, value and success of the people involved. Success is based on mutually beneficial relationships or Win / Win. Why then do we only measure business success by short term revenue and profit? Obviously, these measures are important but do nothing to tell us about a company’s long-
Authoritative management creates dependent employees. It works in the short term but provides mixed results in the long term with a need for significant management time and effort. Conversely, collaborative management creates ownership with greatly reduced management time in the long run. It is human nature that if you demand something from an employee their natural reaction is to resist. If you ask for their opinion or help, they will bend over backwards to help. Most of us react this way in our personal life (If you doubt this try it with your significant other). Why do we act differently it in our careers? Because we need a paycheck. What if our abilities, knowledge, drive, goals, and creativity were allowed to be unleashed?
So why do we embrace a management style that is confrontational? We are rewarded for driving our subordinates, sometimes embarrassing them into performing. Ultimately, we get short term results but at what cost? Resentment, employee turnover and an environment that is stressful at best. This model can work for the short term, as seen in high growth companies with rich compensation plans but can be deadly when external business environment changes. History is full of examples or high-
PROCESS
- Process Re-
engineering - IT Applications Infrastructure
- Empower Change
We are all familiar with processes, supply chain, sales, PO, A/R, etc., that span our entire organization. Many of us have been involved in or heard of process reengineering. Many times these efforts produce positive results but are not sustained as a part of the company culture. Processes must continually be maintained, assessed and adapted to the changing needs of the business. To be successful process changes must be created, developed and implemented by the workers who perform the work or are affected by the process to include suppliers and customers. The need for external participation cannot be overly stressed for process reengineering to succeed. A significant benefit of process re-
Another key to successful process management is knowing how to manage re-
Another tip is to include any group that may be affected such as IT, legal, customers, suppliers etc. on the process team.
People – Process – Performance – IT = Profit
Maximum Performance Methodology -
KnowledgeLab’s Maximum Performance Methodology combines proven, repeatable and actionable business principles with innovative methods to maximize your relationships with customers, suppliers and employees while improving processes and information technology to benefit your bottom line. Maximum results can only be achieved by understanding the effect of change on your organization both upstream and downstream. Simply improving processes without employee buy-
PROFIT
Maximum performers, the leaders, perform over time. This is achieved by empowering people and processes and then implementing tools to measure results and provide for constant change and adaptation. Customer, people, process, goals, key performance indicators and results are measured across operational structures to achieve at the highest levels. Maximum Performance embraces the values of honest profit, capitalism, customer, integrity, respect for the individual and giving back to the community.
The result of the maximum performance model is maximized profit during up and down cycles.
Executive Management and Human Capital
Situation
A computer resale company had sales of $ 100 million dollars but was losing $12 million dollars per year. Sales and marketing was scattered with no direction, selling to individuals, small business medium business and Fortune 500. Additionally inventory was spread over 65 locations with shrinkage a significant problem with extremely poor delivery . Finally there was a lack of leadership and culture to empower employees and motivate them to be their best.
Solution
A quality program was implemented with a culture of achievement and empowerment. The sales and marketing strategy became focused on one market segment and the distribution method was consolidated.
Results
Four years later this company had sales of over $ 1 billion and was the most profitable company among its peers. Employee and customer satisfaction was maximized and shrinkage was minimized. Product delivery became a strong selling point
Information Technology
Situation
This mortgage insurance provider had 36 different systems built independently over 30 years to process loans. Most other processes including customer outreach was done manually. Minor changes or new product introductions cost tens of millions of dollars to implement and maintenance was through the roof and due to the age of the systems. Processing was falling behind and the program was failing due to lack of customer service.
Solution
A complete redesign of internal processes was conducted prior to implementing a software as a service solution including customer relationship management, business intelligence, work flow, web portal and loan processing.
Results
Process time was reduced from 218 days to less than 25 and process steps was reduced from 57 to 16. Customer satisfaction and sales increased significantly. Web based processing and customer intelligence allowed maximum flexibility and maintenance costs were reduced 50%. They went from COBOL to cloud computing in 14 months!
Sales and Business Development
Situation
A technology company had a struggling branch location with low morale, high turnover and dependent on one large account for their revenue. Accounts receivable and product returns were crippling profitability and customer satisfaction was low.
Solution
An employee and customer satisfaction plan was implemented empowering employees to make changes and a bonus program was implemented to reward results. Employees were included in planning and educated on why specific goals were important to them and the company. A sales training program was implemented and key performance indicators were established and tracked daily.
Results
Within three years sales grew from $7 to $38 million, net profit grew 240% and rep productivity grew 900%! Returns and accounts receivable fell dramatically and employee turnover was reduced dramatically. They went from one major account to over a dozen and they became branch of the year.
Marketing
Situation
A federal agency was struggling with consumer outreach. They had numerous contracts outsourcing their marketing activities costing millions to the tax payer but not achieving results. Advertising was chaotic with little concern for the geography .and little understanding of who was in their target market. Their web presence consisted of a static web site created in 1997.
Solution
A new web portal was introduced with web 2.0 capabilities. Many of the contracts were terminated in favor of a combination of one skilled contractor and hiring internal talent for long term needs. A detailed marketing plan that identified the target market was developed. Marketing materials were redesigned to the target market.
Results
Their web traffic increased astronomically and they introduced You Tube videos and a presence on Facebook. Advertising became targeted producing a significant influx of calls and ultimately a significant expansion in business.
PERFORMANCE
Performance metrics are critical to managing your team and the organization for several reasons. The most obvious reason is to determine how they are performing and what they are contributing to the organization. However, there are a number of pitfalls that can make these metrics cause anxiety and harm moral. Are the metrics fair? Do they measure what is important for the success of the employee? The organization? Do they apply to higher level goals set out in companywide Key Performance Indicators (KPI)? Are they perceived as carrot or a stick? Are they quantitative or qualitative? What is the best mix? Do employees have input?
Performance metrics must be tied to performance reviews that are simple easy to execute and manage reducing resistance from both the manager and the employee. Performance reviews should be an opportunity to motivate employees and plan and review training programs and personal goal attainment for the employee. Does every employee have the opportunity for bonuses? Are they attainable or are they just expected to be paid?
Training is also key to performance and moral. Training should begin with a baseline of the employee’s current skills, both technical and subjective, and agreed upon with their manager. This should be done during the performance review. Next the employee should establish career goals. Next, they chart a training plan to achieve their goals to be reviewed at the next performance review.
All aspects of performance must be tied into the core values vision and goals of the organization. This coordination will motivate employees to maximize their performance.
INFORMATION TECHNOLOGY
Underlying the people, process, performance, and profit model is a highly functional IT structure. Are your IT development projects collaborative? Do program areas take the lead or the CIO shop? IT projects that are successful are a team effort. Program areas must be able to drive functionality with IT bringing the right technologies to bear.
Another deadly problem is mission creep. Small or medium size projects that should quickly and within budget solve problems, balloon in cost and fail to deliver needed results in a timely manner. An important element of successful on time, within budget projects involve process reengineering. There are two primary reasons. First IT should be an integral part of the process reengineering team where they are a part of the plan from day one gaining knowledge and insight of the project’s goals and requirements. Second process reengineering generally simplifies IT projects. We have seen process reengineering eliminate dozens of process steps simplifying the IT requirements. Never automate broken processes.
