the building blocks of high performing organisations

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THE BUILDING BLOCKS OF HIGH-PERFORMING ORGANISATIONS Case Study, Concepts and Debatable Ideas Kenny Ong CNI Holdings Berhad www.myCNI.com.my www.OOBEY.com

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

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Page 1: The Building Blocks Of High Performing Organisations

THE BUILDING BLOCKS OF HIGH-PERFORMING ORGANISATIONSCase Study, Concepts and Debatable Ideas

Kenny OngCNI Holdings Berhad

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Page 2: The Building Blocks Of High Performing Organisations

Intro: CNI

1. 19 years old2. Core Business: MLM3. Others: Contract Manufacturing,

Export/Trading, eCommerce, F&B Retail4. Malaysia, Singapore, Brunei, Indonesia, India,

China, Hong Kong, Philippines, Italy, Taiwan5. Staff force: ± 5006. Distributors: 200,0007. Products: Consumer Goods and Services

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Page 3: The Building Blocks Of High Performing Organisations

How do you recognize a high-performing organization?

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Page 4: The Building Blocks Of High Performing Organisations

“…in the past 18 months, we have heard that profit is more important than revenue,

quality is more important that profit, people are more important than profit,

customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our

performance is inconsistent"CEO, Anonymous

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Page 5: The Building Blocks Of High Performing Organisations

High-Performance Companies?

1. Business is good?2. People are good?3. Everyone is good?4. Mission is good?

Be very careful of your company’s definition of high-performance before you embark on anything

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Page 6: The Building Blocks Of High Performing Organisations

Simple, selfish and debatable definition:

What is a High-Performing Organization?

An organization that consistently achieves what it was created to do or what it set out to do

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Page 7: The Building Blocks Of High Performing Organisations

High-Performing Organizations – The Building Blocks

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Page 8: The Building Blocks Of High Performing Organisations

The Building Blocks - starting from HR

Succession Planning (Business Continuity)

Talent Management

Differentiation

Performance Management System

Budgeting + Planning

KPIs

BSC

Business Model

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Page 9: The Building Blocks Of High Performing Organisations

The Building Blocks - starting from HR

Succession Planning (Business Continuity)

Talent Management

Differentiation

Performance Management System

Budgeting + Planning

KPIs

BSC

Business Model

The Hardware

The Software

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Page 10: The Building Blocks Of High Performing Organisations

Summary: Today’s presentation

1. Business Model

2. Strategy

3. Resources

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Page 11: The Building Blocks Of High Performing Organisations

1. Building Block #1: Get the right Business Model first

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Page 12: The Building Blocks Of High Performing Organisations

• How to fail without trying

1. Wrong Business Model

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Page 13: The Building Blocks Of High Performing Organisations

The Roadmap to Failure Fred Wiersema and Mike Treacy

Perf

orm

ance

Time

Clear Sailing

Today’s performance

Ad-hoc Tactics

Denial & Defense

Doom Projections

Overdue Failure

The Moment of Truth

XPerformance

Freefall

Tomorrow’s actual

performance

Downpresure of Unclear Strategy

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Page 14: The Building Blocks Of High Performing Organisations

Denial and Defense

• “It’s not really good value our competitor is offering, because it doesn’t include a lot of our features.” - ABC vs Air Asia

• “It’s good value but not in our preferred customer market.” - ABC vs Toyota

• “Sure they’re hurting us, but with their unfair advantage, what can we do?” – ABC vs MILO

• “The rules we are playing by have always worked before” – AMEX vs VISA

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Page 15: The Building Blocks Of High Performing Organisations

The Roadmap to Failure Fred Wiersema and Mike Treacy

Perf

orm

ance

Time

Clear Sailing

Today’s performance

Ad-hoc Tactics

Denial & Defense

Doom Projections

Overdue Failure

The Moment of Truth

XPerformance

Freefall

Tomorrow’s actual

performance

Downpresure of Unclear Strategy

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Page 16: The Building Blocks Of High Performing Organisations

Ad Hoc Tactics• Selectively hold discounts to hold business that has

started to go elsewhere• Introduce new promotions, terms, conditions, and offers to

confuse and cloud the market• Beef up customer service by adding people to fix mess-

ups and quicken delayed shipments• Delay capital investments and adjust accounting methods

to portray quarterly financial results more favorably• Introduce “new and improved” products that are new in

form, but not in substantive ways that are of consequence to purchasers

• Introduce Balanced Scorecards and Performance Management Systems

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Page 17: The Building Blocks Of High Performing Organisations

The Roadmap to Failure Fred Wiersema and Mike Treacy

Perf

orm

ance

Time

Clear Sailing

Today’s performance

Ad-hoc Tactics

Denial & Defense

Doom Projections

Overdue Failure

The Moment of Truth

XPerformance

Freefall

Tomorrow’s actual

performance

Downpresure of Unclear Strategy

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Page 18: The Building Blocks Of High Performing Organisations

“What is the moral of the story?”

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Page 19: The Building Blocks Of High Performing Organisations

What is the Business Model?

USP

Market DisciplineProfit Model

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Page 20: The Building Blocks Of High Performing Organisations

Intro: Market Discipline

• Mamak stall

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Page 21: The Building Blocks Of High Performing Organisations

Intro: Market Discipline

"They are the most innovative""Constantly renewing and creative""Always on the leading edge"

"A great deal!"Excellent/attractive priceMinimal acquisition cost and hassleLowest overall cost of ownership

"A no-hassles firm"Convenience and speedReliable product and service

"Exactly what I need"Customized productsPersonalized communications

"They're very responsive"Preferential service and flexibilityRecommends what I need

"I'm very loyal to them"Helps us to be a success

Product Leadership

OperationalExcellence

CustomerIntimacy

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Page 22: The Building Blocks Of High Performing Organisations

Intro: Market Discipline

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes Relationship Image

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Page 23: The Building Blocks Of High Performing Organisations

Intro: Market Discipline

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes

Price

Quality

TimeSelection

√√

Smart Shopper

Relationship Image

Operational Excellence: Quality and selection in key categories with unbeatable prices

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Page 24: The Building Blocks Of High Performing Organisations

Intro: Market Discipline

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes

Brand

TimeFunction

√√

Best Product

Relationship Image

Product Leadership: Unique products and services that push the standards

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Page 25: The Building Blocks Of High Performing Organisations

Intro: Market Discipline

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes

Service Trusted Brand

Relationship Image

Customer Intimacy: Personal service tailored to produce results for customer and build long-term relationships

Relations

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Page 26: The Building Blocks Of High Performing Organisations

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Disciplines

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Page 27: The Building Blocks Of High Performing Organisations

Summary: Today’s presentation

1. Business Model

2. Strategy

3. Resources

Done

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Page 28: The Building Blocks Of High Performing Organisations

2. Building Block #2: Set the Strategies

Dangers of BSC, KPIs and other evils sold by Consultants

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Page 29: The Building Blocks Of High Performing Organisations

“…in the past 18 months, we have heard that profit is more important than revenue,

quality is more important that profit, people are more important than profit,

customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our

performance is inconsistent"CEO, Anonymous

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Page 30: The Building Blocks Of High Performing Organisations

Before we start…

In the old days of HR…• Average training hours per staff• % of staff attending training• # of training programs• % of training programs conducted• Training needs analysis conducted• Competency models developed• Training budget as % of payroll

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Page 31: The Building Blocks Of High Performing Organisations

Before we start…

Moral of the story…1. Innovation:

– Business models– Products– Services

2. Market Leadership3. Competitive differentiation

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Page 32: The Building Blocks Of High Performing Organisations

“What is the moral of the story?”

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Page 33: The Building Blocks Of High Performing Organisations

What is Strategic Planning?

Strategic

Planning

Variables:

Research

Growth

Risks

Stakeholders

Constraints

SWOT

Misc.

Output:

Plans

Priorities

KPIs

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Page 34: The Building Blocks Of High Performing Organisations

Before we start…

Which comes first?1. Strategies -> KPI?2. KPI -> Strategies?

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Page 35: The Building Blocks Of High Performing Organisations

Financial

“To satisfy our stakeholders, what Financial objectives must we accomplish?”

Internal Process

“To satisfy our customers, in which internal business processes must we excel?"

Customer

“Who are our target customers?

What is our value proposition?”

Learning & Growth

“What capabilities and tools do our employees require to help them execute our strategy?

Focus: Corporate Alignment

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Page 36: The Building Blocks Of High Performing Organisations

Revenue Growth

Base Retention

Share Gain Positioning Adjacent Market

New Business

Operational Excellence

Product Leadership

Customer Intimacy

Competencies Information Systems

Motivation, empowerment,

alignment

Financial

Learning & Growth

Internal Process

Customers

Investment Strategy

Productivity Market Value

Linking BSC to Strategy

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Page 37: The Building Blocks Of High Performing Organisations

Financial

Learning & Growth

Internal Process

Customers / Distributors

Revenue Growth ProductivityMarket Value

Department Operations

Supplier & Alliances

External Involvement

Target Markets

Products/ Services

Channel Strategies

Human Resources

Technology

Information & IntelligenceSystems &

Processes

Focus: Corporate Alignment

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Page 38: The Building Blocks Of High Performing Organisations

Example: Selection of KPIs for BSC

•Customer satisfactionCustomer loyaltyMarket shareCustomer complaintsComplaints resolved on first contactReturn ratesResponse time per customer requestPrice relative to competitionTotal cost to customerAverage duration of customer relationshipCustomers lostCustomer retentionCustomer acquisition ratesPercentage of revenue form new customersNumber of customersAnnual sales per turnover

•Win rate (sales closed/sales contact)•Customer visits to the companyHours spent with customersMarketing cost as a percentage of salesNumber of ads placedNumber of proposals madeBrand recognitionResponse rateNumber of trade shows attendedSales volumeShare of target customer spendingSales per channelAverage customer sizeCustomers per employeeCustomer service expense per customerCustomer profitabilityFrequency (number of sales transactions)

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Page 39: The Building Blocks Of High Performing Organisations

Financial

Learning & Growth

Internal Process

Customers / Distributors

Example: 1st Level BSC & KPIs

Profit after Tax. Revenue. Cash-to-cash cycle. Operating cash flow

Customer Complaints. Customer Acquisition Rate. Product Availability. Product Quality & Service. Renewal Annual Subscription. Distributor Rank Achievement. No. of Active Distributor. No. DC/Regional Sales. Distributor with commission

Customer Database Availability. Accuracy of Forecast Planning. Continuous Improvement. Response Time to Customer Needs. Perfect Order Fulfillment. Inventory Turnover. Number of Effective Sponsoring Program. On Time Delivery. No. of Effective Training. Number of Effective A&P

% of staff evaluated on Core Competency Framework. % of staff with Career Development Plans. No. of training hours completed per staff. % of staff with access to strategic information. Q12 Index. % staff evaluated on Culture alignment

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Page 40: The Building Blocks Of High Performing Organisations

Sample: Other 1st Level KPIs across industries…

Financial Services Retail Telecommunications

•Maximize ARPU•Minimize Churn•Mutichannel customer service

•Understand customer behavior related to customer conversion, acquisition, and retention•Single view of customer•Multichannel customer experience•Personalized customer experience

•Anticipate and prevent churn despite compensation•Increase number of products per customer•Turn call center information opportunity to up-sell and cross-sell•Increase customer satisfaction and loyalty

Hospitality Travel & Leisure Manufacturing

•Personalized customer experience•Maximize share of wallet•Player/customer loyalty•Multichannel customer service

•Increase customer loyalty and preference•Maximize customer revenue•Improve service quality and efficiency•Capture and close sales opportunities

•Single view of customers across supply chain•Zero-error order capture•Streamline opportunity to cash processes•Leverage investment in ERP and backoffice systems

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Page 41: The Building Blocks Of High Performing Organisations

Lagging and Leading KPIs

Lagging

Leading

Historical, Outcome, Results, 1st Level, Usually Financial or tangible, Quarterly and Annually

Current, Indicators, Drivers, 2nd Level onwards, usually non-financial or intangible, Weekly, Monthly and Quarterly

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Page 42: The Building Blocks Of High Performing Organisations

Developing ‘Driver’ KPIs

Customer Retention % Lagging, 1st Level

Customer Satisfaction Index

Leading, 2nd Level

On time delivery

Time to market for new products

TNA %

Defect levels, warranty claims

Leading, 3rd Level onwards

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Page 43: The Building Blocks Of High Performing Organisations

What is the Objective?

‘Do-or-Die’ KPIs for CNI• Revenue• ARPU

• Sponsoring• Retention

• Commission Plan (BDP)• Product• Corporate Image

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Page 44: The Building Blocks Of High Performing Organisations

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Disciplines, Priorities, and KPIs

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Page 45: The Building Blocks Of High Performing Organisations

The McPlaybook*

Make it easy to eat• 50% drive-thru• Meals held in one

hand

Make it easy to prepare• High Turnover• Tasks simple to learn

& repeat

Make it quick• “Fast Food”• Tests new products

for Cooking Times

Make what customers want• Prowls market for new

products• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007

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Page 46: The Building Blocks Of High Performing Organisations

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Strategy: Disciplines, Priorities, and KPIs

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Page 47: The Building Blocks Of High Performing Organisations

• Operational Excellence• Move know-how from top performing

units to others• Benchmark against best in class• Ensure operations training for all

employees• Use disciplines like TQM for continuous

learning to reduce costs and improve quality

Strategy: Value Disciplines

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Page 48: The Building Blocks Of High Performing Organisations

Strategy: Value Disciplines

• Customer Intimacy• Capture knowledge about customers• Understand customer needs• Empower front line employees• Ensure that everyone knows the

customer• Make company knowledge available to

customers

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Page 49: The Building Blocks Of High Performing Organisations

• Product Leadership• Reduce time to market• Commercialize new products fast• Ensure that ideas flow• Reuse what other parts of the company

have already learned• Ensure there are multiple sources of

funding

Strategy: Value Disciplines

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Page 50: The Building Blocks Of High Performing Organisations

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Value Disciplines

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Page 51: The Building Blocks Of High Performing Organisations

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Value Disciplines

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Page 52: The Building Blocks Of High Performing Organisations

Sample KPIs for Each Discipline

Operational Excellence

• Price• Selection• Convenience• Zero Defects• Growth

Customer Intimacy

• Customer Knowledge

• Solutions Offered• Penetration• Customer Data• Customer-success

focus

Product Leadership

• Marketing• Functionality• # of Successes• # of Failures• Learn from key

users• Interdisciplinary

teams• Pipeline

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Page 53: The Building Blocks Of High Performing Organisations

MBO – Sources of KRAs and KPIs, Targets

1. Department Scorecard [E3], 2. Employee’s Job Description, 3. Department SOP, 4. Department Quality Objectives, 5. Corrective Action Requests (CAR), 6. Preventive Action Requests (PAR), or 7. Special Projects relevant to the employee.

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Page 54: The Building Blocks Of High Performing Organisations

E3 – Department BSC

Financial Perspective

Goals Measures Targets CAPEX OPEXQuality

Innovation

On Time Delivery

Budgeting

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Page 55: The Building Blocks Of High Performing Organisations

Individual Performance

1.0 Key Results

Area (Max 6)

2.0 Goals and

Targets for Q1

3.0 Achievements and

Efforts for Q1

4.0 Merit* 5.0 Rating (Merit x Weight)

6.0 Appraiser

Overall Comments/ Feedback

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Page 56: The Building Blocks Of High Performing Organisations

Summary: Today’s presentation

1. Business Model

2. Strategy

3. Resources

Done

Done

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Page 57: The Building Blocks Of High Performing Organisations

3. Building Block #3: Resource Management

The art and science of allocating, aligning, and managing Resources to

strategic plans

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Page 58: The Building Blocks Of High Performing Organisations

Resource Management: Some thoughts…

Two major roles of Resource Management:1. Provide real-life CONSTRAINTS to

strategic planning2. Provide RESOURCES to realize strategic

plans

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Page 59: The Building Blocks Of High Performing Organisations

Resource Management: Some thoughts…

1. Resource Management = Performance Management

2. Performance Management = Resource Management

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Page 60: The Building Blocks Of High Performing Organisations

Managing Performance

Month 1

Performance Planning

Month 12Performance Appraisal

Month 2-11?

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Page 61: The Building Blocks Of High Performing Organisations

• Beating a Dead Horse

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Page 62: The Building Blocks Of High Performing Organisations

Most Common Desperate Performance Improvement methods

1. Send for more Training2. Enforce more Incentives (positive/negative)

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Page 63: The Building Blocks Of High Performing Organisations

Mager and Pipe

• Analyzing Performance Discrepancies

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Page 64: The Building Blocks Of High Performing Organisations

Alignment: 4-Wheels Model

Culture

Business

ModelStrategic Planning

StructurePerson

Leadership

Resources

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Page 65: The Building Blocks Of High Performing Organisations

Alignment: Framework

• Focus point• Alignment• Quality• Innovation & Differentiation• Risk taking• Performance Management• Corporate obsession• Decision making

Culture

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Page 66: The Building Blocks Of High Performing Organisations

Alignment: Framework

• Org Structure• Job Design• C&B• Policies & procedures• Decision making• Job fit• Management Systems• BSC and KPIs• Decentralized & Empower

Structure

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Page 67: The Building Blocks Of High Performing Organisations

Strategy: Framework

• Role modeling• Vision/Mission/Philosophy• Leadership Style• Delegation & Empowerment• C&B, Promotions• Sense of Urgency• Speak regularly about Performance

Leadership

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Page 68: The Building Blocks Of High Performing Organisations

Strategy: Framework

• Recognition• Recruitment• Training• Profit sharing• Values• Motivation• Self Efficacy• Awareness• Useful Competencies• Career aspirations• Attribution (control)

Person

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Page 69: The Building Blocks Of High Performing Organisations

Strategy: Framework

Enablers• Technology• Equipment• Materials• Human• Intellectual

Property• Partners• Property

Resources

Funding • CAPEX• OPEX

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Page 70: The Building Blocks Of High Performing Organisations

Alignment: 4-Wheels Model

Culture

Business

ModelStrategic Planning

StructurePerson

Leadership

Resources

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Page 71: The Building Blocks Of High Performing Organisations

Operational Excellence

Customer Intimacy

Product Leadership

Organization, jobs,skills

Management systems

Information and systems

Culture, values,norms

Each Discipline Requires Different Priorities & Resources

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Page 72: The Building Blocks Of High Performing Organisations

Operational Excellence

•Central authority, low level of empowerment•High skills at the core of the organization

•Disciplined Teamwork•Process, product- driven•Conformance, 'one size fits all' mindset

• Integrated, low cost transaction systems•The system is the process

•Command and control•Quality management

Organization, jobs, skills

Management systems

Information and systems

Culture, values,norms

Each Discipline Requires Different Priorities & Resources

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Page 73: The Building Blocks Of High Performing Organisations

Organization, jobs,skills

Management systems

Information and systems

Culture, values,norms

Product Leadership•Ad hoc, organic and cellular•High skills abound in loose-knit structures

•Concept, future-driven•Experimentation and 'out of the box' mindset

•Person-to-person communications systems•Technologies enabling cooperation

•Rewarding individuals' innovative capacity•Risk and exposure management•Product Life Cycle profitability

Each Discipline Requires Different Priorities & Resources

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Page 74: The Building Blocks Of High Performing Organisations

Organization, jobs,skills

Management systems

Information and systems

Culture, values,norms

Customer Intimacy

•Empowerment close to point of customer contact•High skills in the field and front-line

•Customer-driven•Variation and 'have it your way' mindset

•Strong customer databases, linking internal and external information

•Strong analytical tools

•Customer equity measures like life time value•Satisfaction and share management•Focus on ‘Share of Wallet’

Each Discipline Requires Different Priorities & Resources

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Page 75: The Building Blocks Of High Performing Organisations

Incentive Problems

Problem with Incentives in managing performance:• Most people are confused or unsure about

compensation tools• Some people misuse compensation tools

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Page 76: The Building Blocks Of High Performing Organisations

What to Pay?

• Pay for Service• Pay for Job• Pay for Performance• Pay for Competency

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Page 77: The Building Blocks Of High Performing Organisations

Performance and Incentives

1. Internal Equity1. Internal Job Rates2. Performance differentials

2. External Competitiveness1. External Job Rates - Benchmarking2. Demand & Supply

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Page 78: The Building Blocks Of High Performing Organisations

What’s the Difference?

• Increment

• Bonus

• Promotion

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Page 79: The Building Blocks Of High Performing Organisations

Compa Ratio Table

Use this if your company: • Pays for Performance, and • Pays for Job rates

Def:Mid-Point = Mid Point of Pay Grade

Grade E2

Min RM2,000

MID RM2,500

Max RM3,000

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Page 80: The Building Blocks Of High Performing Organisations

Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5

4

3

2

1

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Page 81: The Building Blocks Of High Performing Organisations

Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5

4

3 5%

2

1

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Page 82: The Building Blocks Of High Performing Organisations

Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5 9

4 7

3 9 7 5% 4 3

2 2

1 0

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Page 83: The Building Blocks Of High Performing Organisations

Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5 15 12 9 8 7

4 12 9 7 5 3

3 9 7 5% 4 3

2 6 4 2 1 0

1 4 2 0 0 0

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Page 84: The Building Blocks Of High Performing Organisations

Dangers of Direct Incentives

1. lessen internal motivation, 2. switch to mercenary mode, 3. do something and do not do something else, 4. bribe and fraud culture, 5. easier for competitors to recruit, 6. lessen teamwork & helpful culture, 7. less and less impact for same value, 8. mockery of base salary and employment

contract, 9. rebellion from non-incentivised staff, 10.end up incentivising everyone for everything?,

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Page 85: The Building Blocks Of High Performing Organisations

Other Performance Review processes

1. Result Planning schedule inc. BSC, Budget2. Quarterly Performance Appraisals3. EMC – sales performance4. QMS – non-sales performance5. Divisional meetings6. Annual Appraisals7. Specialized KPI committees8. CAR, PAR, SCAR KPI improvements9. Internal Audit & MSD – process problems10. HRM & TND – people problems11. Supervisor Induction – PM training12. Talent Management

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Page 86: The Building Blocks Of High Performing Organisations

Employee Distinction?

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5 9 8 7 6 5

4 8 7 6 5 4

3 7 6 5% 4 3

2 6 5 4 3 2

1 5 4 3 2 1

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Page 87: The Building Blocks Of High Performing Organisations

Employee Distinction?

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5 20 15 12 8 5

4 18 12 9 5 3

3 9 7 5% 4 3

2 1 1 1 0 0

1 0 0 0 0 0

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Page 88: The Building Blocks Of High Performing Organisations

Employee Distinction

Average Rating

Rating Multiply Factor

Example Rating

Example Increme

nt> 4.1 5 2 4.2 8.4%

> 3.3 – 4.1 4 1.2 3.5 4.2%

> 2.3 – 3.3 3 0.75 2.8 2.1%

> 1.3 – 2.3 2 0.5 1.8 0.9%

≤ 1.3 1 0 1.0 0%

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Page 89: The Building Blocks Of High Performing Organisations

Employee Distinction

Group I(Talent Pool)

Group II( Potential)

Group III( Performance)

Group IV(Counseling)

2 3 4 5

23

45

PER

FOR

MA

NC

EPOTENTIAL• Identify

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Page 90: The Building Blocks Of High Performing Organisations

Curse of the Bell Curve

‘A’ Staff

‘B’ Staff

‘D’ Staff

‘E’ Staff

‘C’ Staff

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Page 91: The Building Blocks Of High Performing Organisations

More Problems….

1. cost of evaluation vs. gains of evaluation2. defer achievements of a good year to next3. barely achieve so that next target is not high4. spread improvements over several years5. value reducing actions to increase performance6. most ratings are 4 or 5, new people are 3

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Page 92: The Building Blocks Of High Performing Organisations

Before I forget…

• Re-train Appraisers• Train new Appraisers

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Page 93: The Building Blocks Of High Performing Organisations

Business Situation vs. HR

Upturn Flat Downturn

Fight Complacency

Sharpen Edge

Keep Momentum

Conquer

‘Change’ mgmt

Reduce Fat

Continuity

Everyone Happy

Innovation

Acquire

Profits

Build momentum

Sales

Cash Flow

Talent Mgmt

Stack R&D

Slowdown Hiring

Early wins

Top Talent focus

Stack Sales

Increase attrition

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Page 94: The Building Blocks Of High Performing Organisations

The Business of business is Business, not Human Resource

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Page 95: The Building Blocks Of High Performing Organisations

Thank You.

soft copy of slides: www.totallyunrelatedrandomanddebatable.

blogspot.com