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Developing EffectiveKey Performance IndicatorsMain Slides Compilation
Kenny Ong
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Intro
What is your objective?
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Managing Expectations
• Exercise: Please note down one important item you want to learn or get out from this workshop
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Why do we hate Performance Appraisals?
(How to develop better KPIs)
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As an Appraisee
As an Appraisor
Complaints about Performance Appraisals
Mgmt/HR
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Complaints about Performance Appraisals - Summary
1. Process problem
2. Form problem
3. People problem
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What’s the Difference?
Performance Appraisal Performance Management
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What is the OBJECTIVE of a Performance Management System?
• What is the ultimate objective of a Performance Management System?
• ‘Performance’ – achievement, • ‘Management’ – controllable, improvement• ‘System’ – predictable outcome, autorun
Summary?• A Predictable process to Improve Controllable
Achievements
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What’s In Between Planning and Execution?
Succession Planning (Business Continuity)
Talent Management
Differentiation
Performance Management System
Budgeting + Planning
KPIs
BSC
Business Model
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What is the OBJECTIVE?
Succession Planning (Business Continuity)
Talent Management
Differentiation
Performance Management System
Budgeting + Planning
BSC and KPIs
Strategy
Business Model
Business Strategy Execution
Talent Management
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Intro
Performance Management System
=
Business Plan Implementation
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Performance Management Process [FULL]
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KPIs, Strategy & Behavior
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“…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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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
What’s wrong with this picture?
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Before we start…
Moral of the story…
1. Innovation:– Business models– Products– Services
2. Market Leadership
3. Competitive differentiation
Get the picture?
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“What is the moral of the story?”
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What is Strategic Planning?
Strategic
Planning
Variables:
Research
Growth
Risks
Stakeholders
Constraints
SWOT
Misc.
Output:
Plans
Priorities
KPIs
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Before we start…
Which comes first?
1. Strategies -> KPI?
2. KPI -> Strategies?
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Before we start…
Which comes first?
1. Strategies -> KPI?
2. KPI -> Strategies?
•already know our priorities, aware of all strategy options available
•creating something UNIQUE, INNOVATIVE and DISRUPTIVE e.g. Air Asia
•conducting a business Turnaround e.g. MAS
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Before we start…
Which comes first?
1. Strategies -> KPI?
2. KPI -> Strategies?
•want to find out possible strategies,
•determine our priorities first thru selection of important KPIs;
•growing through ‘normal’ business, not a Turnaround.
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Wrong KPIs
“What is the moral of the story?”
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KPIs and Behavior
Before: “Handle Time” Per Call• Motivated Call Centre staff to transfer callers,
getting rid of complainers, making them someone else’s problem
• Callers at 45% chance of being transferred• 7,000 customers each week suffered transfers 7
times or more
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KPIs and Behavior
After: “Minutes Per Resolution” of a problem
• Resolution in ONE CALL become the core goal• Reduced probability of call transfers from 45% to
18%
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Performance Contracting Model
Review performance & results
- provide feedback
Provide coaching & counselling
Discuss and agree on objectives & key measures
Prioritise the accountabilities agreed upon and discuss on competencies
required for the job.
Discuss & agree on standards for performance
Discuss and agree on role accountabilities
Grievance level Absenteeism Discipline issue Poor workethics
Unclear
ResultsDriven
Low Level of trust & commitment (between team leader and team member)
Proceduredriven
High
Deg
ree
and
clar
ity
of jo
b re
sult
s
High level of employee empowerment
High employee performance
High employee satisfaction
High employee involvement
Challenging working environment
Optimum HRM cost structure
High
Vis
ion
led
Step 5
Step 4
Step 3
Step 2
Step 1
Performance Contracting Model
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Performance Planning
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Performance Planning Diagram
District Engineer
Duties and Responsibilities
If stated as Accountabilities then the job must produce :
Control, operate and maintain the District Distribution System
Ensure uninterrupted supply to consumers in the district by operating the District Distribution System.
Manage major supply projects to customers in the district.
Ensure satisfaction of the major customers in the district by managing supply and Distribution.
Supervise all technical staff in the district.
Ensure high performance and Productivity of technical staff by adopting proper human resource management methods on selection, training, coaching, counselling and motivation.
Plan and design the High voltage system
Ensure availability of adequate supply for future needs of industries in the district by planning and designing the High voltage System
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Results Driven
Activity vs. Accountability
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Exercise: Results Description
Key Result Key Activities (Major Supporting Actions)
KPIs
1. 1.2.3.4.
1.2.3.4.
2. 1.2.3.4.
1.2.3.4.
3. 1.2.3.4.
1.2.3.4.
4. 1.2.3.4.
1.2.3.4.
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• Exercise: Results Description Questionnaire
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Sources of Goals and KPIs
• Exercise: List down the sources of Goals and KPIs available in your company:– E.g. Job Description (RDQ)
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Basics of the Balanced Scorecard
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Reminder: Why BSC?
• Reason 1: Balanced
• Reason 2: Cause-and-Effect
www.myCNI.com.my www.OOBEY.com
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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?
Balanced Scorecard: Corporate
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Mission“Who are our targets?What is our value proposition?”
Internal Process“To satisfy our targets, in which internal processes must we excel?"
Learning & Growth“What capabilities and tools do our staff require to help them execute our strategy?
Financial“To fulfill the Mission, what Financial, how do we fund Internal Processes?”
Balanced Scorecard: NGOs, Non-Profits, Governments
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Side notes on BSC
1. BSC should be a Thought Process and a Tool not a Religion (e.g. Excel™ vs. Budgeting)
2. BSC ≠ Appraisal3. New BSC implementations should start linking
with Budgeting right from the beginning4. The ‘proper’ BSC approach should rightly fully
be heavily customized to the organization5. ‘Strategic Planning’ trainings should be
provided before ‘BSC’ trainings6. Clear definitions for Accountability vs. Impact
vs. Influence vs. Assistance
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Revenue
Base Retention
Share Gain Positioning Adjacent Market
New Business
Financial
Learning & Growth
Internal Process
Customers
Cost Margin
Cause and Effect
Cash Flow Asset
Operational Excellence
Product Leadership
Customer Intimacy
Investment Strategy
Competencies Information Systems Motivation, empowerment,
alignment
Satisfaction
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Financial
Learning & Growth
Internal Process
Customers / Distributors
Revenue GrowthProductivityMarket Value
Department Operations
Supplier & Alliances
External Involvement
Target Markets
Products/ Services
Channel Strategies
Human Resources
Technology
Information & IntelligenceSystems &
Processes
Cause and Effect: An Example
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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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Leading and Lagging KPIs
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Cause and Effect
Goal:Healthy!
What are my Vital Signs?•Blood Pressure?•Temperature?•Cholesterol?•Fever?•Chest Pain?•Dizziness?
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Cause and Effect
Also known as:
Leading vs. Lagging Indicators
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Exercise: Leading vs. Lagging
Lagging?
• Monthly Sales• Customer Retention• Project success • Event attendance• ARPU• Customer Satisfaction• Dealer Satisfaction
Leading?
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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?
Cause & Effect: Strategy
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Top Performers and the ‘No Contribution’ Problem
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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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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What is the Objective?
‘Do-or-Die’ KPIs for CNI• Revenue• ARPU
• Sponsoring• Retention
• Commission Plan (BDP)• Product• Corporate Image
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• Exercise: What are the Key 1st Level KPIs for your Industry?
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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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• Exercise: Developing your own Leading and Lagging KPIs
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Performance Standards
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MBO Standards
A Excellent
B Good
C Average
D Poor
E Useless
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MBO Standards
A Excellent
B Good
C Average Good
D Poor
E Useless
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MBO Standards
A Excellent Excellent
B Good Very Good
C Average Good
D Poor Not Good
E Useless Commit Suicide
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MBO Standards
A Excellent Consistently achieved 4 for 3 quarters
B Very Good Higher than planned results
C Good Achieved Planned Results
D Not Good Did not fully meet planned results
E Commit Suicide
Unacceptable performance
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Rating Scale
≥ 105 million kilo of A5
98 million kilo of A 4
95 million kilo of A3
94 million kilo of A2
≤ 93 million kilo of A1
Key Results KPIs Objectives
Ensure the achievement of current production targets within cost specification by regularly monitoring production reports and directing corrective action, where necessary.
1.Production targets/figures2.Variance in operating expense budget
1.95million kilogram of Product A2.Within budgeted factory cost i.e. RM20 million
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Business Model
The biggest impact
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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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What is the Business Model?
USP
Market Discipline
Profit Model
•Tata Nano
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What is the Business Model?
USP
Market Discipline
Profit Model
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Business Model: USP
USP(How do I
position my organization?)
Trends
Customer
Internal
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Business Model: USP
Unique Selling Proposition (USP)
=
Targeted Customer
=
Core Buying Purpose/ Customer Value Proposition/ Job To Be Done (JBTD)
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Business Model: USP
“The Product is Not the Product”
• What is the customer really buying?
• What is the “Core Buying Purpose”?
• What is the “Job To Be Done”?
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Business Model: USP
Obstacles to JBTD:
1. Insufficient WEALTH
2. Insufficient ACCESS
3. Insufficient SKILL
4. Insufficient TIME
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What is the Business Model?
USP
Market Discipline
Profit Model
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Business Model: Profit Model
Revenue
Cost
MarginCash Flow
Assets
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RevenueFinancial
Learning & Growth
Internal Process
Customers
Cost Margin
Strategy + BSC
Cash Flow Asset
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What is the Business Model?
USP
Market Discipline
Profit Model
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Market Discipline
"They are the most innovative"
"Constantly renewing and creative"
"Always on the leading edge"
"A great deal!"
Excellent/attractive price
Minimal acquisition cost and hassle
Lowest overall cost of ownership
"A no-hassles firm"
Convenience and speed
Reliable product and service
"Exactly what I need"
Customized products
Personalized communications
"They're very responsive"
Preferential service and flexibility
Recommends what I need
"I'm very loyal to them"
Helps us to be a success
Product Leadership
OperationalExcellence
CustomerIntimacy
• Cost• Convenience
• TCO
• Features, Benefits
• Limited Range
• Solutions• Customization
• Breadth & Depth
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Market Discipline
"They are the most innovative"
"Constantly renewing and creative"
"Always on the leading edge"
"A great deal!"
Excellent/attractive price
Minimal acquisition cost and hassle
Lowest overall cost of ownership
"A no-hassles firm"
Convenience and speed
Reliable product and service
"Exactly what I need"
Customized products
Personalized communications
"They're very responsive"
Preferential service and flexibility
Recommends what I need
"I'm very loyal to them"
Helps us to be a success
Product Leadership
OperationalExcellence
CustomerIntimacy•Air Asia
•LV
•Ramly
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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)
Alignment & Consistency: Market Disciplines
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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)
Alignment & Consistency: Market Disciplines
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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)
Alignment & Consistency: Market Disciplines
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Operational Excellence
• Competitive price
• Error free, reliable
• Fast (on demand)
• Simple
• Responsive
• Consistent information for all
• Transactional
• 'Once and Done'
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
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
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
Alignment & Consistency: Disciplines, Priorities, and KPIs
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Operational Excellence(low cost producer)
Product Leadership(best product)
Customer Intimacy(best total solution)
Alignment & Consistency
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Operational Excellence(low cost producer)
Product Leadership(best product)
Customer Intimacy(best total solution)
Alignment & Consistency
HP well-balanced portfolio, mass customization
Acer super lean cost structure, aggressive pricing
Apple powerful products, premium
pricing, limited range
Still Doing well in
2009/2011
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Alignment & Consistency: Business Model
USP
Market Discipline
Profit Model
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Strategy + BSC = How
‘Hope’ is not a strategy
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What is your Goal?
1. Cost Reduction
2. Growth
3. Both?
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Growth Strategy
1.Base Retention
2.Share Gain
3.Positioning4.Adjacent Market
5.New Business
GROWTH
“Double-Digit Growth”, Michael Treacy
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Growth Strategy
1. Base Retention
2. Share Gain
3. Positioning4. Adjacent Market
5. New Business
GROWTH
“Double-Digit Growth”, Michael Treacy
www.myCNI.com.my www.OOBEY.com
•Increase switching cost•Customize products•Preempt Defections•Brand
•Neutralize Competitor advantages•Superior Value•Buy market share
•Spot growth opportunities•Organized search
•Promising Market?•Make or Buy?
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How Markets determine Growth Strategies (1)
• Growth Rate
Growth Rate
Strategy Why?
Fast 1. Market Positioning
2. Share Gain
3. Base Retention
•Maintain market share in strategic segments•Prepare for market decline•Competitors focus too much on getting new customers
Flat 1. Base Retention
2. Share Gain (Acquisitions)
•Lose customers slower than competitors•Create scale economics, squeeze costs
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• Churn RateChurn Rate
Strategy Why?
Low 1. Share Gain (Acquisitions)
2. Adjacent Markets
•Buying customer base is cheaper than own efforts•New products, old customers strategy
High 1. Base Retention
2. Share Gain
3. Adjacent Market
•Lose customers slower than competitors•Customers are always open to the best value and offer•Desperate to gain revenue
How Markets determine Growth Strategies (2)
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How Markets determine Growth Strategies (3)
Fast Growth,
Low Churn
1.Market Positioning
2.Share Gain3.Base Retention
4.Adjacent Markets
•Example: XYZ Sector
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Side Notes on Cost Reduction Strategy
Cost Reduction
Business Model
•USP•Profit Model•Market Discipline•Invest/Divest
Operational
•Finance, HR, IT•Supply Chain•R&D•Sales & Marketing
5% - 30%
30% - 80%
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Revenue
Base Retention
Share Gain Positioning Adjacent Market
New Business
Financial
Learning & Growth
Internal Process
Customers
Cost Margin
Strategy + BSC
Cash Flow Asset
Satisfaction
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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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Operational Excellence• Competitive price• Error free, reliable• Fast (on demand)• Simple• Responsive• Consistent
information for all• Transactional• 'Once and Done'
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
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
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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• 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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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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• 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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Intro: Market Discipline
* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes Relationship Image
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Intro: Market Discipline
* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes
Price
Quality
Time
Selection
√
√
Smart Shopper
Relationship Image
Operational Excellence: Quality and selection in key categories with unbeatable prices
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Intro: Market Discipline
* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes
√
Brand
Time
Function
√
√
Best Product
Relationship Image
Product Leadership: Unique products and services that push the standards
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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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Revenue
Base Retention
Share Gain Positioning Adjacent Market
New Business
Financial
Learning & Growth
Internal Process
Customers
Cost Margin
Strategy + BSC
Cash Flow Asset
Operational Excellence
Product Leadership
Customer Intimacy
Investment Strategy
Satisfaction
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Alignment: 4-Wheels Model
Culture
Business Model
Strategic Planning
StructurePerson
Leadership
Resources
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Alignment: Framework
• Focus point• Alignment• Quality• Innovation & Differentiation• Risk taking• Performance Management• Corporate obsession• Decision making
Culture
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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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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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Strategy: Framework
• Recognition• Recruitment• Training• Profit sharing• Values• Motivation• Self Efficacy• Awareness• Useful Competencies• Career aspirations• Attribution (control)
Person
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Strategy: Framework
Enablers• Technology• Equipment• Materials• Human• Intellectual
Property• Partners• Property
Resources
Funding • CAPEX• OPEX
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Alignment: 4-Wheels Model
Culture
Business Model
Strategic Planning
StructurePerson
Leadership
Resources
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Operational Excellence
Operational Excellence
Customer Intimacy
Customer Intimacy
Product Leadership
Product Leadership
Organization, jobs,skills
Management systems
Information and systems
Culture, values,norms
Each Discipline Requires Different Priorities & Resources
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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
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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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
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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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’
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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Market Disciplines & Learning & Growth
Employee Motivation, Competencies and Alignment
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Case Study
Customer Satisfaction
Service
Product
Facilities
Store Profitability
Sales Revenue
Operating Cost
© Rajiv D. Banker
Employee Satisfaction
Training Support
Managerial Support
Merchandise Support
Associate Support
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Case Study
The company can now predict that:
for every
5% increase in employee
satisfaction
influences
1.3% increase in customer
loyalty
influences
0.5% increase in
revenue
Source: Balanced Scorecard, P. Niven; 2002
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Learning & Growth
Capabilities Tools Culture & Climate
Employee Satisfaction
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• 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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• 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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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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Market Disciplines & The Role of ICT
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Operational Excellence
• Providing reliable products and services at competitive prices with minimal difficulty and inconvenience
• Role of IT– Optimizing business processes for efficiency (e.g., workflow automation)
– Substituting information systems for inventory
– Using integrated information systems to coordinate order entry with production, distribution and service
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Product/Service Leadership
• Producing a continuous stream of state-of-the-art products and services that are attractive to customers
• Role of IT – Optimizing business processes for product development speed– Providing support for quick product-related decision-making (e.g., design, pricing,
advertising)– Information Awareness for discovering new product ideas– Knowledge Management for assimilating and disseminating information
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Customer Intimacy
• Customizing products and services to increasingly fine definitions of customer segments
• Role of IT– Enhancing relationships through the use of IT-based channels– Optimizing business processes for flexibility and responsiveness (e.g., intelligent call
centers, flexible manufacturing systems)– Database marketing and other data-mining tools for customer profiling and segmentation– Decision Architecture empowers employees closest to the customers
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Operational Excellence
• Role of IT– Optimizing business processes for
efficiency (e.g., workflow automation)– Substituting information systems for
inventory – Using integrated information systems to
coordinate order entry with production, distribution and service
– Examples: Wal-Mart, Federal Express, Seven Eleven Japan
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Customer Intimacy
• Role of IT– Enhancing relationships through the use of IT-
based channels– Optimizing business processes for flexibility and
responsiveness (e.g., intelligent call centers, flexible manufacturing systems)
– Database marketing and other data-mining tools for customer profiling and segmentation
– Decision Architecture empowers employees closest to the customers
– Examples: Amazon.com, Merrill Lynch, Kraft
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Product/Service Leadership
• Role of IT – Optimizing business processes for product
development speed– Providing support for quick product-related
decision-making (e.g., design, pricing, advertising)
– Information Awareness for discovering new product ideas
– Knowledge Management for assimilating and disseminating information
– Examples: Intel, Microsoft, Nokia, Sony
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Revenue
Base Retention
Share Gain Positioning Adjacent Market
New Business
Financial
Learning & Growth
Internal Process
Customers
Cost Margin
Strategy + BSC
Cash Flow Asset
Operational Excellence
Product Leadership
Customer Intimacy
Investment Strategy
Competencies Information Systems Motivation, empowerment,
alignment
Satisfaction
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B2B/B2G BSC Matching
Revenue
Base Retention
Share Gain Positioning Adjacent Market
New Business
Financial
Learning & Growth
Internal Process
Customers
Cost Margin Cash Flow Asset
Operational Excellence
Product Leadership
Customer Intimacy
Investment Strategy
Competencies Information Systems
Motivation, empowerment,
alignment
Satisfaction
Customer/Client/ Government BSC
Revenue
Base Retention
Share Gain Positioning Adjacent Market
New Business
Financial
Learning & Growth
Internal Process
Customers
Cost Margin Cash Flow Asset
Operational Excellence
Product Leadership
Customer Intimacy
Investment Strategy
Competencies Information Systems
Motivation, empowerment,
alignment
Satisfaction
Your BSC
1. Draw your ‘customer’s’ BSC
2. Match their CP/IP with your CP
3. Identify IPs that support/conflict
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Financial
Learning & Growth
Internal Process
Customers / Distributors
Revenue GrowthProductivityMarket Value
Department Operations
Supplier & Alliances
External Involvement
Target Markets
Products/ Services
Channel Strategies
Human Resources
Technology
Information & IntelligenceSystems &
Processes
Cause and Effect: An Example
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Dangers of Best Practice and Benchmarking
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Dangers of Best Practice and Benchmarking…
“Abraham Wald’s Work on Aircraft Survivability”, M. Mangel and F.J. Samaniego
Where would you focus reinforcement?
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Dangers of Best Practice and Benchmarking…
Company Performance
high
low
‘Best Practice’ theories
low high
zero Performance
Trend line
“Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005
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Dangers of Best Practice and Benchmarking…
Company Performance
high
low
‘Best Practice’ theories
low high
zero Performance
Trend line
“Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005
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Dangers of Best Practice and Benchmarking…
Selection Bias:
1. Success Traits = Failure Traits
2. Successful Cases + Failure Cases
3. Worst effects in ‘Old’ industries
4. Overvalue ‘best practice’ theories
5. Current accomplishments unfairly magnified by past achievements
6. Reverse Causal
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Dangers of Best Practice and Benchmarking…
Also known as ‘Beware of Consultants’:
1. Selection Bias
2. Big vs. Small company
3. Selective success stories
4. Correlation vs. Causal
5. Survey problems
6. Practical vs. Glamour-to-have
7. Leaders who benchmark
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Survey Problems…
“In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied.”
HBR March/April 1996
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Cascading from Company-Department-Individual
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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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Sample KPIs for Each Discipline
Operational Excellence
• Price• Selection• Convenience• Zero Defects• Growth
Operational Excellence
• Price• Selection• Convenience• Zero Defects• Growth
Customer Intimacy
• Customer Knowledge
• Solutions Offered• Penetration• Customer Data• Customer-success
focus
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
Product Leadership
• Marketing• Functionality• # of Successes• # of Failures• Learn from key
users• Interdisciplinary
teams• Pipeline
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Company – Business Unit – Department KPIs
Department:
Corporate Business Unit Department
Financial Increase Profitability (Margins +15%)
Customer
Internal Process
Learning & Growth
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E3 – Department BSC
Financial Perspective
Goals Measures Targets CAPEX OPEX
Quality
Innovation
On Time Delivery
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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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Cascading
Customer Perspective
Goals Strategies Targets Direct Indirect
Base Retention
Mkt
Share Gain Mkt
New Business
BD
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E3 – Department BSC
Customer Perspective – Marketing Department
Goals Strategies Targets CAPEX OPEX
Base Retention
Share Gain
Budgeting
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Individual MBO
Employee A – Marketing Executive
KRAs Action Plans Targets Weight (%) Score
Class A Customer Retention
Class B Customer Retention
Competition Crossovers
Re: Base Retention
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Performance Planning Worksheet
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Planning, Budgeting, Schedules, Processes
Tying it all up
The Planning & Budgeting ProcessStages Output Month
1. Pre-Planning Analysis & Brainstorming
•Current ½ yr budget & revision•Next yr options and budgets required
July - Sep
2. High-level Group Strategy and Targets
•High-level strategy of Group Corp Plan. •Circulation of Main Budget simulation to all departments
Sep
3. Functional Strategy and Budgets
•BSC & Budget preparation by HODs to HODivs
Sep - Oct
4. Formal Results Planning
•BSC & Budget to CEOs, followed by BOD•Revised and Finalized Plans and Budgets
Oct-Nov
5. Communication and Cascading
•Presentation of Group Budget and Planning summary & distribution•Communication of Highlights to the field and staff
Nov-Jan
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Review processes
1. Result Planning schedule inc. BSC, Budget2. Quarterly Performance Appraisals3. 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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Problems, problems and more problems…
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Problems, problems and more problems…
1. No serious budget to tackle key risks2. Too much optimism or pessimism3. Innovation vs. Results vs. Baseline4. Investment ≠ Portfolio Management5. Top down vs. Bottom up6. Good to have vs. Need to have7. Line Manager not thinking like Investors8. Too focused on KPI and BSC9. Budget allocation seen as ‘popularity’ vote10.Public Listing -> pressure for short-term
budgets and results vs. long-term innovation
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KPI Documentation and Dashboard
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Data Elements and Collection Logic:
An online survey will be administered to clients, both internal* (within LLSG and SJHC) and external (those who refer in work e.g. HICL).*Physicians, Nurses, Ward Clerks, PSA/TSA, Managers/Coordinators, Researchers, Students, Allied Health Professionals, others.Dave Schaus will create the survey form and collect the data with Omniform Perform. Data will exported to MS Access for review and analysis.
Calculation Formula:
For each question:# survey participants response for each rating (1-4)/ total # of survey participants = x/100 = x%
Frequency: YearlyFor the first initiative, customers will be resurveyed once training is completed to see if there has been an increase in customer satisfaction.
Baseline: Not known
Target:
Target Rationale:
Limitations and Exclusions:
Analysis Considerations:
Initiatives: Develop and administer Customer Service Training for existing and new employees
References:
Sample 1: KPI Data Collection Form
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Data Elements and Collection Logic:
Calculation Formula:
Frequency:
Baseline:
Target:
Target Rationale:
Limitations and Exclusions:
Analysis Considerations:
Initiatives:
References:
Sample 1: KPI Data Collection Form
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Sample 2: KPI Data Collection Form
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Sample 2: KPI Data Collection Form
KPI Name
Description
Objective
Type Quantitative Qualitative
Effort Low Medium High
Unit
Assessment Method
Possible Tools
Analysis Frequency
Day Week Month Quarter Year Year+
Comments
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Sample 3: Scorecard/KPI Data Collection Template
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Sample 3: Scorecard/KPI Data Collection Template
Measure Owner:Data Owner:
Actual Results
Measure Name
Perspective Description Mth 1 Mth 2 Mth 3 Commentary
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4. Building a Performance Culture
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Alignment: 4-Wheels Model
Culture
Business
ModelStrategic Planning
StructurePerson
Leadership
Resources
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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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Strategy: Framework
• Role modeling• Vision/Mission/Philosophy
• Leadership Style• Delegation & Empowerment• C&B, Promotions• Sense of Urgency• Speak regularly about Performance
Leadership
http://totallyunrelatedrandomanddebatable.blogspot.com/
Strategy: Framework
• Recognition• Recruitment• Training
• Attitude• Values
• Motivation• Self Efficacy• Awareness
• Useful Competencies• Career aspirations• Attribution (control)
Person
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Strategy: Framework
Enablers or Obstacles• Technology• Equipment• Materials• Human• Intellectual Property• Partners• Property
Resources
Funding • CAPEX• OPEX
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Alignment: Framework
• Focus point• Alignment• Quality• Innovation & Differentiation• Risk taking• Performance Management• Corporate obsession• Decision making
Culture
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4-Wheels Model
Culture
Business
ModelStrategic Planning
StructurePerson
Leadership
Resources
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The Integrated and Holistic Performance Management System
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Why Performance Appraisal?
Performance
ManagementDevelopment
Motivation
Selection
Evaluation
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Talent Segmentation
Group I
(Talent Pool)
23
45
PE
RF
OR
MA
NC
E
2 3 4 5
POTENTIAL• Identify
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Employee Differentiation
Group I
(Talent Pool)
Group II
( Potential)
Group III
( Performance)
Group IV
(Counseling)
2 3 4 5
23
45
PE
RF
OR
MA
NC
E
POTENTIAL• Identify
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Selection and Identification
PERFORMANCE APPRAISAL
1. Results
2. Values
3. Special Contributions
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Selection and Identification
POTENTIAL EVALUATION
1. Capacity
2. Competencies
3. Culture
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Selection and Identification
POTENTIAL EVALUATION
1. Capacity
Learn
Next Level
Ambition
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Selection and Identification
POTENTIAL EVALUATION
2. Competencies
Competent
Reliable/Consistent
Pressure
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Selection and Identification
POTENTIAL EVALUATION
3. Culture
Demonstrate
Improve
Influence
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Exercise
Define ‘Performance’ Define ‘Potential’
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Performance Coaching
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Coaching & Counseling
Month 1
Performance Planning
Month 12
Performance Appraisal
Month 2-11
?
Refer: Coaching Self-Assessment
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Designing Your Own Performance Appraisal Form
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Performance Appraisal Form
• Exercise: Performance Appraisal Form - Critical Components – What Do you Want to Evaluate?– What are Your Objectives?
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Performance and Motivation
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Motivating Talent
Hope
Control
http://totallyunrelatedrandomanddebatable.blogspot.com/
Motivating Talent
Passion Job
GrowthTalent
Minimum Motivation Target: 2 out of 4
Delegation
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8. Performance and Reward
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‘Basic Values’ Driven C&B
1. Performance
2. Differentiation
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What to Pay?
• Pay for Service
• Pay for Job
• Pay for Competency
• Pay for Performance
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•Competency- Knowledge
- Skills - Experience
•Problem solving - Complex
- Type of problems - Special Problems
•Responsibility - Authority
- Success/Failure - Freedom to act
Pay for Job
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Performance and Incentives
1. Internal Equity1. Internal Job Rates
2. Performance differentials
2. External Competitiveness1. External Job Rates - Benchmarking
2. Demand & Supply
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What’s the Difference?
• Increment
• Bonus
• Promotion
Exercise: How does your company define the difference?
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What to Pay?
• Pay for Service
• Pay for Job
• Pay for Competency
• Pay for Performance
Exercise: Which ones does your company use for Pay?
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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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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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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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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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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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Employee Differentiation through Relative Performance and Talent Management
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Values Driven C&B
1. Performance
2. Differentiation
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Employee Distinction
Group I
(Talent Pool)
Group II
( Potential)
Group III
( Performance)
Group IV
(Counseling)
2 3 4 5
23
45
PE
RF
OR
MA
NC
E
POTENTIAL• Identify
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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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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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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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VARIABLE AND INCENTIVE SCHEMES
Part B-3
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Incentive Scheme Design
Agenda
1. Objective
2. Situation Analysis
3. Target Areas to be improved
4. Current Incentive
5. Recommended KPIs
6. Proposed Incentive Scheme
7. Improving Performance
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Objective?
1.What are you trying to achieve?
2.How to measure?
3.What is the Gap?
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Target group?
The following positions are eligible to participate in this scheme:
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Situation Analysis?
1. Retention?
2. Working environment?
3. The current basic pay?
4. Teamwork?
5. Supervision/Leadership style?
6. Attitude?
7. Turnover issues?
8. Absenteeism?
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Target areas to be improved?
1. Increase/Decrease the basic pay?
2. Fixed costs?
3. Incentives tied to… ??
4. Absenteeism?
5. Quality improvement?
6. Easily understood by employee?
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Recommended KPIs to be incentivised
Output Skill (Proficiency) Behavioural (Attitude)
•Manpower productivity •Operational Cost•Safety and Environment •Quality (e.g. Defect/unit)•Volume
•Job Specific Skills •Punctuality•Absenteeism/Attendance•Teamwork •Turnover
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Proposed incentive scheme
1. Fixed Salary Proportion (Fixed Personal Income, Variable Team Bonus)
Total Payout
= Fixed Quantum + Team Based Bonus
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Example:
1. Budgeted incentive = 5.8 months of basic payroll
2. Fixed Quantum = 0.4 months (for example) [4.8 mths 12]
3. Monthly Total Payout = Basic Pay + Fixed Quantum
= RM500 + 0.4 months
= RM500 + RM200
= RM700
4. Amount available for bonus = 5.8 months - 4.8 months
= 1.0 month
Proposed incentive scheme
1. Fixed Salary Proportion (Fixed Personal Income, Variable Team Bonus)
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Team Performance
Rating
5 1.50 months 2.00 months 2.50 months
4 1.25 months 1.75 months 2.25 months
3 1.00 months 1.50 months 2.00 months
2 0.75 months 1.25 months 1.75 months
1 0.00 months 0.00 months 0.00 months
Production Operator Team Leader Group Leader
Annual Bonus Annual Bonus Annual Bonus
Annual Bonus Incentive Matrix
Proposed incentive scheme
1. Fixed Salary Proportion (Fixed Personal Income, Variable Team Bonus)
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Monthly Incentive Payout Matrix
Personal Rating
5 1.2 months
4 1.0 months
3 0.8 months
2 0.5 months
1 0.0 months
Monthly Incentive
Proposed incentive scheme
2. Two-tier Multiplier (Variable Personal Income, Variable Team Bonus)
Total Payout =
Basic Pay + Monthly Personal Target Achievement + (Personal Target Achievement x Team Performance Multiplier)
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Proposed incentive scheme
2. Two-tier Multiplier (Variable Personal Income, Variable Team Bonus)
Personal Performance
Rating 500 550 600 650 700 750 800
5 1,100 1,210 1,320 1,430 1,540 1,650 1,760
4 1,000 1,100 1,200 1,300 1,400 1,500 1,600
3 900 990 1,080 1,170 1,260 1,350 1,440
2 750 825 900 975 1,050 1,125 1,200
1 500 550 600 650 700 750 800
Monthly Basic Pay (RM)
Example: Production Operator
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Proposed incentive scheme
2. Two-tier Multiplier (Variable Personal Income, Variable Team Bonus)
Personal Rating
5 1.2 months 1.70 months 2.20 months
4 1.0 months 1.50 months 2.00 months
3 0.8 months 1.30 months 1.80 months
2 0.5 months 1.00 months 1.50 months
1 0.0 months 0.00 months 0.00 months
Monthly Incentive
Team Leader Group Leader
Monthly Incentive Monthly Incentive
Production Operator
Annual Bonus Incentive Matrix
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5 4 3 2 1
5 2.4 1.8 1.2 0.6 0
4 2 1.5 1 0.5 0
3 1.6 1.2 0.8 0.4 0
2 1 0.75 0.5 0.25 0
1 0 0 0 0 0
Team Performance
Per
son
al P
erfo
rman
ce
Annual Bonus Incentive Matrix
(in months)
Proposed incentive scheme
2. Two-tier Multiplier (Variable Personal Income, Variable Team Bonus)
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Proposed incentive scheme
3. Team Ratio Plan (Team-based Income, No Annual Bonus)
Total Payout =
Basic Pay + Monthly Incentive Payout (No Annual Bonus)
Team Rating
5 2.00 months 2.25 months 2.50 months
4 1.50 months 1.75 months 2.00 months
3 1.20 months 1.45 months 1.70 months
2 0.75 months 1.00 months 1.25 months
1 0.00 months 0.00 months 0.00 months
Production Staff Team Leader Group LeaderMonthly Incentive Monthly IncentiveMonthly Incentive
Monthly Incentive Payout Matrix
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Team Performance
Rating 500 550 600 650 700 750 800
5 1,500 1,650 1,800 1,950 2,100 2,250 2,400
4 1,250 1,375 1,500 1,625 1,750 1,875 2,000
3 1,100 1,210 1,320 1,430 1,540 1,650 1,760
2 875 963 1,050 1,138 1,225 1,313 1,400
1 500 550 600 650 700 750 800
Monthly Basic Pay (RM)
Example: Production Operator
Proposed incentive scheme
3. Team Ratio Plan (Team-based Income, No Annual Bonus)
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Improving PerformancePerformance Improvement Area
Intervention Methods Effectiveness of Direct Incentive Measures
Skill Deficiency
•Off site Training•Job redesign•On-the-job training•Process Redesign
Yes
Performance Punishing
•Review performance management processes•Study on supervision style of Team Leader•Remove punishment
No
Non-performance rewarding
•Proper performance monitoring process•Arrange positive consequence
No
Coordination & Teamwork
•Communication of clear direction and goals•Shared Accountabilities•Focus on Team Competencies
Partly
Behavioural •Communication of clear behavioural indicators•Focus on Behavioural•Coaching and Counselling
Partly
Supervision Style
•Leadership styles of team leaders
•Regular tracking on morale of team members
Yes but not for team members
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Curse of the Bell Curve
‘A’ Staff
‘B’ Staff
‘D’ Staff
‘E’ Staff
‘C’ Staff
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9. Performance Management: Issues and Challenges
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Other Performance Review processes
1. Result Planning schedule inc. BSC, Budget2. Quarterly Performance Appraisals3. Sales performance KPIs4. QMS – non-sales performance KPIs5. 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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More Problems….
1. cost of evaluation vs. gains of evaluation
2. defer achievements of a good year to next
3. barely achieve so that next target is not high
4. spread improvements over several years
5. value reducing actions to increase performance
6. most ratings are 4 or 5, new people are 3
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Before I forget…
• Re-train Appraisers• Train new Appraisers
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Issues and Challenges
1. HODs unclear
2. HODs disagree/unsupportive
3. HODs not committed
4. Functional silos
5. HODs not willing to openly differentiate
6. Incompetent superiors/HODs
7. Difficult to evaluate
8. Aligning with Business Goals
9. Unsynchronized and unmonitored training and development
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End Point
The end of the Beginning
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QUESTIONS, ANSWERS, COMMENTS
forum
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Which Company?
American Customer Satisfaction Index (ACSI) • 64 out of100-point scale: lower than IRS (Tax)• 2nd last among 30 companies surveyed• Lowest 5% among 223 companies surveyed• Bottom 5% of all measured private sector
companies
• 500 million customers
2010 American Customer Satisfaction Index (ACSI) E-Business Report
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Popularly Unpopular
Popularity
≠
Affection
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Don’t forget…
“The business of business is
Business, not KPIs”
Thank You.
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