MDDCCUA workbook 4.14

ACHIEVING BUSINESS EXCELLENCE

Achieving Business Excellence Understanding the Pattern of Business Success

www.johnspence.com Page 1

P P P P

The Formula for Business Success: (T+C+ECF) x DE = Success

THE 4 I’S

The Five Foundations of Strategy

1. How to Avoid the 4 I’s (1-10)

Aggressive external market focus.

2. Ridiculously high level of customer focus.

______ Keep the "Main Things" the main things.

3.

Bullish on knowledge sharing and learning.

4. Teamwork is mandatory – not optional. Passion and commitment at all levels. 5. Foster a healthy paranoia.

Revel in change.



ORGANIZATIONAL EFFECTIVENESS AUDIT

Answer the following questions as honestly as possible using this 1-10 point scale:

1 = Strongly Disagree 3 = Disagree Somewhat 5 = Not Sure

7 = Agree Somewhat 10 = Strongly Agree

1. We have a clear and detailed vision for the direction of our company that is very well communicated

throughout the entire organization:

2. Every employee has clear/quantifiable/observable performance objectives:

3. There is a high level of very open and honest communication throughout the organization:

4. I have a high level of trust in the skills, abilities, and integrity of my co-workers:

5. There is a high sense of urgency within the organization to get things done:

6. We have only the best, highly competent people in all areas of the organization:

7. We focus very intently on the needs of our customers:

8. There are no politics, rumor-mongering or finger-pointing within our organization:

9. Our key leaders operate as a highly-effective team:

10. There is a high level of both personal and mutual accountability within the organization:

11. People display a positive, enthusiastic attitude throughout the organization:

12. We are superb at collecting and using feedback from our customers:

13. Our organization displays great discipline in pursuing our focused business objectives:

14. I am very pleased with where our organization is in the marketplace today:



CHARACTER

COURAGE

COMMUNICATION

COLLABORATION

COMPETENCY

COMPASSION

CONTRIBUTION

WHAT THE BEST CEOs KNOW:

KEY LESSONS FROM THE TOP 7 CEOs IN AMERICA

(Grove, Dell, Gerstner, Welch, Kellerher, Walton, Gates)

1. We have an “Outside-In” perspective and place the customer at the center of the business ______

2. The majority of our people are committed and passionate about working in our company

3. We have a strong corporate culture that supports our people and focuses on our customers

4. We are highly innovative at creating “next generation” products, processes, or solutions _______

5. We study best practices and implement the best ideas, regardless of their origin

Based on: “ What the Best CEOs Know” by Krames



THE TOYOTA WAY

CHALLENGING VISION We form a long-term vision, meeting challenges with courage and creativity to realize our dreams

KAIZEN We improve our business operations continuously, always driving for innovation and evolution (1% better every day)

GENCHI GENBUTSU

We go to the source to find the facts to make correct decisions, build consensus, and achieve our goals at our best speed.

RESPECT, CHALLENGE AND HELP YOUR PEOPLE AND SUPPLIERS We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust.

TEAMWORK We stimulate personal and professional growth, share the opportunities of development, and maximize individual and team performance.

Orange Revolution: 4 + 1

Clear, specific and measurable goals

High levels of trust across the organization

Free flow of all pertinent information across the entire organization

High levels of both personal and mutual accountability

A focus on catching people doing things right and rewarding them

Wow — No Surprises — Celebrate

Based on: ”Results Rule!" by Pennington



ELEMENTS OF A HIGH PERFORMANCE TEAM

D

M

C

C

M

D

10 Key Team Competencies

1. Setting clear, specific and measurable goals.

2. Making assignments extremely clear and ensuring required competence.

3. Establishing 100% accountability for high performance across the entire team.

4. Running effective team meetings.

5. Building very strong levels of trust.

6. Establishing open, honest, frank and safe communications.

7. Managing conflict effectively.

8. Creating mutual respect and collaboration.

9. Encouraging prudent risk-taking, creativity and innovation.

10. Engaging in ongoing team building activities.



WHAT DO ENGAGED EMPLOYEES LOOK LIKE?

They give more discretionary effort

They consistently exceed expectations

They take more responsibility and initiative

They receive better customer service ratings

They offer more ideas for improvement

They promote and model teamwork

They volunteer more for extra assignments

They anticipate and adapt better to change

They persist at difficult work over time

They speak well of the organization

TEN ELEMENTS OF A WINNING CULTURE

1. People enjoy the work they do and the people they work with

2. People take pride in the work they do and the company they work for

3. There are high levels of engagement, connection, camaraderie and a

community of caring

4. There is a culture of fairness, respect, trust, inclusiveness and teamwork

5. The leaders walk the talk, live the values and communicate a clear vision and

strategy for growth

6. Lots of open, honest, robust and transparent communication across the

entire organization

7. The company invests back in employees; there is a commitment to learning,

coaching and development

8. There is a bias for action, employees have an ownership mentality and

always strive to give their personal best

9. There is high accountability and a strong focus on delivering the desired results

10. There is ample recognition and rewards and mediocrity is not tolerated



IS YOUR COMPANY UP TO SPEED? ADAPTED FROM FAST COMPANY MAGAZINE

Score your company from 1 to 10:



WE HAVE A STRONG EMOTIONAL BOND WITH OUR CUSTOMERS: __ Competing strictly on price, quality, and features is the road that most companies travel—and it is the road to disaster. In a world of overcapacity, endless choice, and savvy buyers—there will always be some company that can do it a little faster, a little cheaper, or a little better than you can. Companies that prosper over the long haul don’t just offer good deals, they exude genuine affection and concern for their customers. They build strong, customer intimate relationships as trusted advisors and true business partners.

WE HAVE A UNIQUE STRATEGY THAT CLEARLY STANDS OUT: __

You can’t do great things if you are satisfied doing things just "a little better" than your rivals. If you want to win big, you have to think differently. You must pursue strategic ideas that challenge the status quo in the industry. You must create a position that is unique, highly valuable in the marketplace, and defendable from your competition.

OUR ORGANIZATION IS A FUN PLACE TO WORK—

AND A FUN ORGANIZATION TO DO BUSINESS WITH:

The most productive companies have an atmosphere of fun and excitement that permeates their entire culture. This does not mean people sit around and play video games and tell jokes all day long; it simply means that people smile and have fun while at work. They enjoy their work and the people they work with—and especially serving their customers.

WE ARE BUILT TO CHANGE: The only certainty in business today is that some crucial elements of your strategy, the competitive landscape, your customer’s expectations, the underlying economics of your industry will be different tomorrow. That is why change itself has become a core capability in organizations that prosper over the long run. Companies that succeed—embrace, even revel in change.



WE STRONGLY EMBRACE THE VALUE OF VALUES: ________

Today, more than ever, customers don't just ask "What products do you make?" or "What services do you offer?" they also ask "What values does your company stand for?" The company with the clearest sense of purpose, bolstered by honesty and integrity wins.

WE ARE AS DISCIPLINED AS WE ARE CREATIVE: ________ (AND AS CREATIVE AS WE ARE DISCIPLINED)

Creating long-term value means delivering short-term results—every quarter, every week, every day. There is no contradiction between creativity and execution. The most innovative companies tend to be the most disciplined when it comes to making their numbers. Think outside the box, but build a strong box to stand on while doing it.

WE USE TECHNOLOGY TO CHANGE EXPECTATIONS AND RESHAPE OUR BUSINESS: ________ Every business is a technology business. Regardless of your product, service or industry—every company that hopes to survive, let alone win, must embrace technology as a fundamental driver of their business strategy. Fundamental values and core business excellence is powered by relevant (to the customer) technology.

WE ARE BUILT FOR SPEED: ________ Being fast does not mean reckless. But fast companies do understand the cost of hesitation and delay—whether responding to a customer’s complaint or launching a new product. Successful companies know that time is as valuable a resource as money or talent and treat it accordingly.

WE HAVE BUILT A COMPANY OF LEADERS: ________ There is much more to leadership than the vision and charisma of the CEO. The most effective form of leadership is grassroots leadership; the companies with the most confident and committed leaders, in all levels of the organization, are companies that win.



HEDGEHOG CONCEPT K

N

L

From a twice weekly survey for five years of 2,000+ senior managers and executives at:

IBM

GE

Morgan

Stanley

Merck

3M

AT&T

Microsoft

CIGNA

Heineken

MasterCard

Fidelity Investments

SAP

Motorola

Ikon

American Express

Progressive Insurance

Bank of America

Borders Books

KEYS TO EFFECTIVE MANAGEMENT

Communicate Clearly—internally and externally, honesty, transparency, candor

Force the Hard Decisions — core values drive fast, effective decision making

Focus Relentlessly on Key Results — outcomes not effort , clear metrics, binary

Remain Flexible to Change — be agile, adaptable and nimble, embrace change

Prove Your Value to the Customer — every day, in every interaction

Force Collaboration — teamwork is mandatory, not optional , no Prima Donnas!

Rigorous but Not Ruthless — set high standards and hold people 100% accountable

Based on: “ Tough Management” by Martin



WEB OF VALUE = VOC + MOT + WOM

WHAT ARE ALL THE WAYS YOU CURRENTLY LISTEN TO THE VOC?

WHAT NEW WAYS COULD YOU ADD?

MOT WORKSHOP: WHAT DO YOU BELIEVE ARE THE TOP 3 MOT FOR YOUR CUSTOMERS?

DO YOU HAVE A ROBUST AND THOROUGH PROCESS FOR EACH TO MAKE SURE THEY ARE DELIVERED FLAWLESSLY EVERY TIME?



WOM… DO YOU HAVE A PROCESS TO GENERATE CONSISTENT QUALITY REFERRALS?

IDEAL CUSTOMER PROFILE:

HOW DO YOU GET THEM TO...

FIND YOU:

LIKE YOU:

TRUST YOU:

TRY YOUR PRODUCTS/SERVICES:

REPEAT BUY:

BECOME A CUSTOMER EVANGELIST AND REFER YOU TO OTHER IDEAL CUSTOMERS:



THE 4 + 2 FORMULA

THE FOUR PRIMARY MANAGEMENT PRACTICES

1 = Not at all 3 = Poor 5 = Fair 7 = Good 10 = Superior /Excellent

1. Strategy: Devise and maintain a clearly stated, focused strategy: Whatever your strategy, it will only work if it is sharply defined, clearly communicated, and well understood by employees, customers, partners, and investors.

2. Execution: Develop and maintain flawless operational execution: You might not always delight every customer, but make sure that you never disappoint them. Winners consistently meet the expectations of their customers by delivering on their value proposition. Bad quality surely will hurt.

3. Culture: Develop and maintain a performance-oriented culture: One of the best indicators of being performance-oriented is the way you deal with your own poor performers. It is easy to reward good performers. What matters is whether you have the courage to get rid of poor performers.

4. Structure: Build and maintain a fast, flexible, flat organization: What really counts is whether structure reduces bureaucracy and simplifies work. Simpler and faster - such are the best goals for all organizations.

THE FOUR SECONDARY MANAGEMENT PRACTICES

1. Talent: Hold on to talented employees and find more: Winning organizations pay great attention to finding, growing, developing, and rewarding very talented people.

2. Leadership: Key leaders are truly committed to the business: The research data clearly showed that the leadership effectiveness of the top executives, on average, influenced 15% of the variance in corporate performance, for better or for worse.

3. Innovation: Make innovations that are industry transforming: Agile companies that were highly innovative and able to anticipate rather than react to disruptive events in the marketplace, were always the winner.

4. Mergers and Partnerships: Make growth happen with mergers, alliances, and partnerships: Internally generated growth is essential, but companies that can also master mergers and partnerships are much more likely to be winners.

Based on: "What (Really) Works” by Joyce



High Standards

L

CR=.277

CR=.275

Empowerment Coaching

Long-term

Orientation

Enthusiasm, Commitment,

Respect

Training &

Development

CR=.280

=.285 CR=.371 CR=.365 CR=.191

WHY IS IT SO IMPORTANT TO DELIVER SUPERIOR CUSTOMER SERVICE? It is a proven business fact: The combination of quality products and services, with very high levels of customer satisfaction — directly drives significantly higher profitability.

In other words, it should be spelled Customer $ervice — with a big capital $.

What this chart shows: According to this massive research study, by going from an average of "Somewhat Agree" to "Agree" on the Quality and Customer Relationship scores (in the eyes of the staff) the average company would more than double (104%) its financial performance!

As another example:

If you improve the average rating on

Employee Satisfaction by 10 –15%

(again going from "Somewhat Agree" to "Agree") it will cause a 42% improvement in financial performance, including both profitability and growth.

CR=104.12

T Highest Quality

Products/Services

& N Excellent

Customer Relationships

CR= .404

CR=.249 CR=.334

CR CR=.247

CR = Causal Relationship

Based on: "Practice What You Preach" by Maister

Fair Compensation

Financial Performance

Employee

Satisfaction



HERE IS THE LIST OF THE TOP FACTORS THAT DROVE THESE COMPANIES TO BRING IN FINANCIAL

RETURNS THAT WERE OFTEN 20 TIMES LARGER THAN THEIR COMPETITORS...



We have an uncompromising determination to achieve excellence in everything we do:

We have a real commitment to high-quality work, and tolerate nothing less:

We have a real commitment to high levels of customer service, and tolerate nothing else:

In this company we set and enforce very high standards for performance:

Management gets the best work out of everybody in the company:

The quality of the work performed by our group is consistently high:

We keep customers informed on issues affecting their business:

We make our customers feel as though they are very important to us:

Customer satisfaction is a top priority in our company:

We listen well to what the customer has to say:

We are extremely good at building long-term customer relationships:

The people in our company do "whatever it takes" to do a good job for the customer: _______

We do a good job of resolving customer problems when they occur:

We always place the customers’ interests first, ahead of those of the company: ________

The level of quality service delivered by my group/team is consistently high:

READ THAT LIST AGAIN… AND AGAIN!!!!! THIS IS CRITICAL TO YOUR SUCCESS



DISCIPLINED EXECUTION



We have a clear vision for exactly where we are trying to take our organization

We have a detailed and specific plan to accomplish the key objectives we are trying to execute

Our senior leaders are all 100% committed to executing the key objectives

The key leaders/employees in our organization are all superb at execution

All of the major objectives we are pursuing are fully aligned and mutually reinforcing

We have excellent systems and processes in place to ensure consistently superb execution

There is continuous and transparent communication throughout the entire organization about exactly where we stand on executing on our key objectives

Every employee has all of the training, support, equipment and resources they need to deliver the results required of them

We are superb at adjusting and adapting our strategy and objectives when truly necessary

We do a great job of celebrating both small and big wins and praising great performance

We refuse to tolerate mediocrity or lack of accountability and deal decisively with people who are not able to meet the clear standards of performance in our organization



IBM •Collaborative partnerships with customers.

•Best people

•Transparency

Kiss Theory Goodbye •Superior leadership

•Drive unique value and growth through •Customer focus •Sales effectiveness

innovation that matters. •Sell value •Flawless operational execution

•Invest in people. •Have FUN •Superb financial management

•Leverage talent and knowledge through

trust and communication.

Skinner Nurseries •Own the word service

•Customer loyalty

Charlie Trotter •Only the best people (passion)

•Best people •Lots of communication

Ram Charan: Know How •Position/Reposition the business to

•Lots of communication •Know your business make money

•Highest standards •Have a plan •Pinpoint patterns and change - then take

•Innovation •Sell value Action

•Truly delight the customer

Good to Great •Best people

Small Giants •Independent vision

•Strong Relationships

•Build a strong culture of excellence •Hire the best people - build them into

leaders

•Effective (Level 5) leaders -employees •Build a TEAM of leaders

•Deal with difficult issues -customers •Set the right goals - then FOCUS on key •Focus on the main things -community Priorities

•Patience + discipline

Results Rule •Tell the truth

•Caring workplace •Flexible structure

•Passionate

The Six Secrets of Change 1. Love your employees

2. Connect meaning to the work

•Pursue the best over the easiest •Leverage the power of partnerships

Think Big - Act Small •Stewardship

3. Invest in your people 4. Learning/innovation IS the work

•Focus on the main things •Transparency 5. Transparency rules

•Accountability •Accessibility 6. Create learning systems

•Constant improvement

Microsoft •Best people

•Bet the company

•Stand for something •Erase superficial distinctions

In Search of Excellence •A bias for action

Firms of Endearment Meaningful work

Partnerships with all stakeholders

Respect for individuals

•Require failure •Close to customer Transparency

•Managers are qualified •Intrepreneurship Teambuilding

•Performance is what counts •Values driven Empowerment

•Money where it is important •Focus on core competencies Fun work environment •Stop the insanity •Simple structure Support for life balance

Spence: 6 Ways to Run or Ruin 1. Clear Vision

2. Robust Communication

•Minimal bureaucracy

Top 7 CEOs •Customer focus

Training and development are high

priorities

Recognition and celebration have a high 3. Culture of Urgency •Passion for the job Priority

4. Disciplined Execution 5. Best People

•Culture counts •Constant innovation

Mavericks at Work Value-based differentiation

6. Focus on the Customer •Learn from the best Transparency + knowledge sharing

4+2 Formula •Clear, focused strategy

Tough Management •Communicate clearly

Bond with customers

Talent + culture •Flawless execution

•Performance-oriented culture

•Force the hard decisions

•Focus on results Mastering the Rockefeller Habits Right people doing the right things right

•Fast, flexible, flat organization •Remain flexible Clear focused one-page strategic plan

-Best people •Prove your value to the company Strong core values.

-Committed leaders •Force collaboration Organizational alignment and focus

-Innovation •Be a tough manager/not a tough Relentless and consistent communication

-Growth through partnerships guy of the theme.

Top Concerns of 700 CEOs 1. Have not communicated my vision

Toyota Way •Clear and compelling vision

Transparency and openness to employee

feedback. 2. Do not discuss the tough stuff •Constant improvement (Kiazen) Key executives highly aware of the

3. Do not have the best people in key •Go to the source (Genchi Genbutsu) business. positions •Respect and mutual accountability Deliver the brand promise and truly

4. Lack of disciplined execution •Teamwork delight customers.

Philly Gear



WORKSHOP: IDEAS INTO ACTION

Go back page-by-page and carefully look through the book. Compare and contrast your scores on the various audits and re-read any notes you wrote. What are the themes that emerge… the patterns? Look for any scores below a 7 as an area that needs improvement and anything in the 1-5 range as a serious problem that needs attention.

The goal here is to really dig into these topics so you can take an honest look at the actual current state of your organization. This is a rare opportunity to take a critical look at how well your organization is truly operating and specifically what must be done to improve it. Take this exercise very seriously and push yourself to really understand what these scores and everything you learned today about world-class organizations could mean to your business. Here are three major questions to keep in mind:

What does this mean to our business?

How can I make these ideas work in our company? What can I do right away to improve our success?

1. Strengths What was the pattern of high scores? In what major areas did you seem to have as strengths, where you scored an 8 or higher across all of the workshops?

2. Weaknesses

What was the pattern of low scores? In what major areas did you seem to have as weaknesses, where you scored a 6 or lower across all of the workshops?



3. Key Strategies for Success

Based on everything you have learned here today and your own personal business experience, what do you believe are the top strategies your organization must focus on to build and sustain success? What are the 4 - 6 most important ideas that will drive your organization’s future? (Please describe these in detail. You might lead off with a single word or short phrase, but then you’ll need to give a definition and description to exactly what you mean. It must be clear precisely what each ideas means and how you will pursue it.)

4. Organizational Action Steps

Please list at least 4 specific, measurable, and observable action steps that your organization can take to implement the ideas you learned today. Based on the list you just created, as well as the strengths and weaknesses you identified, what can be done right away to take the lessons of this class and put them into positive action for your organization?

1.

2.

3.

4.



5. Personal Action Steps

Please list at least 4 specific, measurable, and observable action steps that YOU can take to implement the ideas you learned today. Based on the list you just created, as well as the strengths and weaknesses you identified, what can you do to make a more positive impact on your organization’s success?

1.

2.

3.

4.



NOTES:



SMALL GROUP WORKSHOP In your teams, share what you wrote on pages 19—22. Make sure that each person takes time to explain their findings and recommendations. Then, combine all of your answers in order to create a group answer to the following questions:

1. What does your team feel are the major weaknesses of your organization at this point in time?

2. What does you team think should be the key "strategies for success" that your organization needs to focus on?

3. Out of everything you have written, what are your teams top 4 recommended action steps that the organization should take immediately?

EACH TEAM WILL HAVE 5 MINUTES TO PRESENT THEIR FINDINGS AND RECOMMENDATIONS.



NOTES:



NOTES:



It is my sincere hope that you have enjoyed this class and found it extremely valuable. The challenge now is to take everything you have learned and apply it in your business. Even the best ideas in the world are useless without massive action behind them.

If you did find this class of value, I also hope that you will enthusiastically refer me to any colleagues or companies that you think would find value in the sort of programs I offer. 99.9% of all of my business comes from happy clients telling their friends and colleagues about my programs, and I thank you very much for taking a moment to let lots of people know about my work.

If there is anything you need from me please do not hesitate to send a note or call, I’m here to assist you in any way I’m able.



THANK YOU

If you have any questions at all please do not hesitate to send a note or call.

My email address is: [email protected]

PLEASE connect with me on LinkedIn and Twitter:@awesomelysimple

Free videos are available on Vimeo at www.vimeo.connect/businesssuccess

Also, you might find value in the ideas I share in my blog.

You can sign up for it at: www.blog.johnspence.com

Lastly, my workbooks and slides have already been uploaded

to: www.slideshare.net/johnspence

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