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The Voice of Business Growth is coming to the VoiceAmerica Business Network

Airing live every Monday at 1:00 PM EST starting April 27.


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Coming Events:

Staying Union-Free: The Employee Free Choice Act and Avoiding Unionization
May 12, 2009
Presentation for the North Allegheny County Chamber of Commerce www.naccc.com

Dramatically Improving the Impact of Human Resources: How to Run HR Like a Business
May 19, 2009
Workshop for the Westmoreland County HR Association www.whra.org

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Powering Through a Downturn – Part 1: Customer Value

“Powering through the downturn.” That’s the phrase that a client CEO used to kick-off a strategic talent management process we were completing for his manufacturing business. I loved the perspective that this phrase created for the project. I thought it would be a great theme for this newsletter. In Part 1, I’ll present some thoughts for improving customer value during a downturn. In Part 2, below, I’ll come at it from the organization and talent side.

Eric Wiedenmann, a colleague at The Market Development Group www.marketdevelopment.net, recently pointed out that one common trait of companies that survive the business cycles is that they plan for future success. Two of his recommendations particularly resonated with me: 1) Get to know your customers and 2) Work on best practices. Here’s some my thoughts on these two opportunities.

Get To Know Your Customers: Things are slow for you and your key customers. It is a great time to organize and complete customer visits focused on uncovering additional value. The economic climate also creates an opportunity to reconnect to your customer base, to reassure customers and to reaffirm why they should stick with you through thick and thin.

The customer visits should not be typical greet, meet and eat confabs involving only Sales and Purchasing where the typical question is “What can I do for you?” The most productive visits are carefully designed and analyzed processes, with a laser focus on capturing, delivering, and getting paid for the value created by existing or potential products/services. Include employees in the visits that don’t normally interact with customers to get a fresh perspective. It’s a great developmental opportunity as well.

Work On Your Best Practices: Now would be a great time to supercharge your continuous improvement work. Use the output from the customer visits to select the highest-value projects and to set a higher performance target. (Value and the target levels defined from the customer’s perspective). Back office work is also probably slow so why not focus improvement work in new areas that are enablers to value streams.

Is your company doing something unique to build value during the recession? I’d love to hear about it. [email protected]

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Powering Through a Downturn – Part 2: Organization Capability

My manufacturing client was focused on coming through the downturn with a stronger, more capable organization. How is that possible?

We started by re-visiting their strategy. We made sure that the leadership team agreed upon what John Boudreau and others have called “pivotal jobs”. These jobs directly affect mission critical functions or processes. They usually require unique skills that are scarce or involve relationships with key customers or stakeholders. They are not related to hierarchy and are only a small percentage of all your positions. In Talent: Making People Your Competitive Advantage, Ed Lawler also points out that people in pivotal roles also have a wide range of performance variation (that’s a good thing because it means that continuous improvement is possible.)

As we reviewed the manufacturer’s talent, we made sure that the pivotal roles were staffed and/or backed-up by high potential employees. If high potential employees were not in pivotal roles, we made plans for meaningful development assignments. The company also needed to downsize so we worked on cutting with precision and purpose. We protected pivotal functions and targeted employees with low agility and potential.

The resulting Strategy Driven Organization Developmentsm plan:

  • Improved the their leadership capability,
  • Invested more in top talent and pivotal roles,
  • Improved the transfer of knowledge,
  • Improved the number of ready-now backups for key positions, and,
  • Improved the overall performance in pivotal functions.

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Engagement is Engaging

I recently came across two sets of research on employee engagement that I found particularly engaging (sorry).

The first was the survey results from a strategic alliance partner, Diagnostics Plus (www.diagnosticsplus.com). Their research at an academic institution found a significant positive relationship between teacher engagement and student satisfaction, teacher engagement and student attendance and staff engagement and staff turnover.

I also had the opportunity to hear a presentation on Watson Wyatt’s global survey research on engagement. There’s lots of great insights from this work but the most intriguing to me was that high engagement companies have 26 percent higher revenue per employee, 13 percent higher shareholder returns and a 50 percent higher market premium.

Focusing on employee engagement (not just satisfaction) clearly can make a difference in key business outcomes. What drives engagement? Some common themes from the research include:

  • Respect from supervision and colleagues
  • Confidence in leadership
  • Opportunities for development and advancement
  • Work/Life balance

All four of these drivers can suffer during tough economic times. All the more reason to develop specific plans to maintain or improve these components. If you haven’t measured employee engagement, now would be a great opportunity – just make sure you follow through and show that the survey made a difference.

Another benefit from being in engaged in engagement – the Watson Wyatt survey showed that highly engaged employees are twice as likely to be top performers and miss fewer days of work.

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How To Run Effective Strategy Retreats
By: Stuart Cross
Morgan Cross Consulting, UK

Spending time identifying how your organisation can grow and thrive is a vital role of any top team. Yet few activities are able to generate as much heat and as little light as a strategy retreat or 'away day'.

An agenda that is unfocused, the wrong group of people asking the wrong questions and unrealistic expectations can all contribute to a sense of lost opportunity. But effective strategy retreats are neither difficult to create or deliver as long as you follow a few simple rules.

  1. Get the right people in the room. You do not need a cast of thousands to create an effective strategy. The only people you want around the table are those who will have ultimate accountability for its delivery. By all means, seek ideas and insights from others ahead of the session, but avoid broader involvement in the session, as it will dilute your decision-making ability.
  2. Avoid distractions. Just because you've finally been able to get the full team together avoid the temptation to add other issues to the agenda. They only serve to eat up time and divert attention away from the real work required.
  3. Remember that a plan is not a strategy. Many executives believe a plan and a strategy are synonymous - they are not. A strategy is a framework to guide the decisions and actions that will help you succeed; a plan co-ordinates the use of resources over a particular time frame. A plan will not help you create a breakthrough strategy. Focus on building the strategy and the plan will follow.
  4. Start with opinions - and only then use facts. Many retreats I have attended start by going through a fact book, covering past performance, future projections and likely competitor activity. The only impact they have on the discussion is to dampen energy and enthusiasm. Effective retreats use your team's judgments and opinions as a starting point - call them hypotheses if you wish - which can subsequently be tested with specific analyses.
  5. Establish a clear sequence. It is highly unlikely that you will cover everything in a single session. Any strategy process worth its salt is likely to throw up some tough issues and choices. You will need time to reflect and consider options about the best way forward. The elapsed timescale will vary depending on the complexity of your issues and the capability of your teams, but you should be able to create a coherent, integrated strategy that enables you to start taking action within 2-3 months.

The move to implementation will require ongoing sessions - at least every quarter - to ensure progress is being made, issues are being resolved and that your strategy remains valid.

The bottom line

By taking the time to create a structured process, you can transform your strategy retreats from a talking shop that has no long-term impact to a dynamic, focused series of meetings that shape the direction and performance of your organisation.

Stuart Cross
Morgan Cross Consulting

Tel: +44(0)1636-526111
www.morgancross.co.uk

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