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Building a High Performance Culture

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					Building a High
Performance
Culture


Asia Pacific Lottery Association
Regional Conference
Performance culture benefits organizations universally,
regardless of geography and industry
     “People criticize everything – the way we do things, what we
     need to do in the marketplace… it's only through that kind of
     strong performance culture that drives self-improvement,
     which is one of our core values... ”
                                        – Steve Ballmer, CEO of Microsoft, U.S.

                                   “Performance management has reinforced my understanding
                                   of Oxfam’s values and principles that make change possible.
                                   It has helped me deliver my job. I think we get more from our
                                   work and Oxfam gets more from us. That means that, in the
                                   end, the people we service benefit from us”
                                                                             – Staff from Oxfam, U.K.


     “It’s the Southwest culture that will continue to make the
     company different… When you create a performance culture
     that gives employees the creativity and innovation…you end
     up with the ability to turn a plane around faster.”
         – Jeff Lamb, Chief People Officer of Southwest Airlines, U.S.


Source: Company websites, lit. search                                                                   2
Purposes of building performance culture are also
common across organizations
                            Purpose             Description
                            1
                                                • Ensure every staff is performing to
                                Drive company     their highest level
                                performance     • Set alignment and develop momentum
                                                  for the whole organization


                            2
                                                • Communicate consistent message to
     Performance                Performance
                                Align            external stakeholders (e.g. regulators,
     culture                    execution
                                stakeholders     investors, customers)



                            3                   • Maintain staff morale with sense of
                                Accumulate        achievement and belonging
                                human capital   • Attract new talent



Source: McKinsey analysis                                                                  3
However, organizations not purely driven by profits may
face additional challenges
                Socially-oriented                                      Profit-driven


                • Usually quite complex and            • Straightforward and driven
 Mission of      driven by social good/cause            by profit maximization
 organization

                • Metrics often inherently difficult   • Straightforward and
 Impact          to measure due to subjective           objective financial metrics
 measurement     nature of results

                • Often need to balance interest       • Often prioritized based on
 Decision        of social responsibility and           return on investment
 making          regulations


                • Staff motivated by intangible        • Mainly driven by monetary
 Staff           factors                                compensation
 incentives




                                                                                       4
Performance culture includes set of clear targets and 4
enablers

 Target                 Vision, Mission, Values



               A                    B


                   Understanding         Consistent role
                   and conviction           models


 Enablers
               C                    D

                      Skills            Reinforcement
                   required for          mechanisms
                     change


                                                           5
Setting the target with Vision Mission Values (VMV)


                        Vision, Mission,
 Target
                             Values

              A                    B


                  Understanding         Consistent role
                  and conviction           models


 Enablers
              C                    D

                      Skills           Reinforcement
                   required for         mechanisms
                     change


                                                          6
Vision, mission, and values are conceptually distinctive
but collectively define the organization’s target

              VISION - “who we want to be”



              MISSION - “what we want to do”
              Can be expressed as:
              • Company’s reason for existence
              • Strategic intent/ priorities
              • Obligations to stakeholders



               VALUES - “how we do things around here”
               Can be classified into:
               • How one should conduct oneself?
               • How one should work with others?
               • What one needs to do, to drive company’s
                 performance?

                                                            7
Examples of how VMV reflects world-class companies’
aspirations
                                        “To be the world's best quick service restaurant experience.
       Vision
                                        Being the best means providing outstanding quality, service,
                                        cleanliness, and value, so that we make every customer
                                        in every restaurant smile.”

                                        “Create a world where everyone can be connected.”


                                       “To organize the world's information and make it
      Mission
                                       universally accessible and useful.”

                                       “The right to be beautiful day after day: L’Oréal strives
                                       to make this a reality within the reach of every woman and
                                       every man”

                                           • Innovation       • Storytelling
       Values                              • Quality          • Optimism desire
                                           • Community        • Decency
                                           • People           • Integrity
                                           • Service          • Responsibility
                                           • Innovation       • Loyalty
Source: Company reports and websites                                                                8
Enablers are important to ensure staff “lives the
performance culture”

 Target                 Vision, Mission, Values



               A                    B


                   Understanding          Consistent
                   and conviction        role models

 Enablers
               C                    D

                       Skills           Reinforcement
                    required for         mechanisms
                      change

                                                        9
4 key building blocks for driving performance culture
      A                                     B
           Understanding and conviction         Consistent role models


          “… I know what is expected of           “… I see superiors, peers,
          me – I agree with it, and it is         and subordinates behaving in
          meaningful”                             the new way”




      C                                     D

           Skills required for change           Reinforcement mechanisms


          “… I have the skills and              “… structures, processes, and
          competencies to behave in             systems reinforce the change in
          the new way”                          behavior being asked”




                                                                                  10
A   Understanding and conviction



         Common             “What do you want me to do to
         challenge          help the company to be a
                            global leader?”
         Staff unable to
         relate target to
         what they do
         everyday
                             “I’ve been doing this for a
                             long time, what do you want
                             me to do differently?”




                                                            11
A   UNDP successfully makes VMV actionable and real
    to staff
                                            Specific targets for each level


                                            Help people build better life
                              VMV

                                            Create anti-poverty action plan in two
                    Divisional objectives   regions

                                            Develop a model of regional cooperation
                      Regional strategy     for Asia

                                            India puts in place “pro-poor democratic
                        Country plans       policies” with ten public institutions

                                            Establish formal commitment from one
                       Individual goals     public institution

                                            Compile case studies of pro-poor policies
                         What do I do       collaboration with public institution
                         tomorrow?


Source: UNDP, McKinsey analysis                                                         12
B   Consistent role models



                                                             “Are the top management
            Common                                           doing what they say? They
            challenge                                        may be, but I just don’t know”
            Staff do not have a
            chance to observe
            top management
            and peers “walk                                  “My colleagues are doing
            the talk”                                        great things which I heard
                                                             from here and there, but I’m
                                                             not sure if everybody knows”




Source: Southwest Airlines, lit. search, McKinsey analysis                                    13
B   Visible role models consistently reinforce the
    “customer focused” performance culture at Southwest


                                               "We always tell our people, 'Don't worry about
                 Top
                                               profit. Think about customer service“
                 management
                                                                                  – Herb Kelleher
                                                              former Southwest Airlines Chairman

                                           • Herb Kelleher publicly demonstrated his actions by
                                             regularly spending time loading baggage, ticketing
                                             customers, and mixing drinks on board


                                           • All staff dedicated to undertaking cross-functional
                 Peers                       duties (e.g. pilots cleaned up cabins, ramp workers
                                             sold tickets)
                                           • Success stories are publicized internally through
                                             different channels




Source: Southwest Airlines, lit. search, McKinsey analysis                                          14
C   Skills required for change



                                                             “I go through all these training,
           Common                                            but most of the time I don’t
           challenge                                         know how they apply in my
           Staff often lack                                  daily work”
           work opportunities
           to practice the
           skills learned
                                                             “I learnt all these business
                                                             and accounting skills. Yet, I
                                                             don’t even get to see the
                                                             P&L”




Source: Singapore Airlines, lit. search, McKinsey analysis                                       15
C   Singapore Airlines develops desirable behaviors by
    providing training as well as practical opportunities
      Specific training                 Practical opportunities
      • Fus3ion Course                  • Rotation programs and
        – 3-day off-site in               cross-functional
          Bangkok                         projects enable
        – Aims to increase                participants from local
          understanding and               and international offices
          build empathy                   to practice skills learned
          across divisions/
          functions


      • SOAR “Service Over • Regularly seeks
        and Above the Rest”               inputs/feedback
        – 2-day sessions for              from staff to make
          cabin crew                      training more
        – Skills highly                   applicable to their
          applicable to daily             work
          work and staff                                               SOAR Guide Cards
          required to carry
          SOAR Guide Cards
          all the time
Source: Singapore Airlines, lit. search, McKinsey analysis                                16
D   Reinforcement mechanisms



                                  “I really want to improve my
          Common challenge        customer service but I just
                                  don’t know how I’m doing!”
          Difficult to track
          progress and
          identify
          performance pain
          points                  “Our work is team-based and
                                  we don’t want to pinpoint
                                  individual”




Source: NYPD, McKinsey analysis                                  17
D   NYPD has collective performance evaluation
    mechanism to regularly track progress, identify pain
    points and share learning
                                                                        Fact base
                                         Crime statistics of            • Use objective
          Regularity                     precinct #45                     statistics when
          • Semi-weekly                                                   comparing
            strategy review                                               performance
                                                                          across teams
                                                                          and time horizon


                                  Transparency
                                  • Performance reviewed
                   Senior
                    staff           as a group but
                                    transparent to whole
                                                                Precinct #45
                                    team                        commander


                                                     Precinct
                                                   commanders




Source: NYPD, McKinsey analysis                                                              18
J&J has successfully built a strong performance culture
through equipping and creating a great sense of purpose
for staff
     A                                        B
         Understanding and                        Consistent role models
         conviction
         • Credo carved in stone at
           J&J HQ and publicly
                                                  • J&J pulled Tylenol off
                                                   the shelves in the 1982    The Credo
           displayed in all offices
                                                   crisis at a cost of $100   holds J&J
         • Credo as important part of
                                                   million                     together,
           recruiting guidelines
                                                                                guiding
                                                                                 every
    C                                         D                                 action it
         Skills required for                      Reinforcement                  takes
         change                                   mechanisms
         • Monthly town hall                      • Annual Credo survey
          meetings and                            • Credo values built into
          Management informal talk                 performance
          of Credo                                 evaluation


Source: J&J, lit. search, McKinsey analysis                                                 19
Key takeaways



         1 Performance culture enables organizations to achieve
           greater heights



         2 Levers for driving performance culture can be tangible and
           actionable



         3 Performance culture brings out the best in people and you
           can start making a difference




Source: _______                                                         20
Thank you
Building a High
Performance
Culture


Asia Pacific Lottery Association
Regional Conference
Back up




          23
J&J 308-word Credo defining the company’s
responsibilities to its customers, employees, the
community and stockholders
 “We believe our first responsibility is to the doctors, nurses   We are responsible to the communities in which we
 and patients, to mothers and fathers and all others who          live and work and to the world community as well.
 use our products and services.                                   We must be good citizens – support good works and
 In meeting their needs everything we do must be of high          charities and bear our fair share of taxes.
 quality.                                                         We must encourage civic improvements and better
 We must constantly strive to reduce our costs in order to        health and education.
 maintain reasonable prices.                                      We must maintain in good order the property we are
 Customers' orders must be serviced promptly and accurately.      privileged to use, protecting the environment and
 Our suppliers and distributors must have an opportunity          natural resources.
 to make a fair profit.
                                                                  Our final responsibility is to our stockholders.
 We are responsible to our employees, the men and women           Business must make a sound profit.
 who work with us throughout the world.                           We must experiment with new ideas.
 Everyone must be considered as an individual.                    Research must be carried on, innovative programs
 We must respect their dignity and recognize their merit.         developed and mistakes paid for.
 They must have a sense of security in their jobs.                New equipment must be purchased, new facilities
 Compensation must be fair and adequate, and working              provided and new products launched.
 conditions clean, orderly and safe.                              Reserves must be created to provide for adverse
 We must be mindful of ways to help our employees fulfill         times.
 their family responsibilities.                                   When we operate according to these principles, the
 Employees must feel free to make suggestions and                 stockholders should realize a fair return.”
 complaints.
 There must be equal opportunity for employment,
 development and advancement for those qualified.
 We must provide competent management, and their actions
 must be just and ethical.

                                                                                                                       24

				
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