July 11, 2011 at 5:29pm
people engagement 1.0 is dead
having an arrangement that creates significance & certainty, some variety and strong connection will flow to contribution & growth (innovation & discretionary effort or passion)
this means systematically customising the growth & balance paths of the individual, team, function, area, process, project etc
HR and hr software today is still working on the "social control systems" of old - they were designed and built for the last generation of leaders
responsibility for capability, development & balance patterns not just of the individual but for the overall organisation is required for leaders to have engaged followers
web 2.0 software will change the HR software industry forever - it will disrupt the HR admin technology companies
A large private business - Australia. +5000 people worldwide.
Finished 4 years of working directly for the owner and his CEO. 26 and I was taking over my first business P&L. I was green and 10 years junior to peers.
+$100 million in sales, 160 people plus contractors, 4000 customers, 26,000 products. Profitability & balance sheet issues. Target was to to double the trading profit within 12 months to at least keep the business viable.
People safety, customer quality & productivity/labour force issues. The leadership team was exhausted and deflated, the front line was an 'aged' workforce.
Small competitors taking high value, low volume work, and large competitor going head to head on each deal
With little experience in managing people, the good was I had no "inherent rules on how to" the bad was I needed to learn some - quick...
I had to fix the two critical issues of leadership
1. Guide towards value
2. Build stronger momentum
Deep analyse suggested the improvement areas to create genuine value so we structured a plan, created into a Vision etc, there was much to this but is not the essence of the innovation.
The real question was how to build a passionate engaged team.
Reading the management theories ie Jacks A 20/B 70/ C10 and Level 5 Leadership, it didn't actually give me the tools that I needed to look at the team as a whole, understand the gaps, where to balance and accelerate people etc.
We had all the standard systems - rank, 9 block, performance measures 1-5 just like every other company - yet I knew the industry statistics - 7 of 10 people would leave their job for a similar offer, 4 from 10 are almost never engaged.
The old standard systems of managing people don't work well enough to what I wanted - I wanted a team with pride of themselves and their work, that they contributed to their team and the overall teams performance.
Key Innovations & Timeline
the people matrix
1. we mapped in everyone in the business and appropriately grouped by team, function, area, process etc
2. we mapped every job in the business and appropriately weighted the importance of the job to the overall goal
3. we took 3 perspectives ; management, employee, and leading peer group and allocated everyone a score against every job (0 na, 5 apprentice, 10 technician, 15 master, 20 artist) this was based on intuition at the start (later we would back fill with appropriate training and stepped level criteria of progression)
4. we allocated against every allocated score a 0-10 rating for high quality, high maturity for how they approached the job
5. we took every individual performance criteria for each person and concatenated it to 10 workable performance criteria and then allocated a score (0,5,10,15,20) and (0-10)
we now had a overall average score for the business, function, process, team, job, individual etc based on the importance to the overall business goal and the capability of the skills, plus the general performance as a %. (it was 22.6% mmm... with balance range scores as low as 7% to 43%)
it gave us the first focus
1. we had deep skill gaps in certain process, functions and teams - we needed to balance (so we changed/swapped the teams)
2. we had people who had great experience and maturity that weren't being leveraged (so we made them champions)
3. we had people that were not performing and not growing (we gave them choice, grow or be performance managed)
4. we had some cross skilled people who could create flexible options for us (we leveraged them as pinch hitters daily)
this gave us within 3 months overall scores of 25% with a balance range of 17% to 31% - we were getting consistent, everyone was understanding the goal - consistent balanced approach, everyone had a role to play and if they didn't want to play they were demoted or managed out (4 key managers agreed on demotions to expert status coaching roles thus not losing "reputation" but not managing, they become key contributors not blockers)
the next step was more difficult, as by this stage it was serious, people were having career changes based on the data
1. we mapped behaviours we wanted and scored everyone with the 2 tier system (apprentice to artist, high quality high maturity to low quality low maturity) as well weighted importance to overall business goal & culture
2. we mapped aspirations into 5 themes/criteria and scored everyone
3. we mapped flexibility into 3 themes/criteria and scored everyone
4. we mapped thinking ability into 3 themes/criteria and scored everyone
5. we mapped leadership into 5 themes/criteria and scored everyone
6. we mapped spiral progression into the 8 levels and scored everyone
7. we mapped energy style profiles into the 4 areas and scored everyone
8. we mapped listening & relationship skills into 6 area and scored everyone
this gave us a huge array of data, which when summarised, we could by area, function, team, individual, process understand who were potential leaders, where skills and experiences needed to be accelerated, what growth and where the business needed.
Counter, it gave us very clearly were key roles where not filled by leaders we wanted, certain inherent natural leaders were not exposed and where people were not playing by the rules.
everyone knew the overall goal, everyone knew what the hotspots of below standard were
I reorganised every performance appraisal for the leadership team to 3 criteria
1. 50% value - grow and balance your people matrix score by 15% per annum
2. 25% value - overall business behaviours
3. 25% value - individual performance and value project work
each layer summarised to the next thus a manager of 5 people, had the summarised scores of his team worth 75% of his performance - total alignment bottom to top
Challenges & Solutions
being young and having certainty to back your "theory" and judgement is difficult - back yourself
Its just not that easy to 'swap', 'demote' or ask them to 'step up'. the first real challenge was the 17 year veteran leader I had inherited who lead the majority of the team, i had to take him to the edge of the cliff and give him a choice, trust me or jump. when i gave him his 'changed' performance criteria and trusted him to do it after we had won a couple of battles together he took it on raced ahead - roll your sleeves, get dirty and onboard the right people to champion your idea
dealing with large numbers, especially with people who don't normally get "allocated or numbered" the HR team refused to help us, and tried to stop it "apparently it is wrong to analyse people down to the core" and not using their software, as well as the behaviour experts when we starting "commoditising" their reports by breaking each part down into a scoring system - don't accept status quo, ask the questions, what is going on here? NO what is really going on here? what is desirable? what is possible?
the pressure to make the next dollar for the month versus focusing on the growth of individuals, teams, functions, areas everyday was extreme, many times we could have won a dollar quickly versus our weekly, monthly, quarterly & yearly routine of systematic people focus - if it is important, do it and do it well, don't do it rushed once a year
as we progressed in time what was important and inconsistent became "inherent and daily" so we started to change the overall rating importance system of jobs, job types, process, functions, areas, teams - change is the only constant and you need to move with it ie. if quality is no longer a key issue, keep the old indicators but dial up the growth patterns, focus on the next evolution of quality or innovation
Benefits & Metrics
running a systemised growth process for individuals, teams, functions, process, areas is critical to new ideas and balanced growth. i had come to the opinion our HR team was more interested in "making an admin system work for them" or "reacting to the individual growth patterns" rather than the overall patterns the business needed to function but i realised it was more than that, the HR software systems just don't work for overall pattern analysis and real core performance criteria.
we built a business tool to improve business performance at the core, the front line, the supervisor, the manager, and the leader - total alignment through numbers that summarised up to 2 numbers the leader is in charge of
- overall organisational capability & development = 100%
- overall organisational balance = 0%
the perfect score will never be achieved....
I could have now a real discussion with my bosses - we have grown 4% in capability, and shrunk the balance to 7%, down from 9% last quarter. the 3 major initiatives are core skill growth in X, moving to master status in process Y and fixing the Z function. Would you like a break down of the detail and who is leading it and why?
the team achieved great results in the time period
- we tripled our already overinflated profit target
- we paid back all balance sheet issues
- we grew from 22.6% to 31% on performers scale (+40% growth)
- we narrowed the balance gap to 5%
- we had excellent relationships with our people
Customer, unions, safety all was taken care of as a result of the people getting on with it.
don't just rely on the standard software to run your people performance, it was built for a historical "social control system" and people were expected to engage with it - create an arrangement that creates significance and certainty - then you will get growth and contribution (better know as innovation and change)
fixing the root cause of performance is required, not just another structure change
people first, second, third
don't just grow individuals, grow teams, functions, areas, processes, job groups etc
balance criteria is just as critical as performance criteria
aligning people number "standard" & "goals" from front line to the top, summarise key data points that are critical to the success of the business
get the intent & incentive right, ensure the system flows
Last note ;
I often debate the people performance distribution curve that Jack Welch is famous for (whether he invented or not) - I really like that the goal is to improve the overall talent within the company, the issue is that it creates is forced ranking, and statistically 14-18% of people have a main driver of winning, thus 80% don't care much for the ranking system. Moreover even those that like to win ask the same questions as the other 80%
- what if am I not good enough?
- what if I don't make the cut?
- what if I don't win?
The debate is always - does underlying fear in people and/or the organisation mean it will never reach its full potential?
Moving from engagement 1.0 to 2.0