Human Performance Consulting. Transforming Human Potential Into Productive Business Performance

Human Performance Consult in@

Copyright 0 2000 by Gulf Publishing Company, Houston, Texas. All rights reserved. This book, or parts thereof, may not be reproduced in any form without express writ ten permission of the publisher.

Gulf Publishing Company Book Division P.O. Box 2608 0 Houston, Texas 772.52-2608

10 9 8 7 6 5 4 3 2 1

Library of Congress Cataloging-in-Publication Data Pepitone, James S., 1947.

Human performance consulting : transforming human potential into productive business performance / James S. Pepitone.

p. cm. Includes bibliographical references and index. ISBN 0-8771 9-352-5

I. Organizational effectiveness. 2. Organizational change. 1. Title.

HD58.9.P465 2000 6.5 8 .S--dc2 1

Transferred to digital printing 2006

Printed on acid-free paper (w).

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Preface

Have you ever been asked the question, “What do you do?”- only to find it challenging to offer a succinct explanation? You are not alone.

Consultants whose work is improving human performance find this question particularly difficult because it quickly brings to mind the tremendous complexity and frequent ambiguity of their work. Senior executives in particular frequently ask me to explain how I do my work, only to see me struggling for words that can describe the methods with which I work. Not long ago, the CEO of a major industrial firm listened patiently for a few minutes as I tried to explain my work, only to interrupt me with this response: “I don’t understand a word you’ve said!” Ouch.

Sometimes it’s better not to try to explain, particularly when executives and managers don’t seem to be very aware of the human side of enterprise. One approach I use for dealing with such people is to respond to their questions with a question like, “Does how you feel about your work affect your performance?” If I get the more human answer-they recognize that their attitude toward their work makes a huge difference in their behavior and performance-then I continue the dialogue to uncover other aspects of their work and work situation that affect their performance.

The factors that are mentioned may include the relationships they have with their supervisors (even the chairman has one) and peers, particular challenges they face, their personal lives, how others characterize them, and even the weather. The goal I have in this dialogue is for these business leaders to acknowledge that their performance is affected more by how they experience their work than by the training they have received-and that this same

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phenomenon is true for their entire organization. This understanding is a necessary beginning to any meaningful dialogue on the subject of improving human work performance.

One of my hopes for this book is that it will “raise the playing field” for managers and organizational-support practitioners by passing on valuable knowledge and insights I have gained from my education and experiences. I have been fortunate during my twenty-plus years of providing consulting services focused on improving human performance to have had the opportunity to remain an avid student of the many fields of science and technology that lend insight into how greater business results can be achieved. In addition, I have had the opportunity to select projects that have provided substantial and varied challenges and professional learning. By passing on this valuable “technology” to other consultants and the managers they serve, I hope to assist them with their work challenges and thereby to advance this emerging professional discipline.

Human performance consulting is better described as a developing method of professional work than as a body of knowledge. There is wide variance in the principles and practices of consultants in this field, which I think stems from the varied back- grounds, knowledge, and experience that have led them to this work. I know I am not alone in my search for a way to bring this diverse capability together into an integrated methodology and professional body of knowledge. Another one of my hopes for this book is that it will “raise a flag” to inform professionals from other disciplines of the knowledge and methods with which management scientists work.

Some of the thinking in this book is based on ten-plus years of work supporting major organizations with the start-up or development of staff functions specializing in human performance improvement. What began in the 1980s as a reincarnation of the old operations-research consulting function-though now primarily focused on knowledge and service work rather than the mechanized work that occupied it in the ’60s and ’70s-has become an important field of work for human resource, organization development, and training functions.

My colleagues and I have enjoyed sharing our professional practices and experiences to support this new work, and through our efforts we have gained a greater understanding of and appreciation

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for the important role of “internal” consultants. As a result, we have become convinced that internal consultants, if equipped with essential knowledge and effective methods, are better able to provide value-adding human performance consulting to organizations than are their external counterparts. We regard internal human performance consultants as the knowledge-era instruments for human performance improvement.

Jim Pepitone

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Special Note to Managers

This book contains a formula for solving many of the organizational challenges you face in your work. It will help you as a manager to make changes that directly improve operational performance and workforce productivity. And it will help you receive more helpful support from human resource, organization development, training, and other organization support functions. There are no huge capital expenditures, high-profile programs, or major upheavals to endure. Perhaps the greatest challenge is simply that it is probably new to you.

Why this special note to managers? Because you are the critical human resource in any enterprise. Anything material that happens in organizations generally happens with the encouragement and support of managers. Though all employees can make important contributions to an enterprise, we know there is always a manager involved-encouraging or preventing, supporting or rejecting these contributions. By reading this book, you will be prepared to weigh in o n discussions of employee performance and productivity with new clarity, up-to-date knowledge, fresh insights, and a strategy to make it really happen.

In this book, I outline a strategy and process for better capitalizing on human assets-especially organization members engaged in knowledge- and service-oriented work. Few managers now realize the ease with which they can create financial value through organization-based improvements in operational performance. This approach extends the productivity gains of reengineering by

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improving the design of individual work roles within operational processes. These improvements are substantial, frequently exceeding a 30 to 50 percent average.

For quick insight into how this approach works, let me ask you a few questions about your own performance as a manager. You’ll see that I’ve answered for you with the kinds of answers I generally receive, having asked these questions of hundreds of managers.

What’s your assessment of your performance? Answer: I’m doing a good job, sometimes great! What’s your potential to improve it? Answer: I’m already working harder than I want to, but maybe

I could improve 10 percent, 20 percent, or even a bit more. What would you focus on changing if you had the goal of

improving your performance? Answer: I’d focus on improving myself. . . my work habits, a

specific skill or behavior, or on somehow trying harder to create the right results.

Can you detect the misconception reflected in these answers? They seem to suggest that the focus for improving work performance should be on improving people. For organizations, this is a very common strategy, but it’s not very effective. Managers will be hard pressed to point out major operational improvements or increases in productivity that have resulted from employees improving themselves. Personal improvement may be an option, but it certainly isn’t the most effective, fastest, least costly, and most convenient option, and it doesn’t make the best use of current technology. I t also lacks certainty and organizational leverage, and it requires uncommitted funding and time to make it happen.

If personal improvement has these disadvantages, why do managers consistently rely on this approach? Generally speaking, they are simply not aware of a good alternative. That’s one reason why I am writing this book.

My colleagues and I have learned through years of research and consulting experience in major companies that work behavior is influenced much more by employees’ circumstances than by their individual efforts. These circumstances, which I refer to throughout the book as the “work situation,” wield this power

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because of people’s natural inclination to adapt their behavior to the conditions that surround their work.

The circumstances or work situation that I speak of is also casually referred to as “the system.” Perhaps you have heard the refrain, “In any encounter between an employee and the system, you can count on the system to win.” Think of your own work or that of your employees, and you will recognize that this is basically true.

Any employee’s performance-even a manager’s-is largely defined by the context within which he or she works. Sometimes this reality is obvious, and at other times it is hard to imagine. The fact remains that people naturally work within the limits of the work situation in which they are placed, and only within these limits d o they then exercise their capability to achieve.

Explicitly recognizing this law of human nature helps us better understand work performance. Think for a minute about your work situation and the many elements that were not designed with performance in mind-and so become unintended limitations to your performance (information flow, discretion, goal alignment, supportive staff functions, authority, reporting structure, financial resources, information, equipment, and so on).

For some positions that I analyze, I am amazed that the employees accomplish as much as they do. What interests me more, however, is how much better they can perform with a few changes.

If you knew tha t some element of your employees’ work situation was unintentionally standing in the way of improving their performance, you could consider removing or reducing the obstacle based on the marginal payoff for doing so. The problem for managers is that they typically don’t know with certainty the things that are most getting in the way of their employees’ performance. And even if employees recognize such problems and their causes and have the courage or permission to mention them, they are rarely able to impress upon managers the need to make such changes. As a result, relatively easy opportunities for substantial performance improvement are overlooked, and managers have to try to find work-around methods to get individual employees to improve their performance.

People adapt their behavior in a reasonable attempt to fit into the work situation in which they are placed. They are simply accommodating themselves to the prevailing requirements o r

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standards for behavior. The appropriate behavior may be subtly implied by the organization’s culture or dictated by formal policy. The sources are all around: other people’s behavior, supervisor expectations, the physical environment, the job description, the available equipment, current business conditions, customer needs, and a myriad of others. People’s prior experience or inexperience also plays a part in this adaptation, because people learn the impact of their behaviors through experience.

Ultimately, the process of adaptation determines employee performance. It’s our human nature. Regardless of the situation- surviving the first day on a new job, preparing an e-mail message, requesting a budget, serving a customer, or designing a new product-people choose behavior that is consistent with their perception of what’s acceptable. Employees face many behavioral cues and constraints in their work situations, and each one requires some sort of adaptation. Though employees are rarely conscious of this behavior, their first goal is to adapt appropriately, and only then do they try to accomplish their objectives.

Employees are generally not in a position to politically confront constraints in their work situations, even when these situations are obviously unconstructive and unnecessarily restrict their potential for performance. Many who tire of constraints that stand in the way of their performance simply leave when they have had enough. Such departures explain a high percent of the turnover that organizations experience.

Adaptation does not have to be a problem-in fact, it can be just as powerful in guiding people to do what’s necessary for performance. Managers can use this natural behavior to design work situations that produce the results they want to achieve. By making changes in the current work situation, managers can improve employee performance-with much greater improvement potential than exists for employees to somehow improve their individual performance. Management is at its most effective when it designs work situations so that high levels of performance are the natural result and are not overly dependent on the efforts of individual performers.

Granted, there is much more that a manager needs to understand to have an accurate knowledge of work systems, the way they naturally operate, and the way they can be designed to produce the desired performance. This book will begin to provide

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that knowledge, and it will introduce managers to an emerging support role in organizations-internal human performance consulting-that is professionally capable of providing this kind of support.

In the final analysis, this book is about helping managers change the situations within which employees work-in ways that directly improve operational performance and workforce productivity. It is about putting human performance consultants to work for managers in order to create operational value-added.

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Acknowledgments

I think of myself as one who applies emerging knowledge in pioneering ways to create value. Thus I am particularly indebted to the many thought leaders and knowledge contributors whose work is implicitly woven throughout my own, to the point that I no longer know whose ideas are whose. The high levels of collaboration and sharing that have been characteristic of the transdisciplinary open-source development that grounds much of my work have been so rich and stimulating for my colleagues and me that it is no longer possible to sort out who thought of what first. These relationships present a special challenge to me, because I could not feel more enriched and thankful for the people who have contributed their expertise and thinking, either directly through collaboration and conversation or indirectly through their writing to the success I have experienced as a human performance consultant.

Among those to whom I feel most indebted are the explorers and pioneers of knowledge who have contributed to the field of human performance improvement. Many I mention in the text and references of this book, yet many who have been no less important to my work will go unnamed. My genuine appreciation for the work of all these great people is limitless.

Exceptionally helpful have been my clients, whose meaningful challenges have provided my colleagues and me with experiences that have further extended our skills and knowledge far beyond the principles, theories, and concepts we applied. I truly believe that the real heroes in every successful consulting assignment are the executives, managers, and workers who made the improvements happen.

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After consulting for more than twenty years, I have enjoyed working with and learning from several hundred colleagues from all parts of the world. Though I lost touch with many of these talented and delightful professionals when forced to scale back my field work between 1995 and 1998 for health reasons, I thank each of these professional colleagues throughout the world for their expertise, initiative, and judgment that contributed to the performance improvements that we have cocreated.

More recently I have spent many influential hours challenging my own concepts of performance and consulting with John Lusted and Tony Phelan, friends and collaborators who share my great commitment to evolve human performance consulting into a profession equivalent in efficacy to the machine-based work of engineers. Another talented colleague, Beverly Beecher, has played an important role in the recent evolution of my thinking through our work together on many interesting engagements and our shared determination to advance the knowledge and practice of human performance improvement in major corporations.

Books are conceived in the minds of authors, of course, but more important, they are produced for your reading through the hard work of many professionals. For this book, we can thank Tracey Brockett, operations manager for PEPITONE BERKSHIRE PIAGET Worldwide; Sue Coffman, my editor for this and other projects; Kelly Perkins, director of publishing for The Chelsea Group; and Kim Kilmer and her staff a t Gulf Publishing. Their expertise and patience have been invaluable in the completion of the manuscript.

I am indebted to Jack Phillips, series editor for Gulf Publishing’s Improving Human Performance professional book series, for his choice of the author to write this book. Jack’s dedicated leadership in the field of human performance improvement, and his tireless and patient work, as chairman and CEO of Performance Resources Organization, to advance the field’s professional practices, serve as a model to which other consultants in the field can aspire.

And finally, I a m grateful above all to my wife, Susie, for her tireless support of me during seemingly endless hours of writing. Creating a book is a taxing experience on many people, and she especially made this experience manageable for me.

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Introduction

The industry principles that more than a century ago defined the work roles of most people as little more than replaceable parts have now themselves been replaced.

This remarkable change resulted largely from the continuous automation of manual work and the inexhaustible rise of consumerism. These two forces, more than any others, have propelled a continuous shift to knowledge- and service-based work-now the role of more than 80 percent of workforces in developed economies.

Distinguished from production and logistics work, which involves people supporting machine systems that make and move products, knowledge and service work is performed by people and only supported by machines. For knowledge and service work, people themselves are the principal “means of production” and therefore the source of enterprise performance.

Today’s conventional knowledge about organizational performance has its roots in dated industrial-age thinking and experience that no longer characterizes much of today’s workplace. As a result, the human resource, training, organization development, and other professionals on whom executives and managers rely for organizational expertise are under pressure to find more successful methods to cultivate this new kind of human potential into ever more productive business performance. The negative effects on human performance of using industrial methods for organizing, managing, and trying to improve knowledge and service workers may have been a cost that businesses once could bear, but they cannot bear it for much longer.

This book describes the role of new specialists within organizations-human performance consultants. Implemented as a strategy driven by executives and managers, and equipped with

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new knowledge and methods, this new role is highly effective in meeting the challenge to improve the performance and productivity of knowledge and service workers.

Why a new role? Because this new challenge is far more complex than the challenge previously faced by organization support functions. And because the methods for meeting this new challenge are far more sophisticated than the industrial methods that organizations have grown accustomed to using to improve performance workers. It is no longer enough to just give people training and rewards and expect them to perform. This approach doesn’t work with knowledge and service workers, and in fact, it can even have a negative effect on their performance.

When workforce managers look to their staff professionals to effect human performance improvements, they should expect systematic, comprehensive, and precise solutions and not the one- size-fits-all remedies of years past. Today’s ready access to knowledge has made it possible for all staff work to be truly professional and fully responsive to its unique challenge. With the assistance of these new internal specialists, managers can expect knowledge and service work that is designed and continuously improved to achieve the highest possible levels of performance- the kind of performance improvement that generates financial value.

One of my goals for this book is to provide staff professionals from human resources, training, organization development, and other organization-support functions with new perspective for their work. Because knowledge disciplines tend to be self-referring and insulated from one another, the improvement of human performance has been attempted in ways that are strikingly different, if only because such efforts are based on incomplete ideas. To support an expanded viewpoint and facilitate even more productive work, this book bridges these disciplines to provide a comprehensive framework for designing high-performance work, diagnosing performance problems, and creating skillful performance-improving initiatives for today’s postindustrial organizations.

With the goal of widening the dialogue concerning methods for improving human work performance, I purposely avoid some potentially obscure language with which these concepts are often presented in professional journals. I also try whenever possible to point out possible connections between disciplines so the reader can consider new linkages to the knowledge with which

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other practitioners work. As a result, the book is largely inclusive rather than exclusive relative to knowledge that has proven itself useful in this work. But while the potential frame of reference has been widened, the size limitations of the book require that the breadth and depth of knowledge that is presented must be limited to that which has particular significance.

Among several innovations presented in this book are select insights from a fifteen-year transdisciplinary, open-source research effort to compile the scientific code on human and organizational performance. This material directs consultants not to just engineer work designs, but to “humaneer” them when work performance relies on high levels of human performance, which is generally the case with knowledge and service work. This approach may well become a principal methodology by which all human performance consultants work in the future.

Additionally, readers will gain insight into the real impact knowledge and service workers can have on business performance, and they will learn how to transform this potential into high- performance human work that creates financial value-added (not just “soft” benefits). They will also learn why human performance consultants are an essential instrument for future enterprise success and how staff professionals can work in new ways to fulfill this important new role.

This book is written for a transdisciplinary audience, including people who are interested in improving human performance at work but have found it difficult, and those who may consider themselves very knowledgeable about human performance from the perspective of their own disciplines but are interested in finding out about other approaches that have proven helpful. Approaching this challenge with the ultimate goal of bridging disciplines for more effective transformation of human potential into productive business performance, practitioners will do well to see this book as a beginning, not an end, to a much greater understanding of the factors and forces that contribute to human work performance.

The text is organized around three themes, each consisting of chapters that expand on key issues. The early chapters outline new opportunities within organizations that were born of new developments in science, the economy, the nature of human work, the role of managers, and business strategy. The impact of these

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is substantial, creating new opportunities for all organization support professionals while placing additional demands on their work.

The second theme focuses on insights into human work performance that provide a needed framework for better understanding the complexities of its improvement. Specific strategies are discussed that apply this new thinking to the challenges that performance improvement practitioners routinely face.

Finally, I address the vital emerging role of human performance consultants as instruments of performance improvement. They have become an essential resource to executives and managers serious about capitalizing on the substantial untapped potential for improving human performance and productivity. Methods that have proven effective for implementing the support of internal human performance consultants are outlined, along with the rationale for their effectiveness.

This book is a beginning. It is consistent with my earlier book, Future Training (1995), which I wrote to help lead the transition of traditional training departments to more performance-oriented support functions. In this book, I will now focus all organization support functions that are in search of greater effectiveness on the important new potential (and challenge) in organizations- improving the performance and productivity of today’s postindustrial workforce, which is composed primarily of knowledge and service workers.

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C H A P T E R 1

The Industrial Roots of

Performance Improvement

The improvement of human work performance is not a new objective. For as long as people have been employed, managers have been trying to improve their performance. And the methods most managers use to try to improve employee performance are not new, either. The methods used today are essentially the same methods used more than a hundred years ago.

The industrial roots of today’s approach to improving employee performance, including the fundamental goals of work simplification and standardization, developed in situations that were dramatically different from those faced by businesses today. A hundred years ago, managers were dealing with inexperienced laborers whose work required meeting the intolerant needs of machines and machine-like processes. That’s a far cry from today’s situation.

To illustrate just how dramatic the changes have been during the past one hundred years, consider the following list of “major human resource developments in this century.” The list was compiled in a survey of labor economists in 1992 and is presented here in the order in which these developments originated [l].

0 Evolution of human work from machine-labor tasks to knowledge-based responsibilities through automation, standardization, simplification, etc.

4 HUMAN PERFORMANCF CONWLTINC;

0 Development of the social sciences, including sociology, psychology, behavioral science, education, economics, and many other disciplines.

0 Advances in instructional technology that enhanced human learning and enabled people to learn faster, more effectively, and more reliably than ever before.

0 Emergence of a comprehensive management technology (beginning notably with Peter Drucker’s book, The Practice of Management, published in 1954) to guide business management following World War 11.

0 Cultural advancement of modern society, including great advances in education (e.g., the G.I. Bill and expanded public education), consumerism, technology, and conveniences.

0 Application of biological “systems theory” to provide a more accurate explanation of complex circumstances and the strategic effects of decision than the traditional cause- and-effect explanation.

0 Evolution of information technology and the introduction of personal computers.

0 Limits to resources and growth, which spawned a tremendous search for new products, new markets, new sources of labor, new sites for production, and new thinking in almost every aspect of business.

0 Competition at world-class standards, including best quality, speed, cost, convenience, and innovation.

0 Downsizing and the new “implied” employment contract that ceased to recognize loyalty as a feature of employment that employers valued.

0 Need for adaptive “learning” organizations that promoted innovation, risk-taking, empowerment, and participation in order to tap the knowledge and expertise of every employee.

0 Outright dominance in the workplace of knowledge and service workers-now exceeding 80 percent of all employment in developed economies-in place of production and logistics workers, forcing dramatic changes in the design and management of organizations.

In the face of these developments, and in recognition of the substantial changes they have brought to the nature of work and

THE INDUSTRIAL ROOTS OF PERFORMANCE IMPROVEMENT 5

workers during this period, reflective managers and staff professionals will want to question their continuing widespread use of century-old methods in an effort to improve human work performance. It makes sense that if today’s organizations are to be their most successful, then performance improvement methods will need to suit the current nature of work and workers.

To better understand this need for fundamental change, we will begin the search for new performance improvement opportunities with a quick look back at how the current methods came to be.

LOOKING BACK

Prior to the 1700s, the kind of work performed by most people was determined most often by their circumstances at birth, and its design and performance were learned through a combination of observing a master and hands-on experience. Workers were less than eager to share their knowledge with outsiders because they wanted to preserve the economic value this knowledge provided. Crafts remained within families for generations, and apprentices were often sworn to secrecy.

In the early 1700s, this craft knowledge was first transformed into an easily transferred and applied technology-rules, principles, methods, and materials-to guide, improve, and regulate the practice of manual skills. The Encycfopedie, published in 1751, assembled the knowledge of most crafts known a t the time, consequently allowing even nonapprentices to learn them. Putting technical knowledge into written form ultimately led to the establishment of agricultural, engineering, and medical schools, which taught concepts and procedures that defined and guided effective performance. Distinguished from schools whose purpose was to provide education in the liberal arts, these professional and trade schools taught people how to perform a particular kind of work.

Machine Organization

The Industrial Revolution introduced innovations that improved labor productivity and fueled an unprecedented economic expansion in Europe and the United States. The development of machine technology and steam-generated power led to a concentration of

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production in large-scale factories that required large amounts of capital, energy, and human labor. Many trades developed into industries, and most craft work was eventually replaced by machine labor. Machine technology simplified the human challenge in crafts and made it possible for people to easily learn a particular task o r type of work, thus enabling companies to prepare a workforce of the size required for mass production.

The economic transformation that resulted from the Industrial Revolution established employment as the new way most people earned their livelihood. In 1780, approximately eighty percent of the U.S. adult population was self-employed. By 1880, only thirty-seven percent remained self-employed 121.

Machine technology was considered the greatest achievement of society at the turn of the twentieth century. The pursuit of machine-based capabilities soon influenced every aspect of people’s lives. They had to make adjustments to their routines in order to satisfy the needs of machines. People became the flexible resource, adapting to the inherent inflexibility of machines and the large production operations they required.

The organization and management of work soon followed the design of machines. Organizations were not established as ends in themselves but were created to keep machinery productive. In fact, the word organization is derived from the Greek word organon, meaning “ a tool or instrument.” Therefore, it is understandable that organizations have been oriented around tasks, objectives, skills, plans, and goals, and that members have been expected to behave as if they were parts of machines-routinized, efficient, reliable, and predictable.

Early rules for organizing and managing work evolved from concepts pioneered by Frederick the Great, who ruled Prussia from 1740 to 1786. Frederick inherited an unruly mob for an army and set ou t to apply practices of Roman and sixteenth- century European armies along with concepts inspired by the mechanical inventions of his day. H e set out to shape his army into a reliable and efficient war machine, introducing such concepts as ranks, regulations, task specialization, standardization of equipment, and training. T h e concepts tha t mechanized Frederick’s army were gradually transferred to industrial-age factories [3].


Classical Organization Theory

Henri Fayol (1841-1925), a Frenchman who owned a large coal mine, thought through organization design and developed the first rational approach to the organization of enterprise, which he called the functional principle [4]. Fayol was one of the early management theorists interested in the practical problems of management and sought to assemble the current knowledge a bout managing organizations. Drawing from military and engineering principles that were applied in successful factory operations, he was among the first to outline the best management thinking of the late 1800s in his fourteen management principles, represented in Table 1-1 [5].

Fayol’s principles are known today as classical management (or organization) theory, and they are so commonplace to traditional management literature that they are taken for granted. His concept of creating a theory of management that could be studied, taught, and practiced was an important milestone in the history of the field. However, Fayol himself cautioned that managers could not operate solely on the basis of these principles-managers needed to know more than how to plan, organize, command, coordinate, and control. Each business was different, and managers had to have extensive knowledge of the businesses they managed.

Though Fayol’s principles were established for their effectiveness in organizing and managing industrial work in the late 1800s-work that barely exists today in developed economies- they remain in common use in many organizations.

Human Resource Function

The first recorded attempts to provide staff support to employees for the purpose of improving their performance were carried out in 1897 by persons in the new position of “social and welfare secretary.” Persons with this title handled grievances, operated the sick room, provided for recreation and education, arranged transfers for unhappy workers, managed the dining facilities, and looked after the moral behavior of unmarried female employees. This concept of welfarism was soon followed by the expanded role of “employment management,” which was prompted by the

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Table 1-1 Fayol’s “Fourteen Management Principles”

Principle Description

1.

2.

3.

4.

5 .

6 .

7.

8.

9.

10.

1 1 . 12. 13.

14.

Division of Labor

Authority

Discipline

Unity of Command

Unity of Direction

Subordination of Personal Interests

Remuneration

Centralization

The Scalar Chain

Order

Equity Stability of Tenure Initiative

Esprit de Corps

To increase efficiency, workers should specialize in tasks for which they are best suited. Managers should have authority, the right to issue orders. With authority comes responsibility for ensuring that the work is done. The organization should expect obedience from its employees, and in turn, employees should expect to be treated with dignity by their employers. Each employee should report to only one supervisor. Each activity of an organization should have one leader and one plan. Management must ensure that decisions are made from a rational standpoint and not solely to placate self-interested individuals or groups. People should be paid in order to motivate them. The issue of orders creates a degree of centralization in all organizations. However, it is possible to increase employee autonomy (decentralization) or decrease it (centralization). Authority is hierarchical and must be made explicit. In other words, it must be clear who reports to whom. All materials and all activities should be kept where they are appropriate. Employees should be treated justly. People resources should be planned for. Managers should encourage workers to be enthusiastic about their work. Management should encourage harmony and discourage destructive conflict within the organization.

THE lNDlJSTRlA1 ROOTS OF PERFORMANCE [MPROVEMENT 9

growing trend toward “scientific management.” This trend created the need for assistance to first-line supervisors who had responsibility for the selection, training, and retention of employees.

Welfarism fit the dominant religious beliefs about how people should be treated, and scientific management kept productivity high so companies could survive. A good example of how the employment management function operated is found in Henry Ford’s formation of a “Sociological Department” in 1914 to deal with a tight labor market and worker turnover of 10 percent. Later that year, the function implemented a plan that included cutting the work day from nine to eight hours and raising the minimum wage from $2.50 to $5.00 per day, which Ford explained simply as profit-sharing and efficiency engineering.

The success of Henry Ford did much to encourage other companies to establish employment departments, as employers concluded that this added concern for their workers led to greater prosperity for both labor and management. Between 1919 and 1920, the number of such departments formed equaled the number that had been created up to that time [6 ] . A U.S. Bureau of Labor Statistics study determined at the time that modern employment practices reduced labor turnover, thus reducing training and other costs while also providing workers with more stable employment.

Interest in the people and in the potential of human resource (then personnel) management led to significant changes in assumptions about the value, needs, and treatment of people in organizations. Much of what was learned and practiced was based on a behaviorist, or cause-and-effect, model of human behavior that stemmed from the concepts of scientific management. The commonplace tools of this era included job analysis, job descriptions, psychological tests, methods of interviewing and selection, merit ratings, promotion policies, analysis of labor turnover, and training. In addition to training workers, the training of supervisors was common. However, relatively little attention was paid to developing high-level management.

Human Performance Improvement

In the early 188Os, Frederick W. Taylor (1856-1915), an American engineer and thus particularly capable among factory foremen, was concerned by the lack of compassion and support

10 HUMAN P t R F O R M A N C I CONhIJI TING

shown by most factory foremen for workers who did not perform the required work at high levels of productivity. Taylor’s concern ultimately prompted his study of work design-how factory tasks were designed and accomplished-as a viable approach to improving relations between the two groups. His goal was to reduce the hostility between workers and owners by making workers more productive through the redesign of their work, which in turn would increase their value to owners and thus justify better wages and increased respect [7 ] .

Taylor studied work tasks and designed ways to accomplish them most effectively and efficiently. He observed workers as they instinctively completed a task, and then collected data on the physical and mental activities involved. He solicited the one or two best workers from the group and, with their assistance, redesigned the task, trying to eliminate unnecessary time, motion, and variation as well as material waste. The new approach would then be taught to all workers. By tapping into the “best practices” for completing a task, Taylor felt he could improve the work performance of anyone who wanted to learn [8].

Taylor summarizes his philosophy about productive work at the conclusion of his book, Principles of Scientific Management, published in 1911:

Science, not rule of thumb. Harmony, not discord. Cooperation, not individualism. Maximum output, in place of restricted output. The development of each man to his greatest efficiency and prosperity [ 91.

Taylor’s greatest legacy to industry is perhaps his application of intelligent and innovative thought to factory work in an effort to improve performance. Before Taylor’s studies, intelligent people felt it was beneath them to apply their knowledge to work. Labor was labor, and they wanted no part of it. His application of knowledge to work and to the standardization of production and logistics labor enabled workers to improve their performance and employers to achieve steady increases in productivity. Taylor’s “scientific management” principles ultimately became a foundation of the curriculum of the Harvard Business School and subsequently many other business schools.

TIIE INDUSTRIAL ROOTS OF PERFORMANCE IMPROVEMENT 11

Taylor’s innovative contributions to the practice of consulting, time and motion studies, the study of best practices, the orientation and training of workers, and other methods for improving worker performance have sustained a four percent compounded increase in industrial productivity in the United States for more than one hundred years. Management scholar Drucker contends, “Taylor’s greatest impact all told was probably in training. Taylor- based training became the one truly effective engine of economic development. The application of knowledge to work explosively increased productivity. Since Taylor began, productivity has increased some fifty-fold in all advanced countries. On this unprecedented expansion rest all the increases in both standard of living and quality of life in the developed countries” [lo].

Institutionalization of Training

Between 1880 and 1950, workplace training established its performance improvement capability by having a dramatic impact on work performance, workers, and organizations. Training was able to change the way work was performed by implementing improved work designs throughout the workplace-improving the capability, behavior, performance, and productivity of factory workers.

The result was improved quality and efficiency in factory work, increased production capacity and industry productivity, refined products and expanded markets, and added income and an increase in return on investor capital. Moreover, training prepared unskilled and inexperienced people to perform valuable work and increased the productive value and resulting standard of living for factory workers.

Then, between 1950 and 1970, the use of training methods was expanded to address a much wider range of employee communication, education, and development issues. In particular, training became broadly utilized by management as a technique for standardizing characteristics of organization behavior that were much less directly related to task performance than ever before. The new objectives ranged from instructing organization members on more-general information, values, and behaviors that management wanted to see followed in the workplace, to programs intended to improve employee morale, motivation, and work effort.

Training was soon treated as a nearly universal methodology for the design of classroom events to ensure communication with

12 HUMAN P E K I O K M A N C . ~ CONSUITING

employee groups, to change attitudes and behaviors, and to perform cultural transformations. Whenever there was an employee issue, so it seemed, the solution would be training. Practical limitations to training’s capability and effectiveness were ignored. And because only limited evaluation of the success of such efforts was ever made, management merely presumed that to have exposed people to the communication o r experience of training was sufficient [ll].

The Training Function

The creation of separate staff functions to provide this expanded volume of training seemed to further increase training’s misuse. This practice dissociated training from work itself and from the specific needs and character of specific operations. The success of training was no longer tied to the preparation of workers for work and to the increase of worker performance and productivity. It was only natural that the management of this new function would become more concerned with increasing the volume of training provided for any purpose, simply because increased activity would lead to increased staff, budget, and status.

Training continues to be used as a universal solution to performance improvement. Particularly in larger organizations, employees receive training for almost every deficiency imaginable, from a lack of innate ability to a lack of motivation. Some organizations even require employees to attend training just because other employees need it, or to get a certain number of hours of training annually. In other organizations, people can attend training simply i f they want to, or if they can’t get the training they need without their supervisor’s agreement and funding. Sometimes employees are sent to training just because they’ve had no training in a while; others may be permitted to attend a program because they are loyal to the organization or hard-working and deserve the time off from work.

Training’s basic methodology of modeling standardized tasks for the purpose of equipping people to d o productive work continues to be effective in this challenge. However, the misuse of training as a performance improvement method has led to considerable confusion about its effective application. Emphasis on new technologies for conducting training has added further


confusion by creating the illusion that training is appropriate for any challenge.

Given these misapplications of training, it is no wonder that most managers are disillusioned with training as an approach to improving human performance. Beyond its immediate negative effect on productivity-pulling people off the job-there is often little or no change in employee performance once they return to work. Task training continues to be as valuable for organizations today as it was when introduced for this purpose by Taylor, but the multitude of other applications that have been found for this methodology in organizations probably adds little or no value.

Emerging Management Theories

As early as the 1950s it was evident to many that significant change was needed and inevitable. Yet it was not until the 1970s that management had sufficient insight into new alternatives to recognize the nature and direction of likely changes and to realize that appropriate management methods would ultimately have to vary with the work of an organization. It would no longer be sufficient for all organizations to utilize the mechanistic methods as they had in the past.

This conclusion has led to a tremendous increase in organizational research and management theories during the years since, although their naturally gradual unfolding has only added to management’s bewilderment and lack of initiative. Developments in management science are by their nature accompanied by too little application data to be taken seriously enough by management to prompt radical changes. Consequently, management, still unaccustomed to the growing problem and unaware of the real solution, has yielded to a substantial increase in training in the form of a wide variety of promoted programs in hopes of finding an effective answer.

These programs-often promoted by theorists, consultants, and corporate staff professionals driven more by their personal beliefs than by sound logic-have frustrated management’s attempts to resolve this dilemma. Though these typically expensive efforts did not resolve the issues, they did silence the reproach of critics that nothing was being done. Many of these programs have mobilized great efforts that have resulted in placebo-effect improvements,


perhaps still without a greater understanding of the underlying problem that will not go away. Such treatment of the challenge did not solve government’s and industry’s productivity problems, did not address workers’ performance needs in a substantive way, and did not pave the way for future improvements.

~ A L I T Y I M P R O V E M E N T I N I T I A T I V E S

While the human resource functions were working with sociol- ogists and organizational-development practitioners to find a new management paradigm, industrial engineers were at work responding to the increasing threats to U.S. manufacturing dominance by learning from the Japanese how to improve production quality. Following World War 11, Japan’s industry and labor leaders learned a new set of work principles from industrial engineer Joseph Juran and statistician W. Edwards Deming, American consultants brought in to support the rebuilding of Japan’s industry.

Now commonly referred to as “quality” or “quality function deployment,” this improvement initiative applied many aspects of the new management paradigm to the continuous task-level improvement of primarily production and logistics products and services. Workers a t all levels were assigned the responsibility for applying science-based management principles to the design of their work.

U.S. industry began to apply new concepts such as this only in the late 1960s, particularly in order to compete with Japan, which at the time produced greater value at lower cost in several industries. In the 1970s and early 1980s, many astute companies launched quality improvement initiatives with the ultimate goal of better satisfying customers. Then, in the late 1980s, information systems specialists began to focus management on the potential for reengineering cross-functional processes, making possible significant reductions in the number of unnecessary tasks and workers. To accomplish these quality-improvement and reengineering initiatives, managers began to experiment with teamwork initiatives, finally trying cooperation over competition to better accomplish work.

By the mid-1 980s, quality improvement initiatives had expanded beyond the production floor and point-of-service delivery to incorporate required changes to fundamental management practices

THE INDIJSTRIAL ROOTS OF PERFORMANCE IMPROVEMENT 15

throughout organizations. A significant lesson learned in earlier attempts at quality improvement was the need to make supporting changes in areas beyond the factory floor. It was crucial for interrelated organization units and levels to adopt supporting goals in order for the targeted operation to fully realize its quality goals.

Performing at higher levels of quality, it was learned, is the result of many integrated factors, including a substantial role for management’s basic methods of operating an organization. Many companies responded with aggressive large-scale programs to institute sweeping changes in fundamental management practices throughout their organizations, adopting “Total Quality Manage- ment” as a metaphor for the new ways in which the company would work and be managed. Although many organizations had attempted similar changes through massive training initiatives in years prior, usually with limited success, unprecedented competitive pressures forced this fundamental change in management practices.

RE E N G I N E E RI N G

Both quality improvement and reengineering shifted the focus of performance improvement away from the worker and to the work and work situation. And whereas quality improvement is based on systematic problem-solving at the task level of work, reengineering takes a more revolutionary approach and redesigns work at the business process level. The fundamental shift of work away from manual tasks to knowledge- and service-based work created the need to focus on knowledge-work processes just as factories focused on production processes. By focusing on business processes in this way, organizations can redesign workflow and restructure work groups to remove functional barriers, eliminating task-level work in part by using today’s vastly superior technological capability to support human work. In most cases where reengineering initiatives were successfully implemented, sizable increases in workforce productivity were achieved.

Successful reengineering yields process and work roles that optimize productivity in much the same way that quality improvement yields tasks that optimize performance. The goals and most of the principles are very similar. The difference is the shift in focus from task-level work (quality) to business-process work


(reengineering), and the shift in methods from problem-solving to competitive leadership.

Not all reengineering initiatives have been successful. In fact, freely offered assessments suggest that the majority of reengineering projects were not successful. There are several explanations, including perfunctory attempts to implement reengineering initiatives without the committed leadership and professional support that were required, reduced workforce cooperation once reengineering initiatives were associated with downsizing, and the lack of financial support to implement expensive information technology systems that were the linchpin of reengineering success.

Basic process redesign methodology remains a powerful approach to improving productivity; however, skillful implementation is necessary to achieve the potential gains.

LOOKING AHEAD

Although it was not obvious at the time, an evolution in the science of human work was in progress during the past three centuries. When basic labor was elevated to the mystery work of crafts, it created value for workers who had special skills. Next, craft knowledge was organized into technology, which disrupted the monopolistic crafts but initiated the open communication of work methods and gave birth to the Industrial Revolution. Then, to improve labor productivity, Taylor pioneered methods for better integrating people with production machinery and processes and taught workers how to be productive. And following World War 11, social scientists uncovered ways to humanize a productive workplace and make it even more productive, enhancing the effectiveness of industrial engineering efforts to improve product quality.

The systematic improvement of all knowledge and service work is as vital to industries and governments today as the redesign of manual work was in the time of Frederick Taylor. Such improvement is now the obvious, if not the only, way to improve performance and increase productivity, since knowledge and service work now accounts for 80 percent of the work in most organizations.

At the beginning of the twenty-first century, however, organizations remain challenged in their attempts to increase the productivity of knowledge and service workers. Achieving such

Ttit INDUSTRIAL ROOTS OF PERFORMANCE IMPROVEMENT 17

increases has been a major strategy for organizations since the late 1980s and, notwithstanding recent quality and reengineering initiatives, remains a challenge unmet. Organizations continue to perform well below their potential.

The byline of a recent article by Drucker, “Management’s New Paradigms,” which appeared in the October 5 , 1998, issue of Forbes, sums up the situation well:

In a fast changing world, what worked yesterday probably doesn’t work today. One of the fathers of modern management theory herein argues that much of what is now taught and believed about the practice of management is either wrong or seriously out of date [12].

Several principal forces must be considered in the design of successful initiatives to resolve this dilemma and continue the advance of workforce performance, productivity, and worker fulfillment. These forces are at the heart of the challenges faced by human resource specialists and the management they serve. Each is deserving of a book. But because condensed resources do not exist, I have discussed in the following chapters the essential elements of each factor and its implications for improving human performance.

Organization Science (Chapter 2)

Since World War 11, new developments in organization science have paved the way for a new approach to organizing and managing today’s workforce, and to the improvement, if not the optimization, of its performance and productivity. If practitioners working to improve performance and productivity are to be successful in the years ahead, they will need to acquire new and more-effective methods that are based on the highest levels of knowledge available for meeting this challenge.

Knowledge Work (Chapter 3)

During the twentieth century, we witnessed the fundamental shifts of economic production from machines to people, and of the nature of work from machine labor to human discretion. These continual efforts to automate work have shifted the roles

1 8 HUMAN PEKFORMANCI CON W I T I N &

of people in companies from production and logistics work (making and moving things) to knowledge and service work (creating and applying knowledge). Knowledge workers have emerged as the “means of production” for industry and government, and this development and its consequences will need to be better understood if management is to let go of the machine-age principles to which it is anchored.

Management’s Productivity Challenge (Chapter 4)

One of management’s responsibilities is to improve productivity. Yet if labor statistics can be trusted, they make clear the lack of success thus far in meeting this challenge. This failure suggests the need for a fundamental rethinking of the approach management takes toward meeting this responsibility. As practitioners learn through experience, it is essential that management drive or support any initiatives by staff functions to improve performance and productivity.

Creating Value-Added (Chapter 5 )

Management has been disappointed in its efforts to solve the problem of creating value-added and has grown cynical about attempts to address it. Every option proposed is hyped as the ultimate solution, but the benefits promised never materialize. To move forward with management’s support-to begin to make the changes that will achieve this potential-facilitators of performance improvements will need to come forward with specific initiatives that add “hard” financial value to operations.

RE F E R E N c E s

1 . Pepitone Berkshire Piaget. Human Capital: Untapped Financial Oppor tun i t y for Major Corporat ions . Research Paper, Dallas: Pepitone Berkshire Piaget, 1992, pp. 66-67.

2. Reich, M. “The Development of the Wage Labor Force.” The Capitalist System. Eds. R. C. Edwards, M. Reich, and T. Weisskopf. Englewood Cliffs, NJ: Prentice-Hall, 1978, pp. 179-1 85.

3. Morgan, Gareth. Images of Organizations. Newbury Park, CA: SAGE Publications, Inc., 1986.

Tiit ININSTRIAL ROOTS OF PEKFORMANCE IMPROVEMENT 19

4. Drucker, P. F. Management: Tasks, Responsibilities, Practices. New York: Harper & Row, 1973, p. 24.

5 . Wren, D. A. The Evolution of Management Thought. New York: John Wiley & Sons, 1994, pp. 184-188.

6. Lovett, R. F. “Present Tendencies in Personnel Practice.” Industrial Management, Vol. 6 5 , Jun. 1923, pp. 327-333.

7. Weisbord, Marvin R. Productive Workplaces: Organizing and Managing for Dignity, Meaning and Community. San Francisco: Jossey-Bass Publishers, 1987.

8 . Wrege, C. D., and Greenwood, R. G. Frederick W. Taylor, The Father of Scientific Management: Myth and Reality. Burr Ridge, IL: Irwin, 1991.

9. Taylor, F. W. The Principles of Scientific Management. New York: Harper and Brothers, 1911.

10. Drucker, P. F. Post-Capitalist Society. New York: HarperCollins, 1993.

11. Pepitone, J. S. Future Training: A Roadmap for Restructuring the Training Function. Dallas: Addvantage Learning Press, 1995.

12. Drucker, P. F. “Management’s New Paradigms.” Forbes, Oct. 5 , 1998, pp. 152-176.

C H A P T E R 2

Developments in Organization

Aczence

The machine-like control and predictability of classical management methods were initially familiar to U.S. workers following duty in World War 11, though these methods were i l l matched to the changes occurring in the nature of work. Likewise, management’s efforts to apply Taylor’s principles (division of work, work simplification, and standardization training) to improve the performance of a growing white-collar workforce met with mixed results. The mechanistic principles that had been so successful in increasing factory productivity were for the most part ineffective in increasing white-collar productivity.

Much was still not known about managing this new white- collar knowledge- and serviced-based work. The increased security, higher standard of living, and educational opportunities that white-collar workers enjoyed led them to look for more from their work than just getting a paycheck, and to resist narrowly defined jobs and controlling management practices. They sought work that was more in line with their greater education, values, and self-concept overall-work that provided respect, a voice in decisions, and future opportunities. These expectations symbolized new concerns for organizations and new challenges that managers were not equipped or experienced enough to resolve.

20

DEVELOPMENTS IN OKtiANIZATION SCIENCE 21

T H E I N F L U E N C E OF SOCIAL S C I E N C E

The search for ways to make work more meaningful and thus improve performance and productivity-coupled with the social challenges presented by the growing size and complexity of organizations in the early twentieth century-attracted the influence of psychology as it applied to the workplace. This focus led to research on group behavior, motivation, and management methods, as well as new theories and techniques related to instruction and behavior change.

Prominent social scientists theorized at the time that employees were demotivated by their work because of mechanistic job designs, controlling organization structure, and insensitive management. Much of this thinking stemmed from research indicating that psychological factors significantly affect worker attitude, motivation, and performance.

Management, still unaccustomed to the growing problem of unmotivated workers, and unaware of the real solution, ultimately yielded to repeated recommendations for management training in “human relations” skills in hopes of silencing complaints. The goals of programs launched to teach human relations skills and new management practices were not well accepted by management and not well supported by the predominantly bureaucratic organization culture. Moreover, it was frequently not clear or convincing to many people just how these concepts would contribute to performance.

P I o N E E R I N G I N N OVAT I ON s I N 0 RG A N I ZAT I o N DESIGN A N D MANAGEMENT

The bureaucratic structure that had served enterprise so well in the past, coupled with management’s acceptance of Taylor’s methods of work design, brought with them serious limitations for organizations, including ( 1 ) inflexibility and lack of responsiveness during times of uncertainty and change, (2) the inability to capitalize on people’s discretionary effort, judgment, and


creativity, and (3) the failure to satisfy employees’ intrinsic desire for worth and accomplishment.

Beginning in the 1940s, management theorists and practitioners pioneered several techniques to compensate for the limitations in the current workplace. Despite initial reports of success in many of these innovations-team-building, job enrichment and enlarge- ment, participative management, and others-their contributions were generally short-lived because they were based on a set of assumptions that were inconsistent with the existing machine- bureaucracy culture.

Though these innovations did not immediately revolutionize the workplace, their intuitive appeal to performance improvement professionals and their relative success in many organizations made it clear to many that an entirely new paradigm for organizing and managing work was needed if organizations were to overcome their current limitations. Many social scientists contributed to the development of these pioneering innovations, with some of the arguably more important ones summarized below.

Improving Human Affairs in the Workplace

Kurt Lewin ( 1890-1947), a social psychologist, was prominent among the theorists who were searching for a new approach to the organization and management of work. Lewin aspired to formulate a set of formal principles that would improve human affairs in the workplace, just as Taylor had forty years before.

Lewin acknowledged that Taylor’s scientific management practices increased factory output and cut costs while simultaneously increasing wages and reducing worker hours and stress. But he knew there had to be more, that work had value beyond pay in giving purpose to human life. He suggested that psychologists and efficiency experts should join forces to enhance both productivity and satisfaction.

Lewin’s contributions to postindustrial management were enormous. Consultant Marvin Weisbord, who has conducted considerable research on Lewin’s work, emphasized the scope of his influence: “Lewin’s stamp is everywhere in contemporary management: running meetings, work design, team development, systems change, cultural change, leadership styles, participative methods, minority-majority relationships, survey feedback methods, con-

DEVELOPMENTS IN ORGANIZATION SCIENCE 23

sultation skills [ 11.” Lewin’s better-known contributions include the following:

1. Field theory (people are strongly influenced by their sur-

2 . The change process, characterized in terms of unfreezing-

3 . Group influence on individual behavior 4. Stakeholder participation in change management 5. Experience-based learning 6. Process consultation

rounding situations)

moving-re freezing

Theories X and Y

Another prominent theorist, Douglas McGregor ( 1906-1 964), helped Lewin begin the Research Center for Group Dynamics at the Massachusetts Institute of Technology and later recruited faculty that included Richard Beckhard, Warren Bennis, and Edgar Schein, all of whom became prominent for their contributions. In fact, it was McGregor and Beckhard who coined the term organization development, which now represents an entire professional discipline, to describe their innovative “bottom-up” change method. They determined that change was more easily managed bottom-up-with the process starting with the requirements of the external environment and the work to be performed-contrasted with the customary top-down approach then characteristic of management.

McGregor’s noted concept, “Theories X and Y,” first put into management perspective the potential for divergent approaches for managing workers. In addition to the classical factory management approach that was highly standardized (Theory X), he theorized an alternative management approach that offered workers greater opportunity for initiative and discretion (Theory Y) [2]. (See Table 2-1.)

Many years would pass before it was understood that the nature of the work to be performed, not a subjective judgment of right and wrong methods, would best determine the most appropriate management approach. The best approach would thus fall on a continuum of management practices between the extremes of Theories X and Y. In other words, management

24 HLJMAN PERFOHMANCE CON W I T I N G

Table 2-1 Outl ine of McCregor’s “Theories X a n d Y”

“Theory” X Assumptions

1. People have an inherent dislike of work and will avoid it if possible.

2. Most people must be coerced, controlled, directed and threatened with punishment to achieve organizational objectives.

3. People prefer to be directed, wish to avoid responsibility, have little ambition and want security above all.

“Theory” Y Assumptions

1. Work is as natural as play or rest, and will be a source of satisfaction or punishment depending on conditions management can control.

2. People will exercise self- direction and self-control in achieving objectives to which they are committed.

3. Commitment comes from rewards that satisfy needs for status, recognition and growth.

4. People seek and accept responsibility; avoidance is a consequence of experience.

creativity and ingenuity to solve organizational problems.

6. The intellectual potential of people is only partially utilized by modern industry.

5. Many people have the

needed t o choose its method, bu t there were not just two alternatives. Though this approach provided managers with more- effective options for management practice, such choices conflicted with the dominant perception a m o n g managers tha t there must be “one best way” to manage-regardless of the situation.

Interdependence of People and Technology in Work Systems

Eric Trist (1 909-1999), a social scientist, uncovered a n entirely new way of working during a n industrial action research project

DtVELOPMENTS IN O K C A N i Z A T i O N SCIENCE 25

in 1949. He discovered that technology and human relations were interdependent, and that productivity was increased significantly by recognizing their integration and by placing work design within control of the workers who were to implement it.

In other research, Trist recognized that employees at all levels are affected by their feelings about authority in ways that end in conflict, aggression, passivity, demoralization, and withdrawal. This research identified that a key to increased performance and productivity is to give people the greatest possible discretion over their work: to reduce their dependency on outside authority, trust their own capability to perform, and work together. on tasks of importance to the enterprise and to themselves instead of the alternative of being completely dependent-working when, where, and how they are told. He concluded that once the environment and task are accurately determined, the goal is then to remove or reduce factors that block, distract, and demotivate people from doing their work [3].

Trist was intrigued with the “systems” concept of Ludwig von Bertalanffy, a biologist. This theory held that all things are in some way interrelated and influence each other in many possible ways, so that direct cause-and-effect-a machine metaphor- is not the only possible relationship. In fact, the cause-effect relationships that exist in organizations are dense and often circular. Sometimes these causal relationships cancel the influences of one factor on another, and sometimes they amplify the effects of one factor on another. I t is the network of these causal relationships and resultant patterns of influence that accounts for much of what happens in organizations-including work performance. Though machine-system variables are typically either dependent and independent, human-system variables are interdependent. To understand human performance, it is necessary to examine the interdependent relations between workers and their work environment (e.g., work design, organization culture, management systems, relationships, support, etc.) [4].

Relating this concept to organizations and work yielded insight that explained many characteristics previously observed by social scientists. Whereas Taylor had assumed that a company and its parts could be isolated and standardized in one best way, Trist emphasized the needed integration of people (social system) with technology, tools, and techniques (technical system), for which

26 HUMAN PERFORMANU CONWITINL

he created the term socio-technical system. Other key features of this approach included the following:

1. Technology-induced change. New technology that supported the work or the worker was the catalyst for change.

2. Teamwork. Team formation, or “responsible autonomy,” as Trist referred to it, encouraged workers to make the decisions about how they would adapt to new technology. Trist noted that this approach resulted in inherent cooperation between task groups, higher personal commitment, lower absenteeism, fewer accidents, and higher productivity.

3. Process-level design. The level of perspective required to analyze and design work needed to be the entire “work system” rather than Taylor’s focus on individual tasks.

4. Whole-system change. The entire group of workers, not simply individual workers, needed to be the focus for change.

5 . Self-direction. Internal management of the work system, or “self-directed work,” was both necessary and superior in results to external supervision.

This research continued throughout the 1950s, leading to an entirely new paradigm for organizing and managing work that was in sharp contrast to classical management approaches. (See Table 2-2.) Building on social science knowledge not available to Taylor and others in the early twentieth century, these new principles focused on the whole work system for analysis and design rather than on narrow tasks, as Taylor had; and o n autonomous work groups, not individuals, as the smallest unit of organization and management.

Social scientists reasoned even then that this alternative to Taylor’s approach would be particularly important as knowledge- based work further dominated the workplace because of the more important role people play in determining the performance of this work. However, much still remained unclear regarding when and how this new approach to organization and managing work could best be applied.

M E C H A N I S T I C A N D O R G A N I C W O R K SYSTEMS

Management research in the 1960s first distinguished an important difference in the way industrial companies were affected by

DrVELOPMENT5 IN ORGANIZATION SCIENCE 27

Table 2-2 Effective Organizations as Defined by Eric Trist

Classical Management Theory Early 20th Century

0 Technology first 0 People as machine extension 0 People as spare parts 0 Narrow tasks, simple skills 0 External control: procedures

0 Many levels, autocratic style 0 Competitive 0 Organization’s purpose only 0 Alienation: “It’s only a job.” 0 Low risk-taking

book

New Paradigm Late 20th Century

0 Social/technical systems

0 People complement machines 0 People as scarce resources 0 Multiple broad skills 0 Self-control: teams and

departments 0 Flat organizations, participa-

tive style Cl Cooperative 0 Individual and social purposes

included 0 Commitment: “It’s my job.’’ 0 Innovation

optimized together

From Weisbord, 1987, p . 101. (Adapted f rom Eric Trist, “Adapting to a Changing World,” in Readings in Quality o f Working Life, George F. Sanderson, ed. Ottawa: Labour Canada, 1978, p p . 10-20.)

changes in their environments, especially changes with respect to technological innovations and markets. Building on the discoveries of McGregor (Theory X management versus Theory Y management) and Trist (classical management theory versus the new management paradigm of interdependent social and technical systems), scientists recognized that these two distinctly different management approaches provided operational features that were advantageous in different situations [ 5 ] .

This development provided insight into potential operational benefits accruing to each alternative. Thus the question of which management approach t o use was not a matter of right and wrong, but one of choosing the approach that best fi t the specific characteristics and nature of the work performed. These two approaches-characterized in terms of their features and best fit- were identified as mechanistic and organic work systems. (See Table 2-3.)

The mechanistic approach used somewhat rigid bureaucratic methods, which worked well in stable environments characterized


Table 2-3 Conditions Affecting the Fit of Mechanistic

and Organic Work Systems

Work System Feature Mechanistic Organic

Work assignments

Coordination and control

Communication

Supervision and leadership

Sources of knowledge

“Jobs” with specialized, clearly defined tasks and methods

Supervision, rules, standard procedures; detailed plans, frequent evaluation based on clear objectives, standards, training

Top-down emphasis; top management has key outside contacts

Nonparticipative, one-on-one, loyalty to superiors stressed; position and experience grant authority

Local, internal

“Roles” with broad responsibilities, flexible, activity and behavior, responsiveness

Consultation among all having related tasks; flexible plans, changing goals, subjective measures, evaluation over longer periods

Multidirectional, network, multi-level contacts with outside

Participative; stress on task, team, organization; expertise and knowledge grant authority

External, professional, cosmopolitan

The Best Fit When

Industries are . . . Production and Knowledge and

Nature of work is . . . logistics service

Making and moving Creating and apply- things ing knowledge Routine, well under- Nonroutine, not well stood, pre-determined, understood, designed standardized, linear for each problem,

Work processes are . . .

non-linear


Work situation is . . .

Required coordination is . . . People expect . .

Effectiveness criteria stress . . .

Simple, stable, predictable, controlled

Limited

Structure and routine, control from above, limited involvement Efficiency; standard, reliable operations; minimum objectives; control from top or outside, defined hours

Complex, changing, unpredictable, adaptive Extensive

Autonomy, empowerment, flexibility, challenging work Creativity, innovation, and. adaptation; competence; professional development; quality of work life

Adapted from Harrison, M.I. Diagnosing Organizations: Methods, Models, and Processes. 2nd Ed. Thousand Oaks, CA: SAGE Publications, 1994, p. 90.

by traditional technology and consistent customers and competitors. The key distinction in the operating characteristics of the mechanistic approach was its precisely defined and standardized authority, information flow, and technical work. To maintain stable production, no workers operated outside the defined limits of their positions.

The organic approach was more responsive to changing environments, emerging technology, diverse customer needs, and unpredictable competitors. To make the fullest use of workers’ capacities to respond to these changes, organizations needed to use a minimum of job definition and let workers learn the specific needs and requirements of their work as it was performed.

Organic work systems rather than mechanistic work systems were suited to companies with the more challenging knowledge- based white-collar work that dominated most new and growing industries. Commonly, these companies faced very unpredictable environments, in which customer preferences change suddenly in response to new developments or competitors, and nonroutine work such as new-product or market development or management problem-solving. Generally, organic work systems are better suited for work situations that exhibit the following challenges:

1. Adapting to change, adapting to customer needs, and responding rapidly and decisively to threats and opportunities

2 . Performing nonroutine work in innovative and creative ways, solving complex problems, and managing in dynamic situations

3 . Achieving lofty expectations in the face of challenging work 4. Coordinating work with other workers, functions, and

organizations

Aside from the benefits of organic work systems in many situations, the departure from the mechanistic work systems that managers had grown accustomed to in industry, the military- and even the classroom-caused many managers to express concern about the perceived loss of predictability and control. In addition, mechanistic work systems are easier to administer. For this reason, mechanistic work systems are usually more efficient to operate and are typically more productive in situations involving high-volume low-variance tasks. In these situations, the flexibility and responsiveness that distinguish organic work systems are unnecessary and far less efficient.

One additional note, however. As managers have become more experienced with the organic work systems approach, many of them subsequently view the traditional mechanistic work systems approach as too inflexible, and they recognize its inability to capitalize on the potential of more-capable workers.

No Longer Just One Right Way

This conceptualization of two management systems, with the best design selected based on the situation, suggested to managers that there was no longer just one right way to manage work. Management systems should be designed for the situation- markets, functions, responsibilities, the workforce, etc.

Production and logistics companies that use relatively large- scale technology operate better with mechanistic systems and their characteristically precise definitions of jobs and work methods. Knowledge and service companies that require continuous responsiveness, discretion, and adaptation to customers and market conditions operate better with organic systems and their characteristically broadly stated role definitions and work methods.

DEVELOPMENTS IN ORGANIZATION SClENCF 31

Similarly, we can select the more appropriate management system based on the characteristics of functions, roles, and specific responsibilities. All of these factors can be considered together when choosing a management system design that falls between these two extremes, thus selecting the most appropriate approach for every specific situation.

Determining the most appropriate management system requires analysis of the specific situation to be managed. If the nature of the work to be performed is routine and stable, then a more mechanistic management system will best capitalize on the efficiency and predictability of the situation. However, if an analysis of the situation indicates that the nature of the work to be performed requires worker responsiveness, then a more organic management process will give workers and managers the autonomy they need to respond quickly to situations as they occur.

Experience has further demonstrated that, when confronted by increasing stability, people working in stable situations and using the mechanistic approach will favor a balancing shift to a more organic approach to work. The converse is also true. In the face of increasing change, people working in situations requiring responsiveness and using the organic approach will favor a balancing shift to a more mechanistic approach to work. Such adaptations confirm what many people know from their firsthand work experiences: people have a relatively narrow range of tolerance or ability to adapt to management processes that do not fit the work situation.

Choosing the Appropriate Design

Management processes should be developed to ensure that the behavior of managers and workers is aligned with enterprise needs. Because the work processes of enterprises vary so widely, managers need to exercise considerable latitude in choosing just the right management system to optimize performance in each situation.

Mechanistic and organic systems are opposites on a continuum, and managers must identify just the right approach along a broad range of possibilities. Deviation from what is optimal reduces the performance of workers, managers, and the enterprise as a whole system.

32 HUMAN PEKFOKMANCt CONSUITING

This performance sensitivity often entails designing enterprises to include a mix of mechanistic and organic components, each designed for its work and situation. The enterprise is likely to be designed for its overall environment, and individual organizational components are designed for theirs. The greater challenge for managers and consultants entails the interface between components with substantially dissimilar management processes, such as a mechanistic administrative department reporting to an organic business unit manager.

H IGH-PERFORMANCE WORK SYSTEMS

The search for methods to create high levels of human work performance has followed an unpredictable path and has arrived at a design that depends on knowledge that quite simply did not exist at the time of Taylor’s contributions. With the additional experience in applying, proving, and further developing the sociotechnical systems concept of the 3980s, we now have a complete view of a postindustrial organization design that maximizes the performance and productivity of a workplace.

The high-performance work systems (HPWS) approach to the design of organizations is an architecture that brings together work, people, technology, and information in a manner that optimizes the congruence or f i t among them in order to produce high performance in terms of effective responses to customer requirements and other environmental demands and opportunities. The HPWS approach is characterized by ten design principles. In Table 2-4, these principles are contrasted with the corresponding principles for traditional organizational design 161. Below, these same basic principles are expanded briefly to explain how they work together to create high-performance work.

1. Market-driven design and operation For an enterprise to be successful, its design and activity are driven by its customers and external environment. These priorities enable workers to produce and deliver products and services that satisfy customer needs and wants.

DtVELOPMENTS IN ORGANIZATION SCIENCE

Highly controlled fractionated units

Ambiguous requirements Inspection of errors Technical system dominance Fractionated, narrow jobs

Controlling and restrictive human resources practices Controlling management structure, process, and culture Static designs dependent on senior management redesign

Table 2-4 Comparison of Traditional and High-Performance

Work Systems Design Principles

Empowered and autonomous units Clear direction and goals Control of variance at the source Sociotechnical integration Enriched and shared jobs

Empowering human resources practices Empowering management structure, process, and culture Capacity to reconfigure

33

Traditional I HPWS

Internally driven design Customer- and environmentally focused design

2 . Optimized work systems Work systems are both engineered for mechanical precision and “humaneered” to optimize human work performance and productivity. Worker needs for standardization and discretion are integrated into high-performing work designs capable of responding to environmental and customer requirements and maximizing economic performance. (See Chapter 9 for a discussion of humaneered work systems.)

All work has clear purpose, output requirements, and agreed- on measures of performance. Workers exercise discretion in determining how their work will be accomplished, commensurate with their ability and the work challenge.

3 . Clear direction and expectations

4. Empowered and self-managing work teams With exacting customer requirements to satisfy, groups have responsibility for complete products or entire markets and, with complete resource support, determine how best to d o their work and manage themselves.

Work groups have the ability to improve o r radically redesign their work processes as they determine the need to respond to environmental requirements and conditions.

Individuals share roles and responsibilities within work groups to broaden skills and knowledge, create flexibility, expand responsibility and participation, facilitate learning, and generate intrinsic motivation.

Internal design alignment assures the persistent support of management systems such as planning, budgeting, decision- making and information systems, and management processes.

Organizations adopt postindustrial employee treatment, including group-based selection, skill-based pay, performance support, peer feedback, team bonuses, minimum rank and hierarchy, and gain-sharing.

9. Open access to information Work groups require information (not just data) about the environment, process technologies, output, variances, etc., and have the ability to receive, apply, create, and send information as needed.

10. Variance controlled at the source Work groups and processes are designed so that errors can be detected and controlled where they occur, creating the need for proper information and tools to detect and prevent error.

5. Capacity to redesign work processes

6 . Job flexibility and performance support

7. Supportive management systems and culture

8. Supportive human resource policies

With these characteristics, work designs have produced extraordinary results. More than two decades of evidence supports the conclusion that superior performance can be achieved from work units designed with these principles, as compared with those designed using traditional principles. In general, these work units produce the following results:

DEVtlOPMENTS IN ORGANIZATION SCIENCE 35

0 Increased productivity-30 to 40 percent improvement CI Improved customer satisfaction-consistent with total quality 0 Reduced costs o v e r a l l 4 0 to 50 percent less 0 Enhanced internal motivation-driven to do well 0 Lower turnover and absenteeism-down by 50 to 100 percent 0 Increased learning-openness to new ideas 0 Increased capacity to adapt-quicker responses to change

Early attempts to re-create this approach in new and existing worksites enjoyed extraordinary success, with the greatest success gained in new production facilities that were designed using these new work design principles. In fact, several major U.S. companies used this new workplace concept to earn previously unheard-of profit margins for many years, keeping their strategy a secret for obvious reasons.

Notwithstanding successful applications of these principles by many well-known companies, they are not necessarily easy to implement and maintain in the midst of existing traditional management cultures. Some companies have performed significantly better than others, largely because of the way in which the new design approach was introduced. Adoption should be driven by the needs of the organization to enhance performance or to solve problems.

The high-performance work design approach is radically different from the design principles underlying the turn-of-the- century bureaucratic organization style still in use by many companies. Though it may not be universally applicable, this concept is well suited to address management’s challenge to support a new and very different workforce of relatively sophisticated knowledge and service specialists. This concept provides helpful direction to management in creating an effective work environment that supports workers and leads to significant improvements in performance and increases in productivity.

RETH I N K I N G H U M A N PERFORMANCE

Managers and human resources practitioners are compelled to radically rethink their approach to the design of work and the management of organizations in a time when physical work has been replaced by knowledge work, when basic machinery has

36 HUMAN PE RFORMANCC CON SU LTI N ti

given way to advanced technology, and when tradition and stability have succumbed to fast, continuous change. We now know that we must adopt a human-centered approach for designing work if we are to optimize human performance and productivity. People, in place of machines, have become the predominant factor in work performance; machines, in place of people, have become the easily replaceable parts in production processes.

It is important for management and staff professionals to appreciate the substantial change in management methods this change in the nature of work will necessitate. I t is no less important to realize that this view of work was neither appropriate nor possible in Taylor’s day because of limited social science knowledge and the dominance of factory work. Though understanding is growing, it is slow, because the workplace is filled with many inaccurate perceptions of how to optimize work performance-perceptions that must now be unlearned.

We approach a future that will require the achievement of maximum results from people, and this achievement will happen only if we find ways of managing that will be valued by both employees and the organizations they serve. To accomplish these goals, we must satisfy the pressing need for the organization and integration of existing knowledge pertaining to work and human performance. Theorists and practitioners in diverse fields of study, including management, engineering, education, sociology, psychology, and economics, are contributing to this development. Starting where the evolution of machine technology has taken us, the technology to optimize human work performance is emerging as a new priority for competitive organizations.

REFERENCES 1. Weisbord, Marvin R. Productive Workplaces: Organizing and Managing

for Dignity, Meaning and Community. San Francisco: Jossey-Bass Publishers, 1987.

2. McGregor, Douglas. The Human Side of Enterprise. New York: McGraw-Hill, 1960.

3. Ketchum, Lyman D., and Trist, E. L. All Teams Are Not Created Equal: How Employee Empowerment Really Works. Newbury Park, CA: SAGE Publications, 1992.


4. Weick, K. E. The Social Psychology o f Organizing. New York: McGraw-Hill, 1979.

5. Tichy, N . Managing Strategic Change: Technical, Political, and Cultural Dynamics. New York: Wiley, 1983.

6. Nadler, D. A., Gerstein, M. S., and Shaw, R. B., and Associates. Organizational Architecture: Designs for Changing Organizations. San Francisco: Jossey-Bass, 1992, p. 124.

C H A P T E R 3

Knowledge Workers as the Means of

I

Production

The challenges for management have undergone considerable change in recent years. The emergence of global markets and competitors, information and communication technology, and very-large-scale organizations of well-educated and sophisticated employees, along with the increasingly refined discipline of management, has added significantly to the complexity of management practice. But no other change has been as great a challenge as the fundamental shift in how companies create value.

Knowledge has become most companies’ key economic resource; capital, labor, and natural resources have become secondary and can be obtained easily with knowledge. This shift stands in sharp contrast to management’s traditional focus, which can be characterized as the strategically planned achievement of objectives through the allocation of capital, labor, and natural resources.

Management’s work is now better characterized as the continuous application of knowledge resources to create the maximum attainable value. These knowledge resources are not simply secondary sources of information, opinions, or ideas; they are people who possess specialized and advanced knowledge capable of producing economic results-knowledge that proves its worth in value-added. And the work performed by these specialists- whether creating knowledge (knowledge work) or applying knowledge (service work)-extends far beyond the operation of machinery in its importance to management. The work is inherently a

38

KNOWLEDGE WOKKEKS A S THE MEANS 0 1 PRODUCTION 39

human process that is not machine-replicable. In knowledge and service work, people are the means of production.

Furthermore, a company’s organization, once viewed only as a source of labor to operate a company’s machines or to do work that is designed and directed by management, has become its principal means of creating value. As a result, organizations have acquired new importance to management. Organizations are management’s source of knowledge and the principal transformer of knowledge into value for customers-its production capacity. And increasing the performance and productivity of knowledge specialists, who make up a large part of today’s organizations, has become a central challenge facing managers.

KNOWLEDGE WORKERS: A CRITICAL RESOURCE

Knowledge workers , the creators of knowledge, and service workers, the appliers of knowledge-often referred to together as simply knowledge workers-have become critical resources because they are the means by which value is created. For production workers, the makers of products, and logistics workers, the movers of products-frequently referred to together as production workers or machine labor-employers provide the means of value creation in the form of machinery, processes, and materials. Moreover, it is the knowledge worker who designs the machinery and processes and arranges for the correct materials, thereby creating the value that is ultimately realized through the support of production workers.

Knowledge workers, with their well-developed capacity to perceive, reason, and make judgments, provide companies with the means to generate, retain, and apply the knowledge that makes a company successful. Furthermore, knowledge workers are uniquely self-sustaining in their capacity to acquire and convert knowledge resources into value, and to innovate and substitute when specific knowledge is unavailable or insufficient.

The Role of Knowledge Workers

What are knowledge workers, and how are they different from other workers? Knowledge workers are people who earn their


living predominantly by creating and applying knowledge to create value. Knowledge workers include engineers, scientists, specialists, technologists, and service providers-people whose work it is to grasp a body of knowledge and to apply it with skillful methods in the solution of problems and cultivation of opportunities.

When commentators reflect on recent advances in productivity and attribute these gains to technology-as though technology is some kind of business savior-they fail to note that technology is created and implemented by knowledge workers. What is technology but the scientific knowledge and proven methods used to achieve commercial objectives? Technology is created by knowledge workers who have applied their abilities to deal with some problem or opportunity. So whether productivity improvements result from work redesign, improved machinery, better- trained labor, or any of a myriad of possible initiatives, we can be certain that the strategy is created by knowledge workers, that it uses technology developed by knowledge workers, and that its implementation is facilitated by knowledge workers. And as technology takes on an increasingly important role in business success, it is really knowledge workers creating and applying technology who are making the difference.

Growing Ranks of Knowledge Workers

In the early days of the Industrial Revolution, owners and executive managers were among the few knowledge workers in companies. Everyone else worked in a machine labor role.

Over the years, as staff functions joined the ranks of organizations to assist management in dealing with important areas of specialized work, the number of knowledge workers increased. The growing number of line managers who were required for rapidly expanding organizations also added to the number of knowledge workers. And as machine-labor work was progressively automated to increase worker productivity, more and more specialist positions were created so that companies could deal with the increasing complexity of production and logistics processes.

As these changes steadily occurred, the proportion of knowledge workers in the workforce steadily increased. In 1900, approximately 80 percent of all workers were considered machine labor. By 1950, the proportion of machine labor workers had

KNOWLEDGt WORKERS AS THE MEANS OF PRODUCTION 41

declined to 50 percent, and by 1990 it had dropped to less than 20 percent of the total workforce. Though this proportion varies from industry to industry, it is clear that the postindustrial workforce in developed economies is comprised largely of people who make their living by creating and applying knowledge-once a role reserved for top management.

Management of Knowledge Workers

Organizations must be managed differently today because of the dramatic increase in the number of knowledge and service workers. Knowledge workers must be managed differently from production workers-on the basis of responsibility rather than command and control. Drucker elaborates on this critical difference in his book Post-Capitalist Society:

The knowledge-based organization therefore requires that everyone take responsibility for that organization’s objectives, contribution, and, indeed, for its behavior as well.

This implies that all members of the organization must think through their objectives and their contributions, and then take responsibility for both. It implies that there are no “subordinates”; there are only “associates.”

Furthermore, in the knowledge-based organization all members have to be able to control their own work by feedback from their results to their objectives. All members must ask themselves: “What is the one major contribution to this organization and its mission which I can make at this particular time?” It requires, in other words, that all members act as responsible decision makers. All members have to see themselves as “executives [I].”

New Approaches to Management

As Drucker implies, management can no longer afford to think of all workers as simply labor with which to operate a machine, staff a process, or perform a simple task. To be effective, management must recognize the importance, discretionary nature, and greater potential for performance of the knowledge workers who generate and apply knowledge for results. Today, with the majority

of the workforce utilized in knowledge-worker roles, organizations have become the direct source of customer value-and the only source of sustainable competitive advantage for companies.

The Evolution of Organizations

Having described the recent growth of knowledge workers- and the critical role they play in enterprise today-we can now look back to see how organizations have evolved, and how these fundamental changes have affected enterprises, markets, and the role of knowledge workers.

The challenge to rethink any subject that is taken for granted or not already well understood can be substantial. Such is the case with developing an understanding of the significant changes in markets, technology, and work that have occurred over the past century and are responsible for this fundamental shift in the importance of organizations. This understanding seems essential if managers and human resource professionals are to fully appreciate the need for and nature of corresponding changes that will allow organizations to be managed for maximum effectiveness. It will not be enough to simply accept the judgments of others, particularly for those who expect to provide leadership and helpful support as their organizations respond to these developments.

The balance of this chapter reconstructs the complex dynamics of this shift in an effort to give the reader a complete picture of what has transpired.

T H E NATURE OF E N T E R P R I S E S

Let’s begin with the concept of enterprise-defined as “an undertaking, especially one of great scope, complication, or risk [2] .” Though we more often think of a business, government entity, or other institution when we think of an enterprise, the term could also refer to just about any industrious human activity. In every case, an enterprise is the work of people trying t o achieve something.

The act of conceiving an enterprise is knowledge work. So are the designing, developing, and managing of an enterprise. Even if the purpose of an enterprise is to produce products and services, its formation and development require knowledge work.

KNOWLEDGE WORKERS AS THE MEANS OF PRODUCTION 43

Furthermore, even the creation and management of production and logistics processes to control the efficient making of products and services are knowledge work. Only the work of operating the production and logistics processes of an enterprise is considered production work.

For clarification, Figure 3-1 illustrates graphically the relationship between the knowledge work and product ion work that comprise an enterprise. Note that reference is made to the organic work system, which best characterizes the nature of knowledge work, and the mechanistic work system, which best characterizes the nature of production work. (See Chapter 2 for background on mechanistic and organic work systems.)

Enterprises vary considerably in the extent to which they rely on production work and a mechanistic work system. For example, a typical 1880s factory would have consisted almost entirely of production work. The knowledge work in factories at that time was limited primarily to owners, managers, and a few accountants. (See Figure 3-2.)

Enterprise begins with industrious knowledge work, which creates production work to provide efficiency and control to linear processes.

Figure 3 - 1 . Enterprise work systems.

44 HUMAN PERFORMANCE CONSUI r i w

1880s Factory . . . virtually all production and logistics work

Auto-Parts Maker . . . mostly machine and logistics work

Figure 3-2 . Industry examples of enterprise work systems.

In comparison, a modern auto-parts factory would likely consist of proportionally more knowledge work because of the evolution of new and expanded work in functions such as product development, process engineering, marketing, public relations, human resources, information systems, finance, legal, safety, etc.

Further comparison with a major software design firm would reveal an enterprise that consists of less production work than knowledge work. A majority of the work involves design, develop-


ment, documentation, product support, promotion, and customer service, all of which are knowledge work. If the limited production work there-product duplication, packaging, and fulfillment- is outsourced, which is frequently the case, then the proportion of production work in the enterprise would be even less.

In the last example in Figure 3-2, we note that the work of a small professional enterprise like an independent HR consultant is comprised almost entirely of knowledge work. Production work is generally limited to following standard processes and procedures, which is often the case for administrative activity, routinely provided services, and work that is defined by professional methods and standards.

Though the creation of an enterprise is knowledge work, every enterprise consists of knowledge work (organic work systems) and production work (mechanistic work systems), and the proportion of each is determined primarily by the industry and its dominant work function. Neither type of work or corresponding work system is necessarily right or wrong or good or bad. They are different, however, and it is important to understand and consider the difference when improving work performance.

People and Enterprises

Through people working in concert as an organization, enterprises have the means to pursue an objective and compete in the economy. Though pundits may credit advances in technology, automated machinery, superior market position, clever strategy, or new-product developments for the success of enterprises, further reflection would reveal that each of these advantages is produced by people.

People are essential to the creation of the results for which enterprises are founded. This is because people are unique as naturally occurring sources of adaptability (i.e., perception, reasoning, and responsiveness) and innovation (i.e., concern, learning, and invention). These traits result from complex biological, psychological, and social processes, such as goal achievement, caring, self-respect, and trust [3]. Yet people are not born with the innate knowledge or skill that allows them to achieve the sophisticated objectives of enterprises. This capacity must be learned, applied, and honed through experience.

46 HUMAN PERFORMANCE CONSUITING

Application of Human Knowledge and Ability

As people develop in their knowledge and ability, they can apply these personal resources to create artificial means to more efficiently and consistently accomplish the production functions of the enterprise. And to a lesser extent, artificial means can be used to provide partial support for production functions that cannot be automated or that, once automated, still require human backing. This artificial means is a mechanized work system comprised of machinery and technology (i.e., proven processes, methods, and techniques) and controlled through standards, structure, training, and other means.

Some enterprises can make extensive use of mechanized work systems (in particular, production and logistics industries, functions, jobs, and tasks), whereas other enterprises, because of the nature of their work, require extensive use of organic work systems (in particular, knowledge and service industries, functions, roles, and responsibilities).

Engineering is the predominant technology for the design and improvement of mechanized work systems. Performance is engineered into these systems, and the role of people is limited to providing standardized backing to meet needs these systems cannot meet for themselves.

Though the effective work of people in mechanized work systems (found primarily in production and logistics work, functions, and industries) is a significant matter and entails serious consideration of human factors, it is not our principal focus. Rather, this book is concerned most with the work of people in organic work systems (found primarily in knowledge and service work, functions, and industries)-work that is necessarily human and that requires the unique capabilities that only people have.

There is not a predominant technology for the design and improvement of organic work systems. Performance in these systems is determined by people and their effectiveness in optimizing the interdependent factors that influence the results they are trying to create. Improving human performance in this setting is the challenge that is the focus of this book.

(In Chapter 2, I outline several developments contributing to the development of a technology for organic work systems. Then, in Chapter 9, I discuss the potential for using this technology to “humaneer” work for increased performance and productivity.)


HUMAN WORK

We can define work by illustrating that human behavior can be divided into two categories: behavior that is contemplative (without a specific goal) and behavior that is purposeful (goal- directed). We can further subdivide purposeful goal-directed behavior by its purpose: amusement (pursuit of pleasure) or work (pursuit of economic gain). (See Figure 3-3.)

Work Performance

Within the context of human work, this book focuses in detail on performance-work performance. If readers are to understand many of the concepts presented in this book, the meaning of performance must be clearly understood.

Performance is the achievement of defined objectives. It is a relative term; its meaning is based in part on something else- performance compared to some objective. For the term performance to have much meaning, the goal or objective must be defined. If there was no objective or the objective was unknown, then the term performance is meaningless. Indeed, if workers do not have an obvious objective or are for any reason not aware of it, then they can't strive to attain it and wouldn't know whether they attained it or even got close. Without an objective, there is no performance.

To determine the performance achieved in any situation, the results attained by a person, group of people, piece of equipment, or some other goal-pursuing entity are assessed relative to the objective. Performance describes the relative extent to which the

Human

d ..""i Contemplative Purposeful

(without a specific goal) (goal-directed)

$ Z Work Amusement

(pursuit ofpleasure) (pursuir of economic gain)

Figure 3-3. Relationship of human behavior to work.


objectives have been met. If Kim accomplished the objective she set o u t to attain, but n o more or less, we can express her accomplishment as “good performance,” using a qualitative term, or as “100 percent performance,” using a quantitative term, in order to modify the term performance and give it meaning. If Kim accomplished only half the objective, we might express this result as “poor performance” or as “50 percent performance,” depending on how specific we wanted to be. Likewise, i f she accomplished double the objective, we might say “great performance” or “200 percent performance.” The expression high performance is frequently used to describe a situation in which objectives are consistently met or exceeded.

Unlike athletic events that have a single clear, quantifiable measure of performance, work objectives are composed of several elements, some quantitative (expressed as a quantity, such as unit, size, weight, etc.) and some qualitative (expressed as a distinguishing characteristic, such as fitness for the situation, style, character, etc.). We can refer to each element separately or combine them in some way: e.g., Frank’s three stores achieved 125 percent of their sales goal, but their performance fell short of their staff teamwork and community involvement goals.

Key Variables in Work Performance

Thus far, we have discussed work performance in the context of “the achievement of work objectives to produce economic value.” That’s more than just showing up each day for work.

Work performance is a broadly shared concern throughout any enterprise:

1 . As workers, we are concerned that our work performance meets the needs (objective, goals, desires, etc.) of our employers and customers, as well as our personal needs for income, achievement, affiliation, and so on.

2 . If we are employers, we are concerned that the work performance of our employees meets the needs of the enterprise and its customers, and that it meets our employees’ needs.

3 . I f we work in a professional role that is in some way responsible for the work performance of others, or, more important, the improvement of that performance, then we are also concerned.


To effectively impact the work performance ongoing in any enterprise(s) we serve, regardless of our role, then an even clearer understanding of the term work performance is helpful. To introduce key variables, let’s expand our definition of work performance to “the application of human capability to the fulfillment of the objectives of a role in order to create value in exchange for compensation.’’ Five new terms are introduced in this definition, so let’s review them further.

Definition of Terms

Capability refers to relevant worker attributes that contribute to the performance of work, such as physical and intellectual capacity, innate competencies and psychosocial traits, technical knowledge and learned competence, and other factors. This is the “stuff” that a worker brings to her work and uses to contribute to the generation of value for the enterprise served.

Role refers to the challenge assumed by the worker, which may entail broad responsibilities (especially in knowledge and service work), a position with narrowly defined tasks (especially in production and logistics work), or simply a commitment to do something for a specified time period. This is the objective that the worker is challenged to accomplish. Performance is based on how well the objective of the role is met.

Value refers to the economic worth of the worker’s accomplish- ments. It is an economic measure determined by the market of buyers seeking assistance similar to that provided by the worker. Value is estimated in advance of any exchange and is based on the perception of worth agreed to by a buyer and seller. Thus when people are hired for a role, it is the future accomplishment of their defined objectives that serves as the basis for determining commensurate compensation. Once people who are working demonstrate the practice of generating value that exceeds the employer’s initial perceptions of worth, the person is generally given an expanded role with additional potential for creating value. Likewise, we can determine the value-added of any work initiative by assessing the buyer’s estimate of its financial worth. This worth is generally reflected in compensation.

Customer refers to one or more of the following: an employer, another employee, a customer or consumer of the worker’s product or service, even the worker herself in the case of entrepreneurs,

50 HUMAN PI IKFOI:MANCL CONWITING

or anyone else who is the recipient of the worker’s output. The customer is the receiver of the work output, whether product or service, and is considered the ultimate determiner of the work output’s value. Work that doesn’t provide or contribute to customer value is considered waste and should be minimized. The common goal for all knowledge and service work is increasing to the highest level possible the value received by customers. (For production and logistics workers, value is designed into the processes they support, and their role is to perform to standard specifications the work tasks required by these processes.)

Compensation refers to the comprehensive gain for which a worker exchanges her value-creating work, including wages, benefits, security, a means to produce, opportunities for achievement and advancement, incentives, affiliation, personal satisfaction, and numerous other factors. People gain much more than money in exchange for their work performance, and for some people the nonfinancial compensation far outweighs the financial. All work has a corresponding “fair pay” that is determined by employers and employees participating in the employee market. For every role in an enterprise there is an assumed worth based on the value generally created by employees in the role. People can distinguish themselves in their role and receive greater compensation as a result (in so far as the compensation systems of the enterprise recognize value creation).

These are important terms to understand fully because they describe variables that are significant to the task of improving human performance. The need to discuss them in such detail is prompted by fundamental changes in all of them.

Fundamental Changes in the Nature of Work Performance

During the past 30 to 40 years, enterprise has undergone significant additional technological and social change arising from the development of a global economy. This is not news to you, because your life has been affected by all these changes. Compare your life, or the life of your family, with life as it was 10, 20, or 30 years ago, and you’ll see that the changes far outweigh the similarities.

Despite all that you recognize about these changes, you may not fully understand how they occurred or may not have con-

KNOWLEDGE WORKERS A S THE MEANS OF PRODUCTION 51

sidered how they are changing the nature of work. You may be quite familiar with digital technology and with recent advances in social science, but you may wonder what their impact will be on you and the organizations you serve. This book responds to these questions in a way that will help you create a new vision for your work. It focuses primarily on explaining the changes you will recognize from your work, and the changes that will make your work more effective and more valuable as a result.

To begin this process, let’s take a brief journey into the history of industrial enterprise to identify and elaborate on the factors that have set the patterns for our past methods of improving human performance. Only in this way can we appreciate why these methods are not as effective as we wish them to be, and why we must transcend the industrial-age theories on which enterprise has been based.

1 N DUSTRIAL ROOTS

From the beginning of the Industrial Revolution until about 1990, most economic development was devoted to maximizing the standardization, size, speed, and automation of production and logistics operations (mechanized work systems). These strategies were adopted in part to increase production output at a time of scarce labor, abundant materials, and advances in machine technology [4]. Their combined impact was an unprecedented increase in the performance and productivity of workers.

These same strategies continue today as the foundation of industry’s paradigm for work-performance management. Par- ticularly for those of us who have experienced the industrial paradigm and worked with its performance principles, a clear understanding of its foundation is the essential starting point for rethinking performance improvement.

Standardization

The principal tenet of industrial production was standardization. If the variety of goods to be produced was limited, volume could easily be increased by increasing the scale of production machinery.

Creating a single standard product rather than varying products to specific needs meant that manufacturers could reduce the

52 HUMAN PLKFOKMANCI c O N 5 U L r l N t i

amount of labor devoted to creating new designs and supporting more-complex production processes. The result was increased production output and reduced costs that were often passed on to consumers.

Henry Ford’s Model T production line is a classic example of this standardization. His famous words to the effect that customers could have any color they wanted, just so long as it was black, illustrates the influence of standardization. Consumers at that time were delighted with the prospect of purchasing a car, regardless of its color, and they generally enjoyed access to many other new and better products made more affordable through the inherent efficiencies of mass production.

Though standardization made mass production possible, it was the increased productivity and reduced unit costs of mass production that pushed companies to make standardization the priority.

With the adoption of standardization, the strategies of size, speed, and automation became important methods to extend industry’s economic potential.

Size

Size increases were important because of the ready potential to leverage existing production and distribution methods as well as the ease of implementation. By expanding the size of equipment and facilities used to manufacture and transport products, companies could increase worker output.

Because industrial production is by nature a process, an increase in size generally did not require an equivalent increase in labor. As long as the size did not exceed the capacity constraints of the market, capital, or technical capability, its increase would reasonably produce an increase in output per worker.

Speed

Another very important strategy of industrial production and logistics was speed-increasing the pace at which a product moved through the process or a machine performed its function.

Driving up the speed of an operation increased production output without a corresponding increase in labor. If there was a question of trading the gains in output through speeding up an

KNOWLEDGE WORKERS AS T H E MEANS OF PRODUCTION 53

operation for gains that came from increasing size, the advantages of size generally dominated.

Automation

Automation was the ultimate strategy. The objective was to have either a machine or other resource fulfill the step in a process previously performed by a worker. This was the most direct way of substituting machinery, which was readily available, for labor (particularly skilled labor), which was in short supply.

Automation also led to further increases in the size and speed of production processes. What began with simple efforts to mechanize process steps previously entrusted to workers later became a full-scale effort to mechanize this work as well as entire processes. This development led to new, more sophisticated technology, including robots and process computerization- developments that resulted in even more substantial reductions in labor and increases in productivity.

In many industries, interest in automation was reinforced by persistent confrontations with organized labor. Management saw automation as the only strategy that would completely eliminate the problems and inefficiencies that managers attributed to labor.

Economies of Scale

Standardization, increased size and speed, and automation- taken together-are strategies for achieving the entitlements of scale. The introduction of the steam engine as a source of industrial power led to the dissemination of machines built to the larger scale that steam power made practical, and finally resulted in the development of massive factories. This was the essence of the Industrial Revolution.

The biographies of early industrialists reveal that, to them, industry was simply the ultimate opportunity to leverage their abilities. I t was the opportunity to create something that was larger, more powerful, and much more valuable than ever before-the pursuit of a whole new scale of enterprise.

Through the industrialists’ eyes, their work consisted of pulling together ideas, capital, technology, and a few key people in order to build enterprises with the ability to produce, process, and


transport the products society wanted. (A remarkable parallel is the Internet-driven economic revolution we are witnessing today.) Before long, the “enterprise builder” mentality that started in production was transferred into other areas of the economy, including distribution, transportation, farming, government, and retail. The pursuit of scale continues today as the principal driver of economic development.

Benefits for Workers

Owners weren’t the only ones to benefit from increased scale. Workers were beneficiaries as well. Expanding the size and speed of operations without an offsetting increase in labor resulted in increased employee productivity (work output divided by units of labor input), a key factor in determining wages. Industry often targeted new technology to perform tasks that workers considered difficult or unpleasant. Continuous expansion created more jobs than automation eliminated.

All told, the greatest benefit to workers was probably the creation of more-sophisticated work made necessary by the need to continuously design and maintain new technology and to manage increasingly more complex and widespread operations. This new work represented some of the earliest expansion of knowledge work in industry. This change marks only one turning point in a complex change that has profoundly altered many characteristics of enterprise.

A N E W WORLD OF WORK

Since the early 1970s, we have witnessed an unparalleled expansion of technological development, including information, communication, and transportation technology. These advances have transformed a world of parochial economies into an inextricably linked worldwide economy of global markets and global competition. New rules for corporate survival and competitive advantage emerged from this transformation, not the least of which was the recognition that work had changed dramatically in recent years and that management methods and systems would also have to change dramatically to better support and improve the performance of this new work. (See Figure 3-4.)


Market Reference for

Value-Creating Customer Knowledge

Service Functions Services

New Technology

1 Customization <;i Global

Competition

Note: The plus signs indicate that the impact of one factor on another is positive. In essence, then, the Vsrem shown above reinjorces its own expansion as long as all fa tors remain positive.

Figure 3-4. Transformation to knowledge and service work.

Global Competition

A key element of the change that is taking place in enterprises is the new turn that industry competition took in the 1980s. Developments in international trade during the last 20 years had resulted in the formation of a virtual global marketplace of trade, in which production shifted to areas of the world where it was best suited. Suddenly the location and nationality of producers and their products became unimportant except for the impact of these factors on cost, quality, and the ready availability of raw materials and qualified labor. Final products were often made up of component products and services that originated in different parts of the world.

56 H U M A N PERFORMANCE CONSULTING

This strategy allowed the production process to take advantage of available resources and lower costs than were available elsewhere in the world, as compared with restricting the resources incorporated in products to the nation in which they would be sold. Raw materials could originate in one country, be produced into basic parts in another, be assembled in another, and finally be sold and distributed in still another. The goal of globalization was to optimize every phase of the production process, and this could be accomplished by capitalizing on resources wherever they existed.

Employment Shift

A result of the globalization of enterprise was a further shift in the employment market. The movement of work to areas of the world where the appropriate level of labor resource was most plentiful concentrated the shift of jobs in developed economies from blue-collar production and logistics work to essentially white-collar knowledge and service work (plus gold-collar, pink- collar, etc.). For countries like the United States, this shift accelerated the demand for professional, technical, and service workers and further accelerated the reduction of production and logistics jobs as these migrated out of the country to better sources of less-skilled, lower-cost labor.

The New Consumer

Though today’s consumer is a product of the Industrial Revolu- tion, there are important ways in which consumers have broken with the past. One important change is people’s attitudes regarding standardization-the fundamental premise of mass production- and the pursuit of greater scale. Since the late 1980s, the market has witnessed a dramatic shift in consumers’ appetite for products and services that meet individuals’ specific needs.

Just as production was managed globally, so were customers around the world. The sustained efforts of marketers from 1960 to 1990 were successful not only in reaching all potential customers, but also in saturating them with promotions for every imaginable product. These efforts resulted in an unprecedented expansion of consumer purchasing during this period, as consumers had access


to readily available products and services that were attractive in part because they had never before been available or affordable. A consequence of this success of mass marketers was the virtual saturation of consumers with the promotion and consumption of products and services.

In time, these standardized offerings failed to fully satisfy consumers. Consumer interest then gravitated toward products and services that better met consumers’ individual needs and desires. When enterprises offered innovative alternatives, consumers were prone to sample these to determine whether they were more satisfying, thus creating an instant market-though often short- lived-for every imaginable product or service innovation.

A result of this development is a market that will quickly abandon institutional products and services for the promise of new ones that may be better aligned with what individual consumers value most. As innovative products and services are offered in the market, a substantial number of consumers reward these producers with immediate business. The quick success of these new products then serves to entice more companies to introduce new products, resulting in a continuous flow of new-product differentiation intended to better meet specific consumer desires.

Digital Information Technology

During this same period, new developments in digital information technology resulted in substantial new capabilities in manufacturing and logistics. Differing from prior industry innovations, these advances were used to simplify the production and delivery of highly differentiated products and more personalized services.

As producers gained this capability, they were no longer forced to make, distribute, and sell the same product to everyone. The result was the elimination of the underlying basis for mass production itself-standardization. It was now becoming possible to process incredibly large amounts of data instantaneously, giving industry the capacity to efficiently handle much greater variety and complexity than was once possible with traditional production and distribution processes.

This capability supported product and service differentiation while at the same time conserving resources. Companies could

eliminate waste through more precise determination of consumer needs and distribution of product, reducing inventories. Just-in- time production and the sophisticated logistics capabilities of companies like UPS, Federal Express, and Wal-Mart exemplify these applications. Moreover, as a result of this new technology, new companies emerged seemingly overnight, offering individual consumers the unheard-of potential to purchase customized products and services to satisfy their specific wants.

Dell Computer’s entry into the market is a perfect example. Dell customers can configure computers from a myriad of options to meet their particular requirements and then purchase as few as one, and their personalized computers can then be scheduled for production and generally delivered within a week. Compare this process with the mass-production alternative, which amounts to visiting a computer store and purchasing a “standard” configuration designed by the manufacturer to meet a wide range of needs.

In the minds of many people schooled in the industrial paradigm, Dell’s proposition seems too good to be real. H o w could you possibly operate a company with a production lot size of one unit? Perhaps the most astonishing aspect of this transaction is the price, because Dell’s prices are generally lower than the prices that stores charge for standard products.

Customization and Consumer Freedom

At the same time that digital technology equipped manufacturers with a new freedom to efficiently create, produce, and market products that are customized for consumers, it also fueled a new wave of consumer freedom and interest in products and services that reflected consumers’ individual needs and desires.

To consumers, this new development meant producers could sell products and services that were “customized” to meet their individual needs-a welcome concept for consumers who valued the satisfaction of individual needs. Producers, in addition to the challenge to radically redesign (reengineer) their processes to incorporate this new thinking, have also been challenged to discover product features in which customization creates new value for consumers.


Customization Requires Knowledge Work

Product and service customization depends on two kinds of knowledge. The first kind of knowledge that workers must have is full understanding of whatever technology or discipline they provide, including the capability to use up-to-date tools and more-sophisticated methods that are emerging to meet new performance requirements. These developments have increased the need for specialization and requisite knowledge for every organization function. Today, because managers can no longer know how to perform the jobs of the people they manage (i.e., support) or be there to witness and control their behavior, it is necessary for organization members to exercise greater responsibility for their work and its value contribution to the enterprise.

The second kind of knowledge concerns potential customers, including their needs and wants, their likes and dislikes, and most important, the attributes of products and services to which they assign great value. This is not the same kind of knowledge that has been used for years to differentiate consumers into “standard” market segments. The knowledge required for customization concerns individual consumers, not groups with similar needs. Similar is not specific enough. Customization requires a scale of one [ S ] .

For customization, what is important about consumer knowledge is its scope and timeliness. How well does it capture the consumer’s true desires a t the precise moment of purchasing a product or service? Only an enterprise equipped with this kind of knowledge can maximize the creation of value for a customer and in turn maximize the financial value of each customer opportunity. And the enterprise with the greatest scope of knowledge about individual customers-the most extensive customer relationships-will be the most efficient.

Less important now is the number of relationships an enterprise has with customers or prospects, or the general information the enterprise compiles based on other customers. The only truly relevant knowledge for creating value in a customer transaction is that which applies directly to the individual customer. Basing production, distribution, and marketing efforts on segments, averages, trends, styles, and other generalizations is misleading


and thus wastes opportunities to generate value. Whichever enterprise knows a customer best and is prepared to apply that knowledge most effectively has the best opportunity to create the greatest value for that customer. The greater the success at differentiating customers as individuals, the greater will be the financial value generated in the market.

Generating This Kind of Knowledge

Among their responsibilities, knowledge and service specialists must govern what they know and do not know. They also must govern what they need to know and do not need to know. Management cannot possibly make these determinations for specialists; management can only be clear in its expectations regarding performance and productivity so specialists can ascer- tain their own needs. Whatever specialists do not know but need to know, they must be responsible for learning. Furthermore, they must also know what knowledge and services they can procure from others, and they need to work effectively across all boundaries, inside and outside the formal organization, to access the knowledge and other resources they require to carry out their responsibilities. Once again, management cannot govern these actions.

Consistent with their responsibilities, these workers must continuously assemble and apply the requisite knowledge and services that will create value. Often having only the objectives of the enterprise to provide needed structure and created results to provide needed feedback, each worker exercises self-management just by comparing outcomes with expectations. Manage- ment’s role is necessarily redefined as providing needed leadership and support.

Maximizing Customer Value

How is detailed knowledge about customers generated? Who decides how to respond appropriately to maximize customer value? This is the work of knowledge and service specialists.

For instance, knowledge specialists may be asked to create a support tool that allows customer service people to more easily assess the desires of customers or to consult with producers to focus their product offerings on consumer-valued features. Service specialists may then apply this support tool to better interpret


customers’ desires and accurately satisfy them in order to generate the greatest value at the time of sale. Essentially, workers are placed in situations in which they can interact with prospective customers-to observe, inquire, or simply be available to learn about customers’ desires-and respond effectively to their wishes.

To be done well, so as to maximize the value generated, this type of work requires workers with special abilities. To learn what is truly preferred by customers, and the product and service features to which customers assign greater value, it is necessary that interactions with customers include genuine interest and concern.

Likewise, the resulting action taken will need to genuinely reflect the customer values expressed. The way the customer is treated, what is done with the information, and the follow- through with the customer are again key to developing the relationship. If these are poorly handled, the relationship is automatically diminished.

These skills apply equally well to “internal” customers- employees within the enterprise we work for who look to us for the services we provide-and to the “external” customers who purchase the products and services provided in the marketplace.

IMPLICATIONS FOR E NTE RPRl s E

The goal of standardization that was once the unquestioned foundation of enterprise strategy has been tempered somewhat by the opportunity to create greater market value by customizing products and services to address the needs and wants of individual customers. The trend seems set that future growth will be built as much on customizing products and services to meet specific needs of consumers as it will be on standardizing when this approach continues to make economic sense.

Even the economics of scale itself has been called into question as it becomes clear that substantial market value can be created without it. Enterprise success is no longer tied to the need to produce and distribute vast quantities of products and services. Rather, it is dependent on the ability to produce and distribute more of what consumers value.

Efforts to understand consumers and provide products and services for which they are willing to pay a premium will require enterprises to have a much closer relationship with consumers

62 H IJMAN P E KFOKM A N C t CON S l J LTI N G

than ever before-a challenge that may be better met with a smaller scale.

New technology has redefined the foundation of effective enterprise strategy-from the goal of absolute standardization to one of providing the blend of standardization and customization that creates the greatest market value. The term mass cwtomiza- tion was adopted to describe this new strategy, though to explain the strategy in terms any businessperson can appreciate, the author of Mass Customization: The New Frontier In Business, Joseph Pine 11, prefers to quote Nissan Corporation’s manifesto: “Any volume, any time, anybody, anywhere, and anything [6] .”

Standardization Creates Inefficiency

Understanding these concepts, we can better see how standardization creates inefficiency in today’s economy. Any time a product or service does not meet the specific desires of a customer, then potential value is wasted in that transaction. In addition, the opportunity is created for some other enterprise with better knowledge or greater ability to customize just the right product or service to increase the value received by the customer in future transactions.

Effective measures of enterprise efficiency can no longer be stated simply in unit costs, with the goal being their reduction. Today’s more relevant measure of enterprise efficiency is value- added. Furthermore, the potential for knowledge and service workers to create value is predicated on their ability to incur costs at their discretion when to do so increases customer value and, in turn, value for the enterprise.

Knowledge Workers Require Discretion to Maximize Value-Added

Efficiency is best achieved when workers can seek ways to create the highest possible value-added and incur costs necessary to realize maximum value-added from available opportunities, not by minimizing spending from allocated budgets. Value-added includes costs in its calculation, so efforts to maximize value- added are assured of making the most efficient use of available resources. To employ knowledge and service workers and not give


them the resources which will allow them to maximize value- added does not make economic sense. Their principal ability- informed discretion-will be wasted.

Scale will continue as an important strategy to leverage the assets of enterprise, but the scale of greatest importance has shifted away from product volume or number of customers to the scale of relevant and timely knowledge an enterprise has regarding its customers and potential customers and the value it can create in the marketplace with this knowledge.

N E W APPROACHES TO T H E DESIGN A N D MANAGEMENT OF WORK

The dramatic shift that industry has experienced-shifting away from its paradigm of standardization and scale and moving to one of customization and value-creates the need for a new approach to the design and management of work. A new approach is more critical in enterprises whose industries reflect these trends, and less so for those continuing to provide products and services much as they did fifty years ago.

The Means of Production

Since about 1980, employment increases have been largely confined to the sectors of the economy in which knowledge workers are involved in producing value through knowledge. The dramatic increase in the proportion of knowledge workers over the last 100 years has been matched by a proportionate decrease in the number of production and logistics workers.

Knowledge and service workers face several challenges not experienced by production and logistics workers. A particular challenge is the fundamental difference in the nature of this work. In knowledge and service work, the worker, not a machine, is the means of production.

Production and logistics work generally separates labor from the means of production. As a result, effective labor requires strict conformity to standardized production processes for the efficient coordination and support of machinery that produces value. For knowledge and service work, the individual mind is the principal tool for the creation of value. And unlike production and logistics


workers, who were once asked to leave their ‘‘selves’’ at the door when reporting for work, knowledge and service workers must bring to bear in their work as much of themselves as they can.

In knowledge and service work, workers are the production capacity, not something added to it. The work is inherently a human process that is not machine-replicable. Though technology can support these workers, it cannot replace them. Whereas technology supports production and logistics workers by maximizing scale, volume, and speed, technology supports knowledge and service workers in maximizing differentiation, customization, and effective value creation.

Computers and other equipment lack the human abilities essential to perform knowledge and service work-perception, imagination, empathy, concern, sensitivity, judgment, desire, will, and so on. Thus knowledge and service work is not compatible with standardization and mass production.

Knowledge and service roles have substantial knowledge and skill requirements. Workers must stay abreast of relevant technological advances, and they often have to apply their methods in combination with other specialists in order to create valuable output. Unlike the assembly of parts, knowledge and service work requires a uniquely human effort-teamwork-which is characterized by understanding and cooperation.

The Design of Work and Organizations

Several new approaches to the design of work and organizations are illustrated in Figure 3-5, created based on the analysis of organizations by Henry Mintzberg [7].

As indicated, industry and market forces are requiring organizations to become more responsive and decentralized in their operations. This requirement is changing organizations-particularly those whose operations involve knowledge and service work-through the adoption of new work designs.

These work designs-professional work, entrepreneurial work, and team work-are not entirely new. However, in recent years we have come to understand more clearly the dramatic differences required for these work designs if management is to maximize the value-added of this work. A review of each and comparisons among them (and to machine work design) bring to light a new

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66 HUMAN PEI1tORMANCF CONWLTING

level of specialization possible in work design, and the opportunity to further maximize the value-added that people in these roles can create.

0 Machine Work Design (traditional production and logistics work) 1. Functional design with proven methods 2. Rule-based and efficiency-focused 3 . Control through standardization of work 4. Work is best designed for machines, processes, and tech-

nology-and is supported by people

1. Process design with learned competence 2. Classification-based and proficiency-focused 3 . Control through standardization of skills 4. People work best independently and in narrowly defined

0 Professional Work Design

roles 0 Entrepreneurial Work Design

1. Emergent design with time-based urgency 2. Worker-based and results-focused 3 . Control through standardization of norms 4. People work best as a large team to complete emerging

tasks 0 Team Work Design

1. Network design with role flexibility 2. Need-based and synergy-focused 3. Control through standardization of performance goals 4. Work is best designed for people and is supported by

Fully optimizing the value-adding potential of any work requires that its design be matched with the objectives and culture of the enterprise, the nature of the work required, and the worker(s) involved. The fact that most companies do not have the expertise for redesigning work to optimize its value-added is a concern expressed throughout this book.

machines and technology

T H E CHALLENGE AHEAD

Making improvements in the performance and productivity of knowledge and service workers-salespeople, engineers, nurses, service technicians, machine operators, administrative specialists,

KNOWLEDGF WORKERS A S THE MEANS OF PKODIJCTION 67

and others-will not be easy and will require radical changes in the structure and systems of organizations. Management must lead and support these changes, and though it is in employees’ best interests to support such initiatives, management can expect many employees to resist these changes simply to preserve that which is familiar. To be successful, management will need to enlist the support of staff functions to facilitate these initiatives.

If managers are to manage knowledge-based organizations, the practice of management must advance dramatically. Traditionally, management has deflected organization management to layers of supervision and to staff functions such as human resources and training, whose approach has been to standardize the treatment of all workers-placing a greater priority on administrative efficiency than workforce performance and productivity.

To manage knowledge-based work effectively, management will need to find ways to successfully facilitate and support the achievement of maximum performance and productivity by every responsibility-driven individual and group within the organization. Management’s challenge is twofold:

1. Unlearn its traditional “command and control” methods (mechanized work systems) that were appropriate for the unskilled and semiskilled work of machine bureaucracies, in which knowledge was centralized in a few top executives.

2. Redirect the suboptimizing influence of staff functions that continue to attach greater importance to administrative control than to value-added.

Policies and practices that stand as barriers to improved performance and productivity, however well intended, can no longer be tolerated if organizations hope to remain competitive. If management’s objective is to optimize the value contribution of its knowledge-based workforce, then all supporting staff functions (e.g., human resources, information systems, security, and training) will need to make this their priority as well. Rather than continuing to enforce policies and practices originally established to maintain the order and discipline required by mechanized production systems, the raison d’gtre of staff functions will be to find ways to create value through improved support and facilitation of organizational performance and productivity.

68 HUMAN PERFORMANCE CONSIJITING

RE F E R E N c E s

1. Drucker, P. F. Post-Capitalist Society. New York: HarperCollins, 1993. 2. Webster’s II New Riverside University Dictionary. Boston: Houghton

Mifflin, 1988, p. 435. 3. Luhrnann, L. Social Systems. Stanford, CA: Stanford University Press,

1995. 4. Sakaiya, T. The Knowledge-Value Revolution: Or a History of the

Future. Tokyo: Kodansha International, 1985, pp. 27-31. 5. Peppers, D., and Rogers, M. The One to One Future: Building

Relationships One Customer at a Time. New York: Doubleday, 1993. 6. Pine 11, J. B. Mass Customization. Boston: Harvard Business School

Press, 1993. 7. Mintzberg, H. Mintzberg on Management. New York: The Free

Press, 1989.

C H A P T E R 4

Managing T to 1 ncrease

Productivity

Productivity is the ultimate predictor of business success. Productivity is defined as the value of goods and services produced divided by the amount (hours, wages, etc.) of labor consumed in the process. Essentially, it is a combined measure of the effectiveness (value created) and efficiency (labor consumed) of human work.

Since 1980, improvements in productivity in production and logistics industries have advanced the United States from a position of decline to renewed world dominance [l]. However, production constitutes an increasingly smaller proportion of the U.S. economy-employing less than 20 percent of the workforce. Knowledge and service industries now employ more than 70 percent of the workforce but have been unable to sustain increases in the productivity, notwithstanding massive investments in information technology. By all accounts, the potential for increases in the productivity of knowledge and service workers represents a substantial opportunity for enterprise, yet industry statistics suggest that this opportunity remains untapped.

One of the factors complicating this lack of achievement is management’s persistence in using training as a principal tool for improving performance and productivity. As discussed in Chapter 3, training is effective with production and logistics workers, yet much less so with the knowledge and service workers that make up the majority of the workforce.

69

70 HUMAN PEIIFOKMANCE CONSUITING

A second factor has to do with the increased complexity of increasing the productivity of knowledge and service workers. This work is inherently more complex, more dependent on human performance, more dependent on broad forms of worker support, more contingent on management’s priorities, and it is produced with methods virtually opposite to methods successful in improving the productivity of production and logistics work. All of these are subject to management’s control, yet they represent concerns about which management is not well informed or experienced.

The untapped potential for increasing productivity represents a substantial challenge for management and a substantial opportunity for human performance consultants. As instruments of management for the purpose of improving human performance, these consultants can become a unique resource by capitalizing on this potential.

TRAINING Is NOT T H E ANSWER

The achievement of increased productivity is management’s responsibility; however, management now relies too fully for its accomplishment on the capabilities of training. Learning is not the challenge. Moreover, managers often confuse training with learning, losing sight of the fact that training is an attempt to control-to standardize workers in the approved way to d o their work-and doesn’t lead to innovation and the creation of new knowledge, which is the lifeblood of knowledge and service specialists.

Knowledge and service workers learn best when they are performing, facing challenges, and achieving objectives. Classroom activities can be helpful, but only if they closely resemble the actual work situation and if there is support o n the job to transfer what is learned in class into full capability a t work. In addition, the workplace challenge to support the potential for innovation in knowledge and service work generally exceeds the resources of training practitioners.

Though many organizations make a significant investment in training, the support provided by this investment does little to meet the performance and productivity improvement needs of organization members. Workplace training activity is frequently

MANAGING TO ”CREASE PRODUCTIVITY 71

limited to formal classroom programs that attempt to standardize basic knowledge and practices, and is further limited to basic- level instruction-hardly sufficient in breadth or depth to support specialists working with diverse technologies and disciplines to achieve higher levels of performance and productivity. This is not to say that the current level of investment is necessarily too low, just that it is not used for support initiatives that are truly helpful.

This deficiency in support should not be surprising, since workplace training was conceived in the late 1800s to standardize the work of unskilled and semiskilled workers. Workplace training was, and still can be, a very effective method for organizations to support the standardization of work processes, outputs, skills, and norms for the purpose of achieving coordination within a hierarchy, such as in government services, regulated industries, high-risk situations, etc. Also, training is a key design parameter in all work considered professional, such as accounting, medicine, engineering, law, etc.

Even in these cases, however, particularly in organizations that are less bureaucratic, training can be ineffective because standardization has become less acceptable and appropriate in postindustrial organization designs. Standardization is also less effective in organizations consisting largely of knowledge and service specialists, and in companies which emphasize diversity, empowerment, high involvement, responsibility for quality at the source, teamwork, self-direction, and other organizational characteristics that imply individual responsibility, discretion, and initiative- taking. This comes as no surprise to executives who were unsuc- cessful attempting to use training to drive empowerment, quality, or participation in their organization’s culture.

Knowledge and service specialists are responsive to standardization that is required by their professions. One of the characteristics that make these specialists “professional” is their acceptance of responsibility for their own knowledge, skills, performance, and development needs. Accordingly, it is not practical for an organization to provide training that goes beyond support for elements of work and behavior that are appropriate and strongly desired by a large segment of the organization. Because most of the work in organizations today is professional or almost professional-each specialty having its own technology


and practice skills and requiring the standardization of certain work processes, outputs, skills, and norms-companies must find more effective and efficient alternatives than training to better satisfy the extensive learning and performance improvement needs of organization members.

MEETING T H E PRODUCTIVITY CHALLENGE

Strategies for Production and Logistics Work

In production and logistics industries, productivity and quality are increased primarily through the elimination of workers. During the past twenty years, robots have increasingly displaced assembly-line workers, and information technology has essentially displaced supervisors and middle managers. For an investment equivalent to the one-year cost of an industrial worker’s salary and benefits, the industrial robot can produce roughly twice as much. Not only is the work quality of robots consistently higher than that of workers for the replaced functions, but it is not affected by factors such as disagreements with management, illness, and strikes.

Already there are so-called “factories of the future” that have no production workers-the basic manufacturing process is totally automated. Workers are involved only to “supervise” the machines, which is knowledge and service work. Fanuc, the world’s leading manufacturer of robots, has taken the elimination of production workers even one step further in its plants; there are no workers, not even supervisors, on the factory floor. All machine and material operations are automated. The productivity and quality of this production work no longer depend on workers.

Though total automation is not possible in most logistics functions as it is in factories, information technology is clearly having an impact. Computers, communications, and robotics technologies are used throughout transportation and distribution industries: package and equipment tracking, baggage handling, automatic ticketing machines, telephone response systems, etc. Likewise, we can expect automation to replace many of the production and logistics functions that support knowledge and service industries.

MANAGING TO INCREASE PRODUCTIVITY 73

Strategies for Knowledge and Service Work

The opportunities for performance and productivity improvements in knowledge and service work exceed what we have experienced in production and logistics work. Furthermore, the achievement of these improvements will occur very differently. The human capabilities that make knowledge and service work effective are not subject to the same strategies.

People are the means of production for knowledge and service work, and human capabilities like perception, empathy, understanding, caring, desire, life experience, creativity, technical expertise, and so on cannot be replaced through automation. The opportunity for improving the performance and productivity of these workers will come from enhancing their effectiveness in these areas.

Human Resource Systems

Currently much of organization design places a priority on administrative efficiency rather than performance effectiveness. Human resource systems are standardized to maintain current policies that support standardization. These systems were conceived at a time when our knowledge regarding human performance was limited to thinking of people as spare parts for the enterprise machine, and when it was assumed that the same treatment of every situation was optimal. These systems actually suboptimize worker performance in knowledge and service work.

Let’s look at the case of a large industrial distribution firm that has been successful with a wide range of entrepreneurial activity, reorganized to let new business units make their own policies and systems for human resources. Initially, HR adminstrators were transferred to the business units, presumably to maintain the traditional systems. Before long, these people were outvoted, so to speak, regarding the maintenance of the old systems, and they were replaced with new systems (staffing, compensation, performance management, and employee development) that better fi t the business unit. In every instance, the units were better served, and most of the firm’s long-standing human resource problems were resolved. Once it was clear that the HR administrator would

not be able to dictate policy to the business-unit managers, as was the practice beforehand, they either retired or transferred to other positions. Today, the business units of this company operate without a designated HR representative. The responsibility now belongs to the business unit head, and the work is performed by managers and staff that report to her.

The goal for any organization support system should be optimization of performance, not administrative efficiency. In several organizations for which we have evaluated the alignment of support systems with performance objectives, the performance gains realized by unique systems to meet the specific needs of business units were immense.

In some cases, these systems should provide standardization . . . but only when standardization optimizes performance. In other cases, destandardization is better, so more discretion is provided to managers to optimize work performance and productivity.

After limiting decision-making to top executives, dramatic changes in the marketplace in the 1980s led to companies almost frantically trying to push authority down to workers closest to the customers- giving more autonomy to plant managers, sales people, and engineers-and bypassing gatekeeping staffs altogether. Rigid structures began to crumble at the best-managed companies. Replacing them were leaner, more fluid organizations, with fewer levels of management and more direct lines of communication between the top and bottom. Instead of relying on entrenched specialists, companies looked to key managers to solve immediate problems.

Shared Responsibility

The need to continually increase productivity makes it an important objective of all employees. This need requires that everyone in the organization be committed to process-level innovation-the principal method of increasing productivity- which, in turn, necessitates the rethinking of how task-level work is accomplished and the creation of new ways to work with greater effectiveness and efficiency.

Achieving the goal of continuous innovation is contingent on leadership. Though productivity improvement is highly contingent on people-requiring human ingenuity, affecting the design of human work, and depending on the support of employees-it is


an abstract concept not often measured at the individual performer level, and thus often difficult for people to comprehend and effect.

Executives and managers have to establish productivity improvement as a prominent organizational objective for it to receive proper attention from their employees, who are characteristically ingenious and efficient, and are therefore likely to do as little as possible to get a job done [2]. A corporate strategy to achieve organizational competitive advantage provides the needed context. Without such a manifesto to capture the concern of employees, one can assume that this priority will receive little direct attention.

Organizational support for increasing productivity in turn establishes a context for all employees to strive to achieve high levels of individual performance at work. Focusing the organization on a constant challenge to increase productivity establishes a ubiquitous concern for innovation at the process level of work, and this concern often generates a corresponding need to redesign task-level work that improves performance.

Efforts to increase productivity will frequently result in performance improvements at the same time. However, it is unacceptable for performance improvements to reduce productivity or for productivity increases to reduce performance levels. With- out the integration of these two objectives, people often do not grasp the distinctions between these important interventions, and each is then easily accomplished, to the detriment of the other. (In Chapter 9, Figure 9-2 will clarify the relationship between task-level interventions to improve performance and process-level interventions to increase productivity.)

Innovating Processes for Increased Productivity

As you undoubtedly know if you have ever worked in a bureaucratic organization, vast resources are consumed unpro- ductively by what goes on between functions and between people to coordinate the work processes in organizations. Bureaucracies are designed purposely with tightly structured systems and procedures in order to provide for the standardization, specialization, and control of the organization itself. As a result, the challenge to redesign organizational processes to minimize the consumption of unproductive resources calls for virtually everyone in organizations to find better, more efficient ways to work together.

76 HIJMAN PERCOKMANCE CONSULTIN(;

Organizations can meet this challenge by accomplishing the following:

0 Reengineering Business Processes Employees are organized into cross-functional teams to focus on the redesign of important business processes. A process is defined as a series of tasks or steps that receive inputs (materials, information, people, machines, and methods) and produce outputs (physical products, information, and services) designed for specific purposes. These cross-functional teams then design from scratch new high-performance processes that (1) produce product and service outputs that delight customers, (2) optimize the utilization of resources provided by the marketplace, and (3) restructure the relevant parts of the organization to optimize the process output.

Management must generate a supportive climate that values innovation, learning, and change. This objective is accomplished only by genuine efforts to involve employees, encourage their empowerment, create a shared vision, provide clear performance expectations and nonpunitive feedback, provide learning resources, and reward performance and contribution.

0 Creating an Environment for Znnovation (i.e., learning)

Though processes will differ somewhat from industry to industry, and even from company to company within an industry, there are four core processes upon which the success of companies depends:

1. Product-development process 2. Order-generation process 3. Order-fulfillment process 4. Customer-service process

All other processes, such as human resources processes, management processes, information systems processes, and legal processes, exist to support and measure the success of these four core processes.

ACHIEVING A RADICAL REDESIGN OF WORK

Since World War 11, the emphasis on increasing productivity has been directed toward factory labor, although it has been a


steadily declining part of the entire U.S. workforce since the peak of wartime production. After the war, we witnessed the rapid expansion of white-collar employment as organizations continued to expand.

Coupled with the decrease in factory labor, this great increase in white-collar jobs has precipitated a dramatic shift in the makeup of the workforce in the past 50 years. Furthermore, a rapid expansion in technology has added sophistication to almost every area of white-collar work, so that these white-collar workers are now the knowledge and service specialists that dominate the workforce.

Improving the productivity of knowledge and service workers will be a greater challenge yet. Unlike the success achieved in increasing the productivity of factory and transportation labor- a respectable four percent increase compounded over the past 125 years-the greatest gains are likely to come from changes in the work environment rather than changes in the tasks themselves [3].

These gains can be attributed to the very different nature of this work, which, when compared with work in previous generations, is based more on acquired intelligence, cognitive ability, relationship skills, and discretionary effort. Taylor’s strategies for improving the efficiency of machine-like factory labor in the 1920s have already proven themselves ineffective with today’s more sophisticated workforce.

The reengineering initiative of the 1990s is just the beginning of monumental changes that will take place in the workplace in the coming years. It focuses work design on the process that best achieves the performance objective, rather than on the design and control of individuals or tasks.

Reengineering focuses principally on restructuring the organization to align work and workers so the best possible performance and productivity can be achieved. Typically, such restructuring involves a redistribution of tasks, information, and people to facilitate a new, more efficient process.

When this radical redesign of work is accomplished in a positive environment by people insulated from the threat of job loss, and notwithstanding task and job changes for just about everybody, then the majority of employees agree that ( 1 ) such restructuring makes sense and (2) it is well overdue for most of the work that goes on in today’s organizations. These prerequisites


are important, however, and their omission easily explains much of the trouble that firms have encountered with their reengineering efforts. Only savvy leaders have avoided reengineering failures by recognizing the importance of organization members who have an exclusive capacity to provide these key forms of support to reengineering initiatives:

0 Design support-to combine their individual perspectives

0 Support for change-to generate their support for the changes

0 Implementation support-to simplify, speed up, and assure

and talents in a collaborative team effort

that are required

effective implementation

Though people are natural learners in terms of their inborn capabilities, they are reluctant to innovate more productive ways of doing their work or to initiate other changes for the sake of their firms when such actions only increase their feelings of insecurity. Moreover, many people become accustomed to their current way of working and prefer for it to continue without change. These tendencies suggest, then, that the resistance management is witnessing is a t once natural and a response to the overall climate of the organization.

In many organizations, management has failed to accurately assess employee attitudes toward organizations and managers, drawing the unwarranted conclusion that employees are far more positive than they are in fact. Management’s attempts to get organization members to support reengineering and to work as teams on this challenge have in many cases consisted of only authority-based direction and resource support-hardly motivation for insecure employees to initiate changes that will either increase their work requirements or put them out of work.

In the organizational climate of many firms, leadership is more likely to draw the response of people “going through the motions”-with no substantial work being done, or even less. Adding to this predicament, the mid-level managers to whom most employees look for direction and motivation are more at risk than other segments of the workforce. These managers have little to gain and much to lose, even further reducing the chances for successful reengineering.


The reengineering of work continues, though only critical performance areas are receiving attention. The great challenge that firms are experiencing with this initiative reduces the competitive pressures successful reengineering efforts will create in industries. A t some point in the future, every aspect of organizational work can benefit from such redesign. However, this transformation can happen only if management figures out that this work is dependent on people and can be accomplished only in a generative environment that promotes learning, continuous change, and professional development.

Energizing Organizations

The performance, productivity, and competitive advantage of organizations-whether we are speaking of the organization as a whole, of groups, or of individual employees-have become much more essential to the success of any enterprise. For executives and managers, organizations are no longer a simple concern for good human relations. Each individual employee in an organization either adds to or subtracts from the outcome, and therefore creates the margin of success or failure in accomplishing the objective of the enterprise.

The primary purpose of organizations is not simply to exist, to provide jobs, or to achieve any social purpose; organizations exist to produce results.

Not inconsistent with this definition, organizations also help people to meet their human needs and to achieve their human goals, which is precisely why people are willing to focus themselves on the accomplishment of their organizations’ tasks [4]. With the evolution of our postindustrial society, however, the increased prosperity and sophistication of the U.S. workforce have gradually shifted the nature of people’s orientation toward work- essentially changing what people need and want for their services.

Daniel Yankelovich makes this same assertion in his pro- vocative text, New Rules: Searching for Self-fulfillment in a World Turned Upside Down. He explains that people have advanced from their prior “instrumental” view of work, in which work is simply a way to earn a paycheck, to a more “sacred” view, in which people seek more intrinsic benefits [S]. If we compare the knowledge workers of today with the factory workers of 1900,

80 HUMAN PtKl ORMANCE CON\IIITING

or with the “organization men” in post-World War I1 bureaucratic organizations, we can appreciate that what they as humans need from work has evolved to a point well beyond a paycheck- they have effectively climbed Maslow’s hierarchy to such needs as respect, accomplishment, and self-development.

Correspondingly, when people feel that their needs are not being met, that they are not receiving support for the achievement of their goals, or that they are being mistreated, they withdraw- either psychologically or physically, either passively or aggres- sively-and withhold their services from their organizations. Reciprocity-pure and simple. And this reaction is no less true for managers than for any other employee group. Reciprocity is standard market-system behavior-behavior that managers can well understand, behavior they can predict, plan for, and accommodate. Reciprocity does not give managers control in an authoritarian sense, but it certainly is control in a rational sense. Reciprocity is simply a mutual o r cooperative interchange of favors, rights, and privileges, or two or more people exchanging what they have for what they want or need. This is precisely how the market economy was described by Adam Smith in The Wealth of Nations in 1776-and how it still works today (61.

The difficulty managers faced in the 1950s-when it became clear that money and benefits alone could not buy the full effort of employees-was in not understanding what employees wanted. This lack of understanding was innocent enough, as employees were equally unable to express their own evolving needs, wants, and desires in market-rational terms. At that time, the only real insight into employee-dissatisfaction problems was provided by developing psychosocial theories-hardly the type of facts managers were accustomed to using as their basis for decisions. With only recommendations for innocuous human-relations training in hand, and Elton Mayo’s hypothesis that a little more attention paid to employees would solve the problem, management disingenuously agreed to the “training” solution, consequently launching the still- common practice o f prescribing training for just about every kind of people problem experienced in organizations [7].

The Drive for Self-Betterment

The key to productivity improvement that management was searching for can still be found in the wisdom of Adam Smith

MANAGING TO INCREASC PRODUCTIVITY 81

in a basic premise for the market system that he presented in The Wealth of Nations. Given the proposed economic freedom of workers, business owners wondered what would provide the “motive force” for individuals to learn new skills and develop their capabilities so they could meet the needs of their employers.

Smith determined that workers would be motivated to develop the needed capabilities because of an innate human characteristic- the drive for self-betterment. Smith further asserted that advances in production technology would support workers by continuously improving their productivity, and that these gains would then yield increased wages and an ever-higher standard of living for workers.

Self-betterment, which must be defined by each individual, has demonstrated itself to be a predominant motivating force for people. This is even more the case among the somewhat more logical knowledge workers in today’s workforce. Decisions regarding education, careers, employment, roles, and assignments cor- relate very highly with their perceptions of potential for both immediate and strategic self-improvement.

Effective support for employees to develop their competencies to do the work required to accomplish the goals of the organization will lead to the realization of the goals of both the company and employees . . . to the extent that these competencies enable employees to better themselves. The net effect is a quid pro quo. For the organization, the goal is effective performance in creating customer value and continuous increases in productivity. For the employee, the goal is progress up the ladder of Maslow’s “hierarchy of needs”-from survival, to safety, to affection, to esteem, to self-actualization, the ultimate goal [ 81.

The Learning Organization

What constitutes effective support for employees to develop their competencies? When I ask this question of people with the responsibility to provide such support, why do I get a different answer from when I ask randomly selected employees the very same question? From executives, managers, and even human resources and training practitioners, I get responses restricted to such topics as tuition reimbursement programs, performance management programs, course catalogs, and other traditional initiatives intended to support employees. From employees, however, the responses are as varied and unique as the people

themselves. “Let me talk to the manufacturer of this machine”; “somebody help me figure out a way to work with those people”; “help me get into a master’s (degree) program’’; “my supervisor’s brilliant . . . I’d just like to get some of his time”; and “evening and weekend courses so I don’t have to take time off’’ are a few responses that I have received.

Notice the difference? Employees invariably define their support needs in terms of improving their performance in their immediate work, and yet each has somewhat different needs. The people in charge of providing this support see these needs differently, and in terms of solutions that were conceived years ago for a very different workforce.

Typically the support that is provided consists of highly structured initiatives, entry-level knowledge and skill support, and one- size-fits-all training programs. This approach may be easy to administer, but it cannot come close to meeting the development needs of an organization of knowledge and service specialists. Training was designed as a n intervention to provide standardization-not to support development. People develop through experience, through doing their work to meet ever-increasing standards of performance. Furthermore, people have unique performance-support needs and different learning styles; they cannot be well served with the same solutions. What’s more important-supporting employees o r having a program that can be easily administered?

Effective performance support for employees has to be defined in terms that maximize the development of every individual in the organization. Anything less will result in suboptimal performance and will a t some point not be competitive. Therefore, in order to satisfy everyone’s development potential, management must provide an overall work environment that consistently supports the highest potential performance and productivity. This environment is an organizational system that is dedicated to helping people improve their performance and develop their capabilities-with learning occurring as a natural hyproduct of work itself. Because effective support can be accomplished only by providing a work environment that facilitates learning, then the quality of learning that takes place is affected by the kind of organization it is. The organization should not be seen simply as a place where training activities are provided; rather it should be

MANAGING TO INCKEASE PRODUCTIVITY 83

envisioned as an environment that increases productivity because it supports learning and performance improvement [9]. This is the “learning organization” that astute leaders now strive to create.

Productivity Is Discretionary

There is no escaping the fact that increases in productivity are a competitive necessity for all organizations. Such increases must occur if firms are to survive, to invest in new products and services, and to increase their employees’ wages. For organization members to meet this formidable challenge, however, executives and managers will need to acquire a new appreciation for their organizations and learn how to develop a more conducive environment for work. For organization members to provide their discretionary support, management must provide them with a work environment that is at once secure for the hard-working individual, innovative in its ever-changing approach to work, and supportive of individual employee performance development.

The real lesson that needs to be learned about the individual employee’s contribution to organizational productivity is that it is discretionary. Management that looks with antipathy a t an oversized and uninspired organization has only itself to blame. If management could ask why employees are more often motivated to withhold their effort than to give it enthusiastically, they would hear-as I often do-the explanation of perfectly rational behavior that is adapting to processes, structures, and systems that retard rather than inspire a productive response. The process for increasing productivity is not downsizing. Rather, it is the process of creating a “turned-on” organization.

E STAB L I s H I N G 0 RGAN I ZAT 10 N A L COMPETITIVE ADVANTAGE

Nothing is more fundamental to any enterprise than its need to be competitive in its chosen markets. Because of this strategic importance, the responsibility for competitiveness is most often retained by the senior officers of a corporation. Only they have the range of options to assure that the enterprise takes every action required to sustain its business competitiveness, or to advance its competitive position a t the expense of a careless competitor.

Achieving organizational competitive advantage is contingent on this aim becoming a corporate strategy.

Since the late 1970s, strategic management theorists have ascribed competitive advantage to external characteristics inherent in a firm’s industry o r markets. The underlying premise was that the market or industry imposed selective pressures, and firms that successfully adapted to those requirements would survive and grow, whereas those that did not adapt were doomed to failure. This thinking reduces implicitly managerial competencies and organizational effectiveness to elements of labor input [lo].

These theories have weakened considerably in recent years, because they failed to explain how the long-term effectiveness of individual companies contributed significantly to their achieving significant advantages in inherently weak industries and markets. New views of competitive strategy that emerged in the mid-1 980s suggested that firm-specific organizational factors:

CI Contribute to profits independent of economic factors. 0 Contribute a t twice the profit rates of economic factors. 0 Are available to firms without limitation for their industry

0 Have superior advantages as a sustainable competitive o r market.

advantage.

The objective of competitive advantage as a corporate strategy in turn establishes a context for the objective of increasing organizational productivity. Sustaining a persistent effort to increase productivity, particularly in light of the large number of failed reengineering attempts that have been documented in the business press, will require the emphasis given only to corporate strategy.

The Concept of Corporate Strategy

Without question, the highest function of an executive is leading the continuous process of molding the attributes of an organization that generate, govern, and achieve its purposes. Commingled with this lofty role is the formidable challenge to keep quarterly earnings increasing regularly to support stock

MANAGING TO INCKFASE PRODUCTIVITY 85

prices and the stakeholders who provide their capital to the enterprise one day at a time.

Granted, this challenge often calls for improvisatory action. However, it also calls for effective strategic management, or there will be no ace to play when a competitor slips, the market opens up to the company’s way of thinking, or management needs to cover a sizable investment that went sour. Companies cannot back aggressive growth, turn around a bad quarter, and keep the customers “wowed,” as Tom Peters says, without considerable effort on the front end. No such organizations exist without first having a corporate strategy to create this result.

Corporate strategy is the result of the complex functions and responsibilities of the senior management in a company; the crucial problems that affect the success of the total enterprise; and the decisions that determine its direction, shape its future, and produce the results desired. According to Harvard professor Kenneth R. Andrews, these executives are faced with an unending array of concerns, including the choice of purposes, the development and recognition of organization identity and character, the unending definition of what needs to be done, the mobilization of resources for the attainment of goals in the face of aggressive competition or adverse circumstances, and the definitions of standards for the enforcement of responsible and ethical behavior [ 111.

As senior executives know only too well, the determination of suitable objectives provides focus and makes possible a rational choice among alternatives. They are peppered with proposals, suggestions, and inferences promoting every conceivable goal and activity. For executives to do their work, they must formulate an appropriate pattern of purpose and policy and must determine how plans will be converted into results. That is the role of strategy.

There are functional strategies to guide functions, business strategies to guide product and market choices, and corporate strategies that are comprehensive enough to incorporate both. Corporate strategy also encompasses longer-term and more- pervasive goals of the company, issues that require the single- minded convergence of individual effort throughout the organization. Well-designed corporate strategy distinguishes every company from its competitors and establishes a competitive advantage. By arriving at such clarity of purpose, executives are then able to


focus their full attention, energy, and influence on its fulfillment. Powerful ideas that do not find their way into corporate strategy never seem to get the support required by the organization to have them take shape.

A central role for corporate strategy is to keep business managers focused on the same chosen paths for achieving the goals of the enterprise. Clearly articulated corporate strategy provides guiding clarification of the character and purposes of the company to all its operations. Likewise, corporate strategy is intended to focus the technical knowledge of staff-support specialists in the same direction as management, rather than in the direction of their undoubtedly more interesting concerns with technical functions. How else can management direct the effective use of science without actually needing to know it? Quite probably, there is no better way.

A Strategy for Organizational Advantage

Take, for example, the suggestion that enlightened and opportunistic companies should have an explicit corporate strategy to transform the organization into a competitive advantage. Perhaps it is necessary to be even more specific-to say that the advantage will be low cost, product quality, extraordinary service, or some other superlative-so there is no question how managers should mold the future organization. The danger in too narrow a specification, however, is that it produces a lopsided organization that is superior in the target feature but otherwise weak. No, it seems important for the focus to be on well-rounded performance. The best way to achieve this goal would be to have several measures that capture the balance desired . . . just as it is wise to balance sales-volume objectives with profit-margin objectives.

To determine whether having a corporate strategy to transform the organization into a competitive advantage is a smart decision, consider the impact of not having such a corporate strategy. Not having a corporate strategy for the organization is more likely the case for most companies, anyway.

First, we can reasonably surmise that not having such a strategy would lead even the most business-wise and well-intentioned managers to give no more interest and attention to the organization as a point of focus and accountability than they would to office space, furniture, or any other reasonably abundant


resource necessary to operate just about any business. Strategy creates focus, and the absence of strategy assures the absence of focus. Particularly when personal security is involved, expectations drive perception and behavior. Just as no manager wants to be the one who forgets about the company’s strategy or performs poorly in working toward a strategic objective, it makes little sense for managers to emphasize issues that are not considered important by the people making the big decisions. Mature corporate executives are aware of the focusing potential of measured and financially rewarded goals; this is not a new concept.

Second, we can surmise that it is impractical to make every goal a corporate strategy-the idea is to focus everyone on a few key success factors that, if accomplished, will achieve the company’s purposes. Is the goal of organizational competitive advantage sufficiently potent that reaching it should be one of the few key strategies of any business? Though no one is capable of answering that question for the management actually accountable, we can examine some recent research to help in making this judgment. Current strategic management literature offers insight into the factors that contribute to establishing a sustainable competitive advantage. Three studies highlight several of these findings:

0 Organizational factors are independent of economic factors in determining firm performance and contribute twice as much in firm profit rates.

Gary Hansen and Birger Wernerfelt, professors a t the University of Washington and the Sloan School a t MIT, respectively, examined the firm profitability of 60 Fortune 1000 firms and were able to separate the profit contribution based on organizational factors (e.g., structure, motivation, decision-making, leadership, and other factors making up organizational climate) from the profit contribution based on economic factors (e.g., industry return-on-assets (ROA), market share, and organization size). They determined that these two factors were independent, and that the organizational factors contributed about twice the variance in firm profit rates. They conclude, “Our findings have important managerial implications. Top management teams that can demonstrate excellence in both areas-competitive posi- tioning in the marketplace and building organizational


context-will do significantly better than those that strive for more unidimensional concepts of excellence. Addi- tionally, it would suggest that the critical issue in firm success and development is not primarily the selection of growth industries or product niches, but is the building of an effective, directed, human organization [iz].” Human and organizational capital resources are uniquely suitable as a source of sustainable competitive advantage.

Jay Barney, a professor at Texas A&M University, examined the suitability of various firm resources to establish sustained competitive advantage. Previous research in this area by Michael Porter of Harvard, and others, attributes advantage to the characteristics of industries, making the implicit assumption that firms within an industry or strategic group- ing are identical in terms of the resources they control and the strategies they pursue. This assumption fails to factor in any consideration of a firm’s distinctive attributes and the ways in which they contribute to competitive position. Barney’s research questions this omission, and further establishes the following criteria for determining sources of sustainable competitive advantage:

Valuable for improving efficiency and effectiveness Rare among competitors Inimitable due to one or more of the following: Unique history of the firm Advantage not understood by competitors Advantage based on social complexity Unique beyond strategically equivalent substitutes

When the three principal categories of firm resources listed below are evaluated with these criteria, the unique suitability of human and organizational capital resources becomes readily apparent:

Physical capital-physical technology, plant and equipment, geographic location, and access to raw materials. Human capital-training, experience, judgment, intelligence, relationships, and insight of individual managers and workers in a firm. Organizational capital-formal reporting structure, formal and informal planning, and controlling and coordinating

MANAGING TO INCREASE PKODUCTIVITY 89

systems, as well as informal relations among groups within a firm and between a firm and those in its environment. As Barney concludes, “What becomes clear is that firms

cannot expect to ‘purchase’ sustained competitive advantages on open markets. Rather, such advantages must be found in the rare, imperfectly imitable, and non-sub- stitutable resources already controlled by a firm. Managers are important . . . for it is managers that are able to understand and describe the economic performance potential of a firm’s endowments. Without such managerial analyses, sustained competitive advantage is not likely [ 131.’’

0 Firms have the capacity through managerial proactiveness to create organizational competencies that generate a sus- taina ble competitive advantage.

Research conducted by Augustine Lado (Cleveland State University), Nancy Boyd (University of North Texas), and Peter Wright (Memphis State University) demonstrates the limitations to strategic thinking that ascribes competitive advantage solely to market and industry characteristics, and their findings substantiate the conclusion that a firm’s distinctive organizational competencies are, in fact, superior sources of sustainable competitive advantage. Drawing on research in interpretive sociology, cognitive psychology, and behavioral economics, Lado, et al., establish that firms have the capacity to create and grasp opportunities, and in particular recognize managerial proactiveness in influencing business performance. They identify four sources of firm-specific distinctive organizational competencies not subject to imitation:

Managerial competencies and strategic focus-the articulated strategic vision becomes the fulcrum around which the firm’s unique competencies may be developed . . . and effective implementation depends on the extent to which a firm’s managers acquire and mobilize specialized strategic resources that may yield superior returns relative to those of competitors. Resource-based competencies-these consist of core human and nonhuman assets, such as rent-generating skills and capabilities, that allow a firm to outperform rival firms over a sustained period of time . . . and are causally ambiguous, impeding competitor imitation.

Transformation-based strategies-these may encompass innovation-the capability to generate new products and processes faster than competitors can-and organizational culture-the capacity for organizational learning, change, and adaptation. Output-based competencies-these include the firm’s physical outputs that deliver value to customers, and more important, the “invisible” outputs, such as reputation for quality, brand name, and dealer networks, all of which provide value to customers.

Their findings indicate that managerial competencies and strategic focus are largely responsible for attracting specialized resources that are synergistically combined, transformed, and channeled to clients in ways which generate a sustainable competitive advantage to the firm. This strategy requires managerial investment in causally ambiguous organizational competencies that are characterized by the following:

Tacitness-competencies that are not easily explained o r

Complexity-competencies that involve interrelated skills

Specificity-competencies in skills that are not easily

replicated.

and knowledge.

transferable to alternate use.

Lado, et a]., conclude that “a strong organizational culture unleashes human creative potential to generate a continuous stream of ideas that may be translated into new products and processes. At the same time it permits realization of scale economies and incremental learning by encouraging and rewarding “volition, imaginativeness and drive” in the implementation of efficiency- and innovation-enhancing strategies. Top management contributes to the ongoing delivery of value by specifying standards of performance, communicating these clearly and unambiguously to employees, establishing appropriate hiring, training, motivation, and reward systems for developing core skills, and boosting employee morale-developing and nurturing their firms’ idiosyncratic competencies that inhibit imitability 1141.

MANAGING TO INCKEASE PRODUCTIVITY 91

This research, as well as other studies too numerous to mention, points to a consequential shift in our knowledge about the sources of sustainable competitive advantage. It has become clear that management is not restricted to accepting the competitive standing that is implicit in the merits of the industry or market of the enterprise, as was believed in the earliest days of strategic management thinking. In fact, potential sustainable competitive advantage is most readily found in the unique characteristics of effective organizations.

As it becomes clearer to a growing number of senior management teams that organizational competitive advantage may ultimately be the only truly sustainable competitive advantage, their interest increases. Perhaps the prevailing issue is not whether a firm should have a corporate strategy for organizational advantage. The more relevant question may pertain to selecting the organizational areas in which to first improve performance and productivity. Sales, front-line services, middle management, or staff services- all are likely prospects for a significant ramp-up in competitive performance in any company. The principal ingredient that is necessary is for management to make it a strategic priority-a corporate strategy.

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12. Hansen, G . S., and Wernerfelt, B. “Determinants of Firm Per- formance: The Relative Importance of Economic and Organizational Factors.” Strategic Management Journal 10( 1989): 399-41 1 .

13. Barney, J. “Firm Resources and Sustained Competitive Advantage.” Journal of Management 17, l(1991): 99-120.

14. Lado, A. A., Boyd, N. G., and Wright, P. “A Competency-Based Model of Sustainable Competitive Advantage: Toward a Conceptual Integration.” Journal of Management 18, 1 (1992): 77-91.

C H A P T E R 5

Creating Financial Value

Initiatives to improve human performance are generally associated with “soft” results that are not easily converted into financial terms. These results may include better-informed employees, increased motivation to implement a new policy, greater cooperation between work units, and countless possible changes in employee behavior. To the extent that “value” is ever assigned by management to these results, it is for “nonfinancial value”-value that isn’t reflected in management’s financial measures of performance. Even so, these initiatives often require sizable financial investments in terms of employee time and incurred expenses.

Without management’s perception of the direct financial effects of human performance initiatives, its interest in this form of support is generally marginal and limited to times when discretionary spending is possible. And if management is under pressure to create a measurable improvement in performance or to show immediate financial results from expenditures, it is more likely to bypass human performance initiatives to implement market promotions, budget cuts, or even downsizings, which management knows will have an immediate and obvious financial effect.

Understanding management’s perspective, we can appreciate why managers are reluctant to consider major initiatives for improving performance. When all that can be shown for so-called “improvements to human performance” are soft results, is it surprising that management discounts their financial potential? Why are we dumbfounded when staff functions specializing in organizational issues aren’t given respect and resources that reflect their true potential?

93


PROVING VALUE

I recently sat in on a presentation about proving HR’s value at a conference of HR professionals at which I was speaking. The speaker, a prominent professor in the human resources field, was advocating that HR leaders and practitioners (including training, organization development, and all traditional HR specialists) needed to promote their function’s value contribution, in spite of the fact that this value is not easily measurable in financial terms.

In his presentation, the speaker first tried to convince the audience that HR’s efforts do in fact affect financial performance, and he stressed the point that nonfinancial value is important and frequently considered by financial experts. To make his points, the speaker used several stories, graphs, and lists that anecdotally demonstrated HR’s potential influence on organizations and, in turn, an organization’s implied impact on business performance. Among his evidence, he discussed the following:

0 A major retailer’s turnaround strategy that was based in part on management’s confidence that employee attitudes and behavior drove customer satisfaction, which in turn drove the company’s financial performance. An authoritative study of 968 companies indicating that a company’s “market value per employee’’ was higher by as much as 20 percent, coincident with increased “HR intensity” (a metaphor for high involvement in the business).

0 An Ernst & Young study on the use of financial and nonfinancial data by stock market analysts, which indicated that long-term earnings forecasts are more accurate when based on nonfinancial data.

0 Research indicating that institutional investors assess 35 percent of a firm’s value on the basis of nonfinancial factors such as these: - Leadership - Quality of management - Strength of corporate culture - Effective executive compensation - Product development capability - Strategy execution - Ability to attract talented people - Market position

CREATING FINANCIAL VALUE 95

He did a great job. If I hadn’t already been convinced of HR’s impact on business performance, his argument would have done it for me. And, as best I could tell, most members of the audience of HR loyalists were convinced, too. And the examples of nonfinancial value certainly sounded important. It was a good argument. We were sold.

Then again, we were probably sold on this point even before the presentation. All that was different was that we had some great examples to reinforce our claims.

Don’t Sell Yourself Short

I have witnessed serious problems with practitioners trying to use the “nonfinancial value” argument. First, it reinforces management’s current perspective that human performance initiatives have only a marginal impact on operations. If this is true in the case of your work, then you need to become better focused on improving performance o r to design initiatives with greater operational impact. Ineffective initiatives can be fixed. Why reinforce management’s concerns? Such an approach only con- firms their perceptions concerning the limitations of your work. Don’t go there. You don’t need to.

Second, this reasoning supports management’s perspective that human performance initiatives have limited financial value, which is simply not true . . . or doesn’t have to be true. Yes, experience indicates that when initiatives are designed for purposes other than adding financial value, their typical effect is to reduce value. However, when initiatives are designed to add financial value, they can fulfill this purpose. Nonfinancial value is just another way of saying “no value’’ in the minds of many operations managers. Why argue for irrelevance when your work can be as relevant to management’s objectives as any work in the organization?

Following the presentation described earlier, I would have bet there wasn’t one person in the room, including the speaker and me, who could, based on this argument, successfully convince an operations manager (who wasn’t already persuaded) to invest in a major performance improvement initiative. Certainly not the managers with whom I routinely work. They aren’t likely to be too concerned with an expert’s loose claims to results, hearsay about what this or that company did and achieved, or what some academic research study indicated.


Nonfinancial value is not what you want to stand for. Consider instead a strategy that gives managers what they want-real value-added-and gets you the respect and resources you deserve.

Give Managers What They Want

To get managers to seriously consider your performance improvement initiatives, give them specific information concerning the initiative you propose:

0 Your observations, based on a review of their challenge. 0 Factors you think are driving the performance problem or

opportunity. 0 Alternative strategies you think can be effective in improving

performance. 0 Requirements for implementing each alternative strategy

effectively (e.g., cycle time, expense, and management support). 0 Anticipated improvements in management’s performance

measures for each alternative strategy. 0 Comparison of the value-added for each alternative strategy 0 Your recommendations to management.

This approach amounts to giving managers what they want (but may never have requested). Equipped with this information, managers are able to make informed judgments regarding your carefully-thought-out alternatives for dealing with their challenge. Proposals that contain any less information either reduce management’s options unnecessarily or weaken your credibility as a professional, or both.

In particular, management needs to know the projected financial effects of initiatives so it can be determined whether the investment makes good financial sense. As enthusiastic as we practitioners can get about our desire to be helpful, the potential we see for improvement, and our ideas for cultivating this potential, we need to appreciate that these managers have a business to run and a reputation to maintain. Their job isn’t to create service opportunities for us.

Management doesn’t know what you do about your field, and thus managers can benefit from your knowledge and judgment. However, if prior attempts to get such information from you were


not well handled, in management’s opinion, there may be a reluctance to ask again. Don’t wait to be asked. Provide the information that a prudent decision maker should have when making such a decision. Soon management will grow accustomed to receiving information and will depend on you to provide it.

Many practitioners have had experiences with managers who have agreed to, or even requested, initiatives born of only vague intentions or consisting of elements with limited potential to impact worker performance. Not wanting to make excuses for these managers, I attribute this approach simply to their not fully realizing the futility that results. In these cases, I suggest you do what you can to develop management’s thinking in order to clarify their objectives and determine better methods for achieving them. Ill-conceived performance improvement initiatives may keep practitioners busy with work, but they also maintain practitioners’ reputations for work that falls short of measurable impact and value-added.

Importance to Practitioners

I have learned that operational objectives for performance improvement initiatives are as important to practitioners as they are to managers. How else can practitioners grasp the ultimate business purpose of the initiatives they are asked to implement? How can practitioners select strategies and methods appropriate for the situation? How will practitioners know when they have achieved their clients’ objectives? How can practitioners receive credit for their achievements if there was no objective in the first place!

Furthermore, my experience has convinced me that only when human performance initiatives yield measurable improvements that managers can link to important financial gains will these investments be treated in a manner similar to management’s investments in facilities, equipment, and technology. If managers cannot link their challenge to an operational goal and estimate the value-added for its successful achievement, then I am reluctant to become engaged in providing performance improvement services.

In my experience, if a manager is unable or unwilling to provide such an objective, then I have to question whether the manager is entirely committed to the initiative I am being asked

98 HUMAN P~RFORMANCF CONSULTING

to provide. I wonder whether the client has followed through with the required leadership and support during the project, or whether the manager has an ulterior purpose and is unwilling to confide in me. Both of these conditions make it particularly difficult to implement a successful intervention and to achieve substantial results.

By proposing and developing initiatives with direct linkage to improved operational performance and an accepted estimate of potential value-added, practitioners greatly increase management’s interest and support and dramatically change their role within the enterprise. Doing so isn’t as difficult as you might think.

ACCOUNTING FOR T H E VALUE OF HUMAN RESOURCES

Standard accounting rules assign no value to human resources on the enterprise balance sheet. Management and analysts typically acknowledge the importance of workers but ignore human capital in their analysis of performance and financial strength because there is no generally accepted way to quantify it.

For the production and logistics work that dominated industry for many years, the principal role of employees was labor, which was adequately accounted for as a current expense. The value created by this labor was captured in the value of products, which were accounted for as inventory and ultimately sold. Capital investments in machinery accounted for the principal means of production. Overhead costs were customarily allocated across a company’s operations or products on the basis of “direct labor cost.”

As an operating expense, the goal regarding labor was to minimize its cost. Continuous efforts throughout the 1900s to reduce labor costs by automating production and logistics processes eventually shifted most labor costs to capital investments in equipment (large-scale machinery, sophisticated equipment, robots, control systems, etc.). And as labor jobs disappeared, this new technology led to the creation of many new roles for better- educated and more-capa ble knowledge and service workers who were required to design, operate, and maintain these more- complex processes and to provide a rapidly developing economy with a myriad of new services.

More than any other factor, the greater potential to create value through knowledge workers rather than machine labor has


increased the importance of accounting more accurately for the financial potential (asset value) of human resources.

Value Creation Potential

The importance of better accounting for the asset value of human resources can be demonstrated by examining how inac- curately enterprise value is reflected by the current method for reporting Net Assets (including Current Assets such as cash, receivables, and inventory, plus Fixed or Long-Term Assets such as property, buildings, and equipment). Table 5-1 compares the Replacement Cost of Net Assets (a reasonable estimate of current market value for Net Assets) and Market Value of five well- known companies. The one with the highest net assets is Exxon (now ExxonMobil), a petroleum exploration, refining, and retailing operation with a massive investment in assets (land, buildings, equipment, inventory, etc.) required to bring its products to market. The one with the lowest net assets is Coca-Cola, a beverage marketing, franchising, and promotion operation that

Table 5-1 Comparison of the Value Premiums of Major Companies

Market Net Net Asset Value Value Premium Value* Assets* Replacement Premium (% of Market

Company ($B) ($B) Cost ($B) ($B) Value) ~ ~~

Exxon 125 43 107 18 14% GE 169 31 77 92 54% Intel 113 17 43 70 62% Microsoft 11 9 7 18 101 85% Coca-Cola 148 6 15 133 90%

*Based on 1996 financial data published by the respective companies. Key: Market Value ($B)-Average market price of a share of common stock

multiplied by the average total shares outstanding. Net Assets at Cost ($B)-Current and fixed assets at book (balance

sheet) value. Net Asset Replacement Cost ($B)-Net Assets at cost multiplied by 2.5

to compensate for effects o f accumulated depreciation and inflation. Value Premium ($B)-Market Value less Net Asset Replacement Cost. Value Premium (%)-Value Premium ($B) divided by Market Value.

1 0 0 HUMAN PERFORMANCE CONSIILTING

has comparatively few assets and depends on a global organization of knowledge and service professionals to produce its market success.

Subtracting the Replacement Cos t of Net Assets from the Market Value of each company indicates the Value Premium for the enterprise-that amount (or proportion) of the Market Value that exceeds what the company could get just by liquidating its Net Assets. Value Premium is the ultimate measure of enterprise success-the one measure that best indicates management’s effectiveness-because it reflects that part of the Market Value that management has created.

Formulas used in Table 5-1: Exxon Example:

Net Assets x 2.5 = Replacement Cost of $43B x 2.5 = $107B Net Assets ($B)

= Value Premium ($B)

= Value Premium (%)

Market Value - Replacement Cost $125B - $107B = $18B

Value Premium ($B) + Market Value $18B + $125B = 14%

Note the trends in Net Asset Replacement Cost and Value Premium as the list descends. What do you see? What is different about these businesses that might explain the variation in these values?

As you move down the list, you will note that the companies are progressively less involved in production and logistics work and focused more on knowledge and service work.

0 Exxon and GE are production and logistics operations- pure and simple. Note the higher investment in Net Assets, thus their lower Value Premium.

0 Intel also has production operations, but these are highly sophisticated processes that generate premium profits based on the company’s product innovation and market leadership (knowledge work).

0 Microsoft and Coca-Cola focus almost entirely on knowledge and service work. Microsoft has created a technology- based market franchise for its Windows@, Office@, and other


products, from which it earns premium profits. Similarly, Coca-Cola has created a market franchise (knowledge work) for flavored-water products (very low cost) and utilizes outside firms (local bottling companies) to do the required production and logistics work these products require.

From this example I hope you can easily recognize that the goal in enterprise management is to invest as little as possible in Net Assets in order to generate the highest Market Value possible, a goal which can most readily be achieved by leveraging knowledge and service work to increase value-added to the highest level possible.

To compare management quality, you would need to compare companies within the same industry-Exxon to BP or Coca-Cola to Pepsi-because of the fundamental differences in the leverage potential of different industries. As Table 5-1 indicates, production and logistics companies have much less value creation potential (relative to the financial capital employed), whereas knowledge and service companies have substantially greater value creation potential. Since value creation is the work of knowledge and service workers, this figure is a measure of their success, just as it is a measure of management’s.

Rethinking the Importance of Human Resources

As a result of the shift from production and logistics work to knowledge and service work (outlined in Chapter 3) and the tremendous potential people have for creating value, it has become more important than ever to consider and account for the value-generating capability of people as an asset.

Most economists agree that the increased value of the human contribution that is characteristic of knowledge and service work will ultimately drive a change in accounting rules to somehow capitalize human resources. By adding human capital to balance sheets, management and shareholders will gain a clearer picture of company assets, including a more accurate representation of the significance of human resources as assets that create value.

Even without this formal change, many executives are rethinking the importance of human resources as a factor in financial

102 H U M A N PERFORMANCE CONSUITINC;

performance. Recognizing the value of human resources is particularly important in knowledge and service industries, where people are the means of production and represent the major value-generating capability of the enterprise.

If workers are to be treated as assets-human capital-then the only acceptable measure of success in this challenge is improved human performance that in turn creates improved financial performance, which increases enterprise value. Thus the role of management, and of every knowledge and service worker, too, is to create value-to act in ways, make decisions, and implement initiatives that generate positive financial effects. Savvy management understands that this result can be achieved only with a strategy for better managing its organizational resources for improved human performance.

Legitimate efforts to implement such a strategy will require two obvious changes in companies’ fundamental approach to creating and managing human performance improvements:

0 Concentration on creating measurable improvements to human performance that in turn translate into positive financial effects (value-added)

0 Substantially more effective methods for improving the performance of knowledge and service work and workers throughout all operations

Performance improvement practitioners in particular will want to assure their preparedness for these changes and take a leadership role in guiding their organizations to them. What better ways could there be to make a greater difference?

VALUING PERFORMANCE IMPROVEMENT INITIATIVES

Value is a measurement of worth in usefulness or importance to the possessor [l]. In the context of enterprise management, value refers to the monetary worth of a company’s outstanding common stock to stockholders (the price at which holders of common stock are willing to exchange their stock for cash). In the same way, value refers as well to the monetary impact of assets, decisions, alternatives, or other factors that impact the stock’s worth .

CKEATING FINANCIAL VALUE 103

Management’s Role

Management, as the stockholders’ agent, has an obligation to best serve the interests of stockholders, thus to make decisions that maximize the value of the company as reflected by the company’s stock price. (Similarly, public sector managers are obligated to maximize probable utility to their constituencies.) This obligation applies to managers throughout an enterprise and instills in them a persistent concern for the financial effects of their decisions.

The importance of competent management to the success of every enterprise cannot be overemphasized. Through their decisions and other actions, managers either create value (value- added) for their company or diminish its existing value. These financial effects are determined primarily by the impact managers have on the performance of company operations because, for common stocks, current earnings and expected future earnings are the keys to value. As a result, management is concerned with comparing the value-added of alternative courses of action and selecting those with the highest value. At higher levels of management, this process can entail sophisticated financial calculations to project the financial effects of alternatives, whereas managers closer to day-to-day operations may be more likely to trust their experience and judgment, using only a minimum of financial data.

Managers a t all levels are better able to make appropriate decisions when staff functions propose project alternatives with a financial analysis of projected value-added. Likewise, practitioners can create greater value for their clients when they focus on value-added as a measure of their success. Value-added directs practitioners to find ways to improve workforce performance and productivity-in effect helping employees create greater value with their services-thus helping management to improve operations performance and create positive financial effects.

Focus on Value-Added

Value-based performance measures gained immense popularity among top executives during the 1990s. Hundreds of major companies adopted “value-added” (also called “economic value- added,” or “EVA”), and specific formulas for calculating it, as a


single simple measure that gives an accurate picture of shareholder wealth creation [2]. The more obvious benefits of adopting value- added as a company-wide performance measure are as follows:

0 It establishes a common measure that can be applied to all

It creates a common goal for all initiatives, including those

0 It permits a more accurate comparison of the worth of

operations and work activity [3].

to improve human performance.

various alternatives.

Senior executives report that value-added has proven to be an effective measure of the quality of managerial decisions: constant positive value-added results over time indicate an increase in enterprise value, whereas negative value-added results imply value depreciation [4]. Thus a focus on value-added leads managers throughout an enterprise to act more like owners-making better spending decisions, seeking opportunities for performance improvement, and considering long-term as well as short-term benefits [Sj.

As the use of value-added as a measure of performance spreads through organizations, it is replacing other financial measures that are less well coupled with enterprise-level performance. Cost- benefit calculations, profit margin, expense targets, functional measures, return on investment, and qualitative measures are being translated into straightforward measures of value-added [ 61.

Reporting value-added performance measures offers special benefits for staff functions. Long represented only by their performance in managing expense budgets, staff functions are now able to leave behind their traditional “expense-center” image by adopting value-added as a primary measure of performance. The work of staff functions often creates substantial value, but without calculating and reporting it as value-added, this work generally receives much less credit than it deserves.

Value-Added: A Tool for Evaluating Initiatives

The objective of all staff functions is to provide important specialized support to enterprise operations. If a staff function is not able to provide enough support to convince senior executives of its benefit to the operation, then its funding will likely

CREATING F I N A N C I A L VALUE 105

be limited and inconsistent, or its continuation may even be in question.

And what about the future of the staff function that provides support but is not recognized for its contributions? O r the function that is directed to provide support that is not likely to be effective or to add value?

For all these situations, value-added provides quantitative evidence of the benefits of staff initiatives before they are agreed to. Thus value-added can serve as a tool for selecting among possible initiatives the ones that add the greatest value, improving proposed initiatives to increase their value to target levels, and, for current work activity, evaluating it for its value-added and either revising or eliminating work that does not add sufficient value to justify the effort.

D ET E RM I N I N G VALU E-ADD E D

Though complex formulations for value-added are often used by senior executives to accurately measure enterprise performance, such detail is unnecessary for staff functions to generate an accurate picture of the value created by their initiatives. The goal should be to apply the basic concept of value-added, but without the labor-intensive calculations for investment risk and cost of capital. For performance improvement initiatives, it is more appropriate to use a simplified methodology that requires little time or technical ability to apply and yet is reasonably accurate and has the respect of management.

Formula for Calculating Value-Added

A formula for calculating the value-added of performance improvement initiatives is shown in Table 5-2. It is a straightforward method for calculating the financial effects of any initiative to improve performance. This formula is simple to understand and calculate, and the measures of value-added that result are easily supported by management. And, because the calculation is made prior to implementation, the formula provides helpful guidance to practitioners when they are conceptualizing possible initiatives, and to managers when they are making the decision to proceed.


Table 5-2 Formula for Calculating Value-Added

Formula: PV ($Impact) x % Contribution - Sum (Costs)

Financial Value- Added

Terms: Impact-Probable impact of the initiative on current performance

$Impact-Projected financial effect of the performance improvement

PV ($Impact)-Today’s cash value o f financial effect for a reasonable

% Contribution-Your function’s proportionate contribution t o these

PV ($Impact) x % Contribution-Your function’s value contribution Sum (Costs)-Total of your costs for the initiative

measures

initiative

number o f years

results

Unlike accounting-based measures of performance such as margin, profit, and return on investment that are calculated following transactions, value is a finance-based measure of performance that is projected in advance of a decision to act. Finance, which is grounded in economic theory, uses market forces (i.e., likely worth to willing buyers) to establish the amount of value. This makes value a subjective estimate of worth that is determined by customers.

Since customers are exchanging their money for whatever is being purchased, so the theory goes, they determine the value, or worth, of everything. Sellers can ask whatever price they want for what they are selling, but the exchange value is ultimately determined by what a customer is willing to pay.

In organizations, managers are responsible for performance and for any initiatives to improve it. Therefore the customers for performance improvement initiatives are the managers responsible for the organization units that are served. And as customers, managers determine the actual value of initiatives.

Initiative value is equivalent to management’s judgment of the financial effects of the impact to operations projected for the initiative. This is not simply an arbitrary judgment, though, as several forces influence managers to use good judgment.


Managers have a tendency to be conservative in valuing initiatives by their sense of responsibility, their knowledge of experience about what is reasonable, and the open scrutiny to which value- added estimates are subjected. Simultaneously, managers are inclined to be generous in their judgments because practitioners aren’t interested in providing support services in situations in which the work is not highly valued.

As the formula prescribes, managers most often set values rationally, though subjectively, based on a legitimate estimate of the financial effects of improvements to operations that are created through the initiative. However, practitioners can influence the values that are ultimately set for their initiatives by working in partnership with management during the value-setting process.

When first working with value-added as a measure of effectiveness, practitioners may feel that the use of “nothing more than management’s impression” to set the value of their initiatives seems too unspecific, and perhaps even unfair. They may resist this approach, thinking, “Why does management get to decide the worth of my work?” As a personal suggestion to these practitioners, I would ask them to consider for a moment the fact that this is the same kind of judgment that we as consumers impose on every retail business-stores, restaurants, and services- when we decide whether something is worth the indicated price.

Benefits of the Calculation

If management ultimately determines the value of initiatives, then why should practitioners bother with this calculation? It is helpful for several reasons.

By working through the steps of the calculation, you arrive at your own rational estimate of the value-added. This process requires that you think through the problem or opportunity and consider just how successful the proposed initiative is likely to be.

Forming your own estimate of value before your client’s attempt to do so allows you to use this experience to assist the client in setting an accurate value. This practice will also develop in you a keen insight into a client’s business and will eventually equip you to point out opportunities to add value in situations that a client had not yet recognized. This approach also simplifies

108 HUMAN PERFORMANCE CONSIIITING

decisions about which situations and initiatives are most important when the available resources cannot resolve all of them.

Early estimates of potential value-added help you set an appropriate level of investment for dealing with a problem or opportunity. And it encourages you to think through the initiative design to make certain you have configured the optimal mix of features to create the highest possible value-added.

Furthermore, making this calculation prepares consultants for discussing the situation and proposed initiative in management’s terms. It allows meaningful dialogue concerning alternative strategies and their likely impact, and it helps secure management’s commitment to support your function’s work. In addition, once you are confident of your calculations, you will want to report your function’s work in value-added terms to better demonstrate its relevance to the enterprise.

Value Calculation

I t takes seven steps to calculate value-added using the formula in Table 5-2, and with experience the process can take as little as a few minutes to complete. The first five steps focuses on determining the financial effects of the impact on performance, the sixth step determines the “consumption of resources” figure, and the last step makes the final subtraction that computes “value-added. ”

The formula requires you to have already pinpointed a significant problem or opportunity and estimated the extent to which you think you can improve the performance in this situation.

Step 1: Forecast the probable impact [lmpact]. Determine the probable impact of the proposed initiative. If the situation involves a potential for a higher level of performance, then what performance level will the initiative at ta in? Or, if the situation concerns a problem to be solved, then what shortfall in performance will be recovered? The improvement should be noted in whatever performance measure is customary for that function, role, o r task.


Step 2: Project the financial effects [$Zmpact]. Estimate the projected financial benefit for the enterprise if this performance impact is realized. Think through the chain of results that are reasonable to expect from the projected improvement in performance. (Figure 5-1 illustrates the linkage between initiatives and the financial effects of performance improvement.) Follow the projected initiative results through to the point at which a result is convertible into monetary terms (sales increase, expense reduction, margin improvement, etc.).

Present value (PV), which is the current cash value of long-term financial benefit, encourages consideration of financial benefit when it extends beyond one year. The part of the financial value that accrues after the first year needs to be “discounted” at a rate that approximates management’s desired earning rate for the enterprise (often referred to as a “hurdle rate”). You may know this number for your enterprise, you may want to ask someone on the finance staff or any senior executive, or you can simply use 15 percent until you learn differently. The higher the discount rate, the more conservative your present-value calculation (i.e., lower value-added).

To make this calculation, I recommend that you refer to present-value tables that are found in every basic finance text, or use your computer to make this calculation. (Spreadsheet programs like Microsoft@ Excel@ have an easy-to-use PV function).

Consider the importance of your function’s role in the initiative, compare it with the anticipated contribution of other functions involved, and then estimate what percent of the credit can reasonably be attributed to your contribution. There is no precise way to do this, so simply try to look at the situation through your customer’s eyes. Would the customer estimate your function’s contribution in creating the projected results at 20 percent, 50 percent, or even higher?

Step 3: Calculate present value [PV($Zmpact)].

Step 4: Foretell your contribution [ % Contribution].

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Step 5: Calculate your function’s financial value contribution [PV($Zmpact) x % Contribution]. Multiply the present value of the projected financial benefit times your function’s percent contribution to calculate the value that can be attributed to your function’s efforts.

Add all the costs that your function will encounter, much as you would construct a budget and estimate the expenses for anything.

Step 7: Calculate your function’s value-added [Financial Value- Added]. Subtract your costs from your financial value contribution to determine the value-added that is reasonably attributable to your function.

Step 6: Add the initiative costs [Sum (Costs)].

Creating Financial Value

Understanding this formula, practitioners can visualize two principal ways to create value: by making a substantial positive impact on performance (e.g., achieving enterprise objectives, increasing productivity, and improving customer satisfaction) and by reducing the resources that are currently consumed in continuing performance improvement initiatives (e.g., elimination or reduction of any expenses that do not add commensurate value).

The opportunities for improving performance are virtually unlimited and typically receive more attention. However, consultants should not overlook opportunities readily available to add substantial value by reducing non-value-adding expenses (e.g., reduce training time and travel, eliminate programs that don’t improve performance, and make support systems more efficient).

VA LU E - BAS E D C o N s u LT I N G

Value-added is increasingly used by internal consulting functions to measure the results of initiatives and the function overall [7]. (See the Benchmarking Study Report, Developing a World- Class Consulting Function to Improve Performance and Pro- ductivity, p. 27, in the appendix.)


From my work supporting the start-up and development of internal consulting functions, I recognize that many practitioners’ experience in their initial attempts to use value-added is confusing and uncomfortable. Once conversant with value-added, however, practitioners become advocates for it as a measure of their contribution because it finally gives them:

0 A clear goal for all of their work. 0 Genuine alignment with management’s work.

Greater freedom to design initiatives that can be fully effective. 0 A greater sense of professional accomplishment and satisfaction.

Additionally, using value-added as the focal measure of their work can resolve many of the long-standing concerns that organization support practitioners have experienced with:

0 Insufficient management support for initiatives. 0 Management requests for support that cannot be effective

because it is not appropriate for the challenge. Working in fear that budgets may be slashed and their work cut back at the first signs of a business downturn.

Working in Partnership with Management

For consultants, whether internal or external, management is the customer. Therefore, the value of any initiative is equivalent to the financial benefit it brings to management’s business operation. This is the initiative’s worth to management.

The performance improvement practitioner’s role, then, is to bring solutions to management’s problems, and additional opportunities to improve human performance, that improve the performance of management’s operations. This is the kind of support that management will value most highly. In this context, the practitioner’s role is no different from that of any other service provider, which is to focus on what customers will value. The success of practitioners is weighed by management in terms of the value that is created.

To determine the value to management of any initiative or ongoing service, consultants need to ask management, “What is it worth?” and proceed accordingly. If management doesn’t see


much value in what is proposed, then practitioners need to refocus on initiatives in which management sees substantial value. If you feel there is value-added in some aspect of your work that the client doesn’t see, then use the formula outlined earlier to demonstrate your logic to management.

I recently joined a senior VP of HR in a meeting at which his client, the general manager of a massive call-center operation, repeated a concern that in her operation, not enough qualified applicants were applying for jobs. Apparently the general manager had expressed this concern on several prior occasions, but the VP had always responded with explanations of the great efforts HR was making in an attempt to meet her operation’s needs.

This time I politely interrupted the explanation, which to me sounded more defensive than supportive, to try a different approach. When I asked about the impact of this staffing problem, she went on to say that it was substantial-increased training costs and turnover, reduced product and service quality, reduced repeat business, and probably even damage to the company’s market image. I then asked about the financial consequences of leaving this situation as it was. She replied that she felt it was costing the company $75-12SK per month in training and recruiting costs, $SOOK-$lM a month in lost business, and possibly irrepar- able damage to the company’s image.

We then went to a white board and outlined these estimates in some further detail before arriving a t an estimate of total financial impact of $22-26M (present value). Only then, with the customer’s perception of value clearly in mind, did I suggest that the VP and general manager work together to design an appropriate initiative to solve this problem and realize substantial value-added. They did, and the comprehensive initiative that resulted was able to contain the problem quickly and permanently resolve it within six months.

Value-Based Proposals

If consultants want to be associated with creating financial value, then they need to make value-based initiative proposals. A proposal may require no more than a brief written summary and the calculation of projected value-added for each initiative. Such proposals would summarize the following information:

0 Client name (business unit, department, section, etc., and

0 Project name o r other way to distinguish it from other

0 Description of the challenge (presenting problem or opportunity). 0 Objective of the initiative (how the initiative will respond

0 Description of the proposed initiative (activity, timing,

0 Projected value-added (outline of the calculations).

manager in charge).

initiatives.

to the challenge).

resources, etc.).

Once management recognizes and accepts the value of any performance improvement initiative, the focus shifts to concerns such as the following:

0 When can we get started? 0 What will it take to make this happen? 0 What can I d o to get started?

These questions typically signal the beginning of a cooperative initiative to create financial value.

Reports to Management

Since a consulting function’s worth to management is the sum of the value created by its services, value-added should be a key measure discussed in reports to management. If support functions and practitioners report only activity and expense, then it is easy to understand why they are not often given their due respect.

As resources for creating financial value, consultants can report on all their work in terms of the value created. Starting such a report first requires the systematic calculation of the value-added by every individual initiative or group of ongoing services. Of course, this entails meeting with the customer (management sponsor) for each project and program to determine its value.

The report itself should include a list of all existing initiatives and services, listing them in declining value-added order (highest value-adding services at the top). When consultants prepare their first value-based report, they will likely find that some services aren’t creating value. If that’s the case, they should talk to

C I ~ E A T I N C ~ FINANCIAI VAIUE 115

management about dropping these services and replacing them with work that will add value.

Value-based consulting provides practitioners with a discipline to perform initiatives and maintain services that provide value. In addition, it gives them an opening to discuss with management the enhancement or elimination of services that don’t add value.

Capitalizing Human Resources

The next several years will present great opportunities for consultants and managers because of the continuing shift to knowledge and service work. It will be up to them to unleash the inherent value in this human capital. And the measure of their success will boil down to the financial value of their work.

RE F E R E N c E s

1. Webster’s 11 New Riverside University Dictionary. Boston: Houghton

2 . Blair, A. “EVA Fever.” Management Today, January 1997, pp. 42-45. 3. Tully, S. “The Real Key to Creating Wealth.” Fortune, Sept. 20,

1993, pp. 38-48. 4. Lehn, K., and Makhija, A. K. “EVA & MVA as Performance Measures

and Signals for Strategic Change.” Strategy & Leadership, May-June

S . Stewart, G. B. “EVA: Fact and Fantasy.” Journal of Applied Corporate Finance, Summer 1994, 7(2), pp. 71-84.

6. Clinton, B. D., and Chen, S. “DO New Performance Measures Measure Up?” Management Accounting, October 1998, 80(4),

7. Pepitone Berkshire Piaget Worldwide. Developing a World-Class Consulting Function to Improve Performance and Productivity: A Summary of Findings and Implications from the Benchmarking of lnternal Consulting Functions for Improving Organizational Per- formance and Productivity. Benchmarking Study Report, December 1998, p. 27. (Reprinted in appendix.)

Mifflin, 1988, p. 127.5.

1996, 24(3), pp. 34-38.

pp. 38-43.

C H A P T E R 6

N e w Perspective on Human Performance

In the early twentieth century, business owners and managers crafted their actions based on the principles asserted by Fayol and Taylor for designing work and organizations. These same principles then proliferated in the military and in civilian industry during World War 11, firmly establishing “machine bureaucracy” as the accepted design for organizing and managing work. Then with the publishing of Drucker’s Practice of Management in 1954, management emerged as a discipline-a formal methodology detailing the means of obtaining economic results and dealing with the new and more complex challenges of business organizations.

At that time, machine and electronic technologies, along with financial strength, were seen as the critical competitive resources. People were relegated to a role of adapting in required ways to support a company’s chosen technology.

Performance-the effective satisfaction of customer needs-was designed into machine processes and standard procedures and was not generally subject to human skill. Productivity-the efficient application of human effort-was achieved through work redesign and computer automation. Training-formal instruction to direct and correct workers and standardize their use of the proper skills, knowledge, and attitudes to perform their work-played an important role in controlling work processes and human behavior.

THE NEW WORK OF MANAGEMENT

The development of a global economy, fueled by sophisticated information, communications, and transportation technologies,

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120 HUMAN PERFOKMANCF CON~IJLTINC;

has changed organizations dramatically. Enterprises now depend primarily on knowledge workers, and the corresponding refine- ments in management practices have made management’s work increasingly complex.

Since the 1950s, management’s challenge has undergone considerable change. The emergence of global markets and competitors, information and communications technology, and very-large-scale organizations of well-educated and sophisticated employees, along with the increasingly refined discipline of management, has added significantly to the complexity of management’s work. In contrast to its early focus on the strategically planned achievement of objectives utilizing capital, labor, and natural resources, management is better characterized today as the systemic and purposeful application of specialized knowledge resources for maximum attainable performance and productivity.

Knowledge Is the Key Economic Resource

Today, knowledge is the key economic resource-not just any knowledge, but specialized and advanced knowledge that is capable of producing economic results, knowledge that proves its worth in financial value. Capital, labor, and natural resources have taken a back seat and can be obtained easily with knowledge and ingenuity.

The New Organization of Specialists

Accordingly, organizations have developed new structures and systems and have a new importance for management. Advance- ments in the technologies and practices for most kinds of work have led to the development of organizations that now consist mostly of specialists-individuals who know more about their own specialty than anyone else in the organization does. Even factory workers, particularly in highly automated production operations, increasingly have more knowledge of their work than their supervisors do.

The organization can no longer be thought of simply as “labor” required to perform the work designed and directed by management. I t has become management’s source of knowledge and

NEW PERSPECTIVE ON HUMAN PERFORMANCE 121

principal transformer of knowledge into value. As predicted by Drucker as early as the 1950s, organizations must now be managed on the basis of responsibility, rather than “command and control,” because of this shift.

New Management Methods

The knowledge-based organization requires that everyone take responsibility for that organization’s objectives, contribution, and, indeed, behavior as well. Thus all members of the organization must think through their objectives and their contributions and then take responsibility for both. As mentioned earlier, Drucker pointed out that there are no “subordinates”; there are only “associates.”

Furthermore, in the knowledge-based organization all members have to be able to control their own work based on clear objectives and feedback concerning their results. All members must ask themselves: “What is the one major contribution to this organization and its mission I can make at this particular time?” In other words, all members must act as responsible decision makers. All members have to see themselves as “executives.”

If managers are to manage knowledge-based organizations, the practice of management must advance dramatically. Manage- ment’s challenge is to unlearn its traditional command-and-control methods that were appropriate for the unskilled and semiskilled work of machine organizations, in which knowledge was centralized in a few top executives. To manage today’s knowledge-based work effectively, management must learn how to successfully facilitate and support the achievement of maximum performance and productivity of diverse groups and individuals throughout the organization.

To deal with people issues, management has traditionally deflected much of this work to layers of supervision and to staff functions, such as industrial relations, human resources, organization development, and training. For machine labor and other highly standardized functions, the application of Taylor’s management principles has improved performance and productivity. For knowledge-based workers, however, these work-design principles have yielded only marginal gains in performance and have proven ineffective in increasing productivity.

THE CENTRAL CHALLENGE FOR TODAY'S MANAGERS

Today, knowledge is the critical resource, and people are the source of value. With their unique capacity to perceive, reason, and make judgments, people provide companies with the means to generate, retain, and apply knowledge-people provide the capability to acquire and convert knowledge resources to value, and to innovate and substi tute when specific knowledge is unavailable or insufficient.

Capitalizing on this potential throughout the past fif ty years, companies have progressively standardized, systematized, and automated production operations to increase productivity- converting unskilled and semiskilled manual work into skilled technician work, and advancing labor roles to knowledge and service specialist roles, where they add greater value. Only recently has management begun to tap this same potential in technical, administrative, and service operations. Increasing the performance and productivity of these specialists is the central challenge facing management.

Rethin king People Management

Management can no longer afford to think of people simply as labor with which to operate a machine, staff a process, or perform a simple task. To be effective, management must rethink its approach to managing people and in particular must recognize the importance, discretionary nature, and greater potential for performance of knowledge-based specialists-people who generate and apply knowledge for results.

Today, with more than 80 percent of the workforce employed in these professional roles, people have become a direct source of the creation of economic value . . . and potentially the source of competitive advantage as well.

Radical Changes Required

Making improvements in the performance and productivity of salespeople, engineers, nurses, service technicians, machine operators, administrative specialists, and other knowledge-based workers will not be easy. It will require radical changes in the structure and


systems of organizations. Management must lead and support these changes and will need to enlist a savvy support staff to facilitate these initiatives.

These efforts will result in a more supportive workplace and a new premise for creating value. Removing the performance and productivity barriers indigenous to today’s work designs will result in greater job satisfaction for knowledge specialists.

The Impact of Technology

Since the early 1970s, we have witnessed an unparalleled expansion of technological development, including information, communication, and transportation technology. These advances have transformed a world of parochial economies into an inextricably linked global marketplace.

New rules for corporate survival and competitive advantage emerged from this transformation, not the least of which was the requirement to continuously improve the quality of every aspect of work. Consequently, advancing technology fueled new performance requirements, along with new tools and more sophisticated methods with which to meet these requirements.

These developments have increased the need for specialization and requisite knowledge for every organization function. Today, because managers can no longer know how to perform the jobs of their subordinates or be there to witness and control their behavior, it is necessary for organization members to exercise greater responsibility for their work and its value contribution to the enterprise.

Management of Knowledge and Service Specialists

Knowledge and service specialists are responsible for what they know and do not know, as well as what they need to know and do not need to know.

Management cannot possibly make these determinations for specialists; management can only be clear in its expectations regarding performance and productivity so specialists can ascer- tain their own needs. Whatever specialists do not know but need to know, they must be responsible for learning. Furthermore, they must also know what knowledge and services they can procure

124 HUMAN PERFORMANCF CONSULTING

from others, and they need to work effectively across all boundaries, inside and outside the formal organization, to access the knowledge and other resources they require to carry out their responsibilities. Once again, management cannot govern these actions. Consistent with their responsibilities, these workers must bring together the requisite knowledge and service to create value.

High-Performance Work Design

Work design, first introduced in the context of high-performance work systems in Chapter 2, must be structured around knowledge- particularly its acquisition, maintenance, application, and regen- eration-to support the innumerable knowledge and service specialists in today’s organizations whose roles consist funda- mentally of the creation and application of knowledge. These organizations are flat in comparison with political hierarchies and are focused on business processes rather than on functions so as to maximize the flow and speed of knowledge transferred between specialists.

The goals of the organization-goals that clearly state objectives and expectations for all specialists-provide needed structure. And, with well-organized feedback, each organization member can exercise self-management by comparing outcomes with expectations. Management’s role is necessarily redefined as providing needed leadership and support.

Support Requirements for Knowledge and Service Specialists

To maintain their competency, knowledge and service specialists must be persistently concerned with learning, focusing both o n their specialist capabilities and challenges and on the objectives, practices, and immediate concerns of the enterprise a t large. Specialists will also be accountable for increasingly higher levels of competency in the core work methods of the enterprise they serve, the level of authority they hold, and the exact role they fulfill.

Looking Ahead

Management has persisted throughout the past century in its attempts to apply a “machine” metaphor to organizations and


human work. This perspective was effective initially, when work consisted primarily of support for machinery and machine-like production and logistics processes. However, this effectiveness has all but disappeared as the nature of work in developed economies has shifted almost totally to knowledge and service work.

The principles that govern the performance of knowledge and service work are not like the principles that govern the performance of machines or machine labor. Because the effectiveness of this new work is based on abilities that are essentially human, natural, and organic-occurring in people as elements of their basic human nature-the principles that govern performance and performance improvement are substantially different from those that were followed when work was more machine-like than human.

Management’s methods for the design and improvement of human work continue to be based on the assumption that the worker’s role is to adapt to machines and machine-like processes and procedures. Training, evaluation, reward, and other popular forms of management control are all based on the behavioral theories of Pavlov and Skinner, which portray people as simple stimulus-response machines. These behaviorist theories presume that the key to understanding human behavior lies in the observation of external events. The environment is the significant factor in determining human behavior, and the consequences of our actions affect subsequent behavior.

Scientific understanding of human behavior has developed far beyond these early theories. Early knowledge-era theories (i.e., cognitivist) considered people as computer-like, rather than machine-like, because of the great capacity of the human brain to acquire, store, and recall information when required. Many in the information technology field still hold to this theory of people, which in part explains why computers have yet to deliver the anticipated productivity increases in people’s work.

Since the 1970s, however, another understanding of people has emerged in “constructivist” theories that explain more accurately and completely the larger human experience. These theories recognize, for instance, that problem-solving is learning based on personal discovery, and that the source of motivation is intrinsic. Thus if people are to excel at problem-solving (i.e., knowledge and service work), they will require a responsive environment in which consideration has been given to the concept that people are active self-regulating systems. Teamwork, participation,

126 HUMAN PERFOI<MANL‘L CONWLTING

leadership, and organizational learning are concepts that have benefited from this “constructivist” thinking.

If all of these theories are accurate, then their underlying assumptions must guide how they will be applied in the workplace. None fully explain human behavior in every context. However, as long as many managers remain unaware of these guidelines and unfamiliar with the effective management and performance improvement methods that have evolved from them, they will continue to use these methods in inappropriate, problematic, and counterproductive ways.

New perspectives on human performance must be considered if managers and organization specialists are to be effective in the improvement of performance and productivity-particularly for today’s organizations of knowledge and service workers. I outline these new perspectives in the chapters that follow.

Systems Thinking (Chapter 7)

One scientific discovery that, above all others, paves the way for performance improvement effectiveness is general systems theory. The importance of this knowledge is not so much in the principles that guide its application, but simply in the new way of seeing things that it provides. This new viewpoint means setting aside many preconceived notions about how things work and how to best solve problems, in exchange for the ability to see the natural order and relational patterns that shape the workplace and the performance of people.

Rethinking Performance Improvement (Chapter 8 )

The predominant methods used in pursuit of improvements to performance and productivity in organizations stem from a machine metaphor for human work and behaviorist (i.e., stimulus- response) and cognitivist (information processing) perspectives of human work behavior. Though these concepts were proven lacking as early as fifty years ago, they persist in the minds of many executives, managers, and organization specialists as fundamental concepts for working with people and organizations. If these beliefs could be tolerated when the roles of people in organizations were limited to parts in a machine-like production process, they cannot be tolerated now because more than 80

NEW PERSPECTIVE ON HUMAN PERFORMANCF 127

percent of the workforce has replaced machinery as a company’s means of producing value. The excessive operating costs of poor performance, low productivity, turnover, poor-quality work, and so on are excessive in most organizations. If this approach hasn’t worked yet, then let’s quit using it.

Humaneered Work Design (Chapter 9 )

If industry and government are to tap the full performance potential inherent in people, then work must shift from a machine- centered to a people-centered design. At the present, “work- around” is the principal work function of most knowledge and service workers, because their jobs and organizations are engineered for machine efficiency. Only when this work is “humaneered” for human effectiveness will industry begin to realize the potential of these workers.

Assessing Performance Challenges (Chapter 10)

The complex nature of human performance requires that managers and consultants carefully consider the contributing factors that restrict current performance levels. Though scientific literature is replete with potentially helpful knowledge that consultants can use, it is virtually impossible to access for practical application. The consultant’s alternative is to make use of heuristics in the form of “frameworks” to focus their analysis. Several reliable and easy-to-use frameworks are discussed to provide examples of their use.

Improving Performance (Chapter 11)

Methods for performance improvement have changed dramatically in recent years, driven primarily by the dramatic shift of work to knowledge and service roles. Though training has contributed substantially to the development of performance and productivity of production and logistics work throughout the twentieth century, it is not an effective method for improving the performance of most workers today. Rather than a single method to replace training, there are hundreds of appropriate methods for improving the performance of knowledge and service workers. The correct method is the one that provides workers with just what they say they need to improve their performance.

CHAPTER 7

Natural Order in Enterprise Systems

Many people, managers and workers alike, quickly perceive cause- effect relationships in the events around them. If we can imagine a possible link between two circumstances, that’s usually enough for some to think they understand the situation and what is causing it.

This is unfortunate because more times than not relevant circumstances are not apparent such that the obvious explanation is always incomplete and may be inaccurate. Equally misleading are effect-cause judgments that suggest that there is one perfect way to achieve a certain result. A better approach for explaining circumstances focuses on identifying the more influential intervening variables in any situation.

Because managers are the determining factor in the design of enterprises, it is important that the human performance consultants who serve them are well equipped to use sound judgment in analyzing situations and recommending organizational decisions. Likewise, managers and consultants must be critical users of information and be prepared to evaluate the usefulness of data, personal observations, informed perspectives, and hearsay as these might apply when assessing situations.

SYSTEMS T H I N K I N G Systems thinking enables consultants to progress beyond simply

seeing events to seeing patterns of interaction and the underlying structures which are responsible for the patterns. And once consultants understand the real foundations of the situations they encounter, they are in a much better position to respond in an enlightened fashion. They are able to react more responsibly, including interaction with the relevant factors creating a situation

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NATURAL ORDER IN ENTERPRISE SYSTEMS 129

in ways that will enhance or improve the situation without creating new and different problems elsewhere.

Peter Senge’s Fifth Discipline contributed greatly toward popu- larizing systems thinking, yet the foundation of the discipline reaches well back into history. Aristotle first came up with the idea that the whole is greater than the sum of its parts [l]. The concepts and principles of systems thinking can be found in the thinking of philosophers, scientists, and writers throughout the years since then. Today there are systems thinking conferences, books, courses, consultants-a full complement of resources to guide practitioners in learning about this vital ability.

Systems thinking is about understanding reality. It equips consultants with the ability to discern some sense of patterns and events so they can better understand the contributing causes to the reality they experience. All of us are taught to think logically- to understand a situation by breaking it into parts-and this approach is effective when the complexity of the situation is limited to just a few variables. However, when we attempt to understand highly complex systems (e.g., people, organizations, weather, and economics) that have literally hundreds of significant interdependent variables, simple logic fails us because the law of cause and effect doesn’t account fully for enough variables. The events we see are really the result of patterns created by these hundreds of interdependent variables reacting in ways we can’t begin to isolate. Systems thinking is seeing beyond what appears to be isolated and independent occurrences to the deeper patterns that create them.

With a broader and more accurate perspective, consultants can see better what is really happening and then take actions that they know are best in the long run. One important result of systems thinking is that it helps us get beyond assigning role credit or blaming others or ourselves for outcomes. Most credit and blame is misdirected, for people are more often simply doing the best they can in the situation (system) they are in. It is often the structure of the system and not the effort of people within it that determines the outcome, and it takes systems thinking to see this.

Such is the lesson of the late J. W. Edwards Deming’s infamous “red bead’’ exercise. In this exercise, Deming simulated the fact that performance improvement is achieved largely by improving work designs and making changes in work systems rather than by taking steps to coerce or motivate workers.

130 HUMAN PEI~FORMANCE CONSUITING

Deming’s “Red Bead’’ Exercise

For this exercise, Deming typically selected volunteers from his audience and assigned them the task of withdrawing only white beads from a tray containing white and red beads, using a special tool designed for that purpose.

They would try, but they could not perform the task. Regard- less of what they tried, they could not prevent red beads from getting in the tool.

Deming would then poke fun at management’s typical efforts to improve performance by taking the volunteers aside and in order encouraging, scolding, training, and offering an incentive to them in an effort to improve their performance.

None of these initiatives could improve their performance, however, because the real problem was work design. The individuals participating and the people watching from the audience typically had an “aha” experience as they came to realize that nothing within the control of the workers could improve their performance. Until the task was redesigned with performance as its goal and the tool redesigned to support this performance, no amount of effort by the worker or influence from the manager could improve the worker’s performance.

It’s the System

For years, managers have incorrectly viewed people as the cause of poor work performance. They persist in their focus on people alone, overrelying on training, rewards, and threats to improve human performance. Deming estimated that 80 percent of performance problems are attributable to organization and work-design issues-the misalignment of processes, structure, management systems, roles, tasks, and resources-with only 20 percent attributable to worker issues. Based on more than twenty plus years of performance-improvement consulting, I agree.

Viewing companies as systems helps to clarify the point Deming made with his red bead exercise. Individuals work within a larger system and carry out roles, perform tasks, and use resources that are defined by and dependent on this larger system. In such a system, decisions and activities over which workers have no influence or control largely define the circumstances in which they work and the


outputs they produce. As a result, workers have very limited opportunity to improve their performance . . . unless they are given some influence over the larger system within which they work.

Impact of Work Design on Performance

The impact of work design on performance is clarified by viewing an enterprise as a complete system made up of nested and interdependent subsystems that are dependent on the market environment in which the enterprise operates. Refer to Figure 7- 1. If you can imagine being an individual worker performing a task in a company (as illustrated in the oval in the middle of the drawing), and then will think of the ways in which your performance is dependent on the circumstances that surround you, this idea should become clearer yet.

This is a helpful way to recognize the influence of work design, the organization, and even corporate-level decisions on the indi-

Market Environment (Economic, Legal, Cultural, etc.)

Strategic Subsystem ( Principles, Mission, and Strategy)

Figure 7-1. Enterprise management process.

132 HUMAN PERFOKMANCE CONSLILTING

vidual worker’s situation. It is precisely because of the strong influence of this hierarchy of subsystems that Deming made it a practice to insist on (1) the CEO being part of the discussion and (2) “quality” being added to the corporate mission statement. He knew that unless focus and concern are expressed in strategic subsystem objectives, efforts to achieve “quality” in the elements of the organizational and work subsystems will fail.

ENTERPRISE STRUCTURE

Enterprise structure is the distinct and inevitable consequence of dividing work for collective effort. Generally evolving over time, enterprise structure is the result of many management decisions that in effect design the enterprise. The system structure of an enterprise emerges as the process of management is implemented (i.e., as strategy, organization, and operations decisions are made).

0 Mission, vision, and specific goals are the centerpiece of any enterprise. The activity of organizations then revolves around achieving these goals.

0 Management provides planning, organization, leadership, and support to the enterprise. Over time, organizations develop systematic plans and standards, which are intended to guide workers toward these goals.

0 Workers who staff organizations then carry out the necessary work activity in order to achieve the enterprise goals. Their work designs often include standardization to support coordination and consistency, particularly when there is communication and decision-making distance between the workers and the goals and/or market.

So, managers plan, organize, lead, direct, support, and control the work of the enterprise they determine the configuration and operational systems of the enterprise. In this sense, it is the management process that produces the whole system we think of as an enterprise.

The Defining Hierarchy

Visualizing the enterprise layers as nested layers of systems, as illustrated in Figure 7-1, portrays the natural hierarchy of influence that results from the management process.


The subsystems, and the elements within each, as listed in Table 7-1, represent the defining hierarchy of a company’s operations. Each subsystem in the hierarchy defines the context, or environment, for the subsystems within it, just as each element in the hierarchy is defining for the elements within it. A brief review of each subsystem and element will clarify this point: 0 Strategic Subsystem

The design of this subsystem is the responsibility and focus of senior executives, and their work is to make defining decisions regarding principles, mission, and strategy so as to establish a strategic context for decision-making and action within the organizational subsystem.

Principles The principles by which an enterprise is conceived provide a subtle yet powerful influence on every aspect of the enterprise. These principles are often established originally by the founder and then perpetuated with slight market- adaptive changes over time.

The enterprise mission defines the purpose it serves and further functions as an umbrella for enterprise strategy, as in the selection of an industry and markets served.

Enterprise strategy consists of the major initiatives of the enterprise and thereby determines enterprise organizational needs . . . particularly the principal processes that are necessary to accomplish the strategy.

Mission

Strategy

0 Culture Culture is somewhat of an anomaly in the enterprise hierarchy. Though culture is impacted by principles, mission, and strategy, and though it has the capability to define the organizational elements beneath it, it cannot be decided, selected, and controlled directly as can the other elements. Culture is the result of the environment and defining decisions made throughout the whole system, and it is therefore only indirectly subject to change.

The design of the organizational subsystem is the responsibility of managers, yet more recently it has become the focus of the entire organization at all levels. Its purpose is to make defining

17 Organizational Subsystem

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Table 7-1 Framework for Enterprise Design

Natural System Hierarchy Design Factors Level # Elements Involved

1 Principles Quality of life, meaning of work, ethics

Strategic 2 Mission Organization purpose, Subsystem goals, objectives, vision

3 Strategy Planning, competitive initiatives, taccics, defined values

N/A" 4 Culture Real values, customs, beliefs, norms

5 Process Operations management, accountability, reengineering

Organizational 6 Structure Organization design, Subsystem work units, hierarchy

7 Management Decision-making, Systems recruiting, reporting,

compensation

Operational Subsystem

8 Role/Job Functions, assignments, responsibilities, relationships (knowledge and service work designs)

behaviors, attitudes (production and logistics work designs)

technology, materials, schedules

9 Task Duties, activities,

10 Resources Equipment, tools, people,

* Culture exerts its influence nt this level of enterprise design, however, it is a system output, not an input, and therefore not subject to direct design.


decisions regarding processes, structure, and management systems that (1) are in alignment with the context established by the strategic subsystem and ( 2 ) establish an effective and efficient organizational context for decision-making and action within the operational subsystem.

Processes Processes define the structure and function of an organization, including its strategic, core, support, and administrative processes. Because processes are the focus of reengineering efforts, redesign invariably results in organizational restructuring.

Structure defines the flow of responsibility, authority, information, and decision-making within the organization to facilitate the effective and efficient operation of the processes.

Management systems are intended to reinforce the structure and to support the processes of the organization to finely tune its operation. However, in the autonomous control of staff functions, these systems are subject to priorities that stress administrative efficiency rather than alignment with work performance. Management systems have a defining influence on the work subsystem and are (inadvertently) the greatest barrier to improved performance and productivity.

Structure

Management systems

0 Operational Subsystem The design of the operational subsystem is the responsibility of managers. This design is most effective if completed sociotechnically-with the workers designing the work to suit the available technology and specifying the roles/jobs, tasks, and resources needed-all too commonly managers approach work design as a nuisance task and delegated it to human resources practitioners who are only minimally familiar with the work. This subsystem comprises the defining decisions regarding the elements of work and determines (1) if work is in alignment with the context established by the organizational subsystem and ( 2 ) workers have the capability to accomplish the specified work effectively and efficiently.

136 HUMAN PERFORMANCE CONSULTING;

RoleIJob Work roles (or jobs) determine the process responsibilities and duties of individuals, consistent with the structure and management systems, and determine the needs for specific tasks/skills. This is the correct level for defining knowledge and service work because responsibilities based on human abilities (discretion, empathy, intention, etc.) are not divisible meaningfully into tasks.

Task defines specific mechanistic work activities performed by individuals. Tasks are predetermined and standardized, and they typically define clearly how the work will be performed and specifying required resources.

Resources-information, capital, equipment, materials, services, etc.-are required to accomplish the tasks and fulfill the roles of the organization. Resources are frequently the last enterprise-defining element to be determined, unless they are recognized beforehand to be a scarce resource. Scarce resources need to be determined and assured as strategies or processes are defined.

Task

Resources

Flexible Hierarchy

Exceptions to this hierarchial order occur in some companies that are smaller and more entrepreneurial. The hierarchy is more flexible in such companies, and it is not unusual to find a lower- level element defining the elements above it in the hierarchy.

A frequent case is the company with a unique resource, such as a gifted individual or valuable technology. Such a resource can easily become a defining factor for elements above it i f the hierarchy is flexible.

For example, an entrepreneurial company may redefine its mission, change its strategy, redefine its processes, or make exceptions in its management systems if it identifies a unique capability among its employees. Alternatively, well-established bureaucracies are generally too inflexible to capitalize on such a resource, and they typically waste i t - o r run it off so that it can become a defining element for another enterprise.

NATURAL O R D E R IN ENTERPRISE SYSTEMS 137

Natural Framework of Hierarchies

Hierarchies created by the managment process provide a natural framework for understanding and improving enterprise performance. Consultants can use this framework t o simplify and improve the precision of their work.

Many human performance interventions are focused a t the operational subsystem level (see Figure 7-2) at the role/job, task, and resource levels, in that order of priority. In Chapter 9, Table 9-2 will present a framework for work-design that assembles in hierarchical order the predominant factors and issues required for high-performance work designs.

Consultants can use these frameworks to guide their assessment and diagnosis of enterprise and work performance and the design of effective interventions. As a rule, performance is impacted negatively by design factors that are out of alignment with work performance objectives. Efforts to improve performance should improve alignment, beginning with the issues at the top of the framework and continuing down through the hierarchy. It does little good to make changes to elements well into the hierarchy if the more fundamental issues at the top are omitted or out of alignment. For example, it does little good to train workers if the objectives for their work remain undefined or process-defining equipment is insufficient for their task.

A FEW WORDS ABOUT ORGANIZATIONAL HIERARCHIES

Even though we now recognize that organizational hierarchies are not perfect mechanisms, they were previously thought of as the ideal organizational structure. Bureaucracy, with its characteristic inflexible organizational hierarchy, was the management system most widely adopted by companies as they emerged and expanded following World War 11. This practice was not surprising, based on the fact that everyone was returning from some role in the war effort, which had been managed by the military bureaucracy. With diffusion of authority, division of labor, specialized work, formal procedures, and extensive support staff-all to standardize work and reduce uncertainty-the bureaucratic hierarchy was at that time thought of as the best way to organize work.

138 HUMAN rFKFOKMANCE CONSIJLTING

The departmentalization of work into specialties was initially proposed in the late 1910s as the best approach for organizing individuals. These theories paralleled Taylor’s management principles regarding the specialization of labor. Not surprisingly, a sociologist and critic of bureaucracies coined the term machine bureaucracy several years later to emphasize the machine-like rigidity of organizational hierarchies a t that time. Notwithstanding this criticism of its subhuman characteristics, most people saw bureaucratic hierarchy as the way to structure large organizations.

Isn’t it interesting, though, that most people forget their negative impressions of inflexible organizational hierarchy when they have the responsibility for organizing people? When they are the person in charge, a bureaurcracy’s organization charts, hierarchical reporting relationships, rules, procedural requirements, and policies seem to make much more sense. That’s because they are natural and logical. The problems most people have experienced with bureaucracies seem to occur only when the hierarchical organization structure begins to get in the way of achieving goals.

All organizations incorporate elements of organizational hierarchy, and they come by this structure naturally, even if it might be a goal to avoid. Bureaucracy has taken the blame for everything that could go wrong with organizations because it was the most common way for organizing and because its implementation was often unreasonably inflexible. For the most part, the organizational hierarchy we experience in companies is a natural phenomenon . . . a natural way to organize people for the achievement of a large task. No, it is not the only way to organize, but it is perhaps the most efficient approach for many enterprises.

SYSTEMS APPROACH TO IMPROVING PERFORMANCE

Combined, these three subsystems define the central decisions in any enterprise and equip managers and consultants with a systems perspective of the natural order in enterprise systems-an essential tool for diagnosing and solving performance problems and for designing high-performance work. The hierarchy of the enterprise system draws attention to the extraordinary impact that strategic and organizational subsystems have on operational work performance.

Performance improvement is concerned with the elements of the enterprise system and the rational argument that they should


be “in alignment”-in a supporting relationship to each other. Performance improvement generally entails making interventions to adjust the system elements to bring them into greater alignment.

This relationship between system elements makes it important to focus on performance improvement at the correct system levels and in the correct order of influence. For example, reengineering at the organizational level (i.e., processes) should procede redesign at the operational level (i.e., work). Process improvements invariably alter roles and tasks, so any prior efforts to improve tasks will often become less meaningful, because some tasks are ultimately eliminated or altered significantly through process reengineering.

Of course, industry can only focus on alignment at the correct level if effective methods are well known for doing so. Industry focused on quality initiatives (i.e., task redesign) prior to reengineering (i.e., process redesign) because the initiative to improve quality originated twenty years earlier with industrial engineers, who operate at the operational subsystem level of companies. These engineers were not involved in process or strategy decisions at the time and could not generate much interest in their concerns with senior managers or executives, so they focused on tasks- the area in which they could make a difference-even if it meant trying to work around organizational and strategic subsystems designed on completely different principles.

Total Quality Management (TQM) created a major break- through in performance improvement because it required CEOs and top executives to get involved. Their involvement finally brought attention-or is in the process of bringing this attention- to the strategic and organizational subsystems and the need for them to be in alignment with task-level quality improvements already under way. Similar influence to focus on particular system elements results from popular books, conferences, consultants, and other sources of knowledge that enables performance improvement.

RE F E R E N c E

1. Checkland, P. B. Science and the systems movement. In Open Systems Group (Ed.), Systems behavior. New York: Harper & Row Pub- lishers, 1983, pp. 26-43.

C H A P T E R 8

Need for a N e w Approach

In their day, Frederick Taylor’s engineering-based methods for improving work performance represented a tremendous leap forward for both management and employees. As a direct result, companies and their workers achieved levels of performance and productivity previously unattainable.

The widespread success of these methods established an industrial approach for improving work performance that persists today in the minds of many as the “one right way” to design and improve all work. Training, which is considered Taylor’s greatest contribution, remains the staple for standardizing workers in machine- like practices to support the operations and organizations they serve. The “best practice” method for improvement, which is another of Taylor’s contributions, continues to serve as a standard approach for assessing and improving operations in most types of enterprise.

The machine-labor work that was the basis for Taylor’s methods now amounts to less than 20 percent of the work in developed economies-an estimated 12 percent in the United States. And as the nature of human work has shifted away from production and logistics, persistent efforts to apply Taylor’s principles to manage and improve the performance and productivity of a growing workforce of knowledge and service workers have met with poor results.

In fact, the effect of Taylor’s methods on knowledge and service work is virtually opposite of the desired effect. Rather than improving performance, these methods frequently interfere. This undesired result can be explained by the fact that the mechanistic

140

NEED FOR A NEW A P P R O A C H 141

principles that underlie Taylor’s engineering-based methods strive to achieve higher levels of performance by reducing worker discretion (i.e., reducing process variation). Yet worker discretion is precisely the way knowledge and service workers achieve effectiveness.

Therefore, when managers provide knowledge and service workers with training to bring their behavior into line with the organization’s requirements, the instruction is often received by workers as irrelevant to their particular circumstances. Though the content may be interesting and the experience pleasurable to some, virtually all of these knowledge and service workers will continue to rely on their individual judgment to guide their behavior as they did beforehand.

Similarly, when managers try to implement changes to knowledge and service work based on the better practices they see in the operations of other organizations, the changes proposed are often ignored or resisted because these workers feel that the practices of the other organizations don’t apply. Though a few good ideas may be gained from the exercise, most knowledge and services workers will continue to behave according to their discretion just as they did previously.

Knowledge and service workers can be expected to respond in somewhat the same way to any management attempts to standardize or control their behavior by limiting their discretion, including such methods as policies, equipment changes, new standards, and even incentives. The essence of knowledge and service work requires these workers to exercise and trust their discretion-this is how they create value for their customers and the enterprise-so attempts to reduce or otherwise thwart their discretion seem counterproductive. If knowledge and service workers are to improve their performance, they will be the ones to do it.

Knowledge and service workers generally thrive on challenge. This is particularly true when they are faced with challenges to improve their performance in ways that they consider meaningful to the results they want to create. Once these workers buy into a challenge, all they need from management is support. Since many of the limits to current performance are determined by factors largely outside the control of these workers, performance improvement often cannot be accomplished without the resources that only management can provide.

142 HUMAN PFRFOKMANCt CONSULTING;

Shallow attempts by managers to make these workers feel involved in changes that are predetermined by management are often so transparent that these attempts are resisted just the same as more overt controlling efforts.

A DIFFERENT K I N D OF WORK

Production and logistics work is concerned with reproducing a predetermined standard design and transporting the finished product to intended customers-with minimal variation. Entire processes incorporating both machine functions and human work are reasoned out and designed to operate with as much precision and control as possible. The goal is low unit costs, which are best achieved with high-volume efficiency.

Engineers strive to specify every step of production and logistics processes in such ways as to maximize predictable output. The correct behaviors for workers are made explicit by the process, either because the workers’ actions are tightly coupled to machinery and machine-like activity, o r because the work is spelled out in the form of enforced policies, mandated training, or specified materials. Workers contribute to value creation by doing exactly as they are told. Exceptions to what is standard often create additional costs, thus reducing value.

Knowledge and service work is much different. The principal distinguishing feature of knowledge and service work is worker discretion. (See Figure 8-1.) Knowledge and service workers are expected to have and apply the appropriate knowledge to a situation by attending and responding to it adaptively, thereby creating value by meeting the specific needs of each customer. Workers decide what work to d o and determine the appropriate methods for completing it, usually with only a minimum of restrictions.

These differences, which stem from the amount of discretion required for workers to perform the work, have a tremendous impact on what’s effective and what’s not in regard to performance improvement. For production and logistics work, the common goal of improvement initiatives is essentially to get workers to use the prescribed methods to perform the standardized tasks that comprise their work. The desired level of performance is already engineered into the task and typically further supported

No Discretion

Work Classilea tion

BilSiC

Process

Industries

Roles

N E E D FOR A NEW APPROACH

Production &? WorkersV Knowledge & r i c e Workers , t-- Lunlud - - - Moderate +- Elmad - b

tlucremo Discretion L)lmhm 1 Compkte Dlscretion

Knowledge- + -,. _____ + --M~lehtne - - Lab W d

Production Logistics Work Work

Making Moving Products Products

Manufacturing Transportation Acquisition Distributing Construction Retail ‘‘Marts’’ Refining Finance

Laborer Delivery Driver Assembler Stocker Equipment Operator Order Picker Fabricator Data-Entry Clerk Packager Shipping Clerk

Service Work

Applying Knowledge

Leisure Healthcarehledical Retail “Shops” PoliceISecurity

Call-Center Rep Salesperson Trainer Supervisor Engineer

Knowledge Work

Creating Knowledge

Education Consulting Design Legal

Entrepreneur Consultant Analyst Researcher Professor

143

Figure 8-1. Work classification.

by methods, tools, instructions, training, policies, etc., that are prescribed to direct and control workers. If managers can get workers to follow the work design-to do what they are told- then the work will be completed effectively.

For knowledge and service work, the goal of performance improvement initiatives is to get workers to use their discretion in order to provide customers with the most satisfaction possible. These workers create the greatest value for the customer, and in turn for the company, when they do their “best” with every problem or opportunity, using whatever knowledge and expertise they have or can access.

Furthermore, knowledge and service workers do their “best” when they perform with high levels of knowledge and service differentiation-when the service rendered most closely fits what the customer really values. The role of these workers is to perceive and assess consumers’ desires and appropriately vary their work behavior to maximize the value received by customers,


which in turn maximizes the financial value to the enterprise. This requires high levels of discretion exercised by capable workers.

For knowledge and service work, its variation in behavior initiated by worker discretion-not standardization-that is the goal of work and organization design. In turn, any strategy for improving knowledge and service work performance should focus on enhancing effective worker discretion, not on reducing it.

Not That Simple

Knowledge and service workers are of course employed in industries whose principal business consists of production and logistics operations. We naturally expect to find these workers- executives, engineers, managers, analysts, product managers, salespeople, technicians, and so on-in such companies, all of whom have substantial knowledge and service responsibilities.

Likewise, production and logistics workers are found in industries whose principal business consists of knowledge and service operations. These workers may include equipment operators, data-entry clerks, processors, bookkeepers, delivery personnel, and custodial workers, all of whom perform work activities that involve mainly production and logistics.

Moreover, all work combines to some degree the character-istics of each classification of work, yet we find that specific jobs or roles, as well as functions and industries, are most often dominated by one type. Thus we talk about knowledge and service workers as though their roles consist entirely of knowledge and service work. This is not true. All knowledge and service roles (consultant, manager, analyst, salesperson, counselor, etc.) contain elements of production and logistics type work (filling out forms, following procedures, maintaining required records, etc.).

All work is a blend of these two types of work. This is particularly important for practitioners to keep foremost in their minds, since it has become commonplace to use these classifications informally by referring to one or the other without clarifying the true nature of the entire role being discussed. When focused on determining the best methods for improving work performance, it is necessary to be precise about specific functions within the work so that practitioners can address each type separately and differently.

NEED FOR A NEW APPROACH 145

Using an Appropriate Management System

Another concern regarding performance is the practice of operating an entire enterprise with a management system designed for the principal operations-for example, using a production and logistics management systems for all functions within a trucking operation. Specific functions, whose work is the other type, which are better managed with the alternative management system, are forced to achieve their function’s objectives working within a management system that does not best suit their performance (e.g., the planning, engineering, finance, and information systems departments-all knowledge and service work functions-are better managed with a knowledge and service management system).

Consistent management systems throughout an enterprise may simplify management of the overall enterprise, though this consistency compromises the performance of people the nature of whose work is inconsistent with the predominant business operations. Such tradeoffs are common in every enterprise, and the negative impact on the functions affected is readily apparent to practitioners. These arrangements can be made less costly for the enterprise and more tolerable for workers if the leaders of the inconsistent functions are skilled at using the appropriate management systems for their functions and can, while managing this more appropriate way for their function, buffer the dominant management systems of the enterprise to reduce their negative affects.

This concern for the alignment of management systems raises the equally important issue of the interface between companies or functions of one type with the other. Production and logistics functions and workers will find it challenging to work with knowledge and service functions, and vice versa. From the practitioners’ viewpoint, these situations are generally a rich source of opportunities for performance improvement.

Industry Characteristics

To appreciate the substantial differences between production and logistics and knowledge and service work in terms of their fundamental characteristics and the methods they employ for effective performance improvement, a broad comparison is provided in Table 8-1. Take some time to reflect on this information

146 HUMAN PERFOKMANCt CONSIJLTINC;

and consider how well it describes companies with which you are familiar. Recognize that no enterprise is 100 percent characteristic of its industry category.

An important business strategy that companies use to distinguish their market offerings is to include features that are untypical in their industry (e.g., taking a service approach to production). Consider Lands’ End, Dell, Home Depot, Federal Express, and Bibbentuckers (dry cleaners) as a few examples of production and logistics businesses that have created their success based in part on the service they offer their customers. To have this marketing advantage, these businesses have adopted service industry characteristics while maintaining a basic production and logistics operation. Each does a better job than many of its competitors of applying knowledge about the needs and desires of its customers

Table 8-1 Comparison of Industry Characteristics

Production and Knowledge and Industry Logistics Service

Fundamentals

Function Making and moving Interpreting and products providing experiences

Value Proposition Maximize financial Maximize financial value by increasing cost efficiencies

value by creating more value for every customer

Value Creation Created in advance Created at the point of consumption of consumption (stored opportunity) (perishable

opportunity)

Means of Production Machines People

output Tangible Intangible

Performance More objective More subjective Measures

NEED FOK A NEW APPROACH 147

Strategies

Operations Strategy Mass production Mass customization through standardiza- through differentiation, scale, size, and tion, flexibility, and automation a unit of one

Marketing Strategy Group consumers to Differentiate consumers to meet individual desires

meet common needs

Organization

Organization Design Stable, highly structured Dynamic, performance- machine bureaucracy focused work systems

Work Design Low-discretion work High-discretion work

Workers More dependent More independent

Performance improvement

Improvement Strategy

Improvement Focus

Driving Force

Source of Assessment

Target

Process

Techniques

Engineer-optimize machine performance by bringing people into alignment with the machine’s work

People

Mandate

Supervisor

Root cause

Orientation, standardization, and control

Process redesign, policy change, training, controls, and incentives

Humaneer-optimize human performance by bringing systems into alignment with the people’s work

System

Improvement expectation

Self-assessment

Contributing causes

Facilitation, support, and development

Shared experience, challenge new information, interpretation, system realignment, practice, adaptation, and integration

148 HUMAN Pt RFOILMANCt CONfUI TI NL

to create very high levels of customer value. (Keep in mind, however, that these businesses could become too service-oriented and as a result could jeopardize their basic operational efficiencies.)

Likewise, consider Andersen Consulting, Disney World, Harvard University, Cinemark, and the Mayo Clinic as examples of knowledge and service businesses that are successful in part because they have adopted production and logistics techniques that benefit their operations. In various ways these companies have emphasized standardization, size, speed, and automation for the operating advantages that result. Each does a better job than many of its competitors of increasing the scale of its operations in order to provide more services to a much larger market. (Customers would likely not respond favorably, however, if these businesses faltered in their fundamental role as knowledge and service providers.)

DISTINGUISHING TYPES O F WOKK

Just as companies can accommodate characteristics basic to both classifications, so can individual work roles within organizations. Most jobs involve some combination of production and logistics work and knowledge and service work, so it would be impractical to be too specific in dividing jobs into these categories.

What is practical, and very enlightening, is to consider the elements of work (e.g., functions, roles, responsibilities, duties, tasks, activities) constituting specific jobs and to determine the extent to which work requires either standardization of behavior (i.e., low discretion) or variation of behavior (i.e., high discretion) from the worker. Some jobs require workers to make very few adapting decisions (assembly-line operator, fast-food server, retail clerk, etc.), whereas others are highly dependent on worker decisions (sales representative, product designer, counselor, etc.) to achieve their performance objectives.

The requirement for decision-making, or discretion, in any job is related to the need for workers to determine their own behavior in order to perform satisfactorily. This need is prompted by work situations that are not fully predictable, or by situations in which fully standardized behavior is not acceptable. In unpredictable situations, workers are required to perceive and interpret their situations, consider their options, decide on the most appropriate responses, and then act accordingly.

NEED FOR A N E W APPROACH

Low-Discretion Work

149

If a substantial part of a worker’s behavior is essentially predefined, and standardized, then this work is considered low- discretion work. Ask yourself these questions concerning the workers’ behavior. If most of your answers are basically yes, then the work is categorized as low-discretion.

0 Is the place where the work occurs defined? 0 Is the work something that almost any able-bodied person

could do if provided with some basic training? 0 Is the work dominated by the operation of machinery, the

performance of routine procedures, or predetermined activities? 0 Are the work methods, techniques, and materials specified? 0 Does the work require dealing with the same people every day?

Is performance measured primarily in quantitative terms (e.g., volume, time, cost)?

All these work characteristics tend to reduce discretion in the behavior of workers.

High-Discretion Work

Alternatively, work that requires substantial adaptation and variation in the behavior of workers is considered high-discretion work. If your answers to the following questions are basically yes, then the work is categorized as high-discretion.

0 Do workers determine where they will do their work? 0 Does the work depend heavily on technical knowledge and

0 Do workers manage their own schedules and the processes

0 Do workers determine what work methods, techniques, and

0 Do workers have to deal with different types of people to

0 Is performance measured primarily in qualitative terms (e.g.,

prior experience?

they use to perform their work?

materials to use?

perform their work?

satisfaction, appreciation, image)?

150 HUMAN PEKFORMANCF CONWITINC

HIGH- OR LOW-DISCRETION WORK?

Fast-Food Restaurant

H o w would you classify the counter worker a t a fast-food place? This is the person to whom you give your order and pay your money, and who then picks your meal from dispensing bins, assembles it on a tray, and then quickly calls for the next customer.

Is this service? To most customers it doesn’t feel like service, and if you look carefully a t the work design, you will see that it isn’t service. This work is focused on production and logistics. Yes, there is a minimum of interaction (customer service?) during the taking of your order, but rarely is there any material variation in behavior by the worker. Rather, it is the customer who adapts to the standardized worker and his o r her low- discretion logistical process.

Confusion about the term service is introduced when the fast- food company advertises “service” and trains (in other words, standardizes) employees on what it calls “customer service.” The only “service” in this work is that moment of interaction during which workers take a customer’s order-and there too the emphasis is not on variation but on standardization (e.g., scripted greeting, no exceptions, available product determined by inventory).

Consumers learn through experience what they can expect in terms of service (variation) a t a fast-food restaurant. Note how some fast-food restaurants are trying to expand the service component (capacity for variation) of their operations in a n attempt to provide experiences that better satisfy the subjective needs of customers. In some, you may have witnessed a more courteous counter person (generally a matter of hiring, not training), a greater willingness to take special requests (please hold the mayo), o r other attempts to add variation into this otherwise standardized low-discretion work.

Mexican Restaurant

Now compare the job of fast-food workers with that of servers a t a popular Mexican food restaurant. Here you probably experience a friendly greeting, personal assistance in being seated, and

NEED FOR A NEW APPKOACH 151

quick attention to menus, water, and chips. Fairly quickly a personable server appears to tell you about the specials and take your drink order. Returning promptly with your drinks, the server then takes your order (no substitutions, please) and scampers off to the kitchen. Typically within minutes, the server reappears with your order. The server will return again once you start eating, and potentially a time or two during the balance of your meal. No room for dessert-no problem. You get your check, and you’re on your way.

Is it service or not? Certainly it is more service than you received at the fast-food restaurant. The server has focused on you and attempted to meet your individual wants, though within the time and option constraints defined by the kitchen (which is likely a masterpiece of production and logistics operations). High or low discretion? More discretion than with fast food, but still limited. Servers have many tables to attend to, and customers come and go quickly. But servers can create value for customers, which creates value for the business. By doing a good job of attending to the perceived wants of customers, more food gets ordered, customers return more often, and good experiences are communicated to others. Servers also create value for themselves in terms of tips, self-satisfaction for a job well done, and perhaps even fulfillment in providing people with a pleasurable experience.

Exclusive Restaurant

Now let’s go to an exclusive restaurant to celebrate your tenth wedding anniversary. Even if you arrive a few minutes early for your reservation, “your table” is ready for you. You are greeted like royalty, are made to feel very special, and are ever so attentively shown to your special place. While a half-dozen people attend to everything from water and bread to assisting you with your napkin, you admire the restaurant’s stunning beauty and the ambiance of low lights and a mellow quartet.

Once you are settled, your distinguished-acting waiter appears at your table to greet you and let you know what an honor it will be to serve you for the evening. Your dress is pointed out as perhaps the most “stunning” he has ever had the pleasure to see. He then asks if this is perhaps a special evening, and if he might know more about it.

152 HUMAN PLKFUKMANCt CON5tJLT INL

And so on . . . for an experience memorable for a lifetime. Describing this experience alone could f i l l a book-and that is exactly the point.

What Makes the Difference?

All three businesses sell food. What is different about them is the level of knowledge and service work-the discretion in behavior-that goes into serving customers. The greater the discretion designed into serving customers, the greater the ability of the server to differentiate the service provided. We can see that with greater differentiation, servers are able to create greater value for customers-value that translates into revenue for the businesses.

Now review the characteristics outlined for production and logistics and knowledge and service industries in Table 8-1 and consider them in light of these three businesses. Consider . . .

Cl The extent to which service is an important element of the

0 The work of customer servers, whose role it is to provide

0 The experiences provided to customers. 0 What was involved in creating the service level provided. 0 What was required of the server in terms of attention,

perception, empathy, concern, professional knowledge and technique, discretion, and variation in behavior.

business strategy.

this service.

Cl How customers assign value to their experiences. 0 The value of the customers’ experiences, as reflected in the

The customers’ value relative to the probable earnings of price, and relative to the cost of their meal.

the servers.

Your Work

Now consider your own work. Ask yourself how predetermined (or limited) your behavior is by work design, policies, or other restrictions. Does your role specify what you do and how you need to d o it, or does it require that you decide the right things to d o and how to d o them? Or are some responsibilities of your work predetermined and others left up to you?

NEED IOR A NEW ArrKoACH 153

Try this brief exercise. Draw a horizontal line about six inches long and title it “Discretion Scale.” At the left end of the line write “No Discretion.” And at the right end write “Complete Discretion.” Then label the midpoint “Moderate Discretion.” Between the left end and the midpoint write “Limited Dis- cretion,” and between the midpoint and right end write “Broad Discretion.” It may also be helpful for you to write numerical equivalents for these labels, with “0 percent” on the left end and “100 percent” on the right end, and in between, from left to right, “25 percent,” “50 percent,” and “75 percent.”

Indicate with an “X” on this Discretion Scale the level of discretion that best describes your work. Now list six very different jobs with which you are reasonably familiar, including other jobs within your company or held by friends or neighbors. Choose jobs that are substantially different from each other in terms of the work functions and tasks.

Next, reflect on each job briefly and, setting all technical criteria aside, consider how dependent job performance is on workers varying their behavior from one situation to the next (thinking for themselves and adapting to the needs of each situation) or, inversely, how standardized the work is. For example, to what extent is the work performed in a specified place and with specified other people? Does the job entail predetermined activities, methods, procedures, and behavior? Is it specified how the worker is to deal with certain information, people, things, or other aspects of the job? Is the worker dependent on a supervisor to make changes in strategy, approach, technique, or resources?

With these images, make a rough estimate of the discretion level for each job. Essentially you are to divide 100 percent into two amounts: the extent (percent) to which the job design requires worker discretion for effective job performance, and the extent (balance of 100 percent) to which the job design requires workers to follow predetermined instructions in performing the job. Use your estimate to now plot each job on your list, based on your estimate of its requirement for worker discretion, across the horizontal work Discretion Scale.

When you have completed this brief exercise, compare the jobs you selected with the ones included in the example in Figure 8-2. Are your estimates roughly consistent with the discretion estimates

154 HUMAN r iRFORMANCC CON5UITING

Warehouse Major ups Professional Independent Owner Otder Office Delivery Finn Operations Beauty Products Landscaped Pic:,, 7 Driver Manager Representative Mid-size ,

oo? 25% 50% 75% 100% 4----- limited -----+ Moderate - E k d ~ w

Disaelion Discretion Disaetion

/’ X I Complete Discretion

‘, d’ x x ,

I -

/ NoDiscretion 1 I

1 . Warehouse Order Picker 5% 2. Major Ofice Concierge 15% 3. UPS Delivery Driver 30% 4. Professional Finn Operations Manager 65% 5. Independent Beauty Products Representative 70% 6. Owner LandscaperMid-size 85%

Figure 8-2. Work discretion scale.

mates in the example? In actual consulting situations, reasonable estimates such as the one you made here can be helpful in initially framing the nature of jobs and the performance challenges faced by workers. Of course, more specific criteria and thoroughness may be warranted before you can draw firm conclusions.

High-Performance Work

Another helpful way to distinguish knowledge and service work from production and logistics work is to consider the character- isitcs that define high performance. For production and logistics work, the goal is to reproduce products and services to exact specifications, with a minimum of variation. The optimal behavior of workers can generally be specified in great detail, and their job is to do exactly as told. For knowledge and service work, the goal is to best respond to the immediate situation with a maximum of variation. In this case, the optimal behavior of workers cannot be specified in great detail. Their job is to vary their responses to best adapt to the needs of different situations. Variation is the objective.

The Importance of Adaptation

The need for knowledge and service workers to utilize their discretion in order to be adaptive is central to their dealing with

NEED FOR A NEW APPROACH 155

varied and changing circumstances. Adaptation requires applying knowledge and making decisions regarding behavior so as to respond best to a given situation. For example, Brittany may vary her presentation to best suit her audience’s learning level, Megan may choose to listen more attentively to a particularly capable employee, Jared may plant the bushes closer to the house than normal because of the walkway, or Rachel may add a special note to only certain patients’ records.

In these cases, workers assess the situation and decide to vary or adapt their behavior accordingly in order to fulfill their responsibilities. Sometimes this adaptation happens without much conscious attention, but nonetheless it entails a decision or choice to behave in an appropriately responsive way.

PERFORMANCE IMPROVEMENT OPPORTUNITY

Industries and government alike have a substantial opportunity to redesign the work of knowledge and service workers to better capitalize on the potential for people to apply their discretion in ways that create value for customers, which further translates into value for the enterprise.

Many organizations persist in designing and managing all work consistent with industrial methods that were developed more than a hundred years ago to standardize products and logistics- methods that fail to support the knowledge and service workers that dominate today’s workforce. Redesigning this work with features and support that are consistent with what is required today for high levels of performance and productivity creates substantial value for organizations and increases the job satisfaction of the workers affected.

Implementing a strategy to redesign work for high performance and productivity will require an approach that is dramatically different from Taylor’s engineering-based methods upon which most organizations still rely. This challenge is made greater because performance improvement is itself knowledge and service work. In other words, practitioners must learn to use new methods in part by practicing on themselves. Standard practices, to the extent that they exist, can be learned through training, but a genuine knowledge of and skill in methods for improving knowledge


and service work performance can be learned only through disciplined experience.

Most management theories and research are based on observation of industrial work and are less useful because of this context. The fact is, if practitioners hope to come to grips with an entirely different type of work, an utterly different conceptual framework for performance improvement must be developed. The painful and awkward task of creating a new vocabulary and theoretical framework must be embraced. Chapter 9 introduces the concept of “humaneered” work to initiate this learning process.

C H A P T E R 9

Don’t Just Engineer, Humaneer

I t is common practice in the design of production and logistics operations to engineer work-to apply scientific principles to its design, operation, and maintenance-to achieve greater precision, consistency, and efficiency. These principles are drawn primarily from the sciences of physics, chemistry, and mathematics, in addition to practical experience. All together, this scientific knowledge provides important direction, heuristics, and improvement methods that guide practitioners in creating value through its rigorous application.

The engineered design of work has been so successful as a universal method for improving performance and productivity, and is now so well accepted for this purpose, that this approach is unwittingly applied to all work as the best way to optimize results. In many organizations, engineering-based methods (e.g., training, procedures, quantitative measures, time-management systems) are not only the standard tools of practitioners, but they are the only tools. What goes unrecognized is the negative effect of these methods on work with organic characteristics (e.g., adaptive, discretionary, nonlinear, self-paced)-work that depends highly on people, not machines, for the achievement of performance and productivity.

As discussed throughout this book, there is a limit to the appropriate application of engineering principles. This limitaion, simply stated, is to work that is performed best when mechanized (e.g., standardized, prescribed in great detail, regulated for consistency). Characteristically, these work systems can be isolated

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and controlled (i.e., less subject to human nature), thereby acquir- ing a mechanistic or machine-like nature and improving performance when engineered to greater levels of precision, consistency, and efficiency. Such work predominates in production and logistics industries, functions, roles, and tasks, and is also found in relatively minor tasks within knowledge and service industries, functions, and roles. All work contains some elements that are mechanistic, and these elements can be engineered for improved performance.

What about the elements of work that are not mechanistic- that cannot be isolated and controlled and that are very much subject to human nature? What are organizations to do to improve the performance of work that is performed best when the worker i s aware, responsive, and adaptive to circumstances that cannot be predetermined? What about the predominant work of knowledge and service industries, functions, and roles for which performance is dependent largely o n people’s discretion and self-directed behavior? Engineering the organic elements of this work only reduces the capacity of workers to do their work and thereby reduces their performance and productivity.

What methods can organizations utilize for improving the performance of knowledge and service workers and the more organic aspects of all work? It is a question that has not been carefully thought out in the minds of many managers and practitioners because of the universal adoption of a machine metaphor for all work.

LEARNING A NEW APPROACH FOR IMPROVING PERFORMANCE

The nature of the distinction between mechanistic and organic work, and its importance in selecting strategies for improving performance and productivity, are for many executives and managers a new consideration and one not easily grasped. Having grown up during a time when engineers and their principles provided the answers for most questions about doing work better, many adults find it difficult to conceive of limits to the application of the engineering principles in work situations.

However, isn’t it the nature of our existence to continually learn and to reconsider our preconceived notions? We may do so reluctantly because of the effort involved, and only when our

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current understanding is severely challenged and the rewards are great. History bears out the fact that even smart people can learn-when doing so conveys an important advantage.

For more than ten years, my colleagues and I have been working with a new set of scientific principles for improving the work performance and productivity of knowledge and service workers-principles that optimize the aspects of human work that are organic in their nature. During this time, we have discovered ways to trigger in people’s minds an understanding of the existence and importance of these principles. Here is one approach in the form of a short exercise that you can use right now-alone or with a group of people. (The dynamics of the exercise work best in a group setting.)

Step 1: Answer

Think of the work situation when you were performing at your highest level ever. For you this could be your current job or your first job out of school, a special project you worked on years ago or one that you are in the midst of right now, or even a part-time job that you once held. Take a couple of minutes to go there now in your mind, to picture yourself in that situation, and to feel what it was like for you when you were there. Now answer the following question, listing on a blank piece of paper your answers as they come to your mind.

What about that work situation (i.e., the workplace, the work itself, or you) helped or allowed you to be your high performer best? List the attributes of this situation that come to your mind.

Step 2: Discussion

If doing this exercise alone, continue to consider this work situation until you have thought of ten or more attributes.

If conducting this exercise as a group, after a few minutes of individual self-reflection and recording of attributes, pair up so all the participants can share with one other person the work they have in mind and the attributes they have listed thus far. Both


people in the pair should d o this, taking approximately five minutes each to share their stories and another five minutes to compare lists of attributes. This discussion should prompt the memory of additional attributes which people can add to their lists.

Step 3: Reaction

Now ask yourself, or the group, the following questions in the order listed below to uncover any reaction to this experience or the lists of attributes. Acknowledge responses by noting them for later reflection.

How did it feel to return in your mind to that work situation? Did you describe your current job (function, project, etc.) or a

prior situation? I f you didn’t describe your current job, then how far below

your high-performer best are you now performing? (Alone) What do you notice about the attributes on your list?

Is there anything interesting or significant to you about any single item or the entire list?

(Group) What did you notice when you shared your story and list of attributes with someone else? Was there anything interesting or significant to you about any single item or the entire list?

Any open discussion of (group) or reflection on (alone) whatever topics surface in response to these questions is helpful for learning from this experience. It would be wise to make notes of comments and thoughts, in order to prompt further comment and thought and for later reflection. Group facilitation is helpful to assure full participation and balanced discussion.

Step 4: Group List (group only)

Now consolidate the group’s answers onto a single list. The preferred procedure requires a facilitator, who will ask for a single participant to share his or her list, reading the attributes in order. Taking the attributes one at a time, the facilitator will need to

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consider each attribute, probing for any needed clarification and listing the attribute in a place visible to the group (e.g., flip chart, white board). The facilitator’s challenge is to list the attributes in terms that are somewhat generic so others in the group can match their similar responses without losing the significance of the attribute for the person sharing it.

Following the first respondent, the facilitator will ask for one additional volunteer who has attributes on his or her list (not ideas thought of during the discussion) that have not yet been listed for the group to see. The volunteer should read only the attributes that are not on the group list, one at a time and in order. If an attribute can be characterized by an attribute already on the group list, then the facilitator will want to probe for the relevant distinction in the mind of the respondent and potentially defer to the group for its interpretation.

Once the second respondent has exhausted his or her list of attributes, then the facilitator can similarly work with a third or fourth respondent. As a rule of thumb, it is rarely necessary to go beyond three or four respondents to capture all the attributes that group members have individually listed-even in large groups of fifty to five hundred participants. (See Table 9-1 for examples of group lists.)

Step 5: Performance Impact

Now we will determine the impact on our performance of the absence of these attributes from our work situation. Let’s assume for the sake of this exercise that if all of the attributes listed were characteristic of our work situation, our performance would be 100 percent of its high-performer potential. One at a time, starting at the top of the group list, let’s remove an attribute- subtracting it from the list of characteristics that describe our work situation-and estimate the impact this absence of this attribute would have on our 100 percent performance.

Cross ou t the first attribute at the top of the list. Consider, or have the group consider, what impact this would have on your high-performer potential. The question you need to answer is:

At what percent of your high-performer potential would you be performing following the removal of this attribute?

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Table 9-1 Group Lists of Attributes from Exercise Participants

Describing Their Highest-Performance Work ~ ~~ ~

Responses from a major utility training group:

1 . Self-confidence 2. Knowledge, capability, and mentally prepared 3. Supportive environment 4. Feedback from customers 5. Clear understanding of objectives 6. Latitude to perform 7. Trust throughout 8. Support and resources 9. Meaningful contribution

10. Fair reward 11. Great teamwork 12. Shared teamwork 13. Positive expectations 14. Fun . . . liked the people 15. Successful . . . it worked 16. New and adventuresome 17. High profile . . . important 18. Fast-cycle impact

Responses from a Fortune 500 sales force:

I. Clear objectives 2. Sufficient resources 3. Authority and responsibility 4. Support of supervisor 5. Measurable results 6. Great team of people 7. Customers dissatisfied 8. High goals and expectations 9. Aggressive schedule

10. Rewarded and punished 11. Self-responsible 12. Knowledge, skills, and experience to do the job 13. Mentor to look up to 14. Valued the results

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For example, refer to the Fortune 500 sales force group list in Table 9-1. Note that the first attribute listed is “clear objective.” We would ask group members what impact it would have on their performance potential if they no longer had a “clear objective.” To what lower level of performance potential would this reduce the group’s work situation? Answers typically range from 50 to 80 percent (remaining performance potential without the removed attribute), depending on the attribute listed and the importance it has to the specific work of the group.

Continue to remove attributes, stopping after removing each one to reassess the remaining performance potential in the work situation. Generally speaking, only three to five attributes need to be removed to reduce the performance potential to a level at or below 20 percent. That is sufficient for people to realize the importance of these work-situation attributes.

To emphasize the relative impact of each attribute, it is helpful to point out all of the important attributes that remain even though the situation has low performance potential. This makes the point that it is not enough to look at all the good attributes of a work situation and assume they are sufficient (i.e., better than the attributes of some other job). The complete set of attributes needs to exist if people are to achieve their high- performer potential.

Step 6: Reflection

Several significant observations are often made throughout this exercise. If these were noted a t the time, they can now be reflected upon to support learning.

Here are some of the more common observations and my editorial comment about their significance:

0 I t felt great to think back about that situation. All people aspire to perform at high levels in ways that

are important to them, and it is downright energizing to just remember when they felt they were doing so. Talking about it with someone else is all the more energizing.

0 Unfortunately, I wasn’t describing my current job. Generally speaking, fewer than 20 percent of the people

I ask this question say they are now in the “high performer”

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work situation they described. Most people remember their high-performer work situation as though it was a mirage in their work history-a fairy tale they long to revisit. When asked a follow-up question about why their current work situation doesn’t allow them to perform at their best, people readily point to the list of attributes and read the list starting from the top, adding “no” in front of each attribute as they read it.

0 It’s disturbing to admit that my current work performance is a small fraction of what 1 achieved in my high- performer situation-my current performance is easily less than half of my potential, which is unfortunate for me, my family, my boss, my employer . . . for everybody involved.

This is a tough admission to make, which explains the lengthy way people express it, along with their disap- pointment. On average, people not in their high- performer work situations indicate that their current work is 20 to 50 percent of this prior performance. Though sum- marizing all the qualitative and quantitative measures by which people measure their work performance is necessarily a subjective judgment, it still serves as a good indicator of the performance potential that remains untapped within these people.

0 Our individual lists are nearly the same. The work characteristics that support high performance

appear t o be consistent among all people. Though the wording of the attributes will vary from group to group, the principles are the same. I always bring the lists of other groups along so people can compare them to their lists and recognize this fact for themselves.

0 I t appears that some people like tight time deadlines, and others like to have all the time they need.

Though the principles are fairly universal, their implementation must take into account differences among individuals. For instance, one of the principles is that a challenging situation is required . . . as in a tight deadline. However, what is seen as a challenge by one person will be seen as an unwanted source of pressure by another. Inversely, a stiff challenge to some people is child’s play to others. So it is not enough to recognize the principles; it is

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also necessary that they be individualized to the person (or groups of people with similar traits, interests, etc.).

0 This exercise suggests that all people are high-performers i f they are in a work situation that supports them in these ways (referring to the group list).

There are two important truths in this statement. The first fact is that everyone has the potential for a high level of performance. We prove that to ourselves by way of our experiences in life at our high-performer best.

The second fact is that, in order to perform at our highest levels of performance, we need to be in a work situation that provides the attributes that will allow us to do so. People who are performing poorly and well below their potential are probably in work situations that do not support their high level of performance.

I’m not suggesting that a person is limited to that high- performer level-surely we can all develop our abilities and improve our performance. But time spent on personal development doesn’t make as much sense when we are in a work situation that stands in the way of achieving higher performance. Personal development is no substitute for meaningful challenge, clear objectives, freedom to use our discretion, etc.

0 Since I am not in a high-performer work situation for me right now, I guess this means I need to either enhance my current work situation to get the attributes that will allow me to improve my performance, or I need to find another work situation that readily provides these characteristics to support my performance.

Yes.

Insights

This exercise points out several insights that have emerged from my firm’s research and consulting work in the discipline we call “humaneered work design.” This work stemmed from several realizations:

0 There is much more involved in determining the work performance of knowledge and service workers than worker

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ability. Performance improvement efforts that focus primarily on standardizing workers or on developing their abilities will result in little or no improvement in performance.

0 Traditional work analysis and design focus primarily, if not exclusively, on the mechanistic aspects of the work to be performed and apply engineering- based principles to increase consistency and control. These efforts have optimized the mechanistic aspects of this work but neglected its nonmechanistic aspects.

0 The organic aspects of work are largely ignored in work design (or lack of work design). Emphasis on mechanistic factors and disregard for organic factors suboptimize “whole” work performance.

0 The overemphasis on optimizing the mechanistic aspects of work designs severely suboptimizes knowledge and service functions and roles, thus creating substantial opportunity for performance improvement in these situations.

0 There are helpful scientific principles to guide the design of the nonmechanistic aspects of work.

Though we use this exercise to help people discover this knowledge, the hard work of creating it began more than ten years ago with a consulting assignment. Here’s a short version of the story.

THE CHALLENGE TO LEARN IT ALL

The problem was laid out to my colleagues and me in 1989 by the COO of a $2 billion consumer products firm. He was genuinely troubled by his organization’s inability to effectively use emerging management concepts and theories to improve performance and increase productivity . . . particularly in the nonmanu- facturing areas of the company.

Upon examination, we were able to confirm this condition and trace it, in part, to the prohibitive difficulty experienced by executives and managers in accessing, understanding, relating to, and applying this technology. Frequent attempts to introduce to

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the organization various elements of this advanced knowledge as it emerged always seemed to lack relevance and integration with current practices, even after an extensive program of costly and time-consuming training.

Management had become hopeful only six months before, when a simulation exercise had been effective in raising the consciousness of many managers to several management practices previously unquestioned, yet management was disappointed once again when little change in the behavior of managers resulted. This last failure prompted the COO’S call for help.

Based largely on our reputation as “architects of high- performance work,” my colleagues and I were invited to equip the top executives and managers of the company with a working knowledge of the “latest” in management and organizational theory and practices, and subsequently to facilitate a redesign of the company’s organizational systems (i.e., processes, structure, and management systems), with the goal of establishing a sustainable organizational competitive advantage for the company.

Pulling It Together

Before this engagement we, like most consulting firms, made it our business to keep abreast of emerging developments in knowledge and practices that might prove to be helpful in our work. In this case however, we had only 90 days to assemble the latest relevant scientific knowledge and practical field experience concerning the methods for optimizing knowledge and service work and turn this information into a meaningful learning experience for some very bright people. I won’t go into all the details related to pulling this knowledge together, but I do want to comment that having done so has dramatically changed the methods we employ for improving work performance.

This client engagement stimulated my firm’s interest in supporting the development of an integrated technology for the optimization of human work performance. It had become clear that just as mechanistic work needed to be engineered, as was the custom, organic work needed to be “humaneered,” as our program recommended. We found that managers and workers

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alike, when exposed to this knowledge concerning the performance of people involved in more-organic knowledge and service work, could quickly imagine the potency of this knowledge and became energized to apply it to accomplish their objectives.

Humaneers?

The notion of “humaneers” and work that is humaneered in its design suggests an entirely new frontier for human performance consultants. By using the extensive knowledge available regarding human work performance, these consultants can make substantial contributions to improved performance and productivity.

For human performance consultants, science provides many insights that hold the promise of clarifying and enhancing their understanding of the processes for making these improvements. Some of the fundamental insights include knowledge drawn from psychology, organization development, mechanistic and organic work designs, quality improvement initiatives, reengineering, and high-performance work designs. With a better understanding of these insights, human performance consultants will take a step toward becoming the profession that will liberate our economy’s knowledge and service workers.

D I F F E RENC ES B ETW E EN H UMAN E E RE D AND ENGINEERED WORK

Humaneered work design is analogous to engineered work in the sense that both result from the professional application of scientific principles to the design, development, and improvement of work systems. The difference is in the focal point-organic versus mechanistic aspects of work-and therefore the principles are also different (in many ways opposite).

When work is humaneered, the focus is on the human-dependent aspects of work and the optimization of this performance. The very act of exposing executives and managers to humaneered work-suggesting the goal of maximizing human achievement at work-often precipitates a dramatic shift in how they view employees, in how they view performance and productivity, and in how they work to support their human capital.

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Disinterest in Human Performance and Organizational Productivity

In years past, executives and managers did not concern themselves about science unless it related to their product or service. Even though they unknowingly depended on scientific knowledge concerning people and their behavior at work, managers have traditionally chosen to leave any explicit references to science to the experts.

The reasoning expressed to me on a number of occasions was that they knew well enough from experience and common sense what they were doing when it came to people. As long as they were not challenged with a problem they had never seen before, there was no reason to question time-tested methods of management.

This familiar predisposition is understandable yet problematic when it comes to improving human performance. It is understandable when we consider the experience and proven capability of most managers, and when we accept the accountability that they, not we, must assume for their roles and responsibilities. Given the complexity of their job, we too would be tempted to focus on concerns for which we already have skills, from which we get the most enjoyment, and for which we are most likely to be rewarded.

This seeming disinterest in human performance and organizational productivity is also understandable when we consider that only recently have the top business schools focused on these issues as important components of enterprise success. Furthermore, managers have been prodded and preached to concerning their organizational behavior since the “human relations school” theories made their way through major U.S. companies, yet their standards for success continued to focus solely on bottom-line results.

At the same time, this predisposition to ignore the current wealth of organizational technology seems hard to imagine. Executives and managers are, as organization leaders, engaged in a very difficult, rather abstract, and highly intellectual activity that ultimately depends o n all the keen insight, accuracy, and quickness of judgment they can muster. One might think a better understanding of ways to achieve higher levels of human performance would be naturally appealing.

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Complexity of This Knowledge and Its Presentation

My colleagues and I believe the reason for this prejudice of executives and managers against scientific knowledge is the complexity of this knowledge and its presentation. Emerging organizational technology must be sought after in the context of many sciences-psychology, sociology, anthropology, education, economics, and engineering, to name several-and in the text of conspicuously arcane scientific journals that seem almost irrecon- cilable with a manager’s legitimate concerns for the bottom line.

Not that there is anything particularly wrong with the methodology of the scientific pursuit of knowledge. Rather, the difficulty is in how this emerging knowledge is presented to the business community. The accessibility, format, and jargon of academic journals in particular d o not well serve executives and managers who must contend with a multitude of concerns and have little time for such reading. Nor does it well serve functional specialists who must integrate and present this knowledge, because they are already discounted as (and they probably are) overly biased to developments in their area of specialization.

New Potential

Social scientists have developed many critical insights into the principles that best support knowledge and service work. Though select managers pioneered many of these principles for work design and management in the 1950s and 1960s, their motivation at the time was more humanistic. For most managers, however, that these methods produced substantial fianancial advantages seemed less important than their inconsistency with the industrial paradigm for work that was then still prevalent.

The idea of humaneered work seems to be such a very practical idea-utilizing applied science pertaining to human work performance and productivity. Currently, however, it is a formidable task for management and human resource specialists to access this knowledge because it is dispersed throughout many branches of science, practice disciplines, and fields of inquiry. The process taps both scientific and practice knowledge from fields as diverse as corporate strategy, work design, organization design, organization behavior, compensation, management science, industrial engineering,

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industrial management, management accounting, finance, economics, environmental science, cybernetics, ergonomics, communications, anthropology, sociology, psychology, and medicine.

The integration of this knowledge resolved for us the mistaken perception that such knowledge is mutually exclusive-that theories must compete because only one theory can be accurate. We learned that all scientific laws, supported theories, and substantiated models can be in fact simultaneously valid and complementary explanations of human nature, perhaps dependent only on certain circumstances for their predicted or described effect to be demonstrated.

Key Principles

The concept of humaneered work is not the focus of this book, so its further discussion will be limited to some of the thinking that guides its application for the improvement of human performance and productivity. Here are four rules that serve as cornerstones for humaneered work.

1 . Align work design to enterprise performance objectives and core processes, not simply to function, role, task, or employee performance.

2 . Design work at the enterprise “role/job” level, the locus of design between process-level and task-level design.

3 . Improve work designs through joint optimization of the mechanistic and organic elements of the work, each with its own principles for optimal performance.

4. Align human resource practices to support work design and optimal performance and productivity.

1. Align Work Design to Enterprise Objectives

Organization and work design are the means by which management translates enterprise goals into work behaviors. This design takes shape through a continuous flow of management processes and decisions that seek to align ( 1 ) the strategic objectives of an enterprise, ( 2 ) the management processes created to specialize and coordinate operations, and ( 3 ) the work that is performed to satisfy customers.

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The design process begins with the enterprise strategy because of its powerful influence on both organizational and operational design. This order emphasizes the point that without a strategic priority to improve human performance (i.e., make people a competitive advantage), much of the work that must be done within the organization and operations of an enterprise to realize this goal will continually run up against a strategy with different priorities.

Enterprise strategy and the processes for its implementation generally determine the functions required to produce and deliver products and services. The design of these functions includes initial decisions concerning whether workers must or will be included in the function, and the choice of methods from among several that combine machines and workers.

This approach entails consideration of the tradeoff between the use of workers and machines to implement a function. In any function in which conditions change unpredictably or human qualities of perception (observation, concern, empathy, etc.) and discretion (motivation, innovation, consideration, etc.) are required for appropriate response, then human problem-solving behavior is essential. Conversely, if specified rules, routines, and procedures are effective in guiding completion of the function, then machines can be substituted for human problem-solving behavior.

This thinking extends all the way to work design. Highly mechanistic work designs assume that all important behaviors needed to carry out the work have been identified and predetermined. Highly organic work designs, by contrast, require adaptive human behavior.

For highly mechanistic work, a detailed specification of the work is provided (procedure manuals, policies, training, etc.), and little margin is provided for worker initiative and discretion. In other words, we are telling the worker how to do the work instead of simply stating what work is to be done. This approach is based on an analysis of the situation which concludes that the specified behavior will be effective in all cases. The design becomes less mechanistic as opportunities for latitude in worker initiative and discretion are included in the work design.

For highly organic work design, we assume that current knowledge is inadequate to anticipate every circumstance that could arise. In this case, a loose arrangement is specified (role, goals,


qualities, values, etc.) that provides ample flexibility for workers to vary their behavior to respond appropriately as the situation changes. The appropriate flexibility is based on an analysis of the situation, but it assumes that appropriate behavior cannot be specifically defined in advance. The design becomes less organic as opportunities for greater efficiency in standardized behavior become apparent and worker initiative and discretion are excluded from the work design.

To determine the optimal approach to function and work design, it is important to consider the specific situation and its variability, to take into account the availability of machine and human resources, and to test appropriate design alternatives to assess their individual tradeoffs. The consequence of optimized work design is high levels of function and enterprise performance.

2. Design Work at the Enterprise “Role/Job” Level

One aspect of the humaneered work approach that is a carry- over from the early days of my firm (1979) is the concept of designing work for specific work roles (i.e., positions held by workers). For no particular reason, several assignments early in the firm’s history were focused on work roles. Across many industries (production, health care, banking, insurance, education, professional services, franchising, hospitality, and more), we quickly recognized the untapped potential to unleash human performance and substantially improve operational performance by improving the design of highly populated work roles. The opportunity for performance improvement proved to be so great, and the results of our efforts so successful, that the firm picked up the nickname “architects of high-performance work” as a result.

What made the potential for improvement so great was primarily the fact that most companies had neglected work design at the “role/job” level. Work design at this level typically consisted of no more than a task-based job description and a loosely knit training program prepared by the personnel or human resource function. Only work that was highly mechanized received more design thinking, and the focus was at the task level of design. The popularity of reengineering in the 1990s led many companies to redesign their core processes. However, these designs

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typically stopped with the identification of work roles and did not extend to even rudimentary work design.

Design a t the role/job level is particularly vital to solving operational problems, including productivity, turnover, training, work quality, motivation, and many other management concerns. Design efforts at this level have consistently improved the performance and productivity of workers in every conceivable knowledge and service role, and many production and logistics roles.

3. Improve Work Designs Through Joint Optimization

In designing the work component of the organization design process, essential considerations are the required functional roles and tasks to be performed as well as the inherent needs of the people performing them. Job designs that accomplish the requisite work in ways that are consistent with human nature will achieve the highest levels of performance and productivity. There- fore, the alignment of strategy to worker, and worker to strategy, needs to be natural in the sense that it capitalizes on deep-seated human characteristics.

Enterprise is a human endeavor-from the development of strategy to the delivery of products and services. The extent to which it is designed to operate naturally for people is the degree to which people do not have to expend wasteful energy to adjust to conditions not well suited to performance.

Although it is customary for individual efforts to compensate for misalignment between strategy and work performance, such an adjustment is not accomplished without cost. When workers are required to work continuously in situations not highly aligned with basic human nature, doing so represents a cost to the work and the worker-and results in lower performance for the enterprise.

One aspect of this process that has remained innovative, though the underlying knowledge is available, is the practice of designing work for the entire role, not just its standardized elements. In most organizations, work design occurs at a very superficial level. When it goes beyond this level, it generally extends only to those aspects of the work that are predefined by the operation’s machine systems (e.g., equipment, processes, policies, procedures, methods, and materials). Typically these elements of the work are “engineered” for precision, consistency,

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and efficient performance, all of which consider only “human factors” pertaining to workers’ physical capacities. But this is where the design generally stops . . . way short of optimizing workers’ performance.

Performance improvement initiatives that focus on the “role/ job” level of work design face a complex array of variables which must be assessed for significance and alignment. To simplify this challenge, we have developed a framework of the more important variables, combining both mechanistic and organic design principles, to support this analysis. Table 9-2 outlines these variables in categories shown in hierarchical order, with the most fundamental variables a t the top.

Essentially, this hierarchy outlines the issues involved in designing work for high performance. These issues must be addressed and defined to support the desired result in order for the individual in the role or job to achieve high performance. Any issues out of alignment with the desired result will detract from the i nd iv i d ua 1’s perf o r ma nce-genera 11 y in o bse rva bl e be h a v i ors, noted in Table 9-2 as symptoms of deficiencies.

The predecessor to this framework was developed based on the 1989 research project noted at the beginning of this chapter. We continued to analyze and field-test this tool for several years thereafter. Since then, it has proven to be a vital tool for preparing practitioners for internal performance improvement consulting roles. It has endured considerable validation testing and has proven itself through extensive use to be a reliable guide for “role/job” level work design and redesign.

For design, the “factors involved” become a checklist to assure that every relevant issue has been considered and defined to support, not detract from, high performance. For redesign, the “factors involved” provide consultants with a helpful tool for diagnosis of what is missing or otherwise out of alignment. In both cases, efforts to improve individual performance should begin with the “factors involved” noted at the top of the hierarchy. Factors identified as missing or out of alignment should be addressed in this same order. We have learned that it does little good to make changes to issues well into the hierarchy if the more fundamental issues in the first part of the hierarchy are omitted or o u t of alignment.

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Table 9-2 Framework for Work Design

Hierarchy Design Symptoms of # Elements Factors Involved Deficiencies

~~

1 Explicit Role Value-adding activity; Underutilization organization and core-process alignment; operative work design; role- supporting relationships, systems, policies and procedures; and standards of performance

2 Accountability Responsibility, Low self- and authenticity, confidence

Empowerment trustworthiness, security, confidence, self-worth, rationality, respectability, and respectfulness, flexibility, and helpfulness

3 Vision and Life purpose, prin- Confusion Goals cipal values, posi-

tive attitude, focus and direction, and intrinsic motivation

4 Necessary Relevant knowledge Anxiety Capabilities and understanding,

helpful perspective, appropriate process and technical competence, and interpersonal skills

~~ ~

(continued on next page)

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Table 9-2 (continued)

~~

Hierarchy Design Symptoms of # Elements Factors Involved Deficiencies

5 Meaningful Potential for accom- Limited effort Incentives plishment (events),

achievement (growth) and actualization (maturity); financial compensation and rewards (to satisfy security and discretionary needs), explicit recognition (to satisfy self- esteem needs), free time; fulfillment of individual needs, and extrinsic motivation

~~ ~~

6 Adequate Authority; financial, Frustration Resources physical and emo-

tional support; time; leadership, guidance and feedback; and performance measurement

7 Action Plan Strategies, NO follow- programs, projects through and activities; timelines, schedules and deadlines; follow-up and evaluation

8 Development Assessment of Overconfidence Plan strengths and

weaknesses, self- directed learning; skill development; and performance improvement

DON’T ~ U S T ENGINEER. HUMANEER 179

My colleagues and I have been able to consistently demonstrate substantial gains by continuing the design process to include those aspects of work that were not standardized-responsibilities that required discretion. Over time, we discovered a variety of science- based methods to improve workers’ performance in these areas of their work. The approach was essentially to optimize the work design for overall performance-the highest possible achievement in the enterprise objectives. To do so, we would not only engineer the work, but would also “humaneer” it in areas where human, not machine, performance was key. Eventually we came to recognize the need to both engineer and humaneer work in order to achieve the highest level of performance possible.

Today, humaneered work consistently outperforms its engineered- only counterpart by a 30 to 50 percent average difference in productivity, though this figure varies based on work roles, work situations, and performance metrics. This involves the application of numerous field-proven scientific findings, concepts, and theories. However, we find that practitioners new to the process can humaneer work designs very well, with a minimum of instruction in the basic concepts, just by keeping focused on workers’ ability to vary their behavior based on discretion.

4. Align Human Resource Practices to Support Work Design

In most organizations, human resource systems, processes, and practices are designed for administrative efficiency and low cost, not for high performance and value-added. Quite often, substantial gains in performance and value-added can be realized through better alignment of this structure with work design.

The illustration in Figure 9-2 depicts the linkage among the three major enterprise subsystems first introduced in Chapter 7, and two additional subsystems that supply human resources for enterprise operations. This five-stage algorithm helps managers and practitioners consider the impact of these system elements in meeting the enterprise challenge to achieve competitive advantage-a challenge that can be met only through high performance throughout the enterprise.

This algorithm encourages systematic focusing on the unique forms of support that are required from each stage to meet this

180 HLJMAN PFKFORMANCF CON\IJITINL

L, 0

DON’T JUST ENGINEER. HUMANEFR 181

challenge. It helps managers and practitioners make sense of their organizational challenges, aids them in sorting out the many emerging theories and concepts for addressing these challenges, and guides them in determining the most appropriate role for many staff-support functions-all for the purpose of maximizing the human resource contribution to an enterprise.

Each stage in the algorithm is referred to in terms of its system function, principal focus, and goal. Like all representations, this algorithm oversimplifies the interrelationships that exist between the relevant functions concerned with enterprise performance. At the same time, it links the performance of each function to the others and suggests the consequences of goals not met at any single stage.

For example, as the algorithm indicates, human performance a t any level of the organization is determined largely by the alignment and quality of human resources recruited into the enterprise. Though obvious, this point is often lost on the employment manager who is pressured to recruit “bodies” to staff a growing function. Rather than solving the hiring dilemma in a way that optimizes enterprise performance, the quick solution that is more often chosen creates performance compromises that then ripple throughout the enterprise. As a result, some executive in the company feels innocently confident in a clever strategy to emphasize customer service, for instance, not realizing that this goal is being thwarted elsewhere in the enterprise by a well- intentioned staff member responding to operating pressures. To be sure, the only acceptable solution to this dilemma is to find a way to achieve the enterprise strategy-a challenge that can be met only if the consequences of actions in one aspect of the enterprise are linked with the impact they create elsewhere.

The central point to be made by this algorithm is that-in the course of fully capitalizing on the essential human component of an enterprise-alignment will not occur without coordination. The fitness of the people who will show up for work cannot be any better than that of the people hired and subsequently prepared for the challenge. The ability of business managers at all three subsystem levels of the enterprise (strategic, organizational, and operational) to achieve their objectives will be either enhanced or made more difficult by the appropriateness of the hires made. Compromises for the sake of administrative efficiency,

182 H (I MAN p F III OKM ANC F CON 5II LT I N L

consistency in policy, limited understanding of human performance, or simply poor judgment cannot be overcome later in the process. The die is set-adding to the difficulty in and un- likelihood of achieving operational objectives and also raising costs and lowering productivity.

Without understanding the linkage that aligns activity pertaining to human performance, few managers, organization specialists, and practitioners fully recognize the impact of their seemingly isolated handling of people-related issues. Isolated actions that are unknowingly unsupportive can easily become costly barriers to success further along in the process . . . when it is no longer possible to correct the mistake o r to see who is responsible.

The balance of the chapter outlines some of the issues and concern that arise a t each stage of the algorithm.

Strategic Subsystem

The first organizational objective must be to achieve the strategic goal of establishing and sustaining an organizational competitive advantage relative to competing entities, products, and services. Achieving competitive advantage based on other factors is short- lived in today’s marketplace. Price, product feature, speed . . . eventually they make no difference. These advantages are easily replicated by most competitors. Therefore,

0 Develop an organizational strategy. In recent years, we have acquired considerable evidence

that the organization of an enterprise may well be the remaining unique characteristic with which to distinguish a company from its competitors. Organizational performance is the one aspect of business competitiveness that is enduring and not easily copied. With this perspective, some corporate leaders are making organizational performance and productivity a core strategy for their enterprise. And to do so, they are implementing large-scale efforts to assure that the entire company focuses on maximizing human behavior, learning, performance, productivity, and advantage in appropriate ways.

The principal challenge at this system level is finding the leadership within the organization that is required to make

0 ldentify and support leadership.


high performance a reality. Not unlike T Q M or other organizational initiatives, emphasis on human performance and productivity begins at the top of the organization, where the authority is located. Though most of the work does occur within the normal operations of the organization, you can be sure that not much will happen if this is not a top priority of senior management.

Organizational Subsystem

The second organizational objective must be to increase productivity while maintaining or improving human performance. Therefore,

0 lncrease productivity. A company’s organizational productivity-its value created

per unit of human effort (e.g., hours worked, people on payroll, wages, etc.)-should be equal to or better than that of its principal competitors. Moreover, productivity must be continually increased, or a company risks a loss of competitiveness. These requirements motivate companies to invest in new technology, modern equipment and systems, and development support for employees for the purpose of increasing productivity. Employees should be empowered to assure the quality of their work and to effect improvements in their work.

0 Reengineer business processes. Generally speaking, the accepted approach for increasing

productivity is to minimize the consumption of unproductive resources in the strategic, core, support, and administrative work processes of the company. This effort often entails the elimination of roles and tasks and the continuous learning of new ways to work. When roles and tasks are removed from a process, these changes impact the remaining roles and tasks in the process, thus changing the work performed by others. This coordination, which is a principal focus of role-/job-level work design, yields considerable opportunity for increased productivity-achieving or further extending the operational benefits that reengineering initiatives strive to create.

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0 Create an environment for learning. Reengineering often requires employees throughout an

enterprise to continually create and learn new ways to d o their work. In fact, the willingness and skill with which employees respond to needed change in the workplace have considerable bearing on the success of the enterprise. The current emphasis on creating a “learning organization” involves improving performance and increasing productivity by having employees create and support the continuous planned change of the ways in which work is accomplished.

Operational Subsystem

The third organizational objective is for people to perform their work at the highest performance levels achievable. The focus of all human resources should be on developing competitive advantages for the enterprise, with an immediate goal of customer delight and value creation. This focus often entails a continuous process of bringing new people quickly up to required performance levels. Therefore,

0 Achieve peak performance. Assuming that employees have learned the basic tasks,

processes, and systems that are involved in their work, the goal of employees is to do whatever they can to help management accomplish the work. Maximum individual performance at work is the goal. Ongoing employee development should be in the form of performance development support that is on target and just enough to improve performance. Learning that is integrated into the work, perhaps in the form of performance support systems, is the best option. Once employees are a t work, traditional classroom training only disrupts performance, reduces productivity and capacity, and frustrates employees and their managers, who are accountable for performance. Rarely is the content of such training transferred effectively to the sites where the work is performed. Provide a supportive environment.

It is critical that employees be completely focused on the task a t hand. Employees otherwise focused on themselves

DON‘T JUST E N G I N E E R , H U M A N E E R 185

and not on their work-commonly the result of not feel- ing satisfied in the treatment they are receiving from the company-tend to do the minimum and to become inflexible. Have you ever thought or heard the statement, “If the company doesn’t care, then I sure won’t?” Characteristically, dissatisfied people will fail to champion or support change that improves performance. Make continuous improvements.

The product or service that satisfies customers in today’s marketplace will be insufficient for tomorrow’s. This constant need to improve presents an even greater challenge than achieving customer satisfaction today. A continuous process of work redesign is required to improve performance in terms of the quality, speed, cost, flexibility, and innovation of the work output. Humaneered work and TQM initiatives are focused on this challenge.

0 Cross-train for skill versatility. To achieve flexibility in adjusting to changes in the busi-

ness environment, a company must be able to redeploy its employees at will. To facilitate this process, employees should first possess all of the skills within their own skill groups and then diversify to learn what is involved in the other positions in their units of the organization. To the extent reasonable, employees should have hands-on experience in all assignments in their work function.

0 Update task training. Improvements in the form of new technology should be

integrated on a timely basis into the task training received by newcomers.

0 Enhance employee competence. As employees perform their work, developmental feed-

back will allow them to maximize the learning from their valuable experience, which adds to their overall competence.

Orientation and Training

To support the enterprise organizational objectives for competitive advantage, increasing productivity, and high performance, critical organizational support is required to assure the effective

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orientation and training of new employees so they are able to meet the performance specifications of their new roles. Therefore,

0 Teach the organization and the role. Once new o r existing employees are officially placed in

roles, it is essential for them ( 1 ) to become appreciated members of their new organizational unit and (2) to learn the current technology, methods, procedures, systems, etc., required for the role to be assumed. Whatever level of employee competence these people may have reached elsewhere, they will be required to learn through instruction, study, and experience and to adapt appropriately to demonstrate similar or increased competence in their new positions.

The focus of effective task training is to increase workers’ role or task capability, bringing them up to a minimum acceptable standard of performance. Even professionals who practice their profession using many of the same methods and procedures, regardless of where they work, need to learn the unique characteristics of the work performed in the selected organization. Often this standardization is provided in the form of structured learning of some kind, yet sometimes it is left up to the employees to learn for themselves on the job, with o r without helpful coaching. This goal of this effort is to make the employees’ work consistent with the work required by management and performed by others in a similar role . . . to the extent that standardization is desirable in the role being assumed.

0 Provide necessary task training.

0 Learn the newest technology. It is important for task training to reflect the reality of

the way work is really performed in the field or on the floor. Misalignment occurs when work-design changes have been made to the work as it is actually performed, yet this new technology is not reflected in up-to-date task training.

0 Avoid general topic training. The impact on performance of general topic training is

very limited and isolated and therefore relatively meaningless to employers-generally a poor investment. For training to have value in the workplace, it must provide instruction in

DON’T ~ U S T E N G I N E E R . HUMANEER 187

knowledge, skills and behavior that are required for specific work assignments or that are standard for all work within the organization.

Recruiting and Selection

To further support enterprise organizational objectives, it is critical to select the right kind of people for the organization and to situate the right people in the right roles within the organization. The effectiveness of this effort is critical to employees’ on-the-job performance and decisive in the value creation potential of the enterprise. Therefore,

0 Define the culture and environment. This challenge begins with determining what personal

characteristics, or stable traits, the company seeks, both overall and with regard to specific roles to be filled. The goal should be to identify the characteristics (competencies) of people who will perform particularly well.

0 Hire the people, not their skills. Depending on the employment market, companies make

either aggressive or passive recruiting efforts to communicate their employee needs and desires so as to attract people with the best fit of competencies and work-related capabilities for the organization’s culture and work. Emphasis should be placed on finding people who are a good f i t with the organization, with less concern initially placed on the skills and experience required to perform specific work functions. In many cases, capable people can learn the work. People who are not a good fit for the organization will be disruptive and will perform poorly, regardless of their prior work record. When a company is recruiting for professional roles, the implicit assumption is that all candidates should have the requisite professional skills and experience, or they would not receive consideration in the first place.

0 Make applicants responsible. Companies should utilize a variety of methods to assess

and screen applicants. At some point, however, the responsibility for excellent selection should shift to the applicants

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themselves, who must decide whether the organization is one for which they can perform sufficiently well to meet management’s expectations, while simultaneously meeting their own needs and desires in regard to the position. They have, or should have, as much or more at risk than the company.

Assuming that organizations d o select people first for their competencies, the next step is to conduct further assessment and orientation-training activities appropriate to fully introduce employees to the organization, indoctrinate them to the way it works, and then familiarize them with the work options for which they are best suited. Only when employees are brought into organizations with an effective introduction can they serve companies with their full human potential to meet the organization’s needs. Turnover in lower-level positions is largely determined by the effectiveness with which this is done.

0 lntroduce the organization.

No Easy Answer

The more common view of organizational issues suggests that just a single problem is responsible for missed goals, and that the solution is as simple as a single theory, approach, or program. Organizational challenges are not so easily met, yet we want to believe they are, if for no other reason than to simplify our lives. In fact, every activity in an organization is in some way interrelated to everything else in the organization. Every aspect of the organization is changing, causing changes, or being changed by everything that transpires within it. This complexity can be baffling.

The search for and the selection and preparation of employees have tremendous impact on the performance, productivity, and competitive advantage achieved by an enterprise. Falling down on any one objective, even partially, will have adverse consequences that cannot be reversed even by extra effort later in this process. Therefore, each individual within the organization must share responsibility for organizational success-requiring a concerted effort that can be accomplished only by establishing a corporate strategy to make the organization a competitive advantage.


Imagine what happens when even well-intentioned members of the organization (1 ) do not understand what kind of people are best suited to the organization’s work, (2) do not hire people with the right attitude and general capability, (3 ) fail to adequately prepare people for the work they will attempt to perform, (4) do not assign people to tasks designed for performance, (5) do not provide a motivating environment or engineer processes for productivity, and ( 6 ) do not focus the organization on establishing competitive advantage. All or any one of these omissions will negatively affect a company’s performance, productivity, and competitive advantage. Poor performance, low productivity, and disadvantage are results few firms can tolerate in today’s competitive environment.

At this point, readers may feel overwhelmed as they come to realize all the work that needs to be done, and all the knowledge that needs to be acquired and integrated, for companies to support high-performance work in the years ahead. Yes, it is a big job . . . and this is why companies need the help of human performance consultants to meet this challenge.

C H A P T E R 1 0

Strategies to Assess Performance Cba Uenges

Perhaps the most difficult aspect of human performance consulting is making accurate assessments of work systems in search of cost-effective changes that will improve performance.

The complex nature of human performance-particularly for more-organic knowledge and service work-makes it very difficult to clearly distinguish the impact of individual design variables and to link their contributions to current performance levels. The readily apparent contributing factors to which performance shortfalls are frequently blamed are, generally speaking, only visible signs of the real driving forces that precipitate current performance levels. To be effective, practitioners need to detect and understand the forces that drive performance. And this understanding needs to be sufficiently accurate and comprehensive i f they are to design initiatives for performance improvement.

Most practitioners find the scientific literature that contains theories to explain many of these variables, though potentially interesting, not helpful when dealing with the practical realities of work situations. For this scientific knowledge to be truly useful, it needs to be integrated somehow into the practitioners’ field experience. How else can practitioners develop the intuitive recognition and discretion that are needed to deal with their challenges?

For practitioners and managers who are still early in the process of developing this intuitive level of expertise, their best alternative is to utilize tools and techniques that have been refined

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STRATEGIES TO ASSESS PERFORMANCE CHALLENGES 191

by other professionals to reflect a deep understanding of the science and that contain years of rich practical experience. Such is the approach outlined here.

THE PROCESS OF ASSESSMENT A N D DIAGNOS~S

The assessment of current performance is technically referred to as the process of assessment and diagnosis. The particular method outlined here was developed on a foundation of study in industrial management, organization development, and related fields of knowledge, combined with twenty-plus years of hands- on consulting experience and hundreds of projects dealing with a wide range of problems and opportunities regarding work performance in major companies and government entities. During these experiences, the tools employed have undergone rigorous evaluation and continuous refinement by teams of consultants and managers . . . and this process is ongoing.

With its firm scientific basis and continuous in-field refinement, this method provides very helpful and reliable guidance, and therefore we offer it as a means of assisting practitioners and managers who have not yet developed their own intuitive sense of the causes of work performance problems and an understanding of the opportunities for solving these problems. Practi- tioners and managers who follow this approach will progress quickly and confidently to an understanding of the forces that explain current performance levels and to the identification of variables that can be realigned to create improvements.

A Difficult Skill to Master

The assessment of work performance against either some standard or the undefined potential for improvement, and the diagnosis of barriers to achieving higher levels of work performance, are difficult and elusive skills to master.

By its very nature, the human process of discernment is highly subjective. Add to this subjectivity the incredible complexity of the social processes that actualize work performance and organizational effectiveness, plus the ambiguity of the current science in this field, and the challenge seems overwhelming.

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It is understandable that practitioners new to this work may be immediately confused, anxious, and lacking in confidence. Furthermore, I would be wary of any who weren’t.

The lack of absolutes and clear distinctions makes it impossible for practitioners to know with certainty whether they are, in fact, “right,” even when they are convinced they are . . . even when their advice is implemented well and the situation works out well. Although there is a huge collection of knowledge that can be acquired from the research and experiences of others, practitioners must continually face the reality that every situation is unique, without exception. There is no one right answer. Every- thing is contingent on something else.

The assessment and diagnostic work of practitioners exemplifies the complexity of knowledge and service work that has been stressed thus far. Therefore it provides us with the opportunity to even better appreciate what knowledge and service workers are up against in the learning and performance of their work.

Becoming good at this kind of work is more a career challenge than it is a job. Practitioners can’t just casually look at a perceived performance problem and relate it to some prior experience they’ve had, or sense how they would feel if they were in the workers’ situation, in order to determine what needs to be fixed. This approach doesn’t sufficiently take into account the many external factors that are impacting the situation or the much broader base of scientific knowledge and field experience that would shed more light on underlying issues. Furthermore, this approach doesn’t consider the client’s readiness and resources for making changes.

Though people routinely arrive at conclusions similarly in their daily work experiences, such an undisciplined approach is not acceptable in this professional role. The consequences are too serious. Not only does the assessment and diagnostic work of practitioners impact the enterprise and its effectiveness, but it has a direct impact on the effectiveness of workers, managers, and other employees who count on this effectiveness. Furthermore, because people’s work effectiveness is inextricably tied to their quality of life, the decisions of practitioners may impact workers’ lives in dramatic and critical ways. Thus the responsibility that goes with this work is significant.

STRATLGIES TO ASSESS PERFORMANCE CHALLENGES 193

A frequently asked question is whether practitioners learn this work best through experience, yet need experience as a prequisite. If experience is needed, then how do they get it in the first place? Like most other professional work, human performance consulting requires apprenticeship learning that occurs while working alongside and being tutored by accomplished professionals. Because many practitioners have only limited opportunities to work with career professionals in this field, they must augment their learning with other methods as well.

Drawing on years of experience managing project teams, which generally included people at various levels of professional development, serious practitioners can be substantially accelerated in their learning with a simple three-part strategy: working systematically, regularly reading the published material of experienced professionals, and making decisions carefully. This strategy is reflected in the tools presented in this chapter and throughout this book. Each one has been designed to guide learning practitioners in the conscientious application of the latest knowledge in this field. They must avoid misguided fads and the trend to force-fit methods that are unselective imitations taken from well-known organizations.

In light of the complexity and uncertainty of performance assessment and diagnosis, the methods and tools adopted need to be both flexible enough to fit a wide range of situations and capable of reflecting the important issues in a way that is easily understood and accepted by management. It is not enough that the practitioner comes to understand the factors that negatively impact performance. More critical is management’s understanding of both the problem and alternative solutions. Approaches that are heavily laden with jargon that is unfamiliar to management are generally ineffective and reflect poorly on practitioners. The frequent dialogue with management that is needed for the effective implementation of performance initiatives requires, to the greatest extent possible, that practitioners work with methods and language that are easily accepted by management.

DIALOGUE W I T H MANAGEMENT

Like all human performance initiatives, the assessment of current performance needs to be a management-supported effort.

194 HUMAN PERFORMANCE CONSUI.TINC

Whether initiated by management or proposed by human performance practitioners, this process should begin with a dialogue between the practitioner and management, both t o develop a cooperative working relationship and to clarify management’s view of the situation.

This dialogue is management’s opportunity to explain a challenge it is facing and its expectations of the consultant. In the same discussion or series of discussions, the consultant is also expected to ask questions to clarify management’s challenge and to determine management’s support for any data-gathering activity.

The agreement reached between management and consultant will include authorization to proceed with an assessment, as well as requirements specified by either party.

The final product o r deliverable of the assessment will be the consultant’s research-enhanced perspective of the situation, presented in a way that assists management to better understand the underlying causes of the challenge and to explore options for dealing with it.

STEPS IN ASSESSING PERFORMANCE

The initiative to assess current performance should contain three steps. The first step, issue identification, provides the needed initial focus for the assessment process. Using “heuristic scanning” and easily applied assessment frameworks (introduced in Chapter 9), consultants can quickly identify the principal issues that are contributing to management’s performance challenge. The term heuristic refers to a problem-solving technique in which probable best solutions are selected based on prior experience. Consultants are able to quickly profile client situations to uncover issues that are likely influencers of human work performance. By using the provided frameworks, consultants are able to employ relevant science and field experience without otherwise having to be experts.

The second step, factor assessment, organizes the relevant issues into factors, or categories of issues, in order to assess the relative impact of these factors on current performance. Factors are assessed as either supporting or obstructing the performance level sought by management.

The third step, sys tem diagrammif ig , helps the consultant discover and subsequently explain to management the connections

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between key factors and their impact on performance. By depict- ing these relevant variables and visually demonstrating their interrelatedness, consultants are able to place pictures of the performance challenges in front of management. Armed with these views, management is better enabled and more frequently motivated to take effective steps to meet challenges.

STEP I-ISSUE IDENTIFICATION

Gathering Information

0 btaining data and insight concerning organizational challenges can seem like a task without direction or limits. Undoubtedly some aspects of the client’s challenge will seem obvious to the consultant-though early theories rarely hold up throughout the assessment process-whereas other aspects of the challenge will be nebulous. Do you follow your early hunch and find information that validates it, or do you start with a “blank slate” and just see what kinds of information you uncover? Where do you start? Who has the information you need most? Will they share it candidly? If someone understands the problem, why hasn’t it already been fixed? How will you know when you have an accurate understanding of the situation?

These are logical questions that consultants must answer at the outset of their work, and they point to practitioners’ needs for some helpful methods to focus their assessment. For the purpose of this explanation, we can use three frameworks that have been introduced earlier in this book to further explain how to do this. All three are science- and experience-based heuristics that distinguish the principal building blocks of enterprises and work. These are not the only possible frameworks-many can be found throughout organizational development literature. However, by using frameworks already introduced, I can simplify the explanation of how such tools can be used.

Framework for Enterprise Design

Introduced in Chapter 7, the enterprise-design framework (Table 7-1) guides the assessment of enterprise management issues. This framework outlines, in system-hierarchy order, the

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elements of enterprise design. Practitioners can use the enterprise- design framework’s elements and relative design levels as important reference points and indicators of influence. We know from Chapter 7 that each design level, either element or subsystem, is largely defined-either enabled o r limited-by the characteristics of the level immediately above. Therefore information gathered in discussions, regardless of the source, can be sorted into these categories to gain a clearer picture of the potential to which any issue can contribute to the current performance challenge.

Human performance problems are evident primarily a t the “role/job” level of this framework (i.e., reflected in the overall performance and behavior of workers) and sometimes a t the “task” level (i.e., reflected in the performance of only specific tasks). Based on the interdependent nature of social systems and the influence of work environment factors on work performance, experienced practitioners will know to look for the contributing causes to any concerns a t the system level immediately above. Each system level has a defining influence on the levels beneath it, making the next-higher system level the most likely place to look for possible causes of performance barriers. Equipped with this insight, practitioners can confidently focus most of their information-gathering at the correct system level.

Framework for Whole Work Design

Practitioners can also trust the work design framework (Table 9-2) to focus and organize their assessment of a work design that is producing inadequate performance. We know from our earlier discussion that the performance achieved in any human work is a natural consequence of the implemented work design. Therefore consultants can scan the elements of work design through direct observation and with interviews of supervisors and workers to determine the relative alignment of individual design elements with management’s performance objective for the work.

As explained in Chapter 9 , the factors listed at the top of the hierarchy are most important for work performance and thus should be the immediate concern of practitioners. Based on my own consulting experience, 50 to 60 percent of the causes contributing to poor work performance are explained by the factors within the “explicit role” design element. Another 20 to 30 percent of the contributing causes are explained by “account-

STKATECIES TO ASSESS PERFORMANCE CHALLENGES 197

ability and empowerment” factors. That’s 70 to 90 percent of the potential causes identified in two principal design elements.

The high level of effectiveness of this framework demonstrates the power of proven frameworks for assessment. Practitioners can save considerable time and effort by quickly focusing on the right factors rather than having to search every possibility for the predominant contributing causes.

Beyond simply scanning the current work environment and work design using this framework, it can also be utilized to guide a participative assessment. It is effective in situations in which it is helpful to engage management or organization members in the assessment process beyond simply being respondents to interview questions. Practitioners can involve participants in the assessment process by gathering together management and workers, or either group alone, to review each factor in the work design framework hierarchy. Have participants briefly discuss among themselves each factor and then rate it on a scale for the extent to which it is aligned (contributes to or detracts from) with the work performance objective. I typically use a scale that sets 100 percent as perfect alignment. Participants can rate all factors, yet rating only those in the first three or four design elements is generally sufficient to uncover the dominant misalignments that warrant further attention. In addition to its effective solicitation of input directly from management and workers, participative assessment has the added benefit of generating buy-in for change.

High-Performer Framework

Another participative assessment approach begins with the high-performer exercise discussed in Chapter 9. (See Table 9-1 for sample responses.) The exercise directions are similar to those for the beginning of the assessment process. Following the questions outlined in Chapter 9, participants are then asked to rate the extent to which the attribute is present in the current work situation. Again, I typically use a 100 percent scale for simplicity. Situations that are rated at or below 50 percent are then selected for group discussion to support further analysis and initiative planning.

Table 10-1 presents the responses of such a session held with district sales managers for an auto parts wholesaler. (See Appendix B for a complete project report.) In this case, the


Table 10-1 Management Responses to High-Performer Exercise

STRATEGIES TO ASSESS PEKFORMANCE CHALLENGES 199

Situations at or below 50% are shaded.

respondents followed the exercise questions outlined in Chapter 9 to generate the group list of attributes. However, when it came to rating these attributes on the extent to which they are characteristic of the current work situation, they rated the attributes both for their own role and for the role of their direct reports (territory managers). This procedure provides a reliable approach for identifying issues for further analysis and simultaneously generates buy-in for change.

Interviewing Decision Makers and Workers

Consultants generally begin their initial scan for information in similar ways for each project. Armed with the client’s challenge and heuristically defined categories of information to seek, consultants begin the search for information by interviewing select people who potentially have key knowledge and insight, and by gathering data and documentation pertaining to the situation.

Generally speaking, consultants will want to interview the responsible decision makers in regard to factors outlined in the enterprise-design framework that are likely to have a bearing on the performance being assessed. The line of questioning will zero in on the respondent’s understanding of the relevant factors- including why the issue exists, how it started, the impact it is having, and any anticipated changes.

It is often helpful to use the authority of the client to schedule these interviews. This approach has the additional impact of encouraging respondents to talk more openly with consultants. Consultants will also want to interview representatives of the work group whose performance is management’s concern and to explore with them the relative alignment of factors outlined in the work-design framework. Here the questioning will focus on

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the workers’ experience in performing their work-including what it’s like to work for the company, how the unit is performing, how things get done, who does what, and so on.

During this process, consultants should use their discretion to steer the inquiry toward the specific people and issues that seem most pertinent. Essentially, consultants are managing their own perspectives, from a diverging focus that looks broadly for any helpful information to a converging focus that narrows interest to a few key areas. As these areas uncover helpful information, consultants may then keep narrowing their focus or again diverge their focus to consider completely new information. Such is the nature of any investigative work.

The Columbo Approach

To better understand this process, you might watch a rerun of the television series Columbo and carefully observe Peter Falk’s techniques for shifting the focus of his inquiry. The Columbo character also provides a terrific model for interviewing techniques. His unassuming manner and meandering questions stimu- late the kind of dialogues that generate the insight consultants need in order to diagnose performance problems.

I am not suggesting that practitioners wear rumpled trenchcoats to interview clients. However, they d o need to realize that people tell only what they want someone to hear. Indirect questioning can help to uncover actions and motivations that may not be offered as answers to direct questions. Furthermore, it is helpful to remember that whatever is said is limited in its accuracy by the perceptive limitations of respondents. Because people often try to explain what they don’t understand, consultants will need to recognize this possibility when it is happening so that they don’t base their work on mistaken information.

Other Considerations

This step could take one day or three months based on the scope of management’s performance challenge. During this time, consultants should take copious notes and may even tape-record conversations in situations where this practice does not limit the respondent’s candor or helpfulness. The volume of information collected can be substantial and difficult to recall in great detail,

STKATEGIES TO ASSESS PERFORMANCE CHALLENGES 201

and it is rarely clear during such interviews which pieces of information will prove critical.

STEP 2-FACTOR ASSESSMENT

Determining Categories of Issues

The next step in the assessment process involves organizing the issues identified into factors, or categories of issues, in order to assess their relative impact on current performance. Since the performance achieved in human work is a natural consequence of the interaction between the worker and the work situation (i.e., the combined work design and work environment), it is necessary that consultants understand the dynamics of this interaction.

Alignment with Work Performance

By distinguishing factors of the work situation as either supporting (in alignment) or obstructing (out of alignment) the achievement of management’s performance goal, consultants can better determine the specific forces that are standing in the way of improvement. By analyzing these supporting and obstructing factors, they can better understand the current performance level and determine what is needed to bring the obstructing factors into better alignment with management’s performance objective.

The analysis illustrated in Figure 10-1 resulted from the analysis of factors contributing to current levels of patient care quality at a major medical center. Once the many issues identified were consolidated into twelve factors, the individual factors were rated as supporting or obstructing performance, and the strength of each factor was also assigned a weight. Equipped with this visual representation of the relevant factors impacting current performance, the analysis could continue to a discussion of the interdependence between these factors. (Practitioners familiar with Kurt Lewin’s “force-field theory” will recognize that this is an application of his analysis method.)

Interpretation and Analysis

The performance of workers is a function of the forces they bring to their work (skills, experience, judgment, temperament,

202 HUMAN PERFOKMANCE CONSULTING

I Current Performance I Quality of Patient Care

rl -b Supporting

low med high

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high med low - HighTurnover

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+ Cultural Knowledge - Interpersonal Skills

WorkloadLack of Time

Figure 20-2. System analysis of hospital floor nurses.

etc.) and the situation within which they work. To the extent that these forces remain stable, the resulting performance level will also remain stable and predictable.

Because performance often varies with the selection of workers, we mistakenly interpret this variance as purely a function of workers’ individual characteristics (good work habits, self-discipline, motivation, etc.) However, performance variations may also be caused by changes in the work situation. That’s because performance levels are determined through the interaction between these two interdependent components, not simply by varying worker characteristics.

To achieve the highest possible performance, the work situation and workers need to be jointly optimized for the highest performance level physically achievable. To achieve incremental

STKATEtiIES TO ASSESS PEKFORMANCE CHALLENGES 203

improvements in performance, consultants need only identify the more easily changed factors that will bring the components into closer alignment with management’s performance objectives. Careful analysis of the interacting forces, and the direction and intensity of alignment, will equip consultants to assess current performance and to identify ways to improve it. With experience, consultants can predict how the intentional changing of factors will affect performance.

STEP 3-SYSTEM DIAGRAMMING

Effectiveness of Causal-Loop Diagrams

The final step in the assessment process completes the picture of management’s performance challenge. Factors identified as having the greatest impact on current performance are diagrammed to visually demonstrate their interrelatedness.

Practitioners will find system diagrams (causal loop diagram is the technical term) very effective for demonstrating to management the dynamics of performance challenges and, as a result, for motivating management to take appropriate action. With a system viewpoint, management is more likely to make decisions that reflect the systemic nature of performance and to deal more effectively than before with performance-related challenges.

Creating System Diagrams

System diagrams of work performance can be created with only a minimum of experience. Start by reflecting the type of analysis outlined in Step 2 and selecting the factors that you determine are substantially supporting or obstructing improved performance. Consider how these factors relate to each other and to performance, and for each cause-and-effect relationship that you notice, write out the relationship in the style noted in Figure 10-2.

When you think you have identified all the cause-and-effect relationships that are important to your analysis, then shift your focus to a clean writing space and write in the center the performance variable that is the focus of your assessment. Now, one at a time, transfer your cause-and-effect relationship statements to this writing space by adding the factors to the diagram and

204 H~JMAN PERFORMANCE CONSIILTINC

Quality of Work

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Required

Call Center Staffing Challenge

Volume Workforce

Calls Completed

Quality of Work

Fatigue

Figure 10-3. Systems diagram.

drawing the appropriate arrows and plus o r minus signs. Follow the style of the example in Figure 10-3.

When you have finished this transfer of factors and relationships, then carefully follow the arrow paths from one factor to the next to assure the logic of your diagram. You will very likely see additional relationships, and, if they are significant, you should add these to the diagram. Time will improve your skill

STRATFGIFS TO ASSESS PERFOKMANCF. CHALLENGES 205

in selecting factor names and combining or subdividing factors for greater understanding.

Discussing Findings with Management

When this three-step assessment is complete, practitioners are prepared to meet with management to share their findings. (The consulting process will be further discussed in Chapter 13.)

New practitioners often feel that they must bring into such meetings both absolute statements of the problem and detailed alternatives for achieving management’s objective. The client may even have suggested this expectation. However, these feedback meetings will generally lead to better results if consultants limit the discussion to their assessment findings. Part of the motivation for taking further action will generally come from management’s personal understanding of the situation and their alternatives for action.

C H A P T E R 1 1

Strategies to Improve

Performance

The discovery of unintended limits to current performance generally, but not always, leads to management’s agreement to an initiative for creating improvements. Based o n the findings of a consultant’s assessment, management is frequently able t o redefine a performance problem into a performance opportunity simply by better understanding the situation and its causes.

Assessments, and the ensuing discussion with management, typically provide the focus for performance improvement initiatives. In fact, one of the principal advantages of conducting assessments is the precision they can bring to subsequent improvement activity. Attempting to make improvements based solely o n a cursory perception of the situation, regardless of whether it is management’s o r a consultant’s perception, often leads to ineffective action and a waste of management’s courage and resources.

In some cases, however, management will not choose to move in this direction. Some of the reasons include management’s unwillingness to commit resources to the opportunity, low confidence in the assessment process or its findings, dissatisfaction with the alternatives considered, and concern for the competence of consultants to implement the alternatives.

Sometimes it can be difficult for consultants to accept the fact that management, as the client, is the sole judge of what actions will be taken. This is particularly true when management makes its decision based in part on information unknown to the consultants.

206

STRATEGIES TO IMPROVE PERFORMANCE 207

This reality can be frustrating, particularly when during the assessment process consultants uncover situations that can be improved with seemingly obvious action.

A colleague who is an internal consultant with a state agency recently related the story of a comprehensive two-month assessment of 1,500 field-office employees concerning the unacceptable quality level of their work. Her assessment determined that several factors relating to the design of this work and to the support and compensation of employees were leading to high turnover and resulting in an inexperienced staff trying to do work that required high levels of personal initiative and discretion. She commented that she was surprised that the quality of work was as high as it was.

Her findings were presented to the client, and an engaging discussion followed. At the conclusion of this meeting the client handed the consultant a copy of an organization survey of the same employee group and pointed o u t that the educational institution completing the other survey concluded that the organization was operating with essentially no problems. But after my colleague studied the data collected by the educational institution, she found it to support her conclusions. The other report presented the data in such a way as to deemphasize the figures that were troubling, and essentially glossed over any real problems in the text.

This example illustrates the dilemma faced by consultants when they have data that conflicts with the client’s perception. In this case, there was a conflicting consultant report. But in other cases the practitioners’ data or interpretation will simply conflict with the clients’ view of the situation. Then what? If you were the client in the above situation, which assessment would you trust, if either? If you were the client and a consultant presented data or conclusions that substantially differed with your own perspective, whose impression would you trust?

T H E IMPORTANCE OF I N I T I A T I V E DESIGN A N D TESTING

Performance improvement initiatives are concerned with creating an effective sequence of actions and changes that will bring current work performance into alignment with management’s

208 HUMAN PEKFOKMANCF CONSULTING

performance objectives. Careful design and testing are critical, because each initiative needs to be as uniqu.e as the organization it is designed to engage and the problems it is designed to solve.

Furthermore, in order for initiatives to deliver measurable performance improvement, their design must be based on a broad range of actions, and the implementation developed must be consistently effective. Despite these limiting conditions, the potential is great for consultants to assist their clients by creating initiatives that produce improvements in performance.

Factors Affecting Design

The design of performance improvement initiatives, regardless of their specific focus and activity, must take into account conditions outside the immediate context of the proposed change, conditions that could easily impact initiative results. These concerns include the capability of consultants to implement the designed initiative effectively, the readiness and capability of organization members to adapt to required changes, and the general resistance to change in stable organization cultures.

These issues should first be considered during the consultant’s action planning with management, when the initiative is conceived, and they require further consideration throughout the design and development process. Quite often these conditions require special efforts to minimize their impact, including strategies to bring in professional consultants who specialize in needed capabilities, changes in timeframe so as to pace the action to better fit the situation, and advance efforts to prepare the organization for the initiative.

Pilot Testing

Whenever feasible, initiatives to improve performance should be piloted in a realistic setting. This kind of test can give consultants an idea of the impact that full implementation will likely create. Because of the disruptive potential of certain outside conditions, the individual character of each client situation, and the custom design of interventions, a strong argument can be made for a serious attempt to pilot the initiative and use the results to further improve the initiative. When initiatives are not


tested, there is considerable risk that seemingly external issues will prove to be more significant than anticipated by management or consultants.

The Fallacy of the Standard Solution

It seems quite natural for management and consultants to adopt perspectives and theories that would lead them to select certain initiatives to the exclusion of others. The success of a particular initiative in several organizations leads to generalizations about its effectiveness, and in time, its widespread adoption by other organizations seeking the same results. Training, team- building, competencies, corporate universities, reengineering, reorganization, and special incentives are some of the common normative initiatives today. The assumption implicit in this approach to initiative selection is that results materialize directly with the implementation of initiatives-that management can in effect place an order for certain results simply by selecting the initiative that is presupposed to provide them.

These normative initiatives become thought of as standard solutions-the one right way to deal with certain challenges. Of course, the problem with this approach is that it fails to account for the unique nature of every organization. What sounds like a simple solution may develop into a more complex problem as an organization attempts to adapt to an initiative that does not suit it well.

Consultants will be challenged from time to time to deal with managers intent on adopting standard solutions. The extent to which consultants are able to customize these initiatives to accommodate the uniqueness of organizations may be critical to improving performance with these initiatives.

Initiatives That Improve Performance

Throughout this book, I have encouraged the rethinking of work performance and the development of ways to best achieve work-performance improvements. My emphasis has been on developing measurable improvements that add financial value to the enterprise. The discussion that follows presents performance improvement initiatives that rely on this new thinking.

210 HUMAN PERFOI<MANCF CONUII I I N G

Work Performance

Work performance is a function of workers (skills, experience, judgment, temperament, etc.), work design (role, responsibility, support systems, relationships, etc.), and work environment (process alignment, organization structure, management systems, etc.), as shown in Figure 11.1. It is helpful to think of performance as being achieved through the interaction of these interdependent components, and to consider all three when planning action to improve work performance.

Previous Focus on Workers

Traditionally, efforts to improve performance have focused on workers and their adaptation to existing work designs. Since these work designs result from the enterprise design process and are often standardized by large-scale processes or machinery, they are often thought of as unchangeable or certainly as a greater priority than workers. With workers perceived as the easiest variable to adapt, initiatives like training, motivation, and incentives that attempt to change workers’ natural behavior have dominated performance improvement.

New Focus on Work Design

Given the current fundamental shift in the nature of human work, this approach to initiative design makes much less sense.

\Ibrlt- (productivity, effectiveness, fulfillment)

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* WorkDesign Work Environment (roles, responsibility, (mission, strategy, technology, process, structure,

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Figure 1 1 - 1 . Components of work performance.

STRATEClrS TO IMPROVE PERFORMANCE 21 1

For work that is primarily knowledge- and service-based, workers, not large-scale processes or machinery, provide the means by which products and services are produced. Thus workers are critically important to performance achievement.

For this kind of work, workers become the greater priority, and work designs need to be adapted to allow these workers to work in whatever ways achieve the desired performance. Rather than requiring workers to rigidly adapt to a standardized work design, initiatives should emphasize aligning workers to the work environment with a common mission and core process, and providing workers the discretion to design their individual work to achieve the desired performance. Work design in this new context becomes more an issue of providing just the right support to workers to maximize their productivity.

Implications

This shift in importance from worker standardization to worker discretion is evident in many changes in today’s workplace, such as casual dress, flexible work schedules, greater empowerment, and telecommuting. It is also reflected in effective initiatives to improve performance. Because no work is 100 percent knowledge- and service-oriented or production- and logistics-oriented, consultants need to approach performance improvement with an open mind and to consider the impact of potential changes in all three categories-work environment, work design, and workers.

SYSTEMIC APPROACH TO PERFORMANCE IMPROVEMENT

A system perspective of work performance components is represented in Figure 11-2. This image relates the current discussion to our earlier discussions of enterprise design (Chapter 7) and the differing nature of knowledge and service work (Chap- ters 3, 8, and 9).

Each nested system level, represented by bands within the market environment, provides a defining framework for the subsystem levels nested within it. In addition, the certain dominance of the work environment over work design and workers is easy to visualize. Initiatives to improve performance must contend with these different components and their interdepen-

212 HUMAN P~RFOKMANCI CONWITINL

Figure 1 1-2. System perspective of work performance.

dencies, so we will review the design goals and methods for initiatives within each component.

Work Environment

The work environment, which is the context within which enterprise operations are performed, includes both the strategic and organizational subsystems of enterprise design. The elements in the strategic subsystem define the principles, purpose, and strategy of the enterprise. As the work of senior executives, it provides the fundamental direction for all activity within the enterprise.

The elements in the organizational subsystem generally define the core process, structure, and management systems for the enterprise. As the work of general management and corporate staff functions, it focuses on carrying out the enterprise’s strategic game plan. The work environment is therefore important both in keeping the enterprise working toward its goal and in gauging the powerful force exerted by the work environment on work designs and workers.


Performance assessments will often reveal performance-limiting issues originating in the work environment, many of which can be grouped into two broadly defined types, each having a substantial negative impact on performance.

Lack of Worker Alignment This type of issue arises when workers have not effectively bought in to the purpose and strategy of the enterprise. Off- target recruiting, limited and ineffective orientation, and weak support for organizational culture are just a few of the contributing causes in this type of issue. High turnover, absenteeism, and an overemphasis on compensation are a few of the outcomes. A surprising number of executives and managers discount the importance of aligning workers to the work they perform. Although not often the dominant cause of performance problems, it is frequently found to be a contributing issue.

This type of performance-limiting issue generally indicates that the organization’s structure and management systems do not well support the core process and work operations of the enterprise. Poor (or nonexistent) work design that is not supported is generally the cause, as opposed to poor execution of good work design. Poor work performance, low productivity, and employee dissatisfaction are typical outcomes. This lack of support seems to occur when organization structures and management systems are oriented more toward serving interests other than work performance, such as administrative efficiency and management preference. In such cases, work operations are required to employ work- around methods to meet enterprise objectives.

Is] Lack of Work Environment Support

Initiatives prescribed to deal with work environment issues include a wide range of efforts, some of which are aimed at restoring needed alignment of the enterprise design (e.g., organization survey and feedback, communication programs, search- conference planning, and customized support systems). Others are more or less transparent attempts to shift the burden elsewhere in the enterprise (e.g., mandatory training, terminations, culture change, and performance management programs).

214 HUMAN PCRFOKMANCE CONWLTINZ

Work Design

Work design refers to the work performed within the operations and staff functions of an enterprise. The elements in the operational subsystem generally define the roles and responsibilities of knowledge and service workers, the jobs and tasks of production and logistics workers, and all the resources utilized in the work processes of product and service operations. As the work of most organization members, it focuses on work that directly performs the enterprise mission. Work design is vital to enterprise success, and it is implicitly the most important activity within an enterprise.

Most performance-limiting issues identified in performance assessments can be traced to work design. Most work designs are over-engineered and under-humaneered, and clearly not optimized for performance. Organizations typically lack any real expertise in work design, and as a result workers’ roles and jobs are created with many suboptimizing features to which workers are expected to adapt.

Figure 11-3 illustrates a helpful “work system framework” for segmenting work designs into “domains of discretion.” Discretion is a determining variable in the design of all work and is therefore a helpful starting point in work design. Role responsibilities are analyzed so they can be categorized as to the discretion they require:

0 Mechanized system design-fully automated functions 0 Task-level work design-functions that interface with the

mechanized work system and therefore must be adapted to by the worker

0 Role-/job-level work design-functions that are dependent on individual discretion, which is not dependent on mechanized work systems or coordination with others

0 Process, structure and management systems design-functions that are somewhat dependent on organizational discretion and related factors

The design challenge is different for each “domain of discretion,” and optimal work performance will require that different methods be applied.

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216 HUMAN PERFOKMANCC CONSUIlINC

Work performance generally suffers as workers run into difficulty working around impediments to their performance. Examples include poor direction, avoidable paperwork, crudely designed information-system interfaces, inappropriate standards for performance, excessive lecture-based instruction, unnecessarily restrictive policies, poorly designed equipment, insufficient resources, and so on.

Large-scale initiatives that deal with work design issues are generally undertaken directly by operations management, which may in some cases seek consulting expertise to support the effort. This approach is much more likely to occur in production and logistics operations, whose work designs are substantially engineered for standard performance levels.

A growing number of knowledge and service operations have discovered the potential of humaneered work design, including prominent sales-force, call-center, field-service delivery, and large- scale administrative operations. Most consultants-both internal and external-whose work deals with knowledge and service work focus primarily on workers, not on work design, in search of performance improvements.

Experience has demonstrated that the only effective improvement actions are those that squarely address the presenting issues and seek to realign them to enterprise principles, mission, and strategy. This approach amounts to creating or restoring alignment of the important factors that contribute to performance. Thus there can be as many different improvement possibilities as there are work roles or employees in them. See Table 1 1 - 1 for a hierarchy of generic initiatives (listed in order of their ease of implementation-easiest a t the top).

The standardization priority that once simplified performance improvement to a handful of methods no longer applies. The key to optimizing performance and value-added, and to meeting workers’ work-design needs, is to create the means whereby workers can tailor their work to meet their individual needs. If knowledge workers are the means of their own production, then they are the controlling force for improving their own performance.

The improvement of work designs for knowledge and service workers could easily be the next frontier for productivity improvement, as substantial gains-20 percent, 40 percent, 60 percent, and more-can be achieved with only moderate effort.

STILVTFGIES TO IMPROVE PERFORMANCE 217

Table 11-1 Hierarchy of Performance-Improvement Initiatives

Initiative Description

1. Inform

2. Document

3. Define

4. Instruct 5. Counsel

6. Align

7. Motivate

8. Reframe

9. Redesign

10. Standardize

11. Structure

12. Enforce

Acts to communicate goals, objectives, expectations, results, and discrepancies Acts to codify information, i.e. to preserve it and make it accessible Acts to specify or clarify the mission, vision, purpose, processes, products/services, market position, relationships, and outcomes Acts to expand skills, knowledge, and confidence Acts to assist individuals either singularly or collectively to deal with work, personal, career, family, and financial issues Acts to achieve congruency between purpose and practice Acts to induce and maintain desired behaviors, eliminate undesirable behaviors, and reward desired outcomes Acts to generate new paradigms so people can experience new perspectives, find creative solutions, integrate new concepts in their behavior, and manage change Acts to improve tasks by eliminating variance, waste, errors, etc., often adding performance support systems Acts to systematize or automate processes and standardize tasks, tools, equipment, materials, or measures Acts to organize or (re)arrange business units, reporting structures, work processes, jobs, and tasks Acts to actualize consequences and achieve compliance

Workers

Workers a re obviously the organization members w h o perform the work defined in work designs. Historically viewed a s the most easily changed component of work performance, workers receive the most direct attention of all the components in the search for performance improvements.

218 HUMAN I’ERFORMANCC CON\Ul r lNG

Table 11-2 Process Model for Workplace Learning and Development

Stage Description

Need Learning and behavior change occur only when there is a strongly felt need to learn or change. This need may originate internally (e.g., self-image, goals, etc.) or externally (e.g., threat, reward, etc.). The new knowledge or behavior must first be perceived, comprehended, and accepted before it can be applied volitionally.

This knowledge or behavior must be used often, preferably in a safe and supportive environment closely relevant to its intended application.

Understand

Practice

Adapt This knowledge or behavior must then be integrated with and adapted to the learner’s natural behavior style. Teach The learner will encourage and coach others to use this same knowledge or behavior, thereby erasing all self-doubt about its effectiveness and value.

These efforts are generally not very effective, however, because they attempt to get workers to adapt t o suboptimized work designs, and to do so in ways that are not natural (e.g., training, incentives, motivation, team-building, and performance management). Workers will often try to redirect management’s efforts to improve performance to other initiatives that would result in improved performance, but to management this approach often sounds as if workers are trying to shift the blame away from themselves to management’s areas of responsibility.

Performance assessments are often initiated because of widespread unacceptable worker performance, though poor performance levels a r e management’s most objective indication of suboptimized work designs and work environments. Management generally interprets poor performance as worker-created performance problems.

Large-scale worker-focused initiatives for improved performance include a wide range of improvements to the process for worker


I Capability to Perform

Complexity of Task

_______)

Figure 1 1 -4. Accurate selection of instructional method.

selection (e.g., competencies aligned with enterprise culture), to placement criteria (e.g., assignments aligned with role/job competence), and to work preparation (e.g., orientation and technology training). The list of generic initiatives outlined in Table 11-1 points out that there is an almost infinite range of initiatives that might be appropriate for improving worker performance, both the right initiative based on the specific situation. These generic initiatives are listed in order of their difficulty of implementation, with the least difficult at the top.

Instruction is the most commonly used initiative for improving worker performance. Training-originally introduced to industry by Taylor in the late 1800s-became a popular normative initiative at a time when human work was predominantly production

220 HUMAN PERFORMANCE CONWLTING

and logistics and thus when improved performance would result from having workers more closely model the one right way to accomplish their tasks. Education, another form of instruction, became very popular in the workplace in the 1950s as the most common work shifted to knowledge and service functions and the learning challenge was redesigned to focus on the workers’ need to have more information to make appropriate decisions. Development, still another form of instruction, became popular in the late 1960s as the workers’ performance challenge was redefined in terms of human growth and the need to expand the capacity of workers t o do the right things when faced with opportunities to do so.

Instruction became so popular in the twenty years following World War I1 that a separate function was created within operations and personnel departments to meet the large-scale requirements for these experiences. My book Future Training details this expansion and its consequences in detail. Today, many organizations continue to use instruction as the principal initiative for improving worker performance in organizations.

The widespread use of instruction has taught organizations some practical lessons regarding its application. Although the underlying concepts were originally made objective by theorists in the field of educational technology, the universal merit in the application of these lessons has been well established in industry practice. Practitioners who use instructional methods for improving performance would be wise to consider the importance of these two lessons in the design and implementation of performance improvement initiatives (Figure 11-5).

First is the common process underlying all learning, change, and development. This five-stage process is the process of the learner, not the instructor. Experience has shown that the effectiveness of this process for learners ultimately determines the success of all instructional initiatives.

At first glance, many practitioners will conclude that their initiatives lead learners through this process, but this is rarely the case. Consider for a moment the reality of many initiatives in which organization members

1. Are unclear of their purpose for participation. 2. Do not solidly grasp the content.

STRATEGIES TO I M P R O V E PERFORMANCE 221

3. Have little or no time for the supported practice of new

4. Receive little acknowledgment of the merits of their estab-

5 . Get no chance to fully believe that the implied change is

behaviors.

lished behaviors,

best for them.

When practitioners design this learning process model into instructional initiatives, organization members have the opportunity to change their perspectives and behaviors in alignment with the enterprises’ performance objectives for their work. Without this common learning experience, instruction is often no more than a waste of resources.

The second lesson focuses practitioners on selecting the most effective instructional method for each performance improvement challenge based on a combination of factors, including the

Current capability of the performers (e.g., familiarity, experience, and skill). Complexity of the tasks (or responsibilities) to be performed (e.g., involved variables, interdependencies, and discretion). Instructional goal (e.g., target development level).

Considering these three factors and their relationship to the three common instructional methods (as illustrated in Figure 11-6) provides a sound basis for selection of the correct instructional method: training, education, or development. These methods may appear synonymous to the employee or manager who does not work with these concepts on a regular basis. However, practitioners must understand their differences, theoretical constructs, and appropriate applications if they are to use instruction effectively for performance improvement.

Training is instruction whose purpose is to transfer to someone the capability to perform a standardized task-frequently used to standardize work practices in production and logistics work, and as a principal method of management control for all kinds of work. Based on behaviorism, training seeks to make a change in overt behavior through conditioning.

Education is instruction with the objective of transferring to someone the specific knowledge that will expand their context


(i.e., perspective) for making choices-frequently used to acquire a professional body of knowledge and to standardize workplace norms. Based on cognitivism, education seeks to provide learners with new rules of knowledge for use in their decision-making.

Development is instruction that facilitates in people the expansion of their capability to exercise discretion, leading to the achievement of individual potential-frequently used to develop consistent perceptions while allowing diverse behaviors. Based on constructivism, development seeks to provide learners with new insights based on personal discovery.

Performance improvement strategies that seek to deal with specific situations, and that depend on sound theory and practical experience for the design of custom initiatives, will be most effective. The application of normative strategies and methods can provide only vague enhancements and will always fall short of optimizing the potential for work performance.

C H A P T E R 1 2

Instruments of Performance Improvement

Striving to improve the work performance of others is not a new endeavor. Since the time of skilled craftspeople, capable people have been assisting apprentices in the performance of their work.

Human performance consulting began with the work of Frederick Taylor, as was discussed at some length in Chapter 1. Taylor was the first to apply knowledge to the analysis, study, and engineering of work itself. He called it “working smarter [l].” In Drucker’s words, “Taylor (1 865-1 915), the inventor of ‘scientific management,’ in all probability also coined the terms ‘management’ and ‘consultant’ in their present meaning. On his calling card he identified himself as ‘Consultant to Management.’ He deliberately chose these unfamiliar terms to shock potential clients into awareness of his offering something totally new [2].”

Taylor’s pioneering efforts gave birth to the field of human performance improvement. Many of his engineering-based methods, including task analysis, best practices, training, time analysis, and quality improvement, have since launched entire disciplines of professional knowledge and practice.

Years later, with the advent of social science, the field of human performance improvement began to develop an understanding of human performance in situations in which performance was dependent on people, not machines. Regardless of its potential, though, this knowledge would remain largely untapped for as

225

226 HUMAN PERFORMAhCt CON\ULl'ING

long as industry was dominated by the machine metaphor for work and as long as the professionals with this new perspective on human performance could not speak the language of industry leaders.

However, it was only a matter of time until the persistent shift of employment from production and logistics jobs to new knowledge and service roles meant that most work performance would eventually become dependent on people. That day has come, and now virtually everyone in organizations must learn how to improve work performance because it is dependent on people.

Much of what is done to improve the work performance of people is not effective, yet many executives, managers, employees, and even some practitioners persist in these methods. The reasons they do so seem to lie in the challenges that they face in the honest attempt to fully grasp the entire field of knowledge on human work performance.

This challenge is not so much an intellectual feat as it is finding the time, accessing pertinent resources, maintaining a learner's perspective, and having the experiences necessary to absorb the relevant knowledge on this subject. This knowledge must become the wisdom from which human performance consultants devise their work in the service of their clients.

To persist with the old methods, though they are familiar and therefore comfortable, is not acceptable. Executives, managers, and employees must unlearn these rules, which have guided their success until now. And because learning occurs best when people are involved in applying what they are trying to understand, I propose that human performance consultants are the best teachers when engaged in the process of partnering with management to improve operations that create value.

And if this is to be the case, then these consultants must first have this knowledge and be confident in its application. They will also learn through their own hands-on experiences and the experiences of other practitioners.

MANAG I N G 0 RG AN I ZAT I ON s

What distinguishes a formal organization from a random group of people is the presence of a system of management-purpose, structure, authority, support systems, administration, etc.-to

INSTRUMENTS OF PERFORMANCF IMPKOVEMENT 227

weave the whole effort together. The designers and maintainers of this system are the people with managerial roles throughout the organization. They have a special responsibility: to make it all work.

The manager’s job is not an easy one. Contrary to what is presented in simplistic models, the manager’s work is much more than planning, organizing, coordinating, and controlling. With formal authority come status, special relationships, access to information, and the responsibility to make far-reaching decisions.

These managerial challenges are attended to in an array of roles and responsibilities, including figurehead, leader, liaison, environment monitor, information disseminator, spokesperson, opportunity developer, disturbance handler, resource allocator, negotiator, and others. Unless we have been managers ourselves, we may under- estimate the challenges and complexity of this job. Because managers have so many responsibilities, it is virtually impossible for them to add another role to this imposing list. So to improve human performance, managers would do well to pass the torch to human performance consultants who can support management in the challenge.

Management Methods

You may have noticed that keeping abreast of new management methods was not mentioned above as part of most managers’ work. My perception is that managers and executives, unless they feel particularly challenged with their assigned objectives, have very little interest in emerging knowledge and methods pertaining to potentially more effective ways they can accomplish their work. Self-confidence creates an insulation to keep these possibilities at bay until they become a necessity.

Since management emerged as a discipline in the mid-l950s, we have witnessed a virtual explosion of new information and theories regarding every feature of a contemporary business. Much of this new thinking has been in response to the seemingly ever-increasing organizational challenges facing management, and more recently to the recognition that the effectiveness of a company’s human capital may soon be the final frontier for establishing a sustainable competitive advantage. This abun- dance of information has been followed by a rapid expansion of

228 HUMAN PERFORMANCC CONWITINC

support staffs, whose role it is to compile, interpret, and apply this knowledge.

Because I make a living in part by keeping up with business- and management-related research and writing, I naturally value the data, insights, and models that are offered. However, that can hardly be the case for any executive, line manager, supervisor, or even the director of a staff function. Most business functions have become very complex and sophisticated; the work being done by almost everyone in an organization has its own technology, methodology, emerging theories, research, etc. Even i f these busy people wanted to keep up, and even if they could devote a sizable part of their day to the task, they still could not do so without help.

Likewise, the only way I can keep up is to rely o n the support of research assistants who gather the product of this knowledge explosion and review it with me. Keeping management up to date on knowledge developments should be a responsibility of staff functions; however, few provide this service. There could be many explanations for this failure, including internal competition for resources, lack of comfort working around management, traditional thinking, reluctance to encourage change, myopia, hubris, and others.

Keeping Up with New Developments

Executives, managers, supervisors, and directors need help if they are to benefit from the significant developments during the past fifty years in the fields of human behavior, learning, performance, and productivity as they apply to the workplace. All too often, they feel forced to rely solely on personal experience for their understanding of how best to accomplish their organizational objectives . . . and although this is a certainly a valuable starting point, it hardly taps the sophisticated understanding we now have about when, where, why, and how people work the way they do. Only recently has the organization as a subsystem of an enterprise become a substantial topic in the top MBA programs, so we can imagine that most executives and managers have little factual basis on which to incorporate new developments.

As a result, many businesspeople with significant responsibility for and impact on the success of their organizations are compelled

INSTRUMENTS OF PERFORMANCE IMPROVEMENT 229

to make important people-related decisions-decisions that will have an extraordinary effect on the capability and effectiveness of individuals, groups, and even entire organizations-without a firm grasp of their alternatives and of the probable consequences of those alternatives.

A fitting example is management’s current over-reliance on training to deal with almost every conceivable people-related issue in an organization-some people call it the throw training at the problem solution. Routinely, the consequences of this approach include higher-than-necessary expenses, lost productivity, unresolved issues, a demotivated workforce, and persistent barriers to high performance. Such waste, not to mention the forgone opportunity for improved effectiveness and financial performance, is no longer tolerable in many industries. Increasingly, management has to find some way to obtain this knowledge so that it can effectively and efficiently support organizations’ requirements for enhancements to learning, performance, and productivity.

Managers Set the Course

If organizations are to adapt to changes in their environment and deal with problems as they arise, managers must be continually on the lookout for practical solutions as well as new ideas that will maintain or improve performance. As an organization’s information and decision centers, they are often the only ones with the full and current information and authority needed to make strategic decisions. Only managers can commit their organizations to important new courses of action.

When good solutions and ideas appear, then managers initiate development efforts-often in the form of specific projects or initiatives-for their cultivation and eventual implementation. Managers supervise many of these development efforts directly and in certain situations may delegate elements of them to employees, support staff, and trusted associates. In fact, we would expect to find managers supervising five, ten, twenty, and maybe more of these development projects at any time.

This challenge reminds me of the “plate spinning” act a t every state fair. Each plate receives a small part of the manager’s time . . . and just at that point when a plate is wobbling and threatening to fall, it receives just enough needed attention to

230 HUMAN PERFOKMANCF CONSULTIN(;

Figure 12-1. Management “Plate Spinning. ”

keep it going for a while longer. My intent is not to sound critical of managers; rather, viewing managers this way is intended as appreciation for the complex and challenging work they perform.

With this appreciative view of managerial work, ask yourself whether it is hard to understand why managers might be tempted by focus on solutions that appear to minimize their direct effort:

0 Calling in a big-name professional firm to take on the responsibility for analyzing the company’s problems and determining the best solution

0 Implementing a large-scale training and education program in an attempt to drive needed changes in the organization

0 Ignoring or replacing experienced yet underperforming workers rather than developing them

0 Tolerating situations and systems that to workers obviously impede performance and warrant changing


0 Opting for training programs in half-hearted attempts to improve human performance, increase productivity, and resolve complicated operational problems

Perhaps it is simply the inherent characteristics of managerial work that impede managers’ direct attempts to improve human performance. Perhaps they lack the time to equip themselves with the requisite knowledge and skills, and without the insight from this learning, their priorities and their interest in what’s possible have a limited chance to develop. Perhaps it is simply habit.

Anchored in Past Success

Just like everyone else, managers are compelled to work in ways that are anchored to their past-drawn from lessons they learned through efforts that worked and efforts that didn’t-and to attend to issues and use methods that they count on to get the job done. Because managers hold power over the people they manage, we often ascribe to them an all-knowing quality, only to then question how what is so obvious to us is not readily apparent to them.

For those of us who understand the potential for improving human performance, we forget that the knowledge that sustains us in this belief was likely acquired through experiences that demonstrated this fact to us in a meaningful way. Chances are good that most managers have not had similar experiences and so remain uninitiated to this potential.

For the most part, the lack of managerial initiatives to apply the comprehensive methodology available for improving human performance is primarily the result of the managerial job itself. And until managers identify people who are both trustworthy and capable of supporting them in this challenge, this situation is not likely to change.

CURRENT APPROACHES TO IMPROVING HUMAN PERFORMANCE

With this background, let’s now look a t the more common ways managers attempt to improve performance. Without the benefit of any scientific study to frame this understanding, I will


rely on my observations to characterize the four principal approaches that I most frequently hear about and see managers utilizing when they try to improve the work performance of their people:

0 Edict-direct a change in the work situation (e.g., policy, objective, technology, structure) and expect employees to adapt.

0 Training-train employees in order to standardize the desired behavior (e.g., how to work as a team, how to make a sales call, how to handle an irate customer).

I7 Involvement-discuss performance with employees so they figure out better ways to work. This approach typically involves the formation of powerless groups who engage in discussions that, without direct authority, stop short of effecting definitive changes (e.g., performance task force, quality committee, customer service team).

0 Systemic-engage employees in changing their own work situation by launching a highly visible program that generates broad employee involvement in making changes that remove or reduce constraints to higher performance (e.g., on time every time, cut turnover in half).

Certainly there are other approaches that managers take, but these are the most common ones that I have identified. Let’s now examine briefly how each serves or falls short of its intended purpose of improving human performance.

The Edict Approach

The edict approach is based on management’s authority to issue orders to the organization and reinforced with the implicit threat that management also has the authority to “terminate” workers that don’t comply. Management announces a change in policy, structure, process, or some other aspect of the work situation, and employees are expected to adapt to the change and to perform in some new way consistent with the change.

This approach can work in some cases, but only when the change is relatively minor and employees already support it, understand what they need to do differently, and have no difficulty adopting the new behavior. Without an appreciation for

lNSTRUMENTS OF PERFORMANCE IMPROVEMENT 233

the purpose for “management’s change’’ and support to help them make needed changes to existing behavior, workers will be challenged to comply with management’s edict. In today’s work culture, many employees experience this approach as inconsiderate and unappreciative of their work, and some will even respond with frustration, resistance, hopelessness, and cynicism.

What’s surprising about managers’ frequent use of this approach is the fact that managers oftentimes respond in the very same way to executive-made changes that fall on managers to implement.

The Training Approach

The training approach is based on early industrial-engineering methods of standardizing the behavior of workers to the demands of the machines they served, and is often reinforced with other “behaviorist” (i.e., based on theories of Pavlov and Skinner, most notably) methods such as incentives, rewards, contests, and evaluations. Management arranges for training programs that indoctrinate workers in improved work practices, skills, or knowledge in an effort to change their behavior. It’s implicit that employees are expected to somehow buy into, develop, and practice the new behaviors, and that doing so will improve their performance.

This approach works only when the desired behavior is necessarily standardized by machinery, technology, or other condition that is inflexible, as is often the case with production and logistics work. Here the role of workers is to back the machinery or process, and doing so effectively often entails following standardized instruction in how to best perform the task.

However, for knowledge and service workers, training can be effective only when the new behavior represents a minor change, is consistent with workers’ natural abilities and tendencies, and is already appealing to and supported by workers. Training assumes that employees can’t improve their performance (without the training) because they don’t understand how to behave to achieve the performance goal.

The inherent problem in this approach is that the behavior of knowledge and services workers is a natural adaptation to the current work situation. Without changing the relevant aspects of the situation to naturally support the desired behavior, management

234 HUMAN PERFOKMANCE CONSULTING

is simply pressuring employees to adopt new behaviors that aren’t natural-not an easy task o r a likely accomplishment for most workers.

Training can be helpful to all workers if it leads to a solid understanding of current circumstances o r to relevant changes that are taking place, if it lets them know what these changes mean to them and how they need to d o things differently as a result, and if it helps them to begin to develop the required new behavior. However, unless there is a situation that workers can first “buy into’’ that is prompting the training, then training is rarely enough to institute change and usually results in little or no change in employee behavior.

One unintended effect of the training approach on more- capable knowledge and service workers is that, whether true or not, it tells them that management doesn’t really understand their situation and isn’t willing to accept responsibility to make the real changes necessary to achieve improved performance.

The Involvement Approach

The involvement approach is based on social science knowledge concerning methods that more fully engage and satisfy people in their work. As a well-accepted principle for quality function deployment and organization development, employee participation is becoming a more common approach to performance improvement. Essentially, this approach requires that management hold meetings with workers or sponsors groups to involve workers in an examination of a performance problem and to make recommendations for achieving desired improvements.

This approach may be particularly uncomfortable to some managers because it deviates from their customary command-and- control style of management. In addition, many managers d o not fully understand or appreciate the approach, but they nonetheless try to use it because of the results it has achieved for others.

Management hopes that involving workers in the process of grappling with performance challenges will help workers understand how to change in order to achieve management’s goal. Management’s second hope is that employees will then readily adopt the desired change, even in the face of an unsupportive work situation (lack of proper equipment, limited financial

INSTRUMFNTS OF PERFORMANCE IMPROVEMENT 235

resources, unreasonably fast implementation, etc.). If the approach worked this simply, more managers might try it.

This approach is commonly attempted by managers who are trying to shift their management styles from “control” to “empowerment.” However, what begins as an earnest attempt to involve the organization in a process for making constructive improvements all too often just fades away without resolution or substantial impact. This approach is often more challenging than expected to provide a clear focus, to convince employees of the need for a change, or to design a process for the constructive involvement of employees. As a result, management finds it particularly difficult to sustain the required commitment of time and support needed to make it work.

When the involvement approach is not followed through to constructive change, the message to employees is that management doesn’t really care about improving performance, thus lowering employee motivation and commitment to performance.

The Systemic Approach

The systemic approach is based on having a “systems” perspective of organizations and an understanding of what it means to make system interventions. This enlightened view of enterprise provides managers with a perspective that is more accurate than the machine-like understanding that until recent years has dominated industry since the Industrial Revolution.

With the systemic approach, management generally combines the constructive elements of the edict, training, and involvement approaches in ways that effectively support the desired improvement in human performance. The change isn’t just announced- it is confirmed to the workers who have been involved in designing the improved work situation. And the improved work situation is one that naturally supports behavior that achieves management’s performance goals.

The same group of employees is then enlisted to implement the needed changes, including support for all workers as they adapt. Effective employee support may include training but should always consist of more-empowering forms of assistance, such as clear objectives that focus on employee development, models of effective behavior to copy, practice simulations for impact-free

236 HUMAN PFKFORMANCC Coruwi r i w

learning, tools that provide continuous guidance, and measurement for corrective and affirming feedback.

Of all the approaches outlined here, the systemic approach has the best chance of succeeding. It guides managers to take the required actions to support employees in their pursuit of improved performance. It also sends the message to all workers-not just those directly involved-that management is serious about performance and willing to d o what it takes to achieve its goals.

Assessing the Value of These Methods

Some managers remember when the edict and training approaches worked, or seemed to work, in their organizations. No doubt these are attractive on the surface because of the limited expense, political risk, and time commitment for managers. However, it is unlikely that managers ever achieved dramatic performance improvement goals with either approach, because each fails to fully address the principal barriers to improved work performance.

Though employee participation is used more often in the workplace today than in years past, fewer managers have tried the involvement approach for making improvements to employee performance. Rarely are these attempts successful, because this approach is more challenging than initially perceived in its requirement that employees be genuinely involved. I t requires a whole new way of looking at employees, work, and performance, and it takes special knowledge, skills, and abilities that not all managers possess. Additionally, this approach can eat up a considerable amount of managers’ time-time that most managers d o not have.

By comparison, the systemic approach is used least often, yet produces dramatically better results. To use this approach successfully, managers must first be aware of the insights presented early on in this book, should have some direct experiences working with them to fully appreciate their dynamics, and need to have the support of knowledgeable professionals to assist with facilitating the process. The systemic approach combines the strengths of the edict, training, and involvement approaches and thus overcomes many of their individual weaknesses. Though the systemic approach is more complex, it is so effective that all managers, regardless of their customary ways of working, are

INSTKUMENTS OF PERFORMANCE IMPROVEMENT 237

obliged to try it in order to deal with the true complexities of people and organizations.

The manager’s role in improving human performance is not taught in any formal way-not in B-schools, MBA programs, or even industry seminars-adding to management’s challenge in utilizing effective methods. As a result, managers have few alternatives but to take up this challenge by relying on their personal style, using techniques learned in prior experiences, focusing on only the immediate needs of their situation, and trusting their natural abilities. Though understandable under the circumstances, this strategy may be necessary but insufficient as organizations become a more important factor in enterprise success and as competitive pressures increase.

MANAC I NC PERFORMANCE I MPROVEM ENT

In addition to the time, attention, and interest that are required for managers to make human performance a serious focus for their organization units, substantial technical knowledge and hard-to- develop skills are required. I know of no better way to demonstrate this challenge than to review some of the fundamental principles involved in the process of improving human performance.

Key Principles of Human Performance Improvement

To successfully guide changes in organizations in such a way that worker performance and productivity are maximized, managers will need to understand the universal principles that provide a foundation for human performance improvement. I suspect that most managers would find these principles rather obscure, arcane, and even off-putting, and yet they provide the guidance managers need to be effective in improving performance.

0 Equilibrium: Organizations function as systems in a state of quasistationary equilibrium, which consists of an ongoing conflict between opposing forces of change and resistance. The current equilibrium produces the current performance. To improve performance, this equilibrium will need to be disrupted in some way and influenced to shift to a different equilibrium point-one that produces the desired performance.

0 All systems: These systemic conflicts are reflected in interdependent levels of organization analysis (e.g., individuals, groups, and overall), so that changes introduced a t any point in the organization will assuredly disrupt the equilibrium beyond the immediate situation and potentially cause unintended and potentially negative effects elsewhere in the organization.

0 Equilibrium movement: Performance improvement occurs through a shifting of system equilibrium, generally from an intervention that introduces new forces to the system- preferably new forces that reduce the impact of current resistance forces.

0 Resistance: Resistance forces exist in order to maintain the existing performance equilibrium. Management’s attempts to introduce driving forces into the system will result in additional resistance forces so that the performance equilibrium can be maintained.

0 Breaking habits: Improving human performance requires people within organizations to give up existing habits or customs. Such changes require an intervention that introduces balancing forces to reestablish equilibrium.

0 Emotions: Emotional reaction and disruption to routine activity are natural responses to system interventions that result in people having to give up existing habits.

0 Phases: Performance improvement occurs in phases, accounting for the time between when the point of equilibrium begins to shift and when equilibrium is reestablished.

Expectations of Management

What is reasonable for us to expect from managers? The experiences of my colleagues and me suggest that managers

who are informed of these principles, who have mildly challenging situations in which to apply them and to develop confidence for their potential, and who have the support of knowledgeable and experienced practitioners who can support them in these experiences are more likely to adopt these principles and methods. However, without any one of these ingredients, it is unlikely that managers can make this shift. Already burdened with great responsibility and innumerable challenges, managers can be

IN)TRUMENT\ OF PtRI‘ORMANCE IMPKOVEMtNT 239

expected to continue attempting to improve human performance working as they do now.

Human performance consultants are critical to this transition. They can provide managers with the requisite knowledge, experiences, and application support that are essential if managers are to adopt this more successful approach for improving human performance.

To visualize just how critical this support is to management’s transition, imagine managers attempting to implement these principles and methods on their own.

0 Can we reasonably expect managers to make an assessment of the organization’s tolerance for change before any program for performance improvement is initiated?

0 Can we reasonably expect managers to plan ahead for sufficient resources to meet workers’ support needs and to deal with other contingencies as they arise so these occurrences don’t destroy the improvement effort?

0 Can we reasonably expect managers and their immediate staffs to prepare themselves to deal patiently with criticisms raised by affected organization units and customers who do not understand the disruption?

0 Can we reasonably expect managers to make appropriate changes in structure and systems to support the desired behavior in ways that are perceived positively?

0 Can we reasonably expect managers and their staffs to consistently deal rationally and effectively with the symptoms of changing people and a changing organization, even when these symptoms persistently impact every aspect of the work they are otherwise trying to accomplish?

0 Can we reasonably expect managers to resist the use of authority, training, policies, rewards, and other methods for instituting control in a desperate effort to squelch natural symptoms of change so as to create an artificial aura of normalcy?

If we have these expectations of managers, we may be expecting too much. Practitioners will recognize from their own experiences in learning these principles and methods that they require substantial understanding of people, trust in process, and self-discipline to

240 HUMAN PERIOKMANCE CONSUITING

allow them to work. Although these attributes are within the reach of managers, they are not likely to develop without the close support of trusted professionals.

Uncontrollable Factors

In addition to the above challenges managers will face- challenges that make the case for human performance consultants-there will be additional challenges that managers can’t meet for reasons they truly don’t control:

0 Organizations are complex and partly unobservable, and unskilled attempts to learn about how an organization’s social processes are working can impact its integrity and negatively impact performance.

0 Organizations are full of “soft” data and incorporate value systems that are extremely varied, ever-changing, and remark- ably difficult to measure.

0 Managers are integral elements of the organizational systems they manage and are unaware of some of the effects of their own behaviors.

17 Problems and opportunities are rarely the disconnected individual situations we perceive them as, and our responses are often based on incomplete understanding and cultural blindness to complex underlying causal relationships. The human trait of hiding our true feelings and intentions for political and strategic reasons makes it especially difficult for managers to learn the “whole” situation because of the distortion that results. This limitation doesn’t pre- clude investigation, but it does point to the need for alternative sources of understanding from outside managers’ immediate organizations.

0 The current emphasis on the importance of individual perceptions in the creation of shared organizational values suggests increased attention to how individuals make sense of experience and construct and maintain their social worlds, and how social constructions take o n the appearance of certainty.

0 There is often a need to emphasize paradox, irony, eclecticism, and pluralism in this work. Unlike the vast majority of

INSTRIJMENTS OF PERFORMANCE IMPROVEMENT 24 1

managers, they need to break out of the habit of solving problems within accepted and unchallenged theoretical frames.

0 Performance improvement is intellectual work that calls attention to the margins and away from a preoccupation with some mythical truth. This work translates into a distrust of grand theories of all kinds. It is opening space for the consideration of voices, texts, and viewpoints previously neglected or ignored.

0 The goal is to challenge the content of dominant models of knowledge and to produce applied knowledge that breaks down disciplinary boundaries. Such work often amounts to revolutionary challenges to conventional wisdom-the very practical knowledge that managers use to guide their work.

For all the reasons discussed above, managers will be unable to meet the critical human performance challenges of the future unless they can identify people who can earn their confidence and trust, demonstrate the effective application of professional methods, and, as a result, create results that support managers’objectives.

N E W SUPPORT FOR MANAGEMENT

This book presents a solution: developing within organizations teams of specialists who can support management in the effective improvement of human performance. These specialists would act on behalf of management to facilitate the application of the systemic approach for the improvement of human performance.

I refer to the work of these specialists as human performance consulting. However, human performance support services and other terms can equally convey the nature of this role. In this context, I am describing support for managers that is highly effective in achieving dramatic improvements in operational performance and workforce productivity. Thus the role justifies itself by performing work that creates immediate value-added for the enterprise.

By using this kind of support, managers are not required to unlearn their current ways of working or to spend an inordinate amount of time on performance improvement processes. Of course, managers will remain the driving force for all improvements and will need to support this work. Thus substantial trust in the support providers is required.

242 HUMAN ~ E R F O R h l A N C r C O N \ 1 1 1 7 1 N b

The human performance consultant whom I refer to throughout this book as a human resource specialist, performance improvement consultant, practitioner, or simply consultant is in my mind a particular kind of consultant. Consulting work has become so widespread in the past twenty years that it is now necessary to clarify what we mean when using the word. (See Table 12-1.)

The kind of consultants who are essential to the process of improving human performance will define their work as more operational than advisory or educational as a service, and as more process-focused than project- o r function-focused in its responsibility. These distinctions are important because the coach role, as defined by the matrix illustrated in Table 12-1, has the greatest opportunity to create bottom-line value for clients.

I am not suggesting the exclusion of the other consultant roles noted, but I a m suggesting that consultants take on these roles momentarily when doing so better serves the client. I am reflecting on my years of experience in supporting the development of such roles within organizations to recognize that the consultant’s emphasis on process and operations yields the kind of results generally required to sustain management’s support for the human performance consulting function.

Operational Service

Consultants who provide an operational service in their work are the ones who roll up their sleeves to help management get

Table 12-1 Matrix of Consulting Roles

Service Operational Advisory Educational Responsibility (doer) (counselor) (instructor)

Project Manager Leader Teacher

Process Coach Advocate Developer

Function Technician Expert Director

(manage tasks)

(guide workflow)

(prescribe methods)


improvements realized. Not just a “pair of hands,” these field coaches provide leadership to the effort and maintain the respect and trust of management throughout their work. They are continually aware of the most important challenge that requires attention at any given moment, and they are willing to step in and deal with the challenge in order to keep the project moving successfully toward its objective.

Because these consultants are willing to become more involved, their projects generally go beyond the recommendation stage to an active role in supporting implementation. This increased involvement leads to their provision of a wider range of support and often results in consultants becoming an integral member of the management team. As a rule, operational consultants are not finished with their work until the client’s desired results have been achieved.

Process Responsibility

Consultants whose work is process-focused are generally equipped with comprehensive knowledge, a range of tools, and substantial experience so that they can guide clients wisely through a situation, change, etc. They really earn their pay when unforeseen problems and opportunities arise in the midst of a project. Changing and unpredictable circumstances are their specialty.

Process-focused consultants know there are many ways to get from here to there, so they are less concerned with specific content. Instead, they stay focused on keeping the process moving forward with the client’s involvement and blessing. As a coach to the process, they provide needed answers for every question that arises.

These consultants will talk about what other organizations are doing in similar situations, and the really good ones can tell you the latest findings from the research literature, but it’s unlikely they will recommend that a client choose to do something simply because it worked for someone else. Decisions are best made based on the client’s specific circumstances, goals, and resources.

Operational Process-Focused Consultants

For numerous reasons, operational process-focused human performance consultants are essential tools for management. Like

field coaches, they can be powerful instruments for facilitating improvements in work systems and organizations. The goal of these consultants is not to change management’s fundamental beliefs or approach to their work. However, the effectiveness of the new methods employed by these consultants may have just this effect.

These consultants gain this potential both from the role in which they work and from the methodologies, skills, and knowledge they utilize. Their collaborative and facilitative role parallels the natural process of development, learning, and change. They also bring capabilities to their work that are informed, well reasoned, and proven through experience.

INSTRUMENTS OF PERFORMANCE IMPROVEMENT

In this new and rapidly evolving world that has been forever transformed by new technologies and new business structures, the role of human performance consulting-as an instrument of performance improvement-will be increasingly called on to take action that supports the management of enterprise operations and leads to improved work performance. Although managers will always provide the driving force for improvement, human performance consultants, whether internal or external, will perform a critical function in the workplace of the future.

This is a solution for advancing the practice of management in organizations-a solution whose time has come. These professionals will serve as bridges connecting managers with workers. They will stand back far enough to see the whole picture, and they will proactively team with both managers and workers to effect improvements that will keep enterprises competitive and productive. They will enable enterprises to attract and retain knowledge and service workers capable of high performance and able to continuously improve that performance.

The future success of many organizations may depend on these instruments of performance improvement to augment the work of management. The form and substance of this support are decisive in determining its potential for effectiveness. Therefore, in the remaining chapters I detail practices that have proven successful.

INSTRUMENTS OF PERFORMANCE IMPROVFMLNT 245

Continuous Process (Chapter 13)

The process-focused approach of the human performance consultant is distinct in some important characteristics from the many consulting processes detailed by authors in the broad field of consulting. This work is continuous and assumes a much broader responsibility for performance improvement results than implied by most of these other processes. A review of the process, with some elaboration on the work in each of the four recurring steps, provides a better understanding of how human performance consultants support management and create value.

Competent Consultants (Chapter 14)

When the competence of consultants is evident, managers are encouraged to engage their support. For the human performance consultant, there is no other alternative to competence. The effectiveness of their role depends on having their services utilized and having the ability to create value for the enterprise. Though human performance consultants have the pivotal role, the complete challenge is rarely met by one person. Large organizations, with their seemingly endless opportunities for improved performance and productivity, can leverage the efforts of human performance consultants with supporting specialists from a myriad of professional and quasiprofessional disciplines. The solution is a professional team-either a formal organization or a virtual team of external resources.

RE F E R E N c E s

1. Drucker, P. F. Post-Capitalist Society. New York: HarperCollins, 1993. 2. Drucker, P. F. “Management’s New Paradigms.” Forbes, Oct. 5,

1998, pp. 156.

C H A P T E R 1 3

Continuous Process for Improving Performance

It is not enough that consultants have the ability to improve human performance. They must demonstrate their competence as instruments of change-facilitators of planned change that creates improved performance within organizations. We have already described the human performance consultant as providing operational process-focused services to clients. Now we will put that role into action.

The foundation for human performance consulting has long been referred to as “process consultation,” a role first defined by Edgar Schein in his book Process Consultation, published in the late 1960s [ 11. This role has several unique characteristics that separate it from many other consulting roles and definitions, so further definition will assure understanding of this basic role before we discuss features that make the human performance consultant role somewhat unique. Important characteristics of process consultation that also describe today’s human performance consultants include the following:

17 They work with clients that d o not know what is really wrong and therefore will need help in diagnosing their problems and identifying their opportunities.

0 Their clients d o not know how consultants can help them, so they need to be helped to understand what consultants can d o before they know what kind of help to request.

246

CONTINUOUS PIIOCE\S FOR IMPKOVINC PERFOKMANC~ 247

0 Their clients have a general interest in improving things but lack sufficient understanding of what is possible, so they will need help in determining what to improve and how improvements can be made.

0 Their clients could be more effective if they learned how to diagnose and manage their own problems and opportunities. Because organizations and people are never perfect in their functioning, the goal of the consultant’s assistance is improved functioning, not perfection.

0 Much of what constitutes consulting is focused on helping clients find compensating means (work-arounds) for achieving objectives.

0 Only clients can decide what is best for their organizations. Thus the consultant’s role is to provide alternatives for extending their options-alternatives that clients can understand.

0 Clients will be less likely to implement solutions to problems they do not see and diagnose for themselves.

0 Clients own all problems and solutions pertaining to their organizations; the consultant’s role is to provide helpful assistance.

0 The ultimate function of consultants is to develop in clients the skills to diagnose and constructively intervene to improve their own situations.

The nature of today’s organizational challenges and opportunities is more complex than ever before. The continuous competitive pressure faced by many organizations adds further challenge. These and other factors make it imperative that human performance consultants take their assistance into the arena of enterprise operations, where the success or failure of clients is determined.

All enterprise activity must create value or risk being considered a waste. Human performance consultants can work successfully within this environment, but to do so they must focus on the value created by the operational impact of their assistance. The need to create value through operational improvements extends the list of characteristics that describe human performance consultants:

1. They play a significant role in enabling their client to solve complex problems and exploit operational opportunities.

248 HUMAN 1’1 KFORMANCI CONWL~INL

2. They adopt the client’s goal as their own and provide virtually all means of support, within their capacity, to see projects through to successful conclusion.

3 . They develop especially trustworthy relationships with clients so they can be completely open and candid in their communications.

4. They meet or exceed quantifiable business objectives for their work.

5 . They prioritize their work based on the potential for value creation for the enterprise, not other factors such as expertise availability, problem familiarity, ease of solution, etc.

6. They satisfy their client by adding value in the form of meaningful outcomes.

7. They utilize client organization members to conduct the supporting work of the project whenever possible so as to accelerate the development of the client’s organization.

Organizations need the assistance of human performance consultants for reasons that have been enumerated throughout this book. But the consultants they need are the consultants described here, nothing less.

C H A L L E N G I NG S I T U A T I O N s

Human performance consultants will be required to perform in very challenging situations. Following are three real-world situations. As you read them, think of how you would have acted to meet each company’s challenge.

No Time for Service

Recently I returned a call to the executive for U.S. technical services for a major office equipment manufacturer who was seeking assistance in improving the quality of decisions being made by his field force of 3,000 equipment technicians.

Starting several months before the call, he began to notice that a substantial number of the issues that were escalating to his office were the result of situations handled poorly by field people. Once his attention was called to this fact, he further noticed that much of his time-and the entire service organi-

CONTINUOUS PROCESS FOR iMPROVlNG PERFOKMANCE 249

zation’s time-was being consumed by problems that had originated largely because of poor decisions made by either technicians or district supervisors.

He estimated that 60 to 70 percent of his reps’ potential service time was being exhausted not in performing service, but in trying to resolve equipment problems, customer complaints, and other situations of the reps’ own making. Rhetorically, he asked whether he perhaps needed to offer the technicians training in decision-ma king.

No wonder it was such a struggle to keep the service cycle down, he reasoned. Nobody had time left to service equipment. And at the end of his explanation, he asked me, “What can you do about it?”

Call-Center Performance

Not long ago I was invited to make a presentation on “what I know about improving the performance of call centers” to a new senior operations executive for a major financial institution.

She explained that a month previously, the company had consolidated and had put her in charge of all of its call-center operations, with the goal of substantially improving the work quality and productivity of its 6,000 customer service representatives. Since then, she had spent a couple of days at each facility-meeting people, reviewing operations, solving problems, etc. She had heard from a bank executive that we could “perform miracles” and claimed that was what her operation was going to need.

She further explained that, by the standards of her call-center directors, the operation was doing great, with an across-the-board performance of just under four minutes of talk time, 85 percent availability within five minutes, 46 percent employee turnover, 72 percent call quality against standard, and six weeks of new- hire training. By their assessment it should be a model for others to follow.

The problem, however, was that such performance fell significantly short of what the business unit executives needed in customer-service quality and overall efficiency if customer service was to become a strategic advantage for the company. Further- more, a “secret shopper” research survey conducted during the

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month she traveled revealed call-quality levels that were closer to 25 to 30 percent across the entire operation.

When asked for their advice, the business unit executives advised her to tighten up the performance standards and “give ’em thirty days to perform o r pack.” Then she asked what I would recommend.

Sagging Sales

A nationwide industrial distributor engaged us recently t o explain and potentially resolve a persistent decline in sales growth.

Our client was a regional sales executive determined to reverse this trend, and she thought a professional assessment might help her finally get the support of the senior sales executive. The client’s own assessment of the situation suggested that the strongest contributing factors were national in scope and therefore outside her authority.

Our professional assessment was conducted hurriedly and with a modest budget, but it involved exposure to the organization sufficient enough to both confirm the client’s assessment and to suggest a much more troubling situation than declining sales growth.

We learned that within the past three years the company had expediently implemented several major new strategies that had had a dramatic impact on the nature of the field sales organization’s work. In the implementation process, the company had failed to consider the impact these changes might have on the salespeople and their performance. Along with our recommendations, we estimated conservatively that, unresolved, this situation was costing the company 15 to 25 percent of its annual sales- in the neighborhood of $1 billion.

The client was excited about the report, resolving the problem, and presenting this assessment to the national sales manager. Her boss, upon glancing at a one-page summary prepared internally, replied, “I don’t buy it. We don’t have a problem.’’

The Role of Executives

The most important factor in each of these situations is the perspective of the executives. It should be clear with even the brief detail provided here that these executives d o not understand

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the basis of human performance-the essential elements that constitute human work behavior-and do not recognize the potential inherent in people to perform at higher levels. Yet in each of these situations I can attest to the fact that these executives and their companies have been extremely successful.

How can both be true? The answer lies in understanding how the world in which these executives operate is changing beyond the limits of the methods that have contributed to their current success. That these companies, and most others, will not continue to perform as well in the future with traditional management methods is a lesson waiting to be learned by many.

This learning can be accomplished either from failure, as many lessons painfully are, or from an open mind and the counsel of professionals-whether internal or external to the enterprise. In each of the situations outlined, one executive had the wisdom to reach ou t for professional assistance. This is how the process begins. The obvious next step is the response the executive receives from the persons contacted for assistance, which is the focus of this book.

The Role of Human Performance Consultants

The manner in which human performance consultants respond to such an inquiry is crucial. We must remember that the hardest part of learning is not deciding whom to call or what to ask; it is in recognizing that professional support can be helpful and valuable.

For some executives, this recognition comes easily, as they have grown to appreciate the counsel of knowledgeable and skilled professionals. For others, their success-inspired hubris makes this very difficult. It will be a rare moment when these executives ask . . . but it may still happen.

The way consultants respond to these inquiries is critical for both consultants and clients. Clearly the nature of their response will make the difference in whether consultants get the opportunity to use their expertise to assist in presenting situations. Likewise, it will impact what executives know and will do in the future regarding human performance.

In addition, it will be an opportunity seized or lost for consultants to further their experience and development, and it may

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even impact their careers. And finally, a t least in the minds of executives reaching out for support, it may impact the image, reputation, and future success of other human performance consultants or the field in general. In some ways, every consultant is forced to live down or live up to the impressions made by preceding consultants. Everyone involved stands to gain when consultants’ responses are the best they can possibly be.

T H E CONSULTING PROCESS

Like all process models, I imagine, consulting process models emphasize the specific characteristics that the author feels are particularly important. Accordingly, I will present one more consulting process model here to emphasize the continuous nature of human performance consulting relationships. This characteristic is particularly true for internal consultants, yet also presents an interesting alternative to product- and project-focused external consultants. But first let’s briefly discuss the consulting process in general.

As many consulting process models define it, consulting work can be thought of as having four stages:

1. Stage one involves the initial client contact. Regardless of who called whom, a meeting generally follows, and potentially agreement is reached to work together-at the least to take an extended look at the presenting situation.

2. Stage two consists of action to better understand the current work system and determine how it is out of alignment with its objectives.

3. Stage three builds on this understanding by taking steps to bring the work system into better alignment-appropriate changes are proposed, designed, developed, tested, and then implemented in the form of an initiative (or intervention) intended to bring about the desired changes to work performance.

4. Stage four provides for evaluation of an initiative’s impact so consultants can decide whether it is sufficient or more action is required and whether the client and consultant will continue to work together for this purpose.

Some consulting process models are slightly more thorough in detail. These models include separate stages to highlight interim


assessments, client feedback sessions, pilot testing of initiatives, etc., which are interventions as well.

Some practitioners-particularly those in search of a model that precisely and consistently represents the consulting experience- find the linear consulting process model confusing. To them its linear course suggests a project orientation (beginning, middle, end), and yet the actual process for human performance consulting is more of a continuous effort. Consulting to improve human performance often requires several interventions (the number cannot be determined precisely in advance) before the client’s objective is achieved.

CONTINUOUS CONSULTING PROCESS

Contributors to the field have long agreed that each of the stages represented in the consulting process model above is in itself an intervention in the work system. As interventions, then, each stage needs to receive an appropriate level of concern and careful treatment. It has been well demonstrated that “intrusions” into work systems will unavoidably change the dynamics of that system, if only temporarily.

Consultants want to be mindful of this potential and minimize the extent to which these changes are unintended consequences of their involvement. If nothing worse, unintended change com- plicates the dynamics of the client’s situation and can make the consultant’s work much more difficult. For example, the process of seeking data and interviewing people concerning a performance issue will often cause people to attend more closely to their performance, a reaction which might have various effects, such as increasing workers’ performance, distracting workers’ routines, or initiating workers’ concern for what management may be planning.

It is helpful to frame the consulting process as a series of distinct yet related interventions rather than as just a single intervention. A great deal more clarity is brought to the practitioners’ understanding of the consulting process by highlighting each intervention as a phase in successive cycles of a continuous consulting process. This approach reinforces the fact that each of the stages represented above is a separate intervention focused on the same objective.

Figure 13-1 illustrates this continuous consulting process model. Managers and practitioners both seem to find this approach much

254 HUMAN P E R F O R M A N C f CONSULTING

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easier to understand and discuss clearly than linear models. They are helped by the emphasis that it gives to the fact that any direct consultant involvement in the client’s work system is an intervention and will have an impact, even if its sole purpose is to gather information o r test a theory.

The continuous consulting process model illustrated in Figure 13-1 includes four phases: consideration, preparation, intervention, and evaluation. These phases are easily interpreted from the illustration alone, but a brief explanation follows to assure understanding.

Phase 1: Consideration

The starting point for this process is the point a t which new information is presented to consultants for consideration. This point may be the initial contact by a prospective client or receipt of data pertaining to an existing intervention o r other client matter. When consultants receive new data, this is essentially a


signal to review and reflect on the significance of the information received and to decide whether action is warranted in response.

Phase 2: Preparation

If in the prior phase the consultants decided that action was appropriate, then a plan should be developed for this action. This plan doesn’t have to be elaborate, but it should entail conscious consideration of the action to be taken and its possible consequences-both intended and unintended consequences-for the client and client organization. Consultants can be spontaneous and are often required to be so when dealing directly with clients or their organizations. However, it is always best for them to carefully consider their actions before initiating them.

Phase 3: Intervention

Any contact with the client or client organization, or any action that could influence or otherwise impact the client organization, should be thought of as an intervention. These contacts include phone calls to the client, workplace observations, interviews with organization members, feedback of data to the client, etc. Every intervention should be conducted carefully, following the plan that was created for it. As instruments of change, human performance consultants need to strive in every involvement to create positive change that moves the client and client organization closer to their objectives.

Phase 4: Evaluation

The final phase of the process entails the collection of data that provides insight on the impact the consultants are having. This data might include the measurement of key variables, comparison with baseline data, or contact with the client and key informants. Consultants need to know the impact of their actions as early as possible so that they can consider this data and prepare the next steps in their plan to meet the client’s objective.

Being Professional

To be of maximum service to their clients, human performance consultants need to be professional in the work they do. This


means more that just using the latest scientific knowledge and implementing the best strategies for performance improvement. These are important, yet they can be worthless unless consultants get the opportunity to fully practice their work in meaningful ways to serve an organization. To earn this consideration, consultants will need to exhibit the highest levels of professionalism in everything they do.

WISDOM FOR CONSULTANTS

I want to return to the wisdom of Ed Schein [2] to provide human performance consultants with additional direction in the form of ten principles that should guide their consulting work with clients. Though he provides further explanation of his meaning for each, I have found this list alone most helpful in stimulating among practitioners the reflective consideration of what is perhaps most meaningful about the consulting process- the opportunity to be truly helpful to people.

1. Always try to be helpful. 2. Always stay in touch with the current reality. 3. Assess your ignorance. 4. Everything you do is an intervention. 5. I t is the client who owns the problem and the solution. 6. Go with the flow. 7. Timing is crucial. 8. Be constructively opportunistic with confrontive interventions. 9. Everything is a source of data; errors are inevitable-learn

from them. 10. When in doubt share the problem.

Consider these and discuss them with your associates. You would d o well to have them guide your consulting work.

RE F E RE N c E s

1 . Schein, E. H . Process Consultation. Reading, MA: Addison-Wesley,

2. Schein, E. H . Process Consultation Revisited: Building the Helping 1969.

Relationship. Reading, MA: Addison-Wesley, 1999.

C H A P T E R 1 4

Competent Consultants

Anyone who has ever engaged consultants has been involved with one who was not sufficiently competent to give effective support.

Less-than-competent consultants fail to establish adequate buy- in for their work, get involved in gathering or creating too much detail, pester members of the organization with apparently sense- less meetings, fail to tackle the tough issues that stand in the way of improvement, are most comfortable when involved in activity that should be left to clerical support, fail to add value, take too much credit for what goes right, and blame others (particularly clients) for everything that goes wrong.

The experience is unpleasant at best-and at worst is problematic to an organization. It is the opposite of what a client experience should be.

By contrast, you may have also had the experience of working with consultants whose level of capability was appropriate or exceeded what was required. No doubt they set a clear context for their work, gathered only essential insights and data from the organization, were helpful when problems arose, and were self-assured enough to give the organization and client credit for the success.

When the capability of competent consultants is readily apparent, it will inspire managers to address persistent performance challenges and to engage such consultants in the process.

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THE COMPLEXITY OF HUMAN PERFORMANCE CONSULTING

Human performance consulting is difficult work. This difficulty stems from its complexity, which is a t a level surpassed by the complexity of few other professions. Unlike the more formal professions (e.g., accounting, engineering, nursing), there is no single well-developed body of knowledge to guide this work.

Consultants specializing in human and organizational performance must be familiar with and draw on many still-developing fields of science and technology-sociology, economics, behavioral psychology, cultural anthropology, biology, organization behavior, management science, organization development, instructional technology, and more-in order to have an intellectual basis for their work. Adding to the challenge, the nature of these sciences is infinitely complex because of the living and continually evolving systems they attempt to understand.

Furthermore, the people and organizations that are the focus of this work are changing continuously in nonlinear ways that are responsive to ever-changing environments. If we measure complexity by the number of variables involved and the significant interactions between them, then the complexity that human performance consultants must deal with is almost infinite.

If we then add to the challenge of complexity the potential impact and consequences of this work, both good and bad, in terms of the economic success of an organization and the quality of life of its members, we begin to appreciate the difficulty of this work and can consider what it takes to be a consultant that clients call competent.

TH E J IGSAW-PUZZLE METAPHOR

The metaphor of a jigsaw puzzle is a helpful way to get a better grasp of the consultants’ challenge to make sense of this enormous complexity. The kind of puzzle I am referring to can be found in a toy, drug, or book store, in a box featuring an attractive picture and specifying the number of puzzle pieces inside.

Imagine selecting a puzzle that has a detailed picture and 1,000 pieces-considered moderate difficulty-and spreading the pieces

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out face up before you on a table. Doesn’t look like much at this point, does it?

Now note that on the edges of the puzzle pieces there is a myriad of interconnecting shapes that, when matched and used to connect the pieces, hold the puzzle together. Your job, of course, is to match up these shapes on two pieces so that you can connect them. The more pieces you connect this way, then the more discernable will be your view of the whole picture.

And then there is the issue of time. One of the goals in working a jigsaw puzzle is to finish as quickly as you can.

The Completed Puzzle

Now let the completed puzzle represent a clear picture of a new client situation. The pieces are the many variables involved (people, relationships, events, services, policies, etc.). With this image, we can begin to visualize the consultant’s task.

I7 Because there are many pieces, how do consultants know where to start? Similar to their approach to completing a puzzle, consultants begin with the information they are given . . . the pieces in front of them. These often include client descriptions of the situation, observations from witnessing the situation, and prior knowledge about how such situations often develop.

0 Because all the pieces are different, how do consultants know whether certain pieces of information are more helpful than others? Just as they do when working on a jigsaw puzzle, consultants know to look for patterns or groups of pieces that appear significant. This practice often leads to recognizing the major influences on a situation.

0 How long do consultants spend trying to match up a particular piece of information before they set it aside and focus elsewhere in the picture? The answer depends on how much time they have to work with, but generally consultants pursue information for as long as they are hopeful that it will lead to a clearer picture. Quite often, the significance of a piece of information identified early on does not become clear until much later in the puzzle-solving process.

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0 What if consultants run out of time before they can complete the puzzle? Consultants concentrate o n what they think will be major parts of the puzzle for just this reason- they often don’t have time to complete the picture before having to assess it. Working with uncertainty is common.

The Missing Pieces

This jigsaw-puzzle metaphor points ou t the high number of variables and the significant interaction between them, but there are other features of consultants’ situations that the puzzle cannot represent.

0 Consultants don’t have a finished picture to work toward. Thus there is no pattern to which they can match each piece of information. And despite having seen many such pictures before, consultants recognize that what’s most important about a situation is how it is unique or distinguishable from others, not its similarity. Therefore they are reluctant to jump to easy conclusions, and they generally hold their judgment until either the situation is crystal clear or the available time is gone.

0 The variables in the consultants’ picture are constantly changing-just as people, relationships, etc., are continually evolving. Imagine the puzzle pieces uncontrollably changing their color and shape while you are trying to piece them together, and even after you finish piecing them together. Yikes!

Other Factors

Beyond the complexity of human performance consulting, consultants must also deal with politically and emotionally charged situations that require great poise, interpersonal skill, and discretion. The work often involves senior executives and can be highly confidential, so sharing its content with associates and family may be inappropriate.

Not infrequently, consultants are called into situations for which they lack needed technical knowledge, requiring them to study or conduct research. And even when consultants are not involved on specific assignments, they are continually observing,

COMPETENT CONSULTANTS 26 1

reading, and relating in order to prepare themselves for the next situation.

CHARACTERISTICS OF COMPETENT CONSULTANTS

Because the work of consultants is defined both by the nature of their role and by the managers and organizations they are supporting, it is challenging to identify a universal set of features that characterize the competent consultant. Consultants deal with different responsibilities, different situations, different ambiguities, different obstacles, and different client objectives. A few examples bring this challenge to life.

Julie’s Challenge

Julie is an HR consultant for a market-leading specialty retailer, and she was trying to understand why a store leadership team was not working together more effectively.

To address the challenge, she had to take into account the organizational and operating characteristics of the entire store as well as its departments, the current performance in each team member’s area of responsibility, team member capabilities and motivations for working together, specific and general challenges faced by the leadership team, and so on.

Furthermore, she had never been in this store, and she had only about a week to complete the assessment phase of her work. If you were in Julie’s place, how would you proceed?

Christopher’s Strategy

Christopher is a performance consultant assigned to the credit- card servicing call centers of a major financial institution, and he decided to approach the operations VP with a plan for reducing the company’s major problems with workforce turnover, required training time and expense, marginal productivity, and data-entry errors and omissions.

To carry out his plan, he had to take into account factors such as system forces that sustained these problems, management and organizational support for making changes, and initiatives that would have the desired impact. And since Christopher wasn’t

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asked for his input, he had to be particularly concerned with how he was perceived by the operations VP and her direct reports.

What strategy would you use to approach the operations VP with your ideas?

Allison’s Issues

Allison is the director of a newly formed performance consulting function in a major telecommunications company, and she was asked by the COO to make recommendations to executive management regarding training and employee development support required to implement the company’s aggressive business strategy worldwide.

To achieve her objectives, Allison had to take into account the current training and development activity throughout the company’s operations scattered across six businesses and forty-six countries; consider specific business challenges the company faced, including a tremendous battle to recruit and retain its high-tech workforce; and assure managerial support for whatever she recommended. She was able to tap the half-time support of six executives from the prior training organization and an external consultant, but she had only ninety days to prepare her report.

What issues should Allison be most concerned about?

The Complexity Challenge

These examples of real situations indicate the substantial complexity of this consulting work. As consultants proceed with their work, they encounter and deal with some obvious and many unanticipated variables. These variables are often embedded in information and not readily obvious, creating additional complexity.

This complexity, which consultants must address, increases with the number, ambiguity, interdependence, and changing nature of important variables. And as this complexity increases, so does the need for consultants to rely on discretion and judgment in meeting clients’ objectives.

In other words, the greater the complexity, the more difficult the consultants’ work and the greater the ability required to handle a given situation.

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CRITERIA FOR CONSULTANT SELECTION

Negative consultant experiences arise mainly from shortcomings in the criteria for considering, selecting, and evaluating consultants. There are no widely accepted principles for specifying the level of competence required for consultant roles.

As a result, the process is overly generalized, leaving to luck more than design the selection of consultants of the right level of competence for the work at hand.

The present tendency for managers is to make consultant selection decisions largely on the basis of personality and a vague understanding of their prior consulting experiences and ensuing reputation. However, in light of the complex challenges and substantial lost value that are at risk, more precise criteria for determining the fitness of consultants would increase the certainty of successful consultant support.

I have remained a student of this issue during my twenty-plus years working as a human performance consultant and managing a successful practice. The question of consultant-selection criteria continually arises in the normal course of staffing and managing assignments, yet even beyond this I felt it was a question that determined to a great extent the success of the firm’s professional work for clients.

As a result, I have refined a set of criteria that have worked very successfully to guide the selection of consultants for this work.

The Four Primary Criteria

As outlined in Figure 14-1, I have identified four primary criteria that should be considered, with “role competence” requiring expanded explanation. (Criteria are listed in order of priority.)

1. Client Conditions-This may seem like an unusual criterion for selecting consultants. However, it makes the point that not all clients or client situations are appropriate for all consultants, or for consulting support. It raises important questions about the nature of the client (objectives, motives, approach, commitment, authority, resources, etc.) and the presented situation (issues, positions, readiness, scope, scale,

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industry, etc.) that need to be considered before consultants get involved. Equipped with this knowledge, management and consultants alike can then consider the likely helpfulness of a consultant as well as the suitability of individual consultants. Role Competence-There is no such thing as competent consultants per se. If consultants are accurately judged to be competent, it is in the context of specific roles or defined work to be performed. Consultant competence is “role competence”-competence in a particular consulting role. This recognition reinforces the need to define client conditions before consultant qualifications are considered. Four ingredients combine to produce role competence, and all are generally well-understood concepts. However, their order of priority is as important as the criterion itself. (a) Intellectual Horsepower-Having the appropriate level

of cognitive capacity is the single most important criterion in the selection of human performance consultants. It needs to be sufficient for consultants to deal with the complexity inherent in their roles, but can’t be so great that boredom and frustration result. By the term intellectual horsepower, I mean the mental capacity to work with a high number of variables that are ambiguous, changing, and interdependent. This ability lies at the heart of any possibility for consultants to find their way through the continually changing complex of variables that constitute client situations.

(b) Appreciation and Concern-In order to do this work, it is necessary to value doing it. And the more difficult the task, the greater the appreciation for a successful outcome must be. It should come as no surprise that highly successful consultants are intensely devoted to their work and take great pleasure in being workaholics. This is the case because of the inherent value of being able to do the work itself-making a measurable difference in an enterprise and a significant difference in people’s lives.

(c) Knowledge, Skills, and Experience-Each of us is a storehouse of knowledge, skills, and experiences that we bring to our work. Because of the breadth and depth

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of the situations consultants face, prior learning in diverse subjects frequently proves valuable. Otherwise, consultants are expected to get important information if they don’t know it and to enlist the support of colleagues with needed skills and experience when they don’t have them.

(d) Maturity, Wisdom, and Tact-These three qualities provide the glue that binds relationships throughout the consulting process. Maturity allows consultants to transcend their own personalities to work at a higher level of psychological effectiveness. Wisdom provides sound- ness of judgment based on a deep understanding of the ways of people and the world. Tact enables consultants to behave in ways that are both appropriate and acceptable, regardless of the circumstances.

3. Supportive Competencies-Competencies are underlying characteristics that are causally related to a person’s effective performance in a role. They are generally inborn and stable traits, and are frequently reflected in a person’s personality. Notwithstanding the popularity of focusing on competencies today, and the long lists produced to outline the abilities associated with consultant success, I find that hiring consultants based largely on competencies is not an effective strategy. Only if role competence is first assured does selecting for competencies make sense.

4. Natural Temperament-Temperament, which refers to essentially genetic predispositions to certain behaviors, con- tr ibutes to both the diversity and sameness of human behavior across populations. Opposite traits such as extro- version and introversion are one example. Such personality characteristics can be a rich source of insight for consultants in their dealings with people. As a criterion for selection, temperament is important, as it relates to alignment with the nature of the client work. Situations that call for consultants’ natural qualities are easier for them to handle, and there is great strength in working as naturally as possible.

The application of these selection criteria fo r consultants requires substantial judgment. It focuses the selection process on

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the essential quality of being “good enough” to do the work- having the capacity to meet or exceed the minimum acceptable performance requirements in terms of cognitive potential, values, abilities, and sophistication.

Perhaps the downside to this approach is that considerable information about the client situation and the consultant is required to evaluate the fit. This may be a level of thoroughness that some find impractical. However, if consultant effectiveness and successful assignments have the value I think they do, then the time and effort to gather the necessary information will be well worth the investment.

C O N S U L T I N G P R O C E S S A N D O R G A N I Z A T I O N DESIGN

Competent consultants are plentiful; however, for many their professional stature, income, and established independence make them difficult to hire for internal consulting roles. Organizations are more often required to field a team of talented people from a variety of careers to staff their internal consulting function. There is nothing wrong with this approach, just so long as the relative inexperience of these people is kept in mind and they are effectively teamed on client projects so as to prevent errors and omissions in their work.

My colleagues and I have observed that in many large organizations, the successful consulting teamwork can best be achieved by focusing on the consulting service process illustrated in Figure 14-2 and by staffing the five principal roles with role-competent practitioners. This approach effectively narrows the breadth of abilities and experience that any one person requires, and in turn reduces the compensation required to staff the function with competent people.

Relationships with clients and the relationships between these roles are further illustrated in Figure 14-3, which outlines the consulting service process in action. The experiences of some large organizations in applying this approach are outlined in the benchmarking report in Appendix A.

Competent consultants are essential to the improvement of human performance and productivity, and the results of their

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ure

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ive-

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um

an p

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rvic

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ith

pros

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lient

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a pr

essin

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ines

s iss

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at w

ould

be

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lved

with

im

prov

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t in

wor

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perfo

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an

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e in

and

look

at th

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atio

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see w

hat i

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tl -

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I

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itia

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exp

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-

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bei

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reac

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ting

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dec

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inci

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oten

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I

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. I

I -

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umen

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mes

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rm. .

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is,

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14-3

. P

roce

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ased

con

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fun

ctio

n r

oles

. N

Q

\ u,

270 HUMAN PERFORMANCE CONSUITINC;

(text continued from page 267)

work will be measurable and value-adding. If consultants are unable to create the desired results, whether internal or external, then their competence must be questioned. All organizations are ripe with improvement potential, and consultants must define their competence by their ability to meet whatever challenges exist to capitalize on that potential.

Afterword

WAKE-UP CALL

I share a true story that I am told really speaks to people who lead organization-support functions. Though this story is about the leader of a training function, it speaks to the challenge faced by most staff functions. To me it gets to the heart of the leadership required of these functions if they are to provide the innovative support management needs today. If you’ve heard the story, simply think of this as a “back-up call.”

Take a minute to read the letter in Figure 1 that was received by a client of mine. It is reproduced verbatim, aside from a few words changed to conceal the identity of the company, a Texas- based producer of high-tech products.

This letter was hand-delivered to Molly (not her real name), the director of training & development, at her office, while we were meeting to continue a two-year-long discussion about how Molly’s group could increase the impact of work for the organization. Once she read the letter, the focus of our conversation shifted to how she should respond. At my suggestion, we assembled the available department members to discuss the letter and plan the requested presentation. This dialogue, emotional and heated at times, went well into the evening as members dealt with the department’s perceived lack of value.

On the following morning, Molly and I met briefly with Todd (not his real name), the CEO, to discuss the group’s strategy. It turned out that a strenuous effort to improve the company’s operating performance was not hitting its targets, and so a major downsizing was forthcoming. Training & Development was a

271

2 72 t1VMAN ptI(F0KMANC.k CON\IJIl INL

Wake-up Call Letter

Dear (Director of TrainindHRD):

I’ve told you frequently what a pleasure it has been to work with you and your organization. That’s what makes this a difficult letter for me to write.

As you know, we are having to evaluate many options in our efforts to improve our competitiveness and financial performance. We’re paying particular attention to the value added by our various support departments and vendors.

Regarding your organization, I’ve been unable to present a convincing argument to the Executive Committee. However, all agreed that before we decided to forgo your organization’s services in the future, we want to give you the opportunity to prove your value- added to the business. We think that can best be accomplished by having you personally present your case to the Committee.

Let me warn y o u that specific questions have been raised about the apparent negligible impact of training, as well as the current loss of productivity when our people spend their working hours in a classroom. Then again, I think the Committee is willing to listen to any new approaches you can propose that will measurably improve the company’s financial performance.

Please prepare an outline of your presentation that you and I can review beforehand.

Sincerely,

For the Executive Committee

President

pr ime target , bu t because Mol ly a n d Todd had been college friends, she was receiving a n added opportuni ty to make a case t o save the department . After introducing me to Todd and discussing briefly how competitive the market had become in recent months, Molly outlined the plan developed by the group.

AFTERWORD 273

The group’s plan was, for the most part, a summation of improvements that Molly and I had been discussing for almost two years, none of which had been implemented. It called for dramatic changes in training+hanges that would greatly increase the department’s ability to support management. Molly had been reluctant to initiate the changes, primarily due to her fear of the department’s reaction to the required changes in staffing and work assignments, as well as whatever other problems might arise from such a major change.

Throughout Molly’s 15-minute presentation to outline the department’s plan, Todd asked just a few questions for clarification and generally listened carefully, while occasionally nodding agreement. Bottom-line, Molly was proposing to lead a revolutionary effort, certainly by training standards, to measurably improve work performance and increase organizational productivity. This initiative would focus on three key operations of the company-field sales, call-center services and product assembly-all potential areas for establishing competitive advantage. Furthermore, it would be a team effort with management, which would as a byproduct equip managers throughout these departments with a working knowledge of the latest developments in human performance. Molly then pointed out that, armed with a recent assessment of the department’s services that identified (1) several areas of considerable value-added, (2) questionable programs yielding little or no value to the company, and (3) strategically important programs that could be redesigned for lower cost and greater impact, current training activity was being revised to provide funding for this new initiative and to refund about one-fourth of the department’s current budget.

At the end of Molly’s presentation, Todd asked a few probing questions, trying to assess realistically the probable success and likely impact of such dramatic changes in the way Training & Development worked within the organization. I offered my understanding of how the group’s proposal could be very effective and was able to lend credence to Molly’s claims. Much to her credit, Molly rose to the occasion, demonstrating her commitment to lead the changes and her willingness to do whatever it might take to produce the promised results for the organization. She was convincing-you too would have believed that this group could make it happen.

2 74 HUMAN PERFOKMANCF CONWI rihiti

After a brief pause in the discussion, Todd then thanked Molly, expressing sincere appreciation for her and for the group’s intention to take on this challenge to benefit the organization. He confessed that he was reasonably convinced that Molly and the department could make a big contribution-in cutting costs and time needed for training, and in improving performance and increasing productivity in several consequential areas of the organization-even though these were unconventional challenges for training departments, and if successful, they surely would be uncharacteristic results. His remarks were obviously complimentary, and Molly responded with a cautious smile. Todd then paused again, turning sideways to gaze out of the window for perhaps 10 to 15 seconds, although it seemed like several minutes. When he turned back, he looked directly a t Molly and said,

Molly, you need to know how very disappointed I am in you. I mean it. It’s a constant struggle for all of us in this company to produce the kind of performance we need to compete successfully, We need every possible advantage just to survive. He paused briefly. Only now do I learn that for almost two years you’ve known bow to dramatically improve our performance and reduce your spending. He paused again, then added, Why did you wait for me to write?

Why did you wait for me to write? Molly knew it was a question for which she had many excuses, but no good answer. Surprised, if not stunned, by the question, Molly inhaled as though she was going to offer a response, but then stopped with her mouth open when Todd soon added, “Thanks for coming in,” as he waved us out of the office and picked up the phone to place a call. Molly and I returned to a very anxious department.

Why did you wait for me to write? Clearly, Todd intended to express his frustration. The significance of the question was profound, however, because it went beyond the training department’s lack of value to its more critical lack of credibility. Other training directors I know would have appreciated the same opportunity Molly had to pitch for survival. Their departments were closed down or severely downsized without notice. For some of these training directors, it was perhaps their first really clear feedback that all was not well. For years, it seemed, there were always new courses that could be justified, so it became routine to make a persuasive argument for new activity, staff, and budget

AFTFRWORD 275

every year. Only in retrospect could these directors now see the signs of the end approaching-their negative attitude that management was the real problem, all the new requests for return-on-investment (ROI) figures for seemingly sacred training programs, less contact from management and less advance information on the company’s business plans, and quite a bit more resistance to the time required for people to attend courses. But until they got the ax, these training directors believed the game would go on forever.

All staff functions play a critical role in the success of their organizations, though their removal from direct responsibility for results can make it easy for them to become more engaged in their own concerns than the concerns of the organizations they exist to serve. This is a curable situation, but getting the cure requires leadership.

A P P E N D I X A

Benchmarking S tudy Rep o rt

276

DEV

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of F

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and

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fro

m t

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Ben

chm

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f ln

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fo

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prov

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aniz

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form

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and

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Wor

ldw

ide

in th

e fa

ll of

1998

to

upda

te th

e fir

m’s

data

bas

e pe

rtain

ing

to th

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est p

ract

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” of

inte

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ns fo

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o th

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rvic

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pora

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AU

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, Se

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outh

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uthw

est A

irlin

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SBC,

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IFri

days

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d W

alt

Disn

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es S

. (J

im) P

epito

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rman

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E W

orld

wid

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a 2

0-ye

ar v

eter

an i

n m

anag

emen

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nsul

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Jim

is

wid

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prai

sed

by s

enio

r ex

ecut

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as

a “p

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and

lead

ing

auth

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in

hum

an

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s de

sign.

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the

mid

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as n

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arc

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f hi

gh-p

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bel

that

he

reta

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to t

his

day.

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addi

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ful

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im d

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firm

’s A

dvan

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an P

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rman

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nol

ogy

Lab

and

mai

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n ag

gres

sive

sch

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ser

ved

on t

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djun

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t th

e C

ox S

choo

l of

Busi

ness

at

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hern

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hodi

st U

nive

rsity

fo

r se

vera

l yea

rs a

nd h

as b

een

a gu

est

lect

urer

at

prom

inen

t col

lege

s an

d un

iver

sitie

s. Ji

m h

as a

utho

red

two

sem

inal

boo

ks in

his

field

, Im

prov

ing

Pro

duct

ivit

y: N

ew

Rul

es f

or M

anag

ing

Kn

owle

dge

and

Serv

ice

Wor

k to

Ach

ieve

Hig

her

Per

form

ance

(or

igin

ally

title

d H

um

anee

rin

g) (

2000

) and

Fut

ure

Tra

inin

g: A

R

oadm

ap f

or R

estr

uctu

ring

th

e T

rain

ing

Fun

ctio

n (1

995)

. Jim

als

o co

-aut

hore

d M

otiv

atin

g E

mpl

oyee

s fo

r M

cGra

w-H

ill (

1998

), an

d w

ill s

oon

com

plet

e H

um

an P

erfo

rman

ce C

onsu

ltin

g fo

r G

ulf

Publ

ishi

ng

(200

0). P

rior

to c

onsu

lting

, Ji

m w

orke

d in

ind

ustr

y as

a m

arke

t m

anag

er,

VP

of sa

les

and

divi

sion

ge

nera

l m

anag

er f

or m

ajor

NA

SDA

Q-

and

NY

SE-li

sted

firm

s. H

e ha

s a

bach

elor

’s d

egre

e in

Ind

ustr

ial

Man

agem

ent

and

an M

BA f

rom

The

Uni

vers

ity o

f Te

xas

at A

ustin

, an

d an

MS

in O

rgan

izat

ion

Dev

elop

men

t fr

om P

eppe

rdin

e U

nive

rsity

. Ji

m c

an b

e co

ntac

ted

at h

is D

alla

s of

fice-

(214

) 34

3-35

00, e

xt.

300,

or [email protected].

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arch

, le

ctur

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ing.

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PIT

ON

E W

orld

wid

e)

initi

ated

a li

mite

d be

nchm

arki

ng s

tudy

to u

pdat

e its

dat

a ba

se p

erta

inin

g to

the

“bes

t pra

ctic

es”

of i

nter

nal

cons

ultin

g fu

nctio

ns c

reat

ed f

or t

he p

urpo

se o

f im

prov

ing

orga

niza

tiona

l pe

rfor

man

ce a

nd p

rodu

ctiv

ity.

Maj

or c

ompa

nies

tho

ught

to

have

suc

h fu

nctio

ns w

ere

cont

acte

d by

tel

epho

ne a

nd s

cree

ned

for

part

icip

atio

n. T

hose

firm

s qu

alify

ing

wer

e su

bseq

uent

ly in

vite

d to

par

ticip

ate

in t

he s

tudy

. R

espo

nden

ts

wer

e as

sure

d of

anon

ymity

reg

ardi

ng t

heir

data

. And

for

the

ir p

artic

ipat

ion,

res

pond

ents

wer

e pr

omis

ed

This

rep

ort

prov

ides

an

over

view

of

the

stud

y’s

met

hodo

logy

and

fin

ding

s. B

ecau

se o

f its

gra

phic

Par

tici

pant

s ar

e in

vite

d to

joi

n ei

ther

(or

bot

h) o

f th

e on

e-ho

ur t

elec

onfe

renc

e br

iefi

ngs

on t

his

stud

y

z 5 % I ’ P

v

that

are

sch

edul

ed f

or:

Z

7

F

a su

mm

ary

repo

rt o

f th

e st

udy

findi

ngs.

form

at,

this

rep

ort

will

be

mos

t m

eani

ngfu

l w

hen

supp

orte

d w

ith a

ver

bal

revi

ew o

f th

e fin

ding

s.

-3 z c i -

0 F

rida

y, D

ecem

ber

11,

1998

@ 1

1 A

M (

CST

) Z

0 M

onda

y, D

ecem

ber

14,

1998

@ 1

1 A

M (

CST

)

Parti

cipa

nts

who

are

una

vaila

ble

at e

ither

of

thes

e tim

es a

re in

vite

d to

con

tact

PE

PIT

ON

E W

orld

wid

e in

hop

es o

f m

akin

g ot

her

arra

ngem

ents

.

Goa

ls

0 B

ench

mar

king

Stu

dy

The

goal

s fo

r th

is b

ench

mar

king

stu

dy w

ere

to:

0

Upd

ate

and

expa

nd P

EPIT

ON

E W

orld

wid

e’s

body

of

know

ledg

e on

“be

st p

ract

ices

” fo

r de

velo

p-

men

t an

d op

erat

ion

of i

nter

nal

cons

ultin

g fu

nctio

ns c

reat

ed f

or i

mpr

ovin

g or

gani

zatio

nal

perf

orm

ance

and

pro

duct

ivity

Sh

are

the

stud

y fin

ding

s w

ith p

artic

ipan

ts i

n ho

pes

that

this

kno

wle

dge

will

rep

rese

nt m

eani

ngfu

l su

ppor

t to

thei

r ef

fort

s Sh

are

conc

epts

and

met

hods

tha

t m

ay e

mer

ge f

rom

thi

s st

udy

with

the

lar

ger

com

mun

ity o

f pr

actic

e, p

oten

tially

in

the

form

of

whi

te p

aper

s, a

rticl

es,

etc.

(Th

e an

onym

ity o

f pa

rtic

ipan

ts

$ $ m

X

will

be

pres

erve

d in

any

suc

h us

e of

thi

s da

ta.)

>

0 In

tern

al C

onsu

lting

Fun

ctio

n fo

r Im

prov

ing

Org

aniz

atio

nal

Perf

orm

ance

and

Pro

duct

ivity

The

goal

s of

par

ticip

ants

may

var

y so

mew

hat,

yet

unan

imou

sly

incl

ude

the

goal

of

max

imiz

ing

the

valu

e-co

ntri

butio

n of

th

eir

resp

ectiv

e fu

nctio

ns-t

o he

lp t

he e

nter

pris

es t

hey

supp

ort

to r

ealiz

e a

subs

tant

ial

fina

ncia

l pa

yoff

fro

m f

acili

tate

d im

prov

emen

ts i

n or

gani

zatio

nal

perf

orm

ance

and

pr

oduc

tivity

. A

mon

g th

e su

bsta

ntia

l be

nefit

s th

at a

re t

o be

gai

ned

from

the

cre

atio

n of

an

inte

rnal

co

nsul

ting

func

tion

for

this

pur

pose

, any

“bu

sine

ss c

ase”

for

this

initi

ativ

e sh

ould

incl

ude

the

follo

win

g de

mon

stra

ted

gain

s: N

00 n

1.

INT

RO

DU

CT

ION

, GO

AL

S A

ND

ME

TH

OD

OL

OG

Y (

con

tin

ued

) h,

00

h,

Subs

tant

ial i

mpr

ovem

ents

in t

he d

iagn

osis

of

hum

an p

erfo

rman

ce is

sues

, an

d be

tter,

fast

er a

nd

chea

per r

esol

utio

n of

pro

blem

s an

d cu

ltiva

tion

of op

port

uniti

es th

at a

re id

entif

ied

. . . r

esul

ting

in h

ighe

r le

vels

of w

ork

perf

orm

ance

on

the

job,

inc

ludi

ng im

prov

ed p

rodu

ctiv

ity o

f 20

%,

30%

or

eve

n m

uch

mor

e in

are

as o

f hu

man

-dep

ende

nt w

ork

Impo

rtan

t re

duct

ions

in t

he- t

ime

it ta

kes

to s

olve

hum

an-p

erfo

rman

ce p

robl

ems,

inc

ludi

ng t

he

prep

arat

ion

of ne

w-h

ires

and

depl

oym

ent o

f ne

w s

kills

and

kno

wle

dge

thro

ugho

ut th

e co

mpa

ny

. . .

with

cyc

le t

imes

red

uced

by

50%

or

mor

e Si

gnifi

cant

dec

reas

es in

net

dire

ct t

rain

ing

cost

s, in

clud

ing

maj

or r

educ

tions

in l

ow-v

alue

tra

inin

g,

deve

lopm

ent

and

deliv

ery

expe

nses

, an

d re

duct

ions

in p

artic

ipan

t tim

e of

f-th

e-jo

b . .

. re

aliz

ing

a 40

%-5

0%

savi

ngs

Incr

ease

d co

nven

ienc

e fo

r em

ploy

ees,

who

beg

in t

o re

ceiv

e su

ppor

t tha

t is

mor

e on

-targ

et s

o th

ey

can

perf

orm

to th

eir

pote

ntia

l, an

d fo

r m

anag

emen

t, w

ho w

ill s

ecur

e th

e im

prov

emen

ts in

em

ploy

ee

perf

orm

ance

they

ulti

mat

ely

seek

. . .

rem

ovin

g ha

ssle

s, w

aste

d ef

fort

and

was

ted

oppo

rtuni

ties

that

ar

e ex

perie

nced

fre

quen

tly w

hen

tryin

g to

im

prov

e hu

man

per

form

ance

with

tra

ditio

nal

met

hods

Sm

arte

r ap

plic

atio

n of

ne

w t

echn

olog

ies

and

met

hodo

logi

es,

both

in

the

desi

gn o

f hi

gh-

perf

orm

ance

wor

k, a

nd i

n th

e de

sign

and

del

iver

y of

ins

truc

tion

and

on-t

he-j

ob s

uppo

rt .

. .

culti

vatin

g a

true

lea

rnin

g cu

lture

thr

ough

out

the

com

pany

, th

ereb

y m

axim

izin

g th

e po

tent

ial

for

mea

ning

ful

inno

vatio

n, i

mpr

oved

pro

duct

ivity

, m

arke

t le

ader

ship

and

fin

anci

al a

dvan

tage

Met

hodo

logy

C 5 z *

We

empl

oyed

a s

traig

htfo

rwar

d te

leph

one

surv

ey m

etho

dolo

gy f

or c

ondu

ctin

g th

is b

ench

mar

king

stu

dy.

We

star

ted

with

an

inte

rnal

ly g

ener

ated

lis

t of

the

nam

es o

f 10

0+ m

ajor

org

aniz

atio

ns s

uspe

cted

of

oper

atin

g in

tern

al c

onsu

ltin

g fu

ncti

ons

for

the

purp

ose

of

mak

ing

orga

niza

tion

al i

mpr

ovem

ent

inte

rven

tions

. Fi

rms

wer

e co

ntac

ted

rand

omly

, w

ith c

alls

dire

cted

to

know

n in

divi

dual

s w

ithin

the

se

orga

niza

tions

. In

som

e ca

ses,

we

cont

acte

d th

e di

rect

or o

f th

e in

tern

al c

onsu

lting

fun

ctio

n di

rect

ly.

In

othe

r ca

ses,

we

aske

d to

be

refe

rred

to

this

ind

ivid

ual.

Afte

r in

trodu

cing

our

selv

es a

nd i

ntro

duci

ng t

he p

urpo

se o

f th

e ca

ll an

d th

e be

nchm

arki

ng s

tudy

, w

e as

ked

for

prel

imin

ary

info

rmat

ion

that

wou

ld a

llow

us

to q

ualif

y th

e or

gani

zatio

n an

d th

e re

spon

dent

fo

r th

e st

udy.

The

crit

eria

inc

lude

d th

e fo

llow

ing

para

met

ers:

0 R

easo

n fo

r th

e st

art-

up o

f th

e co

nsul

ting

func

tion

that

inc

lude

d a

genu

ine

inte

rest

in

mak

ing

0 M

issi

on a

nd p

urpo

se th

at w

as f

ocus

ed o

n m

akin

g “w

hole

-sys

tem

” im

prov

emen

ts t

o or

gani

zatio

nal

0 B

udge

t an

d st

affin

g th

at d

emon

stra

ted

serio

us i

nten

tion

0 A

uthe

ntic

stru

ggle

s an

d su

cces

ses

expe

rienc

ed i

n op

erat

ion

Twen

ty (

20) q

ualif

ied

resp

onde

nts

wer

e se

lect

ed t

o pa

rtic

ipat

e, a

nd e

ach

sche

dule

d an

app

oint

men

t fo

r the

sur

vey

inte

rvie

w.

Mos

t of

the

int

ervi

ews

wer

e co

nduc

ted

duri

ng th

e m

onth

of

Sept

embe

r 19

98,

thou

gh a

few

wer

e co

nclu

ded

in O

ctob

er a

nd N

ovem

ber.

Part

icip

ants

wer

e pr

ovid

ed w

ith a

cop

y of

th

e su

rvey

for

m in

adv

ance

of

thei

r in

terv

iew

s. T

he in

terv

iew

s w

ere

cond

ucte

d by

Jim

Pep

itone

, or

by

Beve

rly B

eech

er w

ith B

usin

ess

Gro

wth

Alli

ance

, an

d ea

ch l

aste

d an

ave

rage

of

appr

oxim

atel

y on

e ho

ur

and

fifte

en m

inut

es.

This

rep

ort

outli

nes

the

findi

ngs

that

our

team

of

anal

ysts

con

side

red

valid

and

mea

ning

ful

at th

is l

evel

of

det

ail.

A m

ore-

deta

iled

anal

ysis

and

ben

chm

arki

ng o

f th

e da

ta c

an b

e pr

epar

ed f

or in

divi

dual

res

pond

ents

.

orga

niza

tiona

l im

prov

emen

ts

perf

orm

ance

5 7 m z 13 >

X

N

00

P

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S

Inte

rnal

hum

an p

erfo

rman

ce i

mpr

ovem

ent

cons

ultin

g fu

nctio

ns s

tart

ed t

o ap

pear

in

inno

vativ

e co

mpa

nies

in

the

early

198

0s i

n re

spon

se t

o th

e se

arch

by

non-

man

ufac

turi

ng b

usin

esse

s (ty

pica

lly

know

ledg

e- a

nd s

ervi

ce-b

ased

) for

eff

ectiv

e m

etho

ds to

inc

reas

e w

orkf

orce

per

form

ance

and

pro

duct

ivity

. In

par

ticul

ar,

corp

orat

e ex

ecut

ives

wer

e se

ekin

g w

ays

to o

rche

stra

te “

who

le-s

yste

m”

solu

tions

to

deal

w

ith s

eem

ingl

y in

tract

able

org

aniz

atio

nal

prob

lem

s, a

nd t

here

by c

apita

lize

on t

he m

any

succ

esse

s of

“h

igh-

perf

orm

ance

wor

k sy

stem

s” d

esig

ns t

hat

had

been

ach

ieve

d in

sta

rt-u

p ap

plic

atio

ns s

ince

the

la

te 1

960s

. In

the

late

198

0s, P

EPI

TO

NE

Wor

Zdw

ide

was

eng

aged

by

two

FO

RT

UN

E 5

0 co

mpa

nies

to e

stab

lish

inte

rnal

con

sulti

ng f

unct

ions

for

im

prov

ing

orga

niza

tiona

l pe

rfor

man

ce a

nd p

rodu

ctiv

ity,

and

to d

o th

is in

suc

h a

way

as

to te

st s

ever

al e

xecu

tive-

reco

mm

ende

d ap

proa

ches

. O

ne fi

ndin

g th

at w

as r

eplic

ated

in

the

se t

wo

proj

ects

(an

d ot

hers

sin

ce t

hen)

was

the

fac

t th

at T

rain

ing,

HR

D a

nd O

D p

ract

ition

ers

had

prov

en t

hem

selv

es f

ar m

ore

effe

ctiv

e th

an a

ll ot

her

func

tiona

l gr

oups

(e.

g.,

IE,

IT,

oper

atio

ns,

man

agem

ent,

etc.

) to

per

form

the

dia

gnos

tic,

desi

gn a

nd i

mpl

emen

tatio

n as

pect

s of

th

is w

ork.

Fu

rthe

rmor

e, t

he o

nly

area

in

whi

ch t

hese

pra

ctiti

oner

s di

d no

t ou

tper

form

the

oth

ers

was

the

re

quire

men

t to

dev

elop

sol

id w

orki

ng r

elat

ions

hips

with

the

ir m

anag

emen

t cu

stom

ers.

Se

para

tely

, Tra

inin

g/H

RD

fun

ctio

ns w

ere

com

ing

unde

r in

crea

sing

crit

icis

m f

or a

lack

of

impa

ct a

nd

was

te o

f re

sour

ces,

and

witn

esse

d th

e pr

ogre

ssiv

e cu

tting

of

thei

r bu

dget

s an

d st

aff,

with

man

y th

reat

ened

or

elim

inat

ed. P

EPI

TO

NE

Wor

Zdw

ide

cons

ulta

nts

wer

e th

e fir

st in

198

9 to

beg

in r

ecom

men

ding

thi

s ne

w

role

to

thre

aten

ed c

orpo

rate

Tra

inin

g fu

nctio

ns. T

hen,

aft

er fi

ve y

ears

of

supp

ortin

g th

e sh

ift o

f Tr

aini

ng

func

tions

to

“per

form

ance

con

sulti

ng”

Jim

Pep

itone

wro

te F

utur

e T

rain

ing:

A R

oadm

ap f

or R

estr

uctu

ring

th

e T

rain

ing

Fun

ctio

n (1

995)

to f

urth

er s

uppo

rt t

his

tran

sfor

mat

ion.

Si

nce

1995

, th

e nu

mbe

r of

com

pani

es s

paw

ning

int

erna

l co

nsul

ting

func

tions

for

im

prov

ing

orga

ni-

zatio

nal

perf

orm

ance

and

pro

duct

ivity

has

incr

ease

d dr

amat

ical

ly, y

et t

heir

impa

ct a

nd u

ltim

ate

succ

ess

rem

ains

con

ditio

ned

on n

umer

ous

fact

ors

for

whi

ch “

best

pra

ctic

es”

cont

inue

to

emer

ge.

A go

al o

f th

is s

tudy

is

to b

uild

on

the

exis

ting

know

ledg

e pe

rtai

ning

to

thes

e m

etho

ds.

One

wor

d of

cau

tion-

th

is s

tudy

con

firm

s a

fact

lea

rned

in

sim

ilar

prio

r st

udie

s, a

nd t

hat

is th

at t

here

is n

o “o

ne r

ight

way

” to

dev

elop

and

ope

rate

thi

s in

tern

al c

onsu

lting

fun

ctio

n, j

ust

as th

ere

is no

one

firm

tha

t ex

hibi

ts a

ll of

the

“be

st p

ract

ices

.” B

ecau

se e

very

bus

ines

s, or

gani

zatio

n an

d si

tuat

ion

is di

ffer

ent,

inde

pend

ent

lead

ersh

ip a

nd d

iscr

etio

n is

requ

ired

to s

elec

t th

e rig

ht p

ract

ices

tha

t be

st m

eet

prev

ailin

g ne

eds.

The

follo

win

g da

ta g

ener

ates

con

side

rabl

e in

sigh

t in

to th

e ef

fect

ive

desi

gn a

nd o

pera

tion

of i

nter

nal

cons

ultin

g fu

nctio

ns f

or o

rgan

izat

iona

l pe

rfor

man

ce i

mpr

ovem

ent.

To e

nhan

ce t

he r

eade

rs’

com

pre-

he

nsio

n of

the

dat

a co

llect

ed,

num

erou

s re

fere

nces

are

mad

e to

con

cept

s an

d da

ta i

llust

rate

d in

Fut

ure

Tra

inin

g an

d re

late

d co

nsul

ting

wor

k of

PEP

ITO

NE

Wor

ldw

ide.

H

erea

fter

in th

is r

epor

t. th

e in

tern

al c

onsu

ltine

func

tion

that

is th

e fo

cus

of t

his

stud

y w

ill b

e re

ferr

ed

to a

s th

e HPZC

(hu

man

per

form

ance

im

prov

emen

t co

nsu

ltin

g) f

unct

ion.

5- J m z X

E A

. En

terp

rise

Dem

ogra

phic

s >

Twen

ty e

nter

pris

es p

artic

ipat

ed i

n th

is s

tudy

. Sel

ecte

d on

the

basis

of

thei

r se

rious

atte

mpt

s at

cre

atin

g an

HPI

C f

unct

ion,

the

cha

ract

eris

tics

of t

hese

org

aniz

atio

ns m

ay i

llust

rate

som

e co

mbi

natio

n of

co

ntri

butin

g ca

use

and

resu

lting

eff

ect

that

is

rele

vant

to

this

ini

tiativ

e. I

n pa

rticu

lar,

the

follo

win

g st

atis

tics

are

wor

th n

otin

g:

Indu

stry

Ran

k R

even

ue G

row

th

Prof

it R

elat

ive

to In

dust

ry

Prof

it G

row

th

Cor

pora

te C

ultu

re

60%

ran

ked

#I

40%

at

20-3

5%

55%

rep

ort

Abo

ve A

vera

ge

75%

rep

ort

Incr

easi

ng

45

% r

epor

t P

rofe

ssio

nal

20%

ra

nked

#2

10%

at

10-1

9%

30%

rep

ort

Ave

rage

15

% r

epor

t Sa

me

30%

repo

rt M

ach

ine

10%

hav

e tw

o cu

ltur

es

10%

are

shift

ing

cult

ures

40

% a

t 3-

9%

(n

h,

w

Q\

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

The

fol

low

ing

dem

ogra

phic

dat

a pr

ovid

e an

ove

rvie

w o

f ea

ch p

arti

cipa

ting

ent

erpr

ise:

[T

o pr

eser

ve

part

icip

ant

anon

ymit

y, n

o fu

rthe

r re

fere

nce

will

be

mad

e to

any

spe

cifi

c en

terp

rise

con

trib

utin

g da

ta

to t

his

stud

y.]

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VE

NU

E

RE

VE

NU

E

PR

OF

IT

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OY

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e (s

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ard

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vera

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e Te

am

28,0

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+25%

~~

~~

~~

~ ~~

~~

~~~

~ _

__

_

~ ~

Not

es:

1. C

orpo

rate

Cul

ture

-“C

ultu

re”

is u

sed

here

as

a pr

oxy

to s

umm

ariz

e th

e or

gani

zati

onal

cha

ract

eris

tics

of

the

ente

rpri

se a

s:

Mac

hine

-Fun

ctio

nal

desi

gn,

prov

en-m

etho

d fo

cuse

d, s

tand

ardi

zati

on-b

ased

wor

k, a

nd e

ffic

ienc

y-or

ient

ed

Pro

fess

iona

l-P

roce

ss

desi

gn,

cust

omer

foc

used

, sk

ill-

base

d w

ork,

pro

fici

ency

-ori

ente

d E

ntre

pren

euri

al-E

mer

gent

de

sign

, re

sult

s-fo

cuse

d, t

ime-

base

d w

ork,

urg

ency

-ori

ente

d Te

amw

ork-

Net

wor

k de

sign

, sy

nerg

y-fo

cuse

d, n

eed-

base

d w

ork,

agr

ee-g

oals

ori

ente

d 2.

Em

ploy

ee F

TEs-

“FTE

” or

“fu

ll-t

ime

equi

vale

nt ” is

a g

ener

ally

acc

epte

d m

eans

for

agg

rega

ting

par

t-ti

me

empl

oyee

s in

to e

quiv

alen

t fu

ll-t

ime

empl

oyee

s

B.

Stra

tegi

c O

ppor

tuni

ties

Two

ques

tions

in

the

inte

rvie

w r

evea

led

the

exis

tenc

e an

d na

ture

of

stra

tegi

c ch

alle

nges

fac

ed b

y th

e pa

rtici

patin

g en

terp

rises

. M

any

of t

hese

cha

lleng

es r

elat

e di

rect

ly o

r ne

ar-d

irect

ly t

o hu

man

and

or

gani

zatio

nal

perf

orm

ance

and

pro

duct

ivity

, th

us m

akin

g th

em s

trat

egic

opp

ortu

niti

es f

or t

he H

PIC

fu

nctio

n to

sub

stan

tially

im

pact

ent

erpr

ise

perf

orm

ance

:

h,

CQ

C

Q

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

0 C

urre

nt S

trate

gic

Initi

ativ

es:

Exi

stin

g m

arke

ts (

75%

)-in

crea

se

shar

e of

m

arke

t w

ith e

xist

ing

prod

ucts

and

ser

vice

s; ex

pand

dis

tribu

tion;

bec

ome

mar

ket l

eade

r; de

velo

p ne

w m

arke

t ni

ches

; fo

cus

on p

rof-

ita

ble

busin

ess:

impr

ove

cust

omer

rete

ntio

n an

d lo

yalty

. N

ew o

ffer

ings

(35

%)-

laun

ch

new

pro

duct

s an

d se

rvic

es;

inno

vativ

e ne

w s

trate

gies

and

bu

sines

s fo

rmat

s; c

reat

e w

orld

-cla

ss s

ervi

ce.

New

mar

kets

(25

%)-

expa

nd

into

new

mar

- ke

ts;

deve

lop

inte

rnat

iona

l bus

ines

s; c

reat

e gl

obal

org

aniz

atio

n.

Cor

pora

te t

ran

sfor

mat

ion

(25

%)-

capi

taliz

e on

der

egul

atio

n; re

inve

nt th

e bu

sines

s; di

vers

ify;

impr

ove

oper

atio

nal

spee

d.

Otg

aniz

atio

n cu

pabi

liiy

(25%

)-upg

rade

or

gani

- za

tiona

l cap

abili

ty; e

mpl

oyee

dev

elop

men

t; im

- pr

ove

perfo

rman

ce; i

mpl

emen

t bal

ance

d sc

ore-

ca

rd; d

evel

op m

ore

prod

uctiv

e or

gani

zatio

n.

Cu

rren

t off

erin

gs (

20%

)-de

velo

p an

d m

ain-

ta

in l

eade

rshi

p w

ith c

urre

nt p

rodu

cts

and

serv

ices

.

0 B

arri

ers

to I

ncre

ased

Pro

duct

ivity

: O

rgan

izat

ion

des

ign

(55%

)-fu

nctio

nal

silos

; m

isal

igne

d in

cent

ives

; la

rge

span

s of

con

- tr

ol;

lack

of

inte

grat

ion;

lac

k of

acco

unt-

ab

ility

for

per

form

ance

and

beh

avio

r. O

rga

niz

ati

on

dev

elop

men

t (5

0%)-

resi

s-

tanc

e to

ne

w r

ealit

y; u

nwill

ingn

ess

to

F 5 em

brac

e ne

w m

anag

emen

t m

etho

ds;

com

- pl

acen

cy;

inte

rnal

foc

us;

resi

stan

ce t

o z

lear

ning

; la

ck o

f ex

perie

nced

and

tale

nted

$ 5

lead

ers

and

man

ager

s; a

ging

wor

kfor

ce.

z m

3

z 2

Ext

ern

al

chan

ge

(35%

)-co

ntin

uous

te

ch-

prod

ucts

to

mee

t m

arke

t ne

eds;

spe

ed o

f

Sta

nda

rdiz

atio

n

(30%

)-la

ck

of

stan

dard

pr

actic

es;

no d

efin

ed m

etho

ds a

nd p

ro-

cedu

res;

no

docu

men

tati

on;

inco

nsis

tent

ap

proa

ch to

rou

tine

situ

atio

ns; o

n-bo

ard-

in

g pr

oces

s sti

ll ha

ndle

d w

ith c

oach

ing.

W

orkf

orce

sta

bili

ty (

25

%)-

empl

oyee

tu

rn-

over

; co

nsta

nt m

ovem

ent

of p

eopl

e; v

ery

few

est

ablis

hed

wor

kers

.

nolo

gy/in

dust

ry/m

arke

t cha

nges

; ch

angi

ng

Q 5 i

Z

maj

or c

hang

es.

c

Infr

astr

uctu

re (

20%

)-up

grad

e IT

inf

rast

ruc-

tu

re;

prep

are

for

futu

re g

row

th.

Fina

ncia

l per

form

ance

(20

%)-

incr

ease

sa

les

reve

nue

and

oper

atin

g ca

sh f

low

; im

prov

e pr

ofita

bilit

y; i

ncre

ase

shar

ehol

der

retu

rn.

Red

uce

over

head

(15

%)-

man

age

expe

nses

; re

duce

cos

ts o

f op

erat

ion.

Su

pply

cha

in m

anag

emen

t (1

0%)-

impr

ove

vend

or r

elat

ions

hips

, ga

in c

ontr

ol o

ver

proc

urem

ent

proc

ess.

O

ther

initi

ativ

es-n

umer

ous

othe

r in

itiat

ives

.

Info

mat

ion

tech

nolo

gy (

20%

)-pe

ople

ex

- pe

cted

to

wor

k w

ithou

t co

mpe

titiv

e to

ols;

in

cons

iste

nt a

cces

s to

inf

orm

atio

n.

Am

bigu

ous

obje

ctiv

es (1

5%)-

-lack

of

a c

lear

an

d co

nsis

tent

foc

us;

lack

of

spec

ific

ob-

ject

ives

; go

als

chan

ge w

ith p

eopl

e.

Bus

ines

s co

mpl

exit

y ( 1

5%)-

incr

easi

ng

com

plex

ity o

f w

ork

begi

nnin

g to

exc

eed

wor

ker

capa

bilit

y; e

mpo

wer

men

t an

d te

am-

wor

k ad

d co

mpl

exity

. R

esou

rce

cons

trai

nts

(1 0%

)-in

suff

icie

nt

staf

f su

ppor

t av

aila

ble;

con

stan

t pr

essu

re o

n fi

nanc

ial

reso

urce

s le

ads

to

expe

nsiv

e $ 6 X

com

prom

ises

. >

h,

\o

0

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

C.

Tri

gger

ing

Issu

es

Tho

ugh

leng

th o

f op

erat

ion

does

not

cor

rela

te s

igni

fica

ntly

wit

h th

e de

velo

pmen

t le

vel

or e

ffec

tive

ness

of

HPI

C f

unct

ions

, th

is c

ompa

riso

n su

gges

ts a

n in

crea

sing

num

ber

of e

ntra

nts

into

thi

s re

lati

vely

new

fi

eld

of w

ork.

[K

eep

in m

ind

that

fun

ctio

ns i

n ex

iste

nce

for

less

tha

n si

x m

onth

s w

ere

disq

uali

fied

as

resp

onde

nts.

] F

L

I

>

Z 2

f $ c!

0 L

engt

h of

Ope

rati

on:

i=

7

h ., - p 7. c

Z c:

J

r- i

0 T

rigge

ring

Issu

es:

Inte

rnal

Tri

gger

s:

Ext

erna

l Tri

gger

s:

J

New

spir

it of

lead

ersh

ip (2

0%?)

J

HR

res

truc

ture

d fo

r gr

eate

r ac

coun

tabi

lity (

20%

) J

Evo

lutio

nary

deve

lopm

ent (

15%

) J

Larg

e sca

le b

usin

ess p

robl

ems (

20%

) M

anag

emen

t’s in

sist

ence

on

perf

orm

ance

impa

ct

from

trai

ning

, im

prov

ed e

mpl

oyee

per

form

ance

, or

J

New

lead

er (1

0%)

effe

ctiv

e so

lutio

ns to

org

aniz

atio

nal p

robl

ems (

I 5%

)

J

2 J m Z

X 2 >

D.

Org

aniz

atio

nal

Pla

cem

ent

Rep

ortin

g le

vel

is a

mea

ning

ful

indi

cato

r of

the

cur

rent

wor

k co

mpl

exity

and

dev

elop

men

t st

age

of

HPI

C fu

nctio

ns.

Of t

he tw

enty

fun

ctio

ns s

tudi

ed,

two

(10%

) rep

ort

dire

ctly

to

the

CEO

, tw

elve

(60

%)

repo

rt d

irect

ly t

o a

seni

or c

orpo

rate

exe

cutiv

e, a

nd s

ix (

30%

) rep

ort

dire

ctly

to

a “s

hare

d se

rvic

es”

func

tion

that

inc

lude

s H

R-r

elat

ed a

nd o

ther

sta

ff f

unct

ions

. A

s no

ted

belo

w,

wor

k co

mpl

exit

y is

ex

pres

sed

in t

erm

s of

tim

e-sp

an o

f di

scre

tion

’, a

nd d

evel

opm

ent

is ex

pres

sed

in te

rms

of t

rans

form

atio

n st

ages

’ (o

r pha

ses)

. h, 2

t3

w

h,

11.

BEN

CH

MA

RK

IN

TER

VIE

W F

IND

ING

S (c

ontin

ued)

0 R

epor

ting

Lev

els:

EX

EC

UT

IVE

LE

AD

ER

SHIP

5

to1 0

year

tim

e-sp

an of d

iscr

etio

n

EX

EC

UT

IVE

MA

NA

GE

ME

NT

2

to 5

year t

ime-

span

of d

iscr

etio

n

GE

NE

RA

L M

AN

AG

EM

EN

T

I to

2 ye

ar ti

me-

span

of d

iscr

etio

n

OPE

RA

TIO

NA

L M

AN

AG

EM

EN

T

3 to

12

mon

th ti

me-

span

of d

iscr

etio

n

FUN

CT

ION

AL

MA

NA

GE

ME

NT

I

to 3

mon

th ti

me-

span

ofd

iscr

etio

n

! I I

Sha

red

50%

S

ervi

ces

................

i Tra

inin

g/ f

j H

RD

I

......

......

.....

TRAN

SFO

RMAT

ION

STAG

E z 5 Z

S

tage

4 (fO

%)

Focus o

n St

rate

gy

v I

E

Sta

ge3 (60%)

Z

Focu

s on

Org

aniza

tion

Sta

ge2

(30%

) Fo

cus o

n O

pera

tions

Stag

e 1

(0%

) Fo

cus o

n Fu

nctio

n

z 9

n!

*

C.

EI

Z c i

v1 3 I-

Nae

r.

I Tt

mur

-Spu

r uf

llrsc

rrri

ori -

Elli

on la

cquer ir

cred

ited

with

div

ovsn

ng m

the l9SOr

this

ub

ptw

e m

eaw

e of

wor

k kv

clr.

Thr

ough

ext

ensi

ve re

sear

ch, h

e d

nam

imd

that

the

wei

ght o

f re-

abili

ty

in a

ny w

ork

role

-its

cum

plex

ity (x

ch

alle

ng

cwal

dire

ctly

rela

ted

to th

e Iu

wr

eum

plrf

mrr

limes

fM

the

lmgc

rt

task

s in

a r

ole.

For

mw

e &

tail.

re

ad J

acqu

es' I

f~

~i

m

('up

uhdi

ly (1

994)

trad

ition

al c

orpo

rate

trm

iine.

func

tions

to b

encr

sen'

e org

aniz

atio

ns by a

dvan

cing

thei

r rol

e "f

mm

trai

ning

rem

rce

to s

ourc

e of

cci

npet

itive

adva

ntag

e ''

2 Iii~

~m

wo

#

Slu

p -

Spec

ific

refe

renc

e is

mad

e to

this

con

cepc

I" Fu

rurn

Tiw

,rsi

y (P

epito

ne. 1

95's.

pp 2

02

-20

9ta

dev

elop

men

t slr

aleg

y fo

r

Star

ting

in t

he m

id t

o la

te 1

980s

, co

rpor

ate

trai

ning

lea

ders

beg

an s

eizi

ng o

ppor

tuni

ties

to

adva

nce

the

impa

ct o

f th

eir

serv

ices

by

prov

idin

g m

anag

emen

t cl

ient

s w

ith

cons

ulta

tive

supp

ort a

nd i

nter

vent

ions

br

oade

r th

an t

rain

ing.

By

mid

199

0, t

his

initi

ativ

e be

cam

e th

e tr

end

for

corp

orat

e tr

aini

ng f

unct

ions

in

maj

or c

ompa

nies

. Res

earc

h w

e co

nduc

ted

in 1

994

resu

lted

in t

he c

once

ptua

liza

tion

of

the

foll

owin

g fo

ur-s

tage

tra

nsfo

rmat

ion

jour

ney

base

d on

the

exp

erie

nces

of

mor

e th

an 1

00 c

ompa

nies

. [S

ee F

utur

e T

rain

ing,

pp.

202

to

208

.1

0 D

evel

opm

ent

Stag

es:

Min

. Ti

me

Stag

e to

Ach

ieve

Pr

inci

pal

Emph

asis

~~

~ ~

-

1 3

to 6

mon

ths 0 D

emon

stra

te a

lignm

ent

0 S

treng

then

clie

nt r

elat

ions

hips

0 S

uppo

rt pe

rfor

man

ce g

oals

0 In

terv

ene

beyo

nd t

rain

ing

0 P

rodu

ce p

erfo

rman

ce s

uppo

rt

0 C

onve

rge

supp

ort

reso

urce

s 0 F

acili

tate

a l

earn

ing

clim

ate

2 6

to 1

2 m

onth

s 0 F

unct

ion

as in

tern

al c

onsu

ltant

s

3 1

to 3

yea

rs

0 P

ract

ice

cont

inuo

us im

prov

emen

t

4 3

to 5

yea

rs

Prop

ose

optio

ns f

or c

ompe

titiv

e ad

vant

age

prof

icie

ncy

0 D

emon

stra

te a

cum

en a

nd

0 In

nova

te p

ower

ful

inte

rven

tions

z 7 m Z

X E!

A p

roce

ss o

f dev

elo

pin

g co

mpe

tenc

e, ca

pac

ity, a

nd c

md

ibili

ly.

h,

\D

w

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

E.

Func

tion

Pur

pose

The

“pur

pose

” st

atem

ents

pro

vide

d fo

r ea

ch f

unct

ion

are

gene

rally

con

sist

ent

in o

vera

ll in

tent

, ye

t as

div

erse

in

thei

r ex

pres

sion

as

the

ente

rpri

ses

they

ser

ve.

Ther

e is

a m

eani

ngfu

l cor

rela

tion

betw

een

repo

rting

lev

el (

or tr

ansf

orm

atio

n st

age)

of

the

func

tions

stud

ied

and

the

wor

ds u

tiliz

ed i

n th

eir

purp

ose

stat

emen

ts,

how

ever

the

pre

sent

atio

n of

th

is d

etai

l w

ould

mat

eria

lly j

eopa

rdiz

e th

e an

onym

ity

of

resp

onde

nts.

To

gene

raliz

e, t

he r

ule

of t

hum

b fo

r pe

rfor

man

ce is

fu

nct

ion

fol

low

s fo

rm,

whi

ch m

eans

th

at a

n H

PIC

fun

ctio

n’s

purp

ose

will

lik

ely

conf

orm

to

its s

truc

tura

l de

sign

(re

port

ing

leve

l, a

s w

ell

as

othe

r de

fini

ng f

acto

rs).

Fol

low

ing

is a

rand

om l

ist o

f th

e pu

rpos

e st

atem

ents

pro

vide

d, w

ith o

nly

min

or

editi

ng i

n so

me

case

s in

ord

er t

o pr

even

t en

terp

rise

ide

ntif

icat

ion.

(O

ne f

un

ctio

n d

id n

ot p

rovi

de a

pu

rpos

e st

atem

ent.

]

0 P

urpo

se S

tate

men

ts:

1. T

o en

able

wor

kfor

ce t

o im

prov

e bu

sine

ss p

erfo

rman

ce

2. T

o se

rve

as a

cen

ter

of e

xcel

lenc

e to

des

ign,

dev

elop

and

del

iver

sup

port

int

erve

ntio

ns a

nd

serv

ices

3.

To

prov

ide

stra

tegy

and

im

plem

enta

tion

of e

xecu

tive

asse

ssm

ents

and

dev

elop

men

t, an

d sp

ecia

lized

per

form

ance

con

sulti

ng to

the

org

aniz

atio

n 4.

To

mee

t or

gani

zatio

nal

need

s . .

. m

akin

g su

re t

he b

usin

ess

has

the

righ

t pe

ople

with

the

rig

ht a

bilit

ies

in t

he r

ight

job

s 5. T

o se

rve

inte

rnal

bus

ines

s un

its a

nd e

xter

nal

clie

nts

to i

mpr

ove

the

wor

k pe

rfor

man

ce o

f pe

ople

in

orde

r to

im

pact

bus

ines

s re

sults

, an

d to

sol

ve p

robl

ems

and

crea

te c

ompe

titiv

e ad

vant

age

6. T

o so

lve

busi

ness

pro

blem

s by

del

iver

ing

cust

omiz

ed p

erfo

rman

ce-i

mpr

ovem

ent

solu

tions

to

7. T

o m

eet c

ompa

ny n

eeds

for

hum

an p

erfo

rman

ce t

echn

olog

y . .

. app

lyin

g it

to

HR

initi

ativ

es

8. T

o m

eet

the

com

pany

’s n

eed

for

an e

ffec

tive

orga

niza

tion

9. T

o en

hanc

e co

mpe

titiv

e ca

paci

ty o

f bu

sine

ss t

o in

crea

se s

hare

hold

er v

alue

clie

nts

need

ing

sust

aina

ble

chan

ge o

r ne

w a

ppro

ache

s to

com

petit

ive

adva

ntag

e

as i

t m

akes

sen

se t

o do

so

10.

To p

rovi

de o

rgan

izat

ion-

spec

ific

supp

ort

to b

usin

ess-

unit

exec

utiv

es

1 1.

To p

rodu

ce c

lient

val

ue-a

ddin

g co

nsul

ting

that

impa

ct b

usin

ess

resu

lts a

nd in

crea

ses o

rgan

izat

iona

l ca

pabi

lity

. . .

by f

ocus

ing

on p

robl

em s

olvi

ng t

hrou

gh c

hang

es in

str

uctu

re,

proc

ess,

cul

ture

an

d sk

ills

12.

To a

chie

ve i

mpr

oved

bus

ines

s re

sults

thr

ough

im

prov

emen

ts t

o hu

man

per

form

ance

. . .

bot

h em

ploy

ee s

atis

fact

ion

and

cust

omer

sat

isfa

ctio

n . .

. an

d le

arni

ng

13.

To c

reat

e co

rpor

ate

trus

t 14

. To

sup

port

HR

Rep

s. an

d bu

sine

ss-u

nit

clie

nts

to im

plem

ent l

arge

-sca

le s

yste

m c

hang

e pr

ojec

ts

15.

To i

mpa

ct t

he p

erfo

rman

ce o

f pa

rtne

rs a

nd t

he o

rgan

izat

ion

16.

To i

mpr

ove

perf

orm

ance

with

in c

lient

org

aniz

atio

ns

17.

To d

eal w

ith c

orpo

rate

-wid

e hu

man

-per

form

ance

issu

es a

nd s

uppo

rt th

e ro

ll-ou

t of

maj

or in

itiat

ives

18

. To

pro

vide

org

aniz

atio

nal

stra

tegy

, exp

ertis

e an

d su

ppor

t to

busi

ness

-uni

t cl

ient

s an

d bu

sine

ss-

19.

To i

mpr

ove

wor

kpla

ce p

erfo

rman

ce w

ithin

bus

ines

s un

its

z ;

7

m

z 0

unit

leve

l H

R s

ervi

ces

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

F. F

unct

ion

Nam

e

No

two

func

tions

in t

he s

tudy

use

the

sam

e na

me.

Thi

s is

unde

rsta

ndab

le w

hen

cons

ider

ing

both

th

e ne

wne

ss o

f th

is f

unct

ion’

s co

ncep

t, an

d th

e fa

ct th

at s

uch

nam

es a

re o

ften

the

resu

lt of

col

labo

ratio

n be

twee

n th

e fu

nctio

n le

ader

, th

e ex

ecut

ive

to w

hich

the

fun

ctio

n re

port

s, t

he f

unct

ion

staf

f, an

d ot

her

stak

ehol

ders

. Id

eally

, the

nam

e is

sele

cted

for

its

accu

rate

por

tray

al o

f th

e se

rvic

es o

ffer

ed a

nd p

rovi

ded,

w

ith s

ome

adju

stm

ent

to i

ncor

pora

te o

rgan

izat

ion-

fam

iliar

and

acc

eptib

le w

ords

. W

e ha

ve w

itnes

sed

seve

ral

case

s in

whi

ch t

he a

dopt

ed n

ame

is re

ject

ed (

eith

er p

oliti

cally

or

in e

ffec

t) b

y th

e m

anag

ers

that

are

to

be s

erve

d by

the

fun

ctio

n. T

his

seem

s to

occ

ur m

ore

ofte

n w

hen

the

impl

ied

imag

e of

the

na

me

is un

supp

orte

d by

the

fun

ctio

n’s

role

or

imag

e in

the

eye

s of

man

agem

ent.

0 H

PIC

Fun

ctio

n N

ame:

Th

ere

is a

corr

elat

ion

betw

een

repo

rtin

g le

vel

(or

tran

sfor

mat

ion

stag

e) o

f th

e fu

nctio

ns s

tudi

ed

and

the

wor

ds u

tiliz

ed i

n th

eir

nam

es,

how

ever

the

pre

sent

atio

n of

thi

s de

tail

wou

ld m

ater

ially

je

opar

dize

the

ano

nym

ity o

f re

spon

dent

s. A

ltern

ativ

ely,

we

prov

ide

an a

lpha

betic

al l

ist

of t

he

func

tion

nam

es.

Busin

ess

Perf

orm

ance

Con

sulti

ng S

ervi

ces

Empl

oyee

Ser

vice

s Ex

ecut

ive

Dev

elop

men

t &

Per

form

ance

Im

prov

emen

t G

loba

l Pe

rfor

man

ce D

evel

opm

ent

HR

Bus

ines

s Pa

rtne

rs

HR

Pla

nnin

g &

Dev

elop

men

t H

uman

Rel

atio

ns

Lear

ning

& O

rgan

izat

ion

Dev

elop

men

t Le

arni

ng N

etw

ork

Man

agem

ent

Dev

elop

men

t O

rgan

izat

ion

Effe

ctiv

enes

s O

rgan

izat

ion

Effe

ctiv

enes

s &

Con

sulti

ng S

ervi

ces

Org

aniz

atio

n &

Tra

inin

g D

evel

opm

ent

Perf

orm

ance

& C

ompe

tenc

y M

anag

emen

t Pe

rfor

man

ce C

onsu

lting

Div

isio

n Pe

rfor

man

ce D

evel

opm

ent

Perf

orm

ance

Pla

nnin

g Se

rvic

es

Perf

orm

ance

Sol

utio

ns

Trai

ning

& O

rgan

izat

ion

Dev

elop

men

t Tr

ansf

orm

atio

n

h,

W

00

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

G.

Func

tion

Lea

der

Lead

ersh

ip h

as b

een

dem

onst

rate

d to

be

the

singl

e m

ost

impo

rtan

t fa

ctor

in

the

succ

essf

ul d

evel

opm

ent

of a

n H

PIC

func

tion.

Whe

ther

act

ing

as th

e in

tern

al t

rigge

r to

cha

mpi

on a

nd p

ione

er t

his

func

tion,

or

as t

he s

tew

ard

chos

en t

o m

eet

man

agem

ent’s

mor

e st

ring

ent

dem

ands

(ex

tern

al),

the

lead

ers’

rol

e is

pivo

tal.

Her

e’s

a co

mpa

rativ

e lo

ok a

t th

e le

ader

s of

the

HPI

C f

unct

ions

par

ticip

atin

g in

thi

s st

udy.

z 5 z z -J

m

0 A

cade

mic

Cre

dent

ials

: Ed

ucat

ion

(pro

fess

iona

l kn

owle

dge)

and

rel

evan

t pr

ior

chal

leng

es h

ave

prov

en t

o be

val

id i

ndic

ator

s of

pot

entia

l su

cces

s in

thi

s ro

le.

z 2

Hig

hest

Deg

ree

Aca

dem

ic M

ajor

Bac

helo

rs

45%

B

usin

ess

30%

M

aste

rs

40%

P

sych

olog

y 20

%

Ph.

D.

15%

O

rg.

Dev

elop

men

t 15

%

Inst

r. &

Cur

ricu

lum

10

%

Pol

.Sci

. &

Gov

t.

10%

L

iber

al A

rts

5 yo

Fin

ance

5 y

o E

ngin

eeri

ng

5 Yo

L 2

Pri

or W

ork

Exp

erie

nce’

P

il

Ope

rati

ons

Man

agem

ent

40

%

c

z c

z m

r

Hum

an R

esou

rces

50

%

Tra

inin

g &

Dev

elop

men

t 40%

i

Ext

erna

l C

onsu

ltin

g 30

%

OD

Con

sult

ing

(Int

. &

Ext

.)

20%

V

ice

Pre

side

nt

20%

Sa

les

1 5 Yo

M

ilita

ry

10%

Inte

rnal

Con

sult

ing

25 yo

Not

e: 1

. P

rior

Wor

k E

xper

ienc

e-T

otal

s ex

ceed

10

0% d

ue

to m

ult

iple

res

pon

ses

and

over

lapp

ing

cate

gori

es.

Rel

atio

nshi

ps:

Dev

elop

ing

and

mai

ntai

ning

exc

elle

nt r

elat

ions

hips

with

sta

keho

lder

s is

esse

ntia

l w

ork

for

HPI

C

func

tion

lead

ers.

Whe

n th

e de

velo

pmen

t of

an

HPI

C f

unct

ion

is s

talle

d, t

his

is on

e of

the

firs

t fa

ctor

s to

con

side

r.

Ver

y T

op

Man

agem

ent

Cor

pora

te

Dir

ect

Pro

fess

iona

l R

atin

g Sc

ale

Exe

cuti

ves

Clie

nts

HR

Dir

ecto

r R

epor

ts

Staf

f

(1 )

Exc

elle

nt

35%

40

%

35%

5

0%

30

%

(2) V

ery

Goo

d 40

%

45 Yo

3

5%

3

5%

40%

(3)

Goo

d 10

%

10%

10

%

15%

25

%

(4)

Fair

5

%

5%

(5) V

ery

Poor

N

one

5 %

5 Y

o 15

%

0 Yo

5 Y

o 2 T m z X

0 >

w

0

0

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

0 R

elat

ions

hip

Perf

orm

ance

Ind

ex:

A r

elat

ions

hip

perf

orm

ance

in

dex

can

be c

reat

ed f

or e

ach

lead

er b

y av

erag

ing

thei

r re

latio

nshi

p le

vels

for

all

stak

ehol

der

cate

gorie

s. W

ith t

his

indi

cato

r, w

e fin

d th

at th

e re

latio

nshi

p pe

rfor

man

ce

leve

ls a

chie

ved

are

reas

onab

ly c

onsi

sten

t fo

r in

divi

dual

fun

ctio

n le

ader

s-th

at

is t

o sa

y th

at s

ome

lead

ers

are

cons

iste

ntly

bet

ter

at a

ll st

akeh

olde

r re

latio

nshi

ps t

han

are

othe

rs le

ader

s. Th

ough

rat

er

bias

can

con

tribu

te t

o th

is a

ppea

ranc

e, t

he d

ata

para

llels

our

pro

fess

iona

l exp

erie

nce

in th

is r

egar

d.

In p

ract

ice,

any

per

form

ance

bel

ow a

2.0

(Ve

ry G

ood)

is

mor

e of

ten

likel

y to

hav

e a

nega

tive

impa

ct o

n H

PIC

func

tion

deve

lopm

ent.

I

f

Inde

x D

istr

ibut

ion

B 5 15

%

1.0

Exc

elle

nt w

ith a

ll $.

n

30%

1.

6 to

2.0

Ve

ry g

ood

or b

ette

r w

ith a

ll ;

35%

2.

1 to

2.5

A

lmos

t ve

ry g

ood

over

all

- ... Z 2 c z s

20%

1.

1 to

1.5

A

lmos

t Exc

elle

nt o

vera

ll

- - i Z

0 C

ompe

nsat

ion:

T

he c

ompe

nsat

ion

for

HPI

C f

unct

ion

lead

ers

cont

inue

s to

und

ergo

cha

nge

cons

iste

nt w

ith

over

all

chan

ges

bein

g m

ade

to e

nter

pris

e co

mpe

nsat

ion

syst

ems

(e.g

., pe

rfor

man

ce-b

ased

inc

enti

ves,

hig

her

sala

ries

, et

c.).

Ove

rall,

the

ir c

ompe

nsat

ion

corr

elat

es m

ost

sign

ific

antl

y w

ith

the

repo

rtin

g le

vel

of t

he p

osit

ion,

som

ewha

t w

ith

the

corp

orat

e cu

ltur

e of

the

ent

erpr

ise,

and

muc

h le

ss w

ith

any

othe

r va

riab

le s

tudi

ed.

Bas

e C

ompe

nsat

ion

Ince

ntiv

e P

oten

tial

Ran

ge

Mea

n B

y R

epor

ting

Lev

el

Mea

n R

ange

Exe

cuti

ve M

anag

emen

t (S

tage

4)

$192

,500

G

ener

al M

anag

emen

t (S

tage

3)

$128

,600

O

pera

tion

al M

anag

emen

t (S

tage

2)

$120

,400

By

Cor

pora

te C

ultu

re

$185

,000

to 2

00,0

00

$70,

000

to

160,

000

$54,

000

to 2

00,0

00

87.5

%

75

% t

o 10

0%

5 30

.5%

0

% t

o 5

0%

31

.6%

0

% t

o 60

%

z T

m

E?

x

Mac

hine

P

rofe

ssio

nal

Ent

repr

eneu

rial

T

ea m

wor

k

$106

,000

$1

56,0

00

$147

,000

$1

27,0

00

$70,

000

to 12

8,00

0 $5

4,00

0 to

200

,000

$1

30,0

00

to 1

60,0

00

$113

,000

to

14

0,00

0

w

0

h,

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

H.

Pri

ncip

al R

esou

rces

Ther

e ar

e so

man

y va

riabl

es a

ffec

ting

the

reso

urce

allo

catio

ns to

HPI

C fu

nctio

ns a

nd th

eir

acco

untin

g tr

eatm

ent

that

it

is v

ery

diff

icul

t to

gen

eral

ize

on t

his

issu

e. T

houg

h ba

rely

sig

nifi

cant

, re

sour

ce

allo

catio

ns a

re s

omew

hat c

orre

late

d w

ith r

epor

ting

lev

els

(tra

nsfo

rmat

ion

stag

e) a

nd s

ourc

e ac

coun

ting

.

F 5 z 5 = 2 z

0 F

undi

ng:

Low

er l

evel

HPI

C f

unct

ions

gen

eral

ly h

ave

grea

ter

annu

al f

undi

ng t

han

thei

r m

ore

stra

tegi

c co

unte

rpar

ts a

t hig

her

leve

ls of

the

orga

niza

tion.

Fun

ctio

ns th

at a

re f

unde

d by

ove

rhea

d al

loca

tion

an

d cl

ient

cha

rgeb

ack

com

bine

d ge

nera

lly r

ecei

ve g

reat

er f

undi

ng o

vera

ll, a

nd h

ave

expe

rien

ced

grea

ter

incr

ease

s in

rec

ent

year

s. T

wo

resp

onde

nts

repo

rted

cur

rent

pla

ns t

o sh

ift

from

ove

rhea

d al

loca

tion

to

clie

nt c

harg

ebac

k fu

ndin

g, a

nd i

n bo

th c

ases

thi

s ch

ange

is

inte

nded

to

impr

ove

s pe

rcei

ved

acco

unta

bilit

y.

2 c - i A

nnua

l F

undi

ng

Las

t A

nnua

l In

crea

se

z

By

Rep

orti

ng L

evel

M

ean

Ran

ge

Mea

n R

ange

Exec

utiv

e M

anag

emen

t (S

tage

4)

$4.7

SM

$3.O

M t

o 6.

SM

0 Yo

All

0%

Gen

eral

Man

agem

ent

(Sta

ge 3

) $5

.29M

$0

.4M

to

16.O

M

20%

0%

to

70%

O

pera

tiona

l M

anag

emen

t (S

tage

2)

$S..S

SM

$0.4

M t

o 25

.OM

7 y

o 0%

to

30%

By

Res

ourc

e A

ccou

ntin

g M

etho

d

Ove

rhea

d A

lloca

tion

(1 1

func

tions

) $4

.29M

$0

.4M

to

16M

11

%

0% t

o 5

0%

O

verh

ead

and

Cha

rgeb

ack

(7 fu

nctio

ns)

$7.5

1M

$l.O

M t

o 25

M

19%

0%

to

70%

C

lient

Cha

rgeb

ack

(2 fu

nctio

ns)

$3.0

0M

$2.O

M t

o 4.O

M

15%

0%

to

30%

0 S

taffi

ng:

Exte

rnal

ben

chm

arks

are

con

tinua

lly s

ough

t aft

er r

egar

ding

sta

ffin

g iss

ues,

yet

the

com

plex

ity o

f th

e va

riabl

es i

nvol

ved

gene

rally

mak

es i

t di

ffic

ult,

if no

t im

poss

ible

, to

rel

iabl

y id

entif

y th

em.

Past

stud

ies

have

sho

wn

that

hig

her-l

evel

HPI

C fu

nctio

ns m

ore

ofte

n op

erat

e w

ith s

mal

ler

staf

fs,

are

not

invo

lved

dire

ctly

with

tra

inin

g de

velo

pmen

t an

d de

liver

y (w

hich

are

sta

ff i

nten

sive

), an

d he

avily

util

ize

exte

rnal

con

sulta

nts.

The

dat

a fr

om t

his

stud

y ne

ither

con

firm

s no

r re

fute

s th

is

prio

r fin

ding

. In

thi

s st

udy,

how

ever

, st

aff

size

and

las

t an

nual

inc

reas

e re

late

to

the

reso

urce

ac

coun

ting

met

hod

in

use.

2 2

z X E >

Full-

Tim

e St

aff

Last

Ann

ual

Staf

f In

crea

se

By

Rep

ortin

g Le

vel

Mea

n R

ange

M

ean

Ran

ge

Exec

utiv

e M

anag

emen

t (S

tage

4)

Gen

eral

Man

agem

ent

(Sta

ge 3

) O

pera

tiona

l M

anag

emen

t (S

tage

2)

By

Res

ourc

e A

ccou

ntin

g M

etho

d

26.5

5

to 4

2 7.

5%

0% t

o 15

%

43.6

9

to 2

00

12.8

%

0% t

o 42

%

36.3

5

to 1

46

13.0

%

0% t

o 68

%

Ove

rhea

d A

lloca

tion

Onl

y (1

1 fu

nctio

ns)

40.0

5

to 2

00

7.7%

0%

to

50%

O

verh

ead

and

Cha

rgeb

ack

(7 fu

nctio

ns)

42.9

5

to 1

46

13.3

%

0% t

o 42

%

cc,

34.0

%

0% t

o 68

%

cc,

Clie

nt C

harg

ebac

k O

nly

(2 fu

nctio

ns)

27.0

12

to 4

2

LN

0

P

11

. B

EN

CH

MA

RK

IN

TE

RV

IEW

FIN

DIN

GS

(con

tin

ued

)

I. O

rgan

izat

iona

l C

hara

cter

isti

cs

Parti

cipa

nts

in t

his

stud

y w

ere

aske

d to

des

crib

e th

e “c

ultu

re”

of t

heir

ent

erpr

ise,

and

sep

arat

ely

of

thei

r H

PIC

fun

ctio

ns,

by s

elec

ting

from

Hen

ry M

intz

berg

’s w

idel

y ac

cept

ed o

rgan

izat

iona

l ty

polo

gy’

that

is

base

d on

the

driv

ing

influ

ence

s of

geo

grap

hic

expa

nsi

on a

nd m

arke

t ch

ange

on

orga

niza

tion

desi

gn a

nd o

pera

tion.

In

this

app

licat

ion

we

use

the

term

“cu

lture

” no

t fo

r its

pre

cise

eth

nolo

gic

mea

ning

bu

t si

mpl

y as

a p

roxy

for

thes

e or

gani

zatio

nal

char

acte

rist

ics.

The

res

ult

is a

hel

pful

too

l fo

r de

fini

ng

and

com

mun

icat

ing

the

fund

amen

tally

dif

fere

nt w

ays

that

org

aniz

atio

ns o

pera

te.

L 5 2

z

The

unde

rlyin

g co

nstr

ucts

of

this

typ

olog

y, a

nd th

e re

sulti

ng t

ypes

of

orga

niza

tion

desi

gns

and

thei

r m

ore

nota

ble

char

acte

ristic

s, a

re g

raph

ical

ly r

epre

sent

ed b

elow

as

a fo

unda

tion

for

furt

her

disc

ussi

on:

GE

OG

RA

PHIC

EX

PAN

SIO

N

MA

RK

ET

CH

AN

GE

'"M

achi

ne"

Wor

k - fu

nctio

nal d

esig

n w

ith p

rove

n m

etho

ds

- rule

-bas

ed an

d ef

icie

ncy-

focu

sed

-con

trol t

hrou

gh st

anda

rdiz

atio

n of

wor

k - wo

rk is

bes

t des

igne

d fo

r mac

hine

s, pr

oces

ses

and

tech

nolo

gy. .

. and

supp

orte

d by

peo

pk

Con

sist

ent

(sta

ble

wor

k de

sign

) C

entr

aliz

ed

(sin

gle p

oint

of c

ontr

ol)

"Ent

repr

eneu

rial

" W

ork

- emer

gent

desig

n w

ith ti

me-

base

d ur

genc

y - w

orke

r-bas

ed an

d re

sults

-focu

sed

-con

trol t

hrou

gh st

anda

rdiz

atio

n of

nor

ms

- peo

pk w

ork

best as a

larg

e tea

m to

co

mpl

ete n

eede

d tasks

"Pro

fess

iona

l" W

ork

- proc

ess d

esig

n w

ith le

arne

d co

mpe

tenc

e - cl

assif

icat

ion-

base

d an

d pr

ofic

ienc

y-fo

cuse

d - co

ntro

l thr

ough

stan

dard

izat

ion

of sk

ills

- pea

pk

wor

k be

st in

depe

nden

tly in

narro

wly

-

'Tea

m"

Wor

k -n

etw

ork

desig

n w

ith ro

le fl

exib

ility

- n

d-ba

sed

and

syne

rgy-

focu

sed

- con

trol t

hrou

gh S

tand

ardi

zatio

n of w

rform

ance

nod

s - w

ork

is be

st de

signe

d fo

r pco

pk . . . a

nd su

ppor

ted

by

mac

hine

s and

tech

nolo

gy

Dec

entr

aliz

ed

(con

trol

thro

ugh

coor

dina

tion

) R

espo

nsiv

e (a

dapt

ive

wor

k de

sign

)

Not

e: I

. H

enry

Min

tzbe

rg-A

w

ell-

resp

ecte

d un

iver

sity

pro

fess

or, a

utho

r an

d co

nsul

tant

, H

enry

Min

tzbe

rg h

as s

pent

his

w

z ca

reer

stu

dyin

g or

gani

zati

ons.

Mor

e in

form

atio

n on

his

wor

k an

d in

sigh

t in

to h

is c

oncl

usio

ns c

an b

e fo

und

in

Min

tzbe

rg o

n M

anag

emen

t (M

intz

berg

, 19

89).

LJ

0

o\

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

0 In

tra-o

rgan

izat

ion

Alig

nmen

t: Th

e H

PIC

fun

ctio

ns p

artic

ipat

ing

in t

his

stud

y ut

ilize

the

Tea

m (

50

%),

Pro

fess

iona

l (4

5%

) an

d E

ntre

pren

euri

al (

5%)

type

s of

org

aniz

atio

n; n

one

use

the

Mac

hine

type

. The

str

onge

st a

lignm

ent,

or m

atch

ing

of o

rgan

izat

ion

type

s, oc

curs

in e

nter

pris

es w

ith t

he P

rofe

ssio

nal

orga

niza

tion

desi

gn

(30%

of a

ll en

terp

rises

sur

veye

d). I

n th

ese

ente

rpri

ses

with

Pro

fess

iona

l or

gani

zatio

ns,

two-

thir

ds

(67%

) of

the

HPI

C fu

nctio

ns a

lso

utili

ze th

e P

rofe

ssio

nal

orga

niza

tion.

Alte

rnat

ivel

y, i

n ca

ses

whe

re

the

ente

rpris

e an

d H

PIC

fun

ctio

n or

gani

zatio

ns a

re d

iffe

rent

, pri

or r

esea

rch

indi

cate

s th

at s

peci

al

effo

rts m

ust

be t

aken

to

assu

re t

he e

ffec

tive

oper

atio

n of

the

HPI

C f

unct

ions

' or

gani

zatio

n in

5 2 z

orde

r to

at

the

sam

e tim

e re

spec

t an

d w

ork

with

in t

he o

rgan

izat

ion

of t

he e

nter

pris

e.

5 Z

HP

IC F

unct

ion

Org

aniz

atio

n T

ype

2 B

y E

nter

pris

e O

rgan

izat

ion

Typ

e M

achi

ne

Pro

fess

iona

l E

ntre

pren

euri

al

Tea

m

All

Typ

es

9

5 M

achi

ne

0 Yo

1

5%

0 Y

o Pr

ofes

sion

al

0%

30%

0 Y

o En

trep

rene

uria

l 0 Y

o 0 Y

o 5 Y

O

10%

15%

Team

0%

0 Yo

0%

10

%

10%

A

ll C

ult

ure

s 0 Yo

45%

5%

100%

"

1 5 Yo

30

%

E 15

%

45%

z

5

C

By

Rep

orti

ng L

evel

Exec

utiv

e M

anag

emen

t (S

tage

4)

0%

5 Yo

0 Y

o 5

Yo

Ope

ratio

nal

Man

agem

ent

(Sta

ge 2

) 0%

20

%

0 Yo

10%

A

ll L

evel

s 0 Yo

45%

5 Yo

5

0 Yo

Gen

eral

Man

agem

ent

(Sta

ge 3

) 0 Y

o 20

%

5 Yo

35

%

0 P

rofe

ssio

nal

Org

aniz

atio

n D

esig

n:

Prio

r st

udie

s de

mon

stra

te a

mor

e-fr

eque

nt u

se o

f th

e P

rofe

ssio

nal

orga

niza

tion

and

corr

espo

ndin

g le

ss-f

requ

ent

use

of t

he T

eam

org

aniz

atio

n th

an r

epor

ted

here

. Th

is s

eem

s be

st e

xpla

ined

by

the

fact

tha

t the

Pro

fess

iona

l or

gani

zatio

n na

tura

lly s

uits

the

wor

k of

HPI

C f

unct

ions

-con

sulti

ng

is "p

rofe

ssio

nal"

wor

k-an

d th

is i

s pa

rticu

larly

the

cas

e as

HPI

C f

unct

ions

mov

e to

hig

her

leve

ls

with

in o

rgan

izat

ions

(tr

ansf

orm

atio

n st

ages

2, 3

and

4).

To

be e

ffec

tive

in t

heir

role

s, co

nsul

tant

s m

ust b

e ed

ucat

ed, t

rain

ed a

nd e

xper

ienc

ed in

the

ir as

sign

ed d

isci

plin

e, a

nd b

e ab

le to

del

iver

the

ir pa

rticu

lar

serv

ice

with

pro

ficie

ncy

and

in s

uch

a w

ay a

s to

opt

imiz

e th

e cl

ient

situ

atio

n. T

ruly

ef

fect

ive

Team

org

aniz

atio

ns c

hara

cter

istic

ally

req

uire

pro

fess

iona

ls w

ho a

re e

ven

mor

e co

mpe

tent

.

Com

hten

t (s

able

wk

de

sign

)

The

Pro

fissi

onal

O

rgan

izat

ion

is di

ffic

ult

to o

pera

te w

ith a

lack o

f su

ffci

ent c

alib

er or

n

um

b of

com

pete

nt

prof

eUiO

n8ls.

cf

kti

vc T

eam

Tho

ugh

orga

niza

-

tions

char

acte

rist

ical

ly

qu

ire

pmfe

ssio

nals

w

ho M

cvcn

mor

e co

rnp

c~~

~t.

th

e Te

am

orga

niza

tion

can be

the

next

ben

alte

rnat

ive

beca

use

it is the m

ist

to

mim

ic w

hen

tryi

ng to

re

ly on

ad h

oc g

roup

s of

the

best

-ava

ilabl

e sta

ff in

or

da t

o c

ompl

ac

assi

gnm

ents

. Thi

s ap

proa

ch risks

eros

ion

of

cred

ibili

ty, b

ut c

an w

ork

for

a lim

ited

time

whi

le

the

HPI

C fu

nctio

n de

velo

ps a

prof

essi

onal

- le

vel staff a

nd c

onsi

sten

t w

ork

met

hods

.

w

0

cc

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

0 C

onsu

lting

Ser

vice

Pro

cess

: A

lmos

t al

l H

PIC

func

tions

stu

died

util

ize

a se

rvic

e-de

liver

y pr

oces

s as

thei

r co

re o

pera

ting

proc

ess

(ver

sus

a pr

oduc

t-del

iver

y pr

oces

s).

The

pri

ncip

al d

iffer

ence

s be

twee

n ho

w t

hese

pro

cess

es a

re

impl

emen

ted

by th

e in

divi

dual

HPI

C fu

nctio

ns is

con

sist

ent

with

the

org

aniz

atio

n de

sign

util

ized

- Pr

ofes

sion

al,

Team

, or

Ent

repr

eneu

rial

-and

is

fur

ther

ref

lect

ed i

n th

e sc

ope

of

role

s th

at

indi

vidu

als

assu

med

. In

the

Pro

fess

iona

l or

gani

zatio

ns,

role

s ar

e al

igne

d an

d sp

ecia

lized

to

the

indi

vidu

al p

roce

ss s

tage

s . .

. m

eani

ng t

hat

the

prin

cipa

l re

spon

sibi

litie

s of

in

divi

dual

s ar

e sp

ecia

lized

with

in a

sin

gle

proc

ess

stag

e. I

n th

e Te

am o

rgan

izat

ions

, in

divi

dual

s fil

l tw

o or

mor

e of

the

se p

roce

ss r

oles

, an

d in

the

Ent

repr

eneu

rial

org

aniz

atio

n, i

ndiv

idua

ls p

erfo

rm m

ost

or a

ll

I

5 5 g C

r

7.

of t

he r

oles

as

requ

ired.

$ 3 z r, 5 c - - -i z -

r

Fiv

e-St

age

Con

sult

ing

Serv

ice

Pro

cess

Seni

or

Bus

ines

s

Uni

t

Exe

cs.

Clie

nt

Sew

ices

1~

Dev

elop

and

man

age c

lient

re

latio

nshi

ps

Un

dtm

Md

clim

t’s

busi

neu

and

how

to

impr

ove

its

perfo

rman

ce

Dev

elop

mna

nd

cred

ibili

ty fo

r chc

func

tion

Res

pond

to c

lient

re

ques

ts fo

r su

ppon

Id

entif

y cha

nces

lo

supp

on c

lient

Ass

essm

ent &

D

iagn

osis

~

Per

form

requ

este

d as

wum

ents

md

diag

nose

s up

on

clie

nt b

usin

evj

syst

em

Cra

A s

elec

tion

of

prog

ress

ive

inte

rven

tion

alte

rnat

ives

E

stim

pte

likel

y pe

rfm

ance

and

prod

uctiv

ity re

sults

fo

r ea

ch a

ltern

ativ

e

inte

rven

tion

deve

lopm

ent

supp

on

Inte

rven

tion

D

esig

n &

D

evel

opm

ent

rn M

ain

uin

lum

of

prof

essi

onal

s lo

prfm

ncc

ded

Wor

k D

Fin

ali

i des

ign

for

who

le-s

yste

m

inte

rven

tion

D C

reat

e de

liver

able

el

emen

ts u

tiliz

ing

ever

y av

aila

ble

appl

ied

scie

ncc

(i.c.,

tech

nolo

gy)

P P

ilot i

nter

vent

ion o

n te

st g

roup

3R

en in

clud

es:

OWOD D

esig

nen

, Acc

ers

to H

R s

yste

ms

’ Acc

css

to IT s

yste

ms

Acc

ess

to IE s

yste

ms

Ext

erna

l spe

cial

ists

Inte

rven

tion

D

eliv

ery

Mai

ntai

ntea

mof

pr

ofes

sion

als f

or

deliv

ery on n

eede

d in

tmcn

tions

F

acili

tate

prec

ise

impl

emen

tatio

n of

in

terv

entio

ns

M~

.ge

ch

c

impl

cmen

ta(io

n P

WS

F

ollo

w-th

mug

h un

til ta

rget

ed

mul

ts are

achi

eved

, mea

sure

d an

d ac

cept

ed by

the

clie

nt

Ofte

n in

clud

es:

-Cor

pora

te U

nive

rsity

-T

rain

ing

Dep

artm

ent

-OD Fa

cilit

ator

s

Eva

luat

ion

&

Con

tinu

ous

Impr

ovem

ent

Mai

ntai

n as

wsY

nent

(0ol

s and

data

base

of

achi

evem

ent d

ata

mea

sure

men

t su

ppon

and

qu

antit

ativ

e fe

edba

ck d

urin

g an

d fo

llow

ing

inte

rven

tions

0

Rov

ide

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

Alig

nmen

t, C

onve

rgen

ce a

nd I

nteg

ratio

n:

All

HPI

C f

unct

ions

stu

died

rep

ort

proj

ect

oppo

rtun

ities

to

prov

ide

alig

nm

ent

of

obje

ctiv

es,

conv

erge

nce

of r

espo

nsib

ility

, an

d th

e in

tegr

atio

n of

dec

isio

n m

akin

g w

ith r

egar

d fo

r or

gani

zatio

n-

desi

gn e

lem

ents

that

im

pact

hum

an-w

ork

perf

orm

ance

. So

me

of th

ese

elem

ents

inc

lude

rec

ruiti

ng,

com

pens

atio

n, e

ngin

eerin

g, p

rodu

ct d

esig

n, i

nfor

mat

ion

syst

ems,

fac

ilitie

s, a

nd p

lann

ing,

jus

t to

na

me

a fe

w. T

radi

tiona

lly,

polic

y-m

akin

g in

lar

ge o

rgan

izat

ions

occ

urs

som

ewha

t in

depe

nden

tly

and

rare

ly .c

onsi

ders

its

ful

l im

pact

. By

dep

loyi

ng i

nter

nal

cons

ulta

nts

to f

ocus

on

busi

ness

uni

t ch

alle

nges

, or

gani

zatio

ns c

reat

e a

perf

orm

ance

-ori

ente

d (v

ersu

s po

litic

al)

forc

e to

foc

us t

he

atte

ntio

n of

pol

icy

mak

ers

on th

e pe

rfor

man

ce i

mpa

ct a

nd v

alue

con

sequ

ence

s of

the

ir d

ecis

ions

. A

s H

PIC

fun

ctio

ns a

dvan

ce a

long

the

tran

sfor

mat

ion

stag

es,

thei

r re

ach

acro

ss th

e or

gani

zatio

n ex

pand

s an

d th

ey a

cqui

re a

dditi

onal

pot

entia

l to

per

form

thi

s im

port

ant

func

tion.

Tra

nsfo

rmat

ion

Sta

ge

Sta

ge 4

Fo

cus

on S

trat

egy

T S

tage

3

Focu

s on

Org

aniz

atio

n

z S

tage

2

Focu

s on

Ope

ratio

ns

< 5 2 d m

z I-

stug

e I

Focu

s on

Fun

ctio

n

J. K

ey R

oles

No

two

desig

ns o

f H

PIC

-fun

ctio

n or

gani

zatio

n ar

e al

ike.

Thi

s is

not

surp

risi

ng b

ecau

se s

uch

desi

gns

are

crea

ted

in r

espo

nse

to m

any

influ

ence

s, in

clud

ing

the

ente

rpri

se o

rgan

izat

ion,

sta

ffin

g le

vels

and

strat

egy,

ava

ilabl

e ta

lent

, en

terp

rise-

leve

l man

agem

ent

syste

ms,

indi

vidu

al p

refe

renc

es, a

nd s

o on

. With

in

this

stu

dy, h

owev

er, s

ome

cons

iste

ncy

was

evi

dent

with

in o

rgan

izat

ion

type

s. U

sing

title

as

a m

etap

hor

for

a fu

ll ro

le d

escr

iptio

n, t

he d

istr

ibut

ion

of

title

s be

low

rep

rese

nts

the

staf

fing

em

phas

is i

n th

e Pr

ofes

sion

al-

and

Team

-org

aniz

atio

n fu

nctio

ns.

bJ

h, M

11.

BEN

CHM

ARK

IN

TERV

IEW

FIN

DIN

GS

(con

tin

ued

)

0 P

rofe

ssio

nal

Org

aniz

atio

n:

With

in P

rofe

ssio

nal

orga

niza

tions

, st

affi

ng e

mph

asis

is p

lace

d on

dev

elop

ing

clie

nt r

elat

ions

hips

, w

ith s

econ

dary

em

phas

is p

lace

d on

dia

gnos

is a

nd i

nter

vent

ion

desi

gn.

Perf

orm

ance

Con

sulta

nt

Perf

orm

ance

Ana

lyst

Pr

ojec

t Man

ager

Sp

ecia

lty C

onsu

ltant

Pr

ojec

t M

anag

er

Sr. P

erfo

rman

ce A

naly

st

Proj

ect S

uper

viso

r O

D C

onsu

ltant

Sr

. Hus

ines

s Pa

rtner

A

naly

st

Inst

ruct

iona

l Dcs

igne

r L

earn

ing

Faci

litat

or

Bus

ines

s Pa

rtner

Sp

ecia

lty

Con

sulta

nt

Spec

ialty

Con

sult

ant

Con

sult

ant

Perf

orm

ance

& l

xarn

ing

Man

agcr

of(

poli

cy a

rm)

lxad

Bus

ines

s Pe

rfor

m-

Con

sulta

nt

ancc

Con

sulta

nt

’I&

D A

dvis

or

I IR

Bus

ines

s R

cp.

01.:

Con

sulv

an1

Sr. I

’crlb

rman

ce l

kv

cl-

op

inen

: M

anag

er

Perf

orm

ance

Dev

elop

- m

ent

Man

ager

s Pe

rfor

man

ce Ik

velo

p-

mcn

t Sp

ccia

lists

0 T

eam

Org

aniz

atio

n:

With

in T

eam

org

aniz

atio

ns,

staf

fing

em

phas

is i

s se

gmen

ted

alon

g th

e lin

es o

f b

rea

dth

-of-

re

spon

sibi

lity

rat

her

than

by

spec

ific

expe

rtise

or

key

role

. In

gen

eral

, po

sitio

ns f

all

into

thr

ee

leve

ls of

sen

iorit

y, w

ith t

he m

ore

seni

or r

oles

pro

vidi

ng t

he c

lient

int

erfa

ce a

nd i

nter

vent

ion

man

agem

ent

resp

onsi

bilit

ies,

and

the

mor

e ju

nior

rol

es h

andl

ing

mor

e na

rrow

ly d

efin

ed a

nd l

ess

impo

rtan

t re

spon

sibi

litie

s.

Seni

or L

evel

Con

sulta

nt

Seni

or C

onsu

ltant

H

R Pr

ofes

siona

l Se

nior

Man

ager

A

rea

Trai

ning

& O

D

Perf

orm

ance

Sup

port

Man

ager

M

anag

er

Dire

ctor

Pr

ojec

t D

irect

or

Lear

ning

8c

OD

Man

ager

Pe

rfor

man

ce C

onsu

ltant

Mid

Lev

el

Lear

ning

Con

sulta

nt

Lear

ning

Sys

tem

Con

sulta

nts

Com

pete

ncy

Man

agem

ent

Con

sulta

nt

Perf

orm

ance

Sup

port

Spe

cial

ist

Perf

orm

ance

Con

sulta

nt

Seni

or S

peci

alist

M

anag

er

Inst

ruct

iona

l D

esig

ner

Lear

ning

Spe

cial

ist

Ana

lyst

Juni

or L

evel

Tech

nica

l Tr

aine

r Tr

aini

ng M

anag

er

Juni

or S

peci

alist

?

7

m

Z

x 0

D

11.

BE

NC

HM

AR

K I

NT

ER

VIE

W F

IND

ING

S (c

onti

nu

ed)

K.

Per

form

ance

Mea

sure

s

Mea

sure

men

t is

esse

ntia

l to

mak

ing

plan

ned

impr

ovem

ents

to

perf

orm

ance

. Onl

y by

mea

surin

g an

d th

en

com

parin

g ac

hiev

ed r

esul

ts t

o or

igin

al i

nten

tions

can

we

iden

tify

varia

nce

and

gene

rate

acc

urat

e in

sigh

ts

for

redu

cing

it.

This

fac

t is

no

less

tru

e an

d ap

plic

able

for

HPI

C f

unct

ions

. Fo

ur l

evel

s of

m

easu

re

wer

e in

clud

ed i

n th

e st

udy,

and

the

fol

low

ing

list

iden

tifie

s th

e m

ore

com

mon

mea

sure

s us

ed b

y re

spon

dent

s. T

he m

ore

popu

lar

(i.e.

, fr

eque

ntly

men

tione

d) m

easu

res

are

note

d w

ith a

n as

teri

sk (

*).

Leve

l: Ev

ent/A

ctiv

ity

Inte

rven

tion/

Prog

rarn

Fu

nctio

n/D

epar

tmen

t En

terp

rise

/Org

aniz

atio

n

Imm

edia

te i

mpa

ct o

f a

sing

le

Exp

ion

atio

n:

acti

vity

or

euen

t

Exam

ples

: Ta

rget

ed b

usin

ess

met

rics

* Le

vel

1 sa

tisfa

ctio

n m

easu

re'

Obs

erva

tion*

Im

med

iate

clie

nt r

eact

ion *

Pr

e S:

pos

t te

st

Part

icip

ant

self-

asse

ssm

ent

Cos

t sa

ving

s C

lient

sat

isfa

ctio

n re

port

car

d:

-res

pons

iven

ess

--:iss

essii

ient

qu

ality

-i

nnov

atio

n in

sol

utio

ns

-.icc

essi

hilir

y -p

rofe

ssio

nalis

m

-exp

ecta

tions

m

et

Ane

cdot

al d

at.i

lii

tern

al h

ench

ni.ir

ks

Six

mon

th p

.irtic

ip.in

t fo

llow

-up

Enr

olIi

nent

/sii

hsc.

ript

ioii

d.1

t.i Te

stlp

ilor

perf

orm

-:inc

e

Ou

eral

l im

pact

of

com

plet

ed

inte

rven

tion

s

Val

ue a

dded

" Ta

rget

ed b

usin

ess

mer

rics

' D

efin

ed c

lient

sat

isfa

ctio

n'

Proi

ect

cost

s' In

tern

al e

valu

atio

n of

pro

ject

" Em

ploy

ee s

atis

fact

ion

inde

x C

urrn

mer

sat

isfa

ctio

n in

dex

I're

S: p

ost

test

s Fo

cuse

d su

rvey

s Pr

oces

s S:

cyc

le t

imes

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Inte

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Stay

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to m

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- an

d po

st-a

sses

smen

t, ca

se s

tudi

es,

etc.

D

evel

oped

pro

fess

iona

l tr

aine

r w

orks

hop

to im

prov

e in

stru

ctio

nal

skill

s of

faci

litat

ors

from

the

lin

e-or

gani

zatio

n

Cre

ated

new

on-

boar

ding

pro

cess

,

Dev

elop

ed s

ophi

stic

ated

job

-ski

lls

5- i

rn

z X P

M.

Func

tion

Str

engt

hs a

nd W

eakn

esse

s w

t4

0

Res

pond

ents

wer

e as

ked

to i

dent

ify t

op t

hree

str

engt

hs a

nd w

eakn

esse

s of

th

eir

func

tions

. Th

ere

was

gen

eral

con

sist

ency

in t

he f

acto

rs m

entio

ned,

whi

ch a

re s

umm

ariz

ed b

elow

in

orde

r of

the

fre

quen

cy

with

whi

ch t

hey

wer

e m

entio

ned.

0 S

treng

ths

Stro

ng r

elat

ions

hips

with

clie

nts

. . .

cred

i-

bilit

y, t

rust

and

con

fide

nce

in o

ur w

ork

Get

res

ults

for

clie

nts

. . .

pro-

activ

e,

prov

ide

capa

bilit

y cl

ient

doe

sn’t

have

, de

liver

on

com

mitm

ents

A

dvan

ced-

degr

eed

spec

ialis

ts .

. . s

tron

g te

chni

cal

expe

rtise

, up

-to-

date

kno

wle

dge,

ta

lent

, qu

ick,

sm

art,

etc.

capa

bilit

y, u

nder

stan

d cu

lture

iss

ues,

repu

tatio

n fo

r ad

ding

val

ue

Proj

ect

man

agem

ent

. . .

brin

g in

rig

ht

peop

le,

get

thin

gs d

one

right

, st

ay o

n to

p of

wor

k up

to

the

payo

ff

Invo

lved

in

the

busi

ness

. .

. str

ateg

y de

velo

pmen

t an

d im

plem

enta

tion

And

oth

ers

Esta

blis

hed

func

tion

. . .

diag

nost

ic

0 W

eakn

esse

s Li

mite

d re

sour

ces

. . .

coul

d ad

d ev

en

I

C L

>

Z

mor

e va

lue

with

mor

e st

aff

and

budg

et

Man

agem

ent/o

rgan

izat

ion

. . .

not

seri

ous

a bou

t im

prov

ing

perf

orm

ance

, tu

rf,

silo

s,

old

thin

king

, et

c.

P

don’

t op

timiz

e to

day’

s pe

rfor

man

ce,

base

d on

out

-dat

ed t

hink

ing,

etc

. 3 2 2

1

F $ r. c

Indu

stria

l-age

sys

tem

s . .

. co

mpa

ny m

etho

ds

- La

ck o

f bu

sine

ss a

cum

en a

nd m

anag

emen

t - - z

expe

rtis

e . . .

take

s a

whi

le f

or u

s to

re

cogn

ize

man

agem

ent’s

rea

l co

ncer

ns

impr

ovem

ent

met

hods

. .

. can

’t ke

ep u

p,

don’

t ha

ve e

noug

h ou

tsid

e re

sour

ces,

etc

. D

iffic

ulty

in

man

agin

g ou

r se

lves

and

our

w

ork

. . .

com

mun

icat

ion,

coo

rdin

atio

n,

on-b

oard

ing,

pro

ject

man

agem

ent,

etc.

r

Don

’t m

ake

full

use

of p

erfo

rman

ce-

And

oth

ers

111.

DA

TA

SY

NO

PSIS

This

syn

opsi

s of

eac

h be

nchm

ark

inte

rvie

w p

rovi

des

an a

ccur

ate

imag

e of

the

rea

litie

s su

rrou

ndin

g su

cces

sful

ent

erpr

ises

and

the

ir H

PIC

func

tions

. We

have

inc

lude

d as

muc

h da

ta a

s re

ason

ably

pos

sibl

e,

yet

stop

ped

shor

t of

in

clud

ing

info

rmat

ion

that

wou

ld l

ink

resp

onde

nts

to t

heir

dat

a. R

espo

nden

t in

terv

iew

s ar

e ou

tline

d in

ran

dom

ord

er.

SYN

OPS

IS O

F IN

DIV

IDU

AL

HP

IC-F

UN

CT

ION

IN

TE

RV

IEW

S

Cor

pora

te c

ultu

re

z cu

stom

er f

ocus

ed,

skill

-bas

ed,

met

hods

, st

anda

rdiz

atio

n, e

ffici

ency

- cu

stom

er f

ocus

ed,

skill

-bas

ed,

rn

prof

icie

ncy-

orie

nted

) or

ient

ed) . .

. an

d i

n th

e pr

oces

s pr

ofic

ienc

y-or

ient

ed)

z of

m

ovin

g to

. . . P

rofe

ssio

nal

(pro

cess

des

ign,

cus

tom

er f

ocus

ed,

>

Prof

essi

onal

(pr

oces

s de

sign

, M

achi

ne (

func

tiona

l des

ign,

pro

ven

Prof

essi

onal

(pr

oces

s de

sign

, a s X

skill

-bas

ed.

orof

icie

ncv-

orie

nted

)

Cur

rent

stra

tegi

c in

itiat

ives

pr

oduc

t de

velo

pmen

t Fa

ster

and

mor

e in

nova

tive

new

-

Red

ucin

g cy

cle-

time-

to-m

arke

t

Beco

min

g 1"

in

inno

vativ

e de

sign

Incr

easi

ng p

rofit

abili

ty t

hrou

gh

redu

ctio

ns i

n co

st-o

f-go

ods-

sold

(p

ublic

ly tr

aded

sto

ck p

ress

ures

us t

o de

mon

strat

e ea

rnin

gs g

row

th)

for

new

pro

duct

s

Red

uce

over

head

cos

ts (

GB

rA)

Ret

entio

n of

em

ploy

ees

(red

uce

. Grow

bus

ines

s in

mor

e pr

ofit-

Ach

ieve

wor

ld-c

lass

ser

vice

and

Rise

to

mar

ket

lead

er i

n bo

th

Incr

ease

ope

ratio

nal

spee

d

Beco

me

an e

mpl

oyer

of

choi

ce

supp

ort

mar

ket

shar

e an

d m

arke

t co

vera

ge

(red

uce

cycl

e tim

es)

turn

over

)

able

ser

vice

s

w tl

LJ

h,

h,

SYN

OPS

IS O

F IN

DIV

IDU

AL

HP

IC-F

UN

CT

ION

IN

TE

RV

IEW

S (c

onti

nu

ed)

Barr

iers

to

incr

ease

d pr

oduc

tivity

pr

oces

ses

and

prog

ram

s la

dy i

n ce

ntra

l op

erat

ions

no

logy

dev

elop

men

t *

Lack

of

cons

iste

nt f

ocus

on

Our

lar

ge f

unct

iona

l si

los

slow

- do

wn

or i

nhib

it th

e qu

ality

of

deci

sion

mak

ing

keep

ing

up w

ith m

ore

dem

ands

Stab

ility

of

wor

kfor

ce,

part

icu-

Com

plex

ity o

f se

rvic

es w

ith w

hich

ce

rtai

n em

ploy

ees

mus

t op

erat

e La

ck o

f le

ader

ship

ski

lls in

Kee

ping

up

with

spe

ed o

f te

ch-

Cos

t of

sal

es a

nd a

dmin

istr

atio

n is

too

high

. .

. m

ust

beco

me

mor

e ef

fect

ive

to b

e m

ore

Mai

ntai

ning

rol

e cl

arity

and

m

anag

emen

t co

mpe

titiv

e To

o m

uch

chan

ge a

t on

ce .

. .

and

diff

eren

t w

ays

of w

orki

ng

cultu

ral

tran

sitio

n, r

estr

uctu

ring

, I

in t

he m

idst

of

freq

uent

cha

nges

re

engi

neer

ing,

etc

. 2 >

z 2

%

FUN

CTI

ON

DAT

A

Purp

ose

To i

mpr

ove

perf

orm

ance

with

in

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eal

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pora

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ide

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an-

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rovi

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izat

iona

l st

rate

gy,

h

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t u re

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ofes

sion

al (

proc

ess

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gn,

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essi

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oces

s de

sign

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amw

ork

(net

wor

k de

sign

, G

Y

cust

omer

foc

used

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ill-b

ased

, cu

stom

er f

ocus

ed,

skill

-bas

ed,

syne

rgy-

focu

sed,

nee

d-ba

sed,

f

clie

nt o

rgan

izat

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pe

rfor

man

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ssue

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ppor

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pert

ise

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supp

ort

to B

U cl

ient

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d BU

-leve

l H

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ervi

ces

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roll-

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ajor

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prof

icie

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orie

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ruct

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men

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orts

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corp

o-

rate

HR

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hich

in

turn

rep

orts

Su

ppor

ts 1

4 R

egio

nal

HR

to

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func

tions

whi

ch f

acili

tate

and

Tr

aini

ng,

Lead

ersh

ip &

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ralle

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rnin

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rvic

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ivity

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ent,

func

tion

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ness

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ds A

sses

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t, O

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ices

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hich

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orts

to

CE

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n (w

hich

rep

orts

to

CE

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udes

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pora

te U

nive

rsity

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OE,

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form

ance

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lysi

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d C

ompe

tenc

y iM

anag

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t

iMgm

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stem

s Fu

nctio

n le

ader

ear

ns $

54K

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mai

lubl

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lus

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per

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bon

us)

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tion

lead

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perf

orm

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nus)

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orm

ance

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sulta

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chel

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HPT

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form

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lyst

s (w

ith

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ters

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10-

15

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orm

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lyst

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elor

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d ex

perie

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ager

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ters

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D o

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BA

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ojec

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anag

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aste

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ctio

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nolo

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lysts

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aste

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perie

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arge

org

aniz

atio

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sim

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empl

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mak

eup)

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ect

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rvis

ors

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nnin

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elop

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ent

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ters

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rele

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lity

expe

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ce)

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pete

ncy

Man

agem

ent

Con

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ltant

s (w

ith

3 yr

s. co

mpa

ny

expe

rienc

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d 2

yrs.

exp

erie

nce

in b

usin

ess

oper

atio

ns)

(with

3 y

rs.

com

pany

exp

erie

nce

and

2 yr

s. ex

perie

nce

in

busi

ness

ope

rati

ons)

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ning

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tem

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onsu

ltan

ts

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urce

s *

$900

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verh

ead

allo

catio

n $1

0.6M

bud

get

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ver-

57

M o

verh

ead

allo

catio

n (2

3%

?

6 FT

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char

geba

ck f

or p

roje

ct w

ork

26 F

TEs

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incr

ease

) r,.

(no

incr

ease

) he

ad a

lloca

tion

and

40%

fee

in

crea

se)

-3 z 0

12 F

TEs

X >

Soph

istic

ated

des

ign

for

prob

lem

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lvin

g su

perv

isor

y jo

b-sk

ills

trai

ning

pro

cess

(2.

5 w

ks.)

that

in

clud

ed b

usin

ess

sim

ulat

ion,

pre

-

(10%

incr

ease

)

Rece

nt I

nter

vent

ions

*

Impr

oved

the

per

form

ance

of

Supp

ort

mas

sive

tec

hnol

ogy-

A

rea

Sale

s D

irec

tors

by

rede

sign

- dr

iven

tra

nsiti

on t

o ne

w

ing

role

, in

clud

ing

perf

orm

ance

pr

oduc

ts,

cust

omer

s an

d m

arke

ts

mod

elin

g, g

ap a

naly

sis,

lea

rnin

g,

. . .

crea

ted

Com

pete

ncy

acco

unta

bilit

ies,

job

exp

ecta

tions

an

d po

st-p

roce

ss a

sses

smen

ts,

Man

agem

ent

proc

ess

and

and

mea

sure

s, e

tc.

man

agem

ent

invo

lvem

ent,

etc.

te

chno

logy

to

supp

ort

step

- *

Impr

oved

the

per

form

ance

of

Prof

essi

onal

Tra

iner

dev

elop

- Fi

eld

Ope

rati

ons

Man

ager

s (s

imila

r pr

oces

s)

time

faci

litat

ion

of lin

e or

gani

- cl

assr

oom

s fo

r ge

ogra

phic

ally

Im

prov

ed t

he p

erfo

rman

ce o

f "l

eade

rs"

(sim

ilar

proc

ess)

upgr

ade

in s

ales

for

ce

men

t w

orks

hop

to i

mpr

ove

real

-

zatio

n m

embe

rs .

. . u

sing

fa

cilit

atio

n pr

oces

s fo

r in

stru

ctio

n

Cre

ated

dis

tanc

e le

arni

ng v

irtu

al

disp

erse

d lo

catio

ns a

nd s

ales

forc

e

w

h, w

SYN

OPS

IS O

F I

ND

IVID

UA

L H

PIC

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NC

TIO

N I

NT

ER

VIE

WS

(con

tin

ued

) (*,

h,

P

Stre

ngth

s A

naly

tical

ski

ll se

t pr

oduc

es c

lear

da

ta t

hat

clie

nts

unde

rsta

nd

Flex

ible

app

roac

h th

at a

djus

ts

to c

lient

’s n

eeds

whi

le m

aint

ain-

in

g H

PT p

roce

ss h

as r

esul

ted

in

supp

ort

for

the

perf

orm

ance

im

prov

emen

t pr

oces

s R

elat

ions

hip

build

ing

with

bus

i- ne

ss u

nit

clie

nts

and

inte

grat

ion

with

HR g

ives

us

grea

t cr

edib

il-

ity a

nd a

rep

utat

ion

of cr

eatin

g pa

rtner

ship

s an

d al

lianc

es t

hat

resu

lt in

tot

al s

olut

ions

Ana

lysi

s th

at a

llow

s m

anag

e-

men

t to

add

ress

the

cor

rect

ex

pert

ise

. . .

peop

le r

eally

pr

oble

m a

nd i

mpa

ct p

erfo

rman

ce

deve

lop

. . .

lead

ing

to r

educ

tions

in

Tech

nolo

gy b

ased

lea

rnin

g co

sts

prov

ides

inf

rast

ruct

ure

and

Inst

ruct

iona

l de

sign

cha

nges

are

en

viro

nmen

t fo

r w

eb-b

ased

a

key

appr

oach

for

lea

ding

the

so

lutio

ns,

whi

ch r

educ

es

chan

ge i

n cu

lture

em

ploy

ee ti

me

away

fro

m j

ob

OD

con

sulti

ng a

llow

s us

to

and

(in

man

y ca

ses)

incr

ease

s be

tter

defin

e jo

bs a

nd s

kill

lear

ning

eff

ectiv

enes

s se

ts r

equi

red

so t

he c

ompa

ny

gets

the

rig

ht p

eopl

e in

to t

he

right

iob

s

Com

pete

ncy

man

agem

ent

area

of

Wea

knes

ses

Inab

ility

to

influ

ence

and

int

e-

grat

e th

e fu

nctio

nal

HR

org

ani-

za

tion

at th

e co

rpor

ate

leve

l re

sults

in

HR

sol

utio

ns t

hat

are

isol

ated

in

the

busi

ness

uni

ts

Reso

urce

s-m

ainl

y pe

ople

-are

in

suff

icie

nt t

o su

ppor

t all

clie

nts

who

wan

t an

d ne

ed o

ur h

elp

Poor

at

docu

men

ting

our

wor

k an

d le

arni

ng f

rom

our

ow

n

expe

rienc

e to

est

ablis

h be

st

prac

tices

Too

muc

h to

do

and

not

enou

gh

peop

le .

. . w

hich

mak

es u

s vu

lner

able

to

affe

ct q

ualit

y an

d bu

rn-o

ut p

eopl

e Re

sist

ance

to

trans

ition

fro

m p

eer

trai

ning

to

OD

int

erve

ntio

ns

Taki

ng on m

ore

wor

k th

an w

e ca

n do

eff

ectiv

ely

Not

as

in t

ouch

with

fie

ld

oper

atio

ns a

s w

e ne

ed t

o be

to

assu

re r

elev

ant

link

betw

een

com

pete

ncie

s an

d bu

sines

s re

sults

Pe

ople

tra

nsfe

r in

to o

ur u

nit

and

don’

t w

ant

to l

eave

, su

ch

that

they

los

e to

uch

with

the

hu

sine

ss u

nits

Cor

pora

te c

ultu

re

Prof

essi

onal

(pr

oces

s de

sign

, Te

amw

ork

(net

wor

k de

sign

, M

achi

ne (

func

tiona

l de

sign

, cu

stom

er f

ocus

ed,

skill

-bas

ed,

syne

rgy-

focu

sed,

nee

d-ba

sed,

pr

oven

met

hods

, st

anda

rdiz

atio

n,

prof

icie

nc y-

orie

nted

) ag

reed

-goa

ls o

rien

ted)

AN

D

effi

cien

cy-o

rien

ted)

En

trep

rene

uria

l (e

mer

gent

des

ign,

re

sults

-foc

used

, tim

e-ba

sed,

ur

genc

y-or

ient

ed)

Cur

rent

str

ateg

ic

Gro

w m

arke

t sh

are

Laun

ch a

nd o

pera

tiona

lize

all-

In

crea

se s

hare

hold

er r

etur

ns

initi

ativ

es

Cus

tom

er r

eten

tion

and

loya

lty

new

ser

vice

s Sa

fety

M

anag

ing

expe

nses

(co

st)

Incr

ease

sal

es r

even

ue a

nd

oper

atin

g ca

sh f

low

U

pgra

de e

quip

men

t in

fras

truc

ture

Envi

ronm

enta

l st

ewar

dshi

p

2 Ba

rrie

rs t

o in

crea

sed

Tech

nolo

gy (

lack

PC

acc

ess

Ill-d

efin

ed m

etho

ds a

nd p

roce

dure

s In

cent

ive

syst

ems

not

alig

ned

to

f: 7

m

prod

uctiv

ity

v ac

ross

the

org

aniz

atio

n)

Still

-evo

lvin

g pr

oduc

ts a

nd

supp

ort

beha

vior

to

driv

e X

Can’

t st

ick

with

a p

lan

serv

ices

pr

oduc

tivity

>

Ca

n’t

keep

up

with

tra

inin

g La

ck o

f st

anda

rdiz

atio

n N

o cl

ear

pict

urel

defi

nitio

n of

Loos

ely

stat

ed g

oals

and

no

requ

irem

ents

co

mpe

titio

n

acco

unta

bilit

y

FUN

CTIO

N D

ATA

Purp

ose

To e

nabl

e w

orkf

orce

to

impr

ove

busi

ness

per

form

ance

To

ser

ve a

s a

cent

er o

f ex

celle

nce

to d

esig

n, d

evel

op a

nd d

eliv

er

supp

ort

inte

rven

eion

s an

d se

rvic

es

To p

rovi

de s

trat

egy

and

impl

e-

men

tatio

n of

exec

utiv

e as

sess

men

ts

and

deve

lopm

ent,

and

spec

ializ

ed

perf

orm

ance

con

sulti

ng t

o th

e or

gani

zatio

n

SYN

OPS

IS O

F IN

DIV

IDU

AL

HP

IC-F

UN

CT

ION

IN

TE

RV

IEW

S (c

onti

nu

ed)

Cul

ture

Te

amw

ork

(net

wor

k de

sign

, Te

amw

ork

(net

wor

k de

sign

, Te

amw

ork

(net

wor

k de

sign

, sy

nerg

y-fo

cuse

d, n

eed-

base

d,

syne

rgy-

focu

sed,

nee

d-ba

sed,

sy

nerg

y-fo

cuse

d, n

eed-

base

d,

agre

ed-g

oals

ori

ente

d)

agre

cd-g

oals

ori

ente

d)

agre

ed-g

oals

ori

ente

d)

Stru

ctur

e R

epor

ts t

o H

R S

hare

d Se

rvic

es

Alig

ned

to e

xper

tise,

inc

ludi

ng

(cor

pora

te)

thes

e w

ork

units

: I.

Edu

catio

n D

esig

n Cy

r D

eliv

ery

2. O

rgan

izat

ion

& J

ob D

esig

n 3.

Sel

ectio

n 4

. Pe

rfor

man

ce A

ppra

isal

s 5.

Rew

ards

(inc

lude

s tr

aini

ng)

Rep

orts

to

HR

(co

rpor

ate)

A

ligne

d to

del

iver

y ex

pert

ise,

in

clud

ing

thes

e w

ork

units

: 1.

Tra

inin

g 1.

Ass

essm

ent

2. H

R D

evel

opm

ent

3. C

orpo

rate

Uni

vers

ity (

virt

ual)

4

. O

rgan

izat

ion

Dev

elop

men

t

Rep

orts

to

HR

(co

rpor

ate)

A

ligne

d to

exp

ertis

e, i

nclu

ding

th

ese

wor

k un

its:

2. L

eade

rshi

p D

evel

opm

ent

3. P

erfo

rman

ce C

onsu

lting

4.

Lea

rnin

g C

ente

r 5. P

erfo

rman

ce S

uppo

rt

~ Mgm

t. Sy

stem

s C

reat

es a

nnua

l se

rvic

e ag

ree-

m

ents

with

clie

nts-

then

ch

arge

s th

e cl

ient

for

ser

vice

s Fu

nctio

n le

ader

ear

ns $

200K

lyr.

(plu

b el

igib

le f

or 4

0%

per

for-

m

ance

inc

entiv

e)

Key

Rol

es

Sr.

HR

Con

sulta

nt

HR

Con

sulta

nt

HR

Pro

fess

iona

l Sr

. M

anag

er

Bot

tom

-up

budg

et p

roce

ss

Use

ove

rhea

d fu

ndin

g fo

r an

alys

is

and

asse

ssm

ent

serv

ices

, th

en

char

geba

ck i

mpl

emen

tatio

n co

sts

(bus

ines

s un

its c

reat

e th

eir

goal

s,

obje

ctiv

es a

nd i

nitia

tives

, th

en

T&O

D p

ropo

ses

solu

tions

with

a

pric

e ta

g)

Syst

ems

Trai

ners

Te

chni

cal

Trai

ners

Le

arni

ng C

onsu

ltant

s A

rea

Trai

ning

& O

D

Perf

orm

ance

Sup

port

Spe

cial

ists

Pe

rfor

man

ce S

uppo

rt M

anag

ers

Reso

urce

s $2

5M b

udge

t (5

% in

crea

se)

$11M

(7

0%

incr

ease

) $1

.6M

14

5 FT

Es (10Y0 in

crea

se)

100

FTEs

(4

2%

inc

reas

e)

11 F

TE

s (5

%)

Rece

nt I

nter

vent

ions

N

ot a

vaila

ble

Cre

ated

pro

gram

for

con

flict

re

solu

tion

and

open

dia

logu

e Cr

eate

d so

phis

ticat

ed te

am b

uild

- in

g pr

oces

s fo

r bu

sine

ss u

nits

C

reat

ed n

ew-m

anag

er a

ssim

ila-

tion

prog

ram

Rede

signe

d su

cces

sion

pla

nnin

g pr

oces

s fo

r ex

ecut

ives

D

evel

oped

car

eer

man

agem

ent

proc

ess

for

sele

ct f

unct

ions

C

reat

ed c

ross

-fun

ctio

nal c

om-

pete

ncy

mod

els

for

orga

niza

tion

Stre

ngth

s H

ave

5 te

ams

that

spe

cial

ize . .

. ce

nter

s of

exce

llenc

e in

the

ir di

scip

line

Org

aniz

atio

n de

ploy

ed i

n th

e w

orks

M

ore

effe

ctiv

e an

d ef

ficie

nt f

or

clie

nts

than

ext

erna

l re

sour

ces

Stro

ng r

elat

ions

hips

with

clie

nts

. . . c

redi

bilit

y an

d co

nfid

ence

Hav

e ab

le a

nd t

alen

ted

peop

le

to p

rovi

de g

ood

deliv

erab

les

field

at

the

busi

ness

-uni

t le

vel

Goo

d un

ders

tand

ing

of t

he

indu

stry

and

how

thi

s bu

sine

ss

Exce

llent

ana

lysi

s an

d di

agno

stic

sk

ills

. . .

can

cut

right

thr

ough

to

cos

t-eff

ectiv

e so

lutio

ns

Prof

essi

onal

sta

ff . .

. wel

l

Con

trac

t to

pro

vide

ser

vice

s

z- re

spec

ted

by m

anag

emen

t I

Wea

knes

ses

m

Lack

of

syne

rgy

betw

een

team

s D

uplic

ate

cost

s an

d in

effic

ien-

C

halle

nge

wor

king

acr

oss

busi

- ne

ss u

nits

and

fun

ctio

nal

silo

s z 3

cies

due

to

field

allo

catio

n of

X

prof

essi

onal

sta

ff Po

or c

oord

inat

ion

and

allo

catio

n of

res

ourc

es

Try

to d

o to

o m

uch

. . . o

ver-

>

lo

ad o

urse

lves

outs

ide

orga

niza

tions

and

oth

er

prof

essi

onal

s

Don

’t ge

t en

ough

exp

osur

e to

Cor

pora

te c

ultu

re

Mac

hine

(fu

nctio

nal

desi

gn,

Entre

pren

euria

l (e

mer

gent

des

ign,

Pr

ofes

sion

al (

proc

ess

desi

gn,

prov

en m

etho

ds,

stan

dard

izat

ion,

re

sults

-foc

used

, tim

e-ba

sed,

cu

stom

er f

ocus

ed,

skill

-bas

ed,

effic

ienc

y-or

ient

ed)

urge

ncy-

orie

nted

) pr

ofic

ienc

y-or

ient

ed)

(cl

h,

co

SYN

OPS

IS O

F IN

DIV

IDU

AL

HP

IC-F

UN

CT

ION

IN

TE

RV

IEW

S (c

onti

nu

ed)

Cur

rent

str

ateg

ic

New

mar

ket

stra

tegy

D

evel

opin

g in

fras

truc

ture

tor

Ta

ke m

arke

t sh

are

initi

ativ

es

New

pro

ject

s fu

ture

gro

wth

(m

anuf

actu

ring

R

apid

ly i

ncre

ase

new

pro

duct

s G

over

nmen

t pr

ojec

ts

capa

bilit

y in

par

ticul

ar)

to m

arke

t In

dust

rial

mar

ket

nich

es

Dev

elop

peo

ple’

s su

ppor

t fo

r

Mai

ntai

ning

the

pos

itive

cul

ture

of

a s

mal

ler

com

pany

yet

stil

l gr

ow

Con

trol

cos

ts

(pha

rmac

eutic

al)

futu

re g

row

th

TT

c

z Ba

rrie

rs t

o in

crea

sed

Stan

dard

pra

ctic

es

Com

plex

ity o

f th

is t

ype

of

Man

agem

ent’

s ig

nora

nce

. . .

5

way

we

alw

ays

have

?

Succ

ess

mak

es u

s co

mpl

acen

t 5

Agi

ng w

orkf

orce

pop

ulat

ion

Z 2

FU

NC

TIO

N D

AT

A

7 Pu

rpos

e To

mee

t co

mpa

ny n

eeds

for

hum

an

To m

eet

the

com

pany

’s n

eed

for

To e

nhan

ce c

ompe

titiv

e ca

paci

ty

-

perf

orm

ance

tec

hnol

ogy

. . ,

appl

y-

an e

ffec

tive

orga

niza

tion

of b

usin

ess

to i

ncre

ase

shar

ehol

der

i

f- _I

prod

uctiv

ity

Fron

t-lin

e le

ader

s . .

. pr

ojec

t bu

sine

ss

even

tho

ugh

the

situ

atio

n ha

s 2

z m

anag

ers

slow

to

lear

n an

d de

velo

p O

ur s

ize

mak

es it

har

d fo

r ev

ery-

on

e to

kno

w w

hat’s

goi

ng o

n ch

ange

d, k

eep

doin

g th

ings

the

z 7

- ‘f

ing

it to

HR

initi

ativ

es a

s it

m

akes

sen

se t

o d

o s

o

valu

e

Cul

ture

Te

amw

ork

(net

wor

k de

sign

, Te

amw

ork

(net

wor

k de

sign

, Pr

ofes

sion

al (

proc

ess

desi

gn,

syne

rgy-

focu

sed,

nee

d-ha

sed,

sy

nerg

y-fo

cuse

d, n

eed-

base

d,

cust

omer

foc

used

, sk

ill-b

ased

, ag

reed

-goa

ls o

rien

ted)

ag

reed

-goa

ls o

rien

ted)

pr

ofic

ienc

y-or

ient

ed)

Stru

ctur

e R

epor

ts t

o H

R (

corp

orat

e)

Org

aniz

ed a

s a

pool

of

perf

or-

man

ce c

onsu

ltant

s to

sup

port

an

d as

sist

HR

and

its

othe

r pe

rfor

man

ce o

rient

ed u

nits

(T

echn

ical

Tra

inin

g, O

D,

HRD

, Pr

oces

s Im

prov

emen

t, an

d G

loba

l Le

arni

ng S

ervi

ces)

Rep

orts

to

CFO

O

pera

te w

ith p

roce

sses

tha

t ar

e in

form

al t

o m

atch

the

cul

ture

Rep

orts

to

Pres

iden

t O

rgan

ized

int

o m

atri

x of

: 1.

Bus

ines

s Pa

rtner

s as

signe

d to

bu

sines

s gr

oups

to

prov

ide

diag

nost

ic a

nd i

mpl

emen

ta-

tion

supp

ort

2. S

ubje

ct-m

atte

r ex

pert

s (S

MEs

) th

at s

uppo

rt Bu

sines

s Pa

rtner

s in

pro

vidi

ng s

ervi

ces

to

busin

ess

ente

rpris

e-w

ide

(incl

ude

expe

rtise

in s

taffi

ng,

com

pens

atio

n, H

RIS,

exe

cutiv

e le

ader

ship

, tra

inin

g &

de

velo

pmen

t, la

bor

rela

tions

an

d em

ploy

ee r

elat

ions

) 2 7 rn z P

Mgm

t. Sy

stem

s Fu

nctio

n le

ader

ear

ns $

70K

/yr.

Func

tion

lead

er e

arns

$13

0K/y

r. Fu

nctio

n le

ader

ear

ns $

18SK

lyr.

(no

perf

orm

ance

inc

entiv

e)

(plu

s 40

% p

erfo

rman

ce

(plu

s $2

00K

cas

hlsto

ck

X

perf

orm

ance

inc

entiv

e)

>

ince

ntiv

e)

Key

Role

s Pe

rform

ance

Con

sulta

nts

($58

Wyr

.) Sp

ecia

lists

($35

K to

$75

K/y

r.)

Sr.

Busin

ess

Partn

ers

($10

0K/y

r. pl

us $

SOK

/yr.

perf

orm

ance

in

cent

ive)

10%

per

form

ance

inc

entiv

e)

Busin

ess

Partn

ers

($SO

K/y

r. pl

us

~ ~~

Reso

urce

s O

verh

ead

allo

catio

n: $

900K

$S

oOK

bud

get

$6.5

M

budg

et (

flat

) bu

dget

(10

% in

crea

se)

$1.2

M (

no in

crea

se t

his

year

)

12 FTEs

(20%

incr

ease

) 48

FTE

s (1

5% in

crea

se)

Fee

char

geba

cks

for

serv

ices

:

9 FT

Es (

12%

incr

ease

) Ic

, h,

\o

SYN

OP

SIS

OF

IND

IVID

UA

L H

PT

C-F

UN

CT

ION

IN

TE

RV

IEW

S (c

onti

nu

ed)

w

w

0

Rec

ent

Inte

rven

tions

El

ectro

nic

perf

orm

ance

-sup

port

R

estr

uctu

red

Empl

oyee

Ser

vice

s C

hang

ing

com

pens

atio

n sy

stem

sy

stem

(EP

SS) s

olut

ion

for

a pr

ojec

t in

ord

er t

o sa

ve s

ub-

stan

tial

inst

ruct

ion

time

ing

tool

s to

sup

port

fie

ld

busi

ness

pro

cess

es

base

d on

int

erna

l cu

stom

er

feed

back

(m

ore

effe

ctiv

e, e

nd

conf

usio

n, b

uild

cre

dibi

lity,

KtC

.)

Dev

elop

ed p

rogr

am t

o id

entif

y,

prom

ote

and

deve

lop

lead

ersh

ip

qual

ities

to

supp

ort

CEO

’s v

isio

n

for

tech

nica

l po

sitio

ns

proc

ess

to i

mpr

ove

the

accu

racy

of

ass

essm

ents

and

rel

iabi

lity

of

tale

nt d

ata

Inst

itute

d su

cces

sion

pla

nnin

g

Dev

elop

men

t of

spe

cial

eng

inee

r-

Bro

ught

in

outs

ide

data

fro

m

Dev

elop

“he

lp f

iles”

to

elim

i-

Perf

orm

ance

rev

iew

pro

cess

tha

t cu

stom

ers

and

com

petit

ors

to

IT

7

nate

the

nee

d fo

r tr

aini

ng

hold

s bu

sine

ss t

eam

s ac

coun

tabl

e he

lp b

usin

esse

s un

ders

tand

the

ir

- 5 (a

ssig

ns sc

ore)

for

the

perf

orm

ance

re

al c

ultu

re

z 7

Stre

ngth

s Fo

cus

on p

erfo

rman

ce p

rovi

des

Rel

atio

nshi

ps t

hey

have

with

Bu

sine

ss k

now

ledg

e, a

llow

ing

us

z; “

cons

iste

nt f

ocus

and

mes

sage

5 n

to h

ave

a si

gnif

ican

t im

pact

on

the

husi

ness

w

hen

they

are

nee

ded

Dia

gnos

tic c

apab

ility

. .

. can

7

Focu

s on

end

-mar

ket

cust

omer

s Su

ppor

ting

man

agem

ent

with

id

entif

y th

e ga

ps f

airly

eas

ily

=’

of t

heir

are

a of

the

bus

ines

s 7 - c

cust

omer

s . . . c

usto

mer

see

s th

e to

ant

icip

ate

and

be p

repa

red

for

wha

t’s g

oing

on

in t

he

solu

tions

tha

t re

ally

mak

e se

nse

z r.

from

gro

up

adde

d va

lue

-7

Pro-

activ

e . .

. a

nd h

ave

prov

en

Tech

nica

l ex

pert

ise

. . .

in

busi

ness

, an

d to

dev

elop

re

crui

ting,

get

the

rig

ht p

eopl

e 5

z c Z c.

(clie

nt’s

cus

tom

ers)

hel

ps

cultu

re i

ssue

s re

latio

nshi

p w

ith c

usto

mer

s Pr

ojec

t m

anag

emen

t . .

. br

ing

in

righ

t pe

ople

and

get

thi

ngs

done

~~

Wea

knes

ses

Cred

ibili

ty .

. . of

ten

have

a g

ood

solu

tion,

but

we

are

not

seen

a5

a vi

able

sou

rce

for

the

answ

er

Perf

orm

ance

tech

nolo

gy .

. .

co

muc

h to

lea

rn

Dev

elop

ing

perf

orm

ance

-sup

port

sy

stem

s w

ith t

he s

uppo

rt o

f IT

Pr

ojec

t m

anag

emen

t . .

. ha

ve

had

a co

uple

of

deve

lopm

ent

prol

ectc

tha

t w

ent

poor

ly

Com

mun

icat

ion

and

coor

dina

- tio

n w

ithin

the

dep

artm

ent,

and

keep

ing

up w

ith b

est

prac

tices

th

at a

re c

onst

antly

cha

ngin

g G

row

th r

ate

has

heap

ed l

ots

of

resp

onsi

bilit

y on

jun

ior-

leve

l st

aff

Dev

elop

men

t do

esn’

t ha

ppen

w

hen

we

get

busy

. . . w

hich

is

mos

t o

t th

e tim

e

Too

reac

tive

. . .

wai

t fo

r th

e ph

one

to r

ing

and

then

rea

ct

Can’

t sa

y no

. . .

still

do

too

too

slow

ly

man

y of

the

wro

ng t

hing

s (n

on-

valu

e-ad

ding

) an

d no

t en

ough

of

the

righ

t on

es

Lack

of

func

tiona

l ex

pert

ise,

an

d th

eref

ore

lack

tun

ctio

nal

cred

i hili

ty

Cor

pora

te c

ultu

re

Entre

pren

euria

l (e

mer

gent

des

ign,

Pr

ofes

sion

al (

proc

ess

desi

gn,

Mac

hine

(fu

nctio

nal d

esig

n, p

rove

n re

sults

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used

, tim

e-ba

sed,

cu

stom

er f

ocus

ed, s

kill-

base

d,

met

hods

, st

anda

rdiz

atio

n, e

ffici

ency

- ur

genc

y-or

ient

ed)

prof

icie

ncy-

orie

nted

) or

ient

ed) . . .

and

iri t

he

proc

ess

of

mov

ing

to .

. . P

rofe

ssio

nal

(pro

cess

des

ign,

cus

tom

er f

ocus

ed,

skill

-bas

ed,

prof

icie

ncy-

orie

nted

)

Cur

rent

stra

tegi

c In

tern

atio

nal

expa

nsio

n D

eliv

er s

olut

ions

tha

t en

able

Im

plem

entin

g "b

usin

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proc

ess

initi

ativ

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llenc

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prog

ram

at

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ate

orga

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tion

stru

ctur

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ersi

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w s

ervi

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usin

ess

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elop

men

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busi

ness

to

real

ize

the

full

valu

e su

ppor

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owth

ini

tiativ

es

of i

nfor

mat

ion

tech

nolo

gy

Alli

ed S

igna

l

Mai

ntai

n le

ader

ship

of

serv

ice

5 pr

oduc

ts a

nd "

mid

dle

war

e"

Dev

elop

ele

ctro

nic

web

-bas

ed

.7

busi

ness

sol

utio

ns,

serv

ices

and

z z

prod

ucts

X

>

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ly m

anag

emen

t

7

Barr

iers

to

incr

ease

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oduc

tivity

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ard

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ntro

duce

cha

nge

(ope

n cu

lture

fos

ters

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ate

that

tak

es

time

to p

lay

out)

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nanc

e dr

iven

-oft

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hort-

sigh

ted

Tech

nolo

gy i

s ch

angi

ng s

o qu

ickl

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t is

hard

to

keep

pe

ople

inf

orm

ed a

nd s

kille

d C

ompa

ny is

qui

ckly

bec

omin

g gl

obal

, m

akin

g it

hard

er t

o im

plem

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tices

D

eplo

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e of

end

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r IT

and

app

licat

ions

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orkf

orce

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e ca

ses

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have

the

ski

lls,

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need

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not

reco

gniz

ed o

r va

lued

Cha

ngin

g th

e w

ay b

usin

ess

is do

ne w

hile

doi

ng b

usin

ess

Agi

ng w

orkf

orce

. . .

wel

l- es

tabl

ishe

d vi

ews

of

how

thin

gs

shou

ld b

e do

ne .

. . sl

ow t

o ch

ange

La

bor

unio

n sl

ows

thin

gs d

own

desp

ite g

ood

rela

tions

hip

w

SYN

OPS

IS O

F I

ND

IVID

UA

L H

PIC

-FU

NC

TIO

N I

NT

ER

VIE

WS

(con

tin

ued

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cu

h,

FUN

CTI

ON

DAT

A

Purp

ose

To m

eet

orga

niza

tiona

l ne

eds

. . .

mak

ing

sure

the

bus

ines

s ha

s th

e rig

ht p

eopl

e w

ith t

he r

ight

ab

ilitie

s in

the

rig

ht j

obs

To s

erve

int

erna

l bu

sine

ss u

nits

an

d ex

tern

al c

lient

s to

im

prov

e th

e w

ork

perf

orm

ance

of

peop

le i

n or

der

to i

mpa

ct b

usin

ess

resu

lts,

and

to s

olve

pro

blem

s an

d cr

eate

co

mpe

titiv

e ad

vant

age

To s

olve

bus

ines

s pr

oble

ms

by

deliv

erin

g cu

stom

ized

per

form

ance

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prov

emen

t so

lutio

ns t

o cl

ient

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edin

g su

stai

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e ch

ange

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proa

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to

com

petit

ive

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ntag

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Cul

ture

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ork

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ente

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nted

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nerg

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base

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ng

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ork

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aini

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OD

, O

E an

d H

RD

are

all

sepa

rate

, bu

t al

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view

Rep

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nera

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atio

n &

Tra

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g Fu

nctio

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rep

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ectly

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Glo

bal

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pany

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prov

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rais

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valu

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nctio

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t cl

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fee

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k

~~

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~

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~

Impl

emen

ted

skill

s m

anag

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t sy

stem

and

rel

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per

form

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pmen

t sy

stem

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requ

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cost

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to i

mpr

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prod

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sign

of o

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roce

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grat

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com

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Res

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sem

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line

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mpl

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or t

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ompa

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>

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ned

train

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for

deal

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com

pany

cul

ture

for

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hair

man

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trem

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good

tal

ent

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quic

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mar

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ple

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ults

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thin

gs d

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orie

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pr

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less

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impl

emen

tatio

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vide

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pany

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ff t

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com

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and

cred

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org

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n Te

am h

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w

hile

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know

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k to

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DIV

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AL

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ork

hard

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take

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t te

chni

cally

sou

nd s

olut

ions

0

Mar

ketin

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r co

nsul

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serv

ices

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aini

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g ne

w

empl

oyee

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our

met

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es

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ging

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n pe

ople

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peed

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ckly

Pe

rson

al p

rodu

ctiv

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ime

requ

ired

to

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d ad

vanc

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n te

chno

logy

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’t ch

alle

nge

each

oth

er

enou

gh .

. . h

ave

lear

ned

to b

e co

mfo

rtab

le w

ith e

ach

othe

r’s

limita

tions

A

ll m

ale

popu

latio

n lim

its

pers

pect

ive

and

judg

emen

ts

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over

in

depa

rtm

ent

. . .

take

s 6

mon

ths

to g

et p

eopl

e up

to

spee

d

Cor

pora

te c

ultu

re

Mac

hine

(fu

nctio

nal

desi

gn,

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epre

neur

ial

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erge

nt d

esig

n,

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essi

onal

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oces

s de

sign

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oven

met

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anda

rdiz

atio

n,

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lts-f

ocus

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time-

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foc

used

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ill-b

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fici

ency

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ente

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ti-ch

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rrie

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o in

crea

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prod

uctiv

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Trad

ition

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lly f

ocus

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(but

now

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rtin

g to

cha

nge)

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rate

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inte

grat

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of bu

sine

ss

units

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ccou

ntab

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indi

vidu

al a

nd

team

lev

els

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age

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een

indi

vidu

al

cont

ribu

tions

and

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aniz

atio

nal

goal

s

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lity

to p

rior

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ot h

avin

g en

ough

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ff p

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ader

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ve t

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ngin

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e en

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lt in

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r ch

ange

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emen

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s re

sist

ance

to

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rol

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tic a

ppro

ach

to p

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rman

ce

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t im

med

iate

act

ion

and

resu

lts

Syst

ems

tech

nolo

gy i

s an

on-

go

ing

chal

leng

e . .

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eed

for

all

empl

oyee

s ha

ve s

ame

acce

ss

FUN

CTI

ON

DA

TA

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ose

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rovi

de o

rgan

izat

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spec

ific

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rodu

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lient

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g To

ach

ieve

im

prov

ed b

usin

ess

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lts t

hrou

gh i

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ents

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rman

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n an

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ning

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utiv

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ness

re

sults

and

inc

reas

es o

rgan

iza-

tio

nal

capa

bilit

y . .

. by

foc

usin

g on

pro

blem

sol

ving

thr

ough

ch

ange

s in

str

uctu

re,

proc

ess,

cultu

re a

nd s

kills

Cul

ture

Pr

ofes

sion

al (

proc

ess d

esig

n,

Entre

pren

euria

l (e

mer

gent

des

ign,

Pr

ofes

sion

al (

proc

ess d

esig

n,

cust

omer

foc

used

, sk

ill-b

ased

, re

sults

-foc

used

, tim

e-ba

sed,

cu

stom

er f

ocus

ed,

skill

-bas

ed,

prof

icie

ncy-

orie

nted

) ur

genc

y-or

ient

ed)

prof

icie

ncy-

orie

nted

)

Stru

ctur

e R

epor

ts to

HR

(co

rpor

ate)

O

rgan

ized

as

a po

ol o

f or

gani

za-

tiona

l spe

cial

ists w

ho "

cont

ract

" or

te

am w

ith b

usin

ess

unit

man

ager

s an

d H

R g

ener

alis

ts i

n th

e bu

sine

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nits

in

orde

r to

Rep

orts

to E

mpl

oyee

Ser

vice

s (t

he H

R f

unct

ion

repo

rtin

g to

Pr

esid

ent

of la

rges

t bus

ines

s un

it)

Incl

udes

the

fol

low

ing

serv

ices

: -L

eade

rshi

p co

achi

ng a

nd

Rep

orts

to H

R

Rep

lace

d ol

d Tr

aini

ng &

D

evel

opm

ent

func

tion

2 ye

ars

ago

. . .

now

tho

ught

of

as a

C

ente

r of

Ex

perti

se

deve

lopm

ent

Incl

udes

Tra

inin

g, H

uman

z 3

m

z

X 0 >

prov

ide

focu

sed

supp

ort

-Bus

ines

s pr

oces

s im

prov

emen

t Pe

rfor

man

ce C

onsu

lting

and

Busin

ess

Uni

t H

R,

EEO

&

Com

plia

nce,

Com

pens

atio

n,

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ning

& O

pera

tions

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crui

t-

men

t an

d be

nefit

s), T

rain

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&

Dev

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men

t, an

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goal

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ting

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men

t -T

eam

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velo

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Oth

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R f

unct

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incl

ude

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le

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ng d

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ent

HR

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eetin

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sign

and

fac

ilita

tion

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form

ance

m

anag

emen

t &

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y -C

hang

e m

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xter

nal

cust

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con

sulti

ng

w

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CT

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IEW

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nu

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lead

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nctio

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per

form

ance

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s)

Key

Rol

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Lead

Bus

ines

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rfor

man

ce C

on-

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ctor

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m L

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ters

M

anag

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w/B

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ters

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and

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ears

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erie

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in

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.D.

expe

rien

ce)

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ialty

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sult

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chel

ors

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spec

ific

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ecia

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erie

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M

anag

er o

f C

omm

unic

atio

n &

In

tegr

atio

n of

HR

Pol

icy

(w/

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elor

s an

d 3

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gene

ralis

t an

d 5

yrs.

spec

ialis

t exp

erie

nce)

M

arke

ting

& N

ew B

usin

ess

Ope

ratio

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anag

er (

w/

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s an

d 10

yrs

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nce

oper

atio

ns a

nd 3

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fect

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ess

Dir

ecto

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ters

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s Ph

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ABD

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d 15

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peri

ence

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lline

man

agem

ent)

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peri

ence

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HR

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m

anag

emen

t . .

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edic

al,

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ce,

mar

ketin

g, s

ales

, et

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or C

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ters

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orm

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6-7

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expe

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ce in

re

late

d ar

eas . .

. s

ever

al h

ave

f M

aste

rs)

Lear

ning

Fac

ilita

tors

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yrs.

busi

ness

exp

erie

nce

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ofte

n $

cont

ent

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rts)

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ee c

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or 1

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ease

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ted

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ide

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orm

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stem

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trate

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fort

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hug

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fort

with

sho

rt ti

me

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Stre

ngth

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iver

sity

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skill

s al

low

us

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help

a w

ide

rang

e of

nee

ds

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t-bas

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elat

ions

hips

with

cl

ient

s al

low

s us t

o tru

ly p

artn

er

and

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par

t of

the

plan

ning

fo

r st

rate

gic

initi

ativ

es

Seni

or-le

vel

spon

sors

hip

got

us

our

seat

at

the

tabl

e, y

et w

e ha

ve h

ad t

o ea

rn o

ur r

ight

to

stay

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re

Org

aniz

atio

n de

sign

, de

velo

p-

men

t an

d im

plem

enta

tion

of ne

w g

loba

l bu

sine

ss s

tart

-up

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lysis

, re

desig

n an

d ex

pan-

si

on o

f fie

ld f

orce

(sa

les)

C

ondu

cted

res

earc

h an

d an

alys

is

of m

arke

tpla

ce (

cont

ract

ed w

ith

exte

rnal

con

sulta

nts)

to d

eter

- m

ine

how

to

best

mar

ket

in

diff

eren

t ar

eas

Invo

lved

in

sign

ifica

nt b

usin

ess

stra

tegy

dev

elop

men

t an

d im

plem

enta

tion . .

. cl

early

see

n as

val

ue-a

ddin

g pa

rtne

r D

eliv

er on

com

mitm

ents

, w

hich

le

ads

to r

epea

t w

ork

and

wor

d-

or-m

outh

sup

port

R

elat

ions

hip

orie

nted

and

se

rvic

e dr

iven

, w

hich

has

led

to

incr

ease

in

our

clie

nt b

ase

Lead

maj

or c

hang

e ef

fort

for

Trad

e Se

rvic

e C

ente

r (b

ack

offic

e fu

nctio

ns)

orga

niza

tion,

sh

iftin

g fr

om h

iera

rchi

cal

man

agem

ent

to e

mpo

wer

ed

envi

ronm

ent

Cre

ated

pos

ition

des

ign

and

cont

ent

for

sele

ctio

n, r

ecru

iting

, on

-boa

rdin

g an

d pe

rfor

man

ce

mea

sure

men

t fo

r ne

w g

loba

l ro

les

Partn

erin

g w

ith o

ther

sta

ff

func

tions

to

impr

ove

recr

uitin

g,

sele

ctio

n, a

nd p

erfo

rman

ce

man

agem

ent

proc

ess

z- go

als

and

is m

easu

rabl

e X

7

m

Usin

g an

int

egra

ted

appr

oach

Z 0

5.

(hol

istic

) tha

t im

pact

s bu

sine

ss

Cen

traliz

atio

n of

func

tion

to

redu

ce d

uplic

atio

n of

effo

rt, t

o im

prov

e co

st e

ffect

iven

ess,

and

to

incr

ease

exp

ertis

e an

d ca

pabi

lity

Acc

ess

to l

eadi

ng-e

dge

tech

- no

logi

es,

info

rmat

ion,

and

ex

tern

al c

onsu

ltant

s al

low

s us

to

prov

ide

bette

r qu

ality

pro

duct

s an

d se

rvic

es t

o ou

r cl

ient

s

w

w

-4

w

(h,

00

SYN

OPS

IS O

F IN

DIV

IDU

AL

HP

IC-F

UN

CT

ION

IN

TE

RV

IEW

S (c

onti

nu

ed)

Wea

knes

ses

Lack

bus

ines

s ac

umen

in

som

e ar

eas,

suc

h th

at i

t ta

kes

long

er

to u

nder

stan

d th

e bu

sine

ss a

nd

to w

rite-

up s

olut

ions

in a

lan

- gu

age

that

clie

nts

can

unde

rsta

nd

Diff

icul

ty f

indi

ng a

ble

staf

f w

ith

the

righ

t sk

ills . .

. cr

eate

s ad

ded

wor

k fo

r ot

hers

who

ha

ve t

o do

the

ext

ra r

esea

rch

to f

ind

good

ans

wer

s

Cor

pora

re c

u I t 1

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e5sio

nal

(pro

cess

des

ign,

cu

stom

er f

ocus

ed,

skill

-bas

ed,

prof

icie

ncy-

orie

nted

)

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eno

ugh

staf

f ca

paci

ty t

o m

eet

all

the

pres

entin

g ne

eds

Hav

e no

t be

en a

ble

to c

odif

y pr

oduc

ts,

serv

ices

and

pro

cess

es,

such

tha

t it

is d

iffic

ult

to r

eplic

ate

serv

ices

eas

ily a

nd t

o br

ing

new

pe

ople

up

to s

peed

qui

ckly

. . .

so w

e ar

e av

aila

ble

whe

n th

e hi

gh-p

rior

ity w

ork

com

es a

long

Get

ting

bal

ance

. .

. sa

ying

no

Prof

essi

onal

(pr

oces

s de

sign

, cu

stom

er t

ocus

ed,

skill

-bas

ed,

prof

icie

ncy-

orie

nted

)

Stak

ehol

der

resi

stan

ce t

o ut

ilize

ou

r se

rvic

es .

. . th

ey c

onti

nue

to p

ursu

e so

luti

ons

that

are

not

as

im

pact

ful

on b

usin

ess

resu

lts

proc

ess

for

supp

orti

ng t

he

perf

orm

ance

-con

sult

ing

appr

oach

can’

t al

way

s re

spon

d in

a t

imel

y w

ay t

o cl

ient

req

uest

s

Find

ing

the

righ

t st

ruct

ure

and

$ f

Bui

ldin

g in

tern

al c

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ilit

y . . .

1J - 7

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i;

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Team

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k (n

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Cur

rent

str

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ic

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tific

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d us

e of

val

ues

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ed s

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card

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aint

ain

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mar

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bus

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rmat

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s

Get

ting

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tion

al b

usin

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initi

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usin

ess

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adva

nces

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rnov

er

prod

uctiv

ity

Lim

ited

reso

urce

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cilit

ies,

etc.

His

tory

of

cont

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d st

able

en

viro

nmen

t C

ultu

re r

esis

tant

to

chan

ge .

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getti

ng p

eopl

e to

acc

ept

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aliti

es

Diff

icul

t to

pre

dict

new

rea

litie

s . .

. in

dust

ry r

espo

nse

to

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gula

tion

is so

mew

hat

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edic

tabl

e

Hav

e in

expe

rienc

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anag

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t an

d no

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proc

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s,

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ts i

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ish

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thin

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requ

ently

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hang

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g so f

ast

it’s

hard

for

peo

ple

to g

et g

roun

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in o

ne b

efor

e ha

ving

to

mov

e on t

o th

e ne

xt

Hav

ing

to d

o th

ings

man

ually

w

hile

we’

re s

till

build

ing

an

MIS

inf

rast

ruct

ure

FU

NC

TIO

N D

AT

A

:

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reat

e co

rpor

ate

trus

t To

sup

port

HK

Bus

ines

s R

eps

and

To i

mpa

ct t

he p

erfo

rman

ce o

f m

hu

sine

ss u

nit

clie

nts

to i

mpl

emen

t pa

rtne

rs a

nd t

he o

rgan

izat

ion

z

larg

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syst

em c

hang

e pr

ojec

ts

X

7

0 >

Cul

ture

Te

amw

ork

(net

wor

k de

sign

, Pr

ofes

sion

al (

proc

ess

desi

gn,

Team

wor

k (n

etw

ork

desi

gn,

syne

rgy-

focu

sed,

nee

d-ba

sed,

cu

stom

er f

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ed,

skill

-bas

ed,

syne

rgy-

focu

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nee

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ag

reed

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ls o

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ted)

pr

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ed-g

oals

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ente

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StI ’u

ctur

e R

epor

ts t

o C

hair

man

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tabl

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t of

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n-

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orts

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irect

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f C

orpo

rate

R

epor

ts t

o V

P H

R (

who

repo

rts

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, an

d ha

s do

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lin

e to

H

R f

unct

ions

in

the

busi

ness

U

nive

rsity

(w

ho re

port

s to

V

P H

R,

who

in t

urn

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rts

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e . .

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ter

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w m

ore

year

s w

ill l

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y be

to

CEO

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its)

inte

grat

ed w

ith o

ther

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ppor

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nctio

ns

Com

p/B

enef

its

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llel

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R S

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w

P

0

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OF

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IVID

UA

L H

PIC

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NC

TIO

N I

NT

ER

VIE

WS

(con

tin

ued

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~

~~~

~~~

Mgm

t. Sy

stem

s Fu

nctio

n le

ader

ear

ns $

200K

lyr.

Func

tion

lead

er e

arns

$1 1

5K/y

r. Fu

nctio

n le

ader

ear

ns $

125K

/yr.

(plu

s 30

% p

erfo

rman

ce b

onus

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lus

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Kly

r. pe

rfor

man

ce

bonu

s)

bonu

s)

and

stoc

k op

tion

s)

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s $2

5K/y

r. pe

rfor

man

ce

Key

Rol

es

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ect

Dir

ecto

rs (

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ache

lors

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E C

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ltant

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lMas

ters

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to P

h.D

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d ap

prop

riat

e re

leva

nt f

ield

and

5-1

0 yr

s. ex

peri

ence

bas

ed o

n w

ork)

co

nsul

ting

expe

rien

ce)

Tech

nolo

gist

or

Con

sult

antJ

Inst

ruct

iona

l D

esig

n [i

n pr

oces

s of

cha

ngin

g tit

le t

o Pe

rfor

man

ce

(wit

h B

ache

lors

and

2-3

yr

s. Pr

oiec

t M

anag

ers

(wit

h re

leva

nt

HR

Bus

ines

s R

eps

(wit

h ex

peri

ence

bas

ed o

n w

ork)

Ba

chel

ors,

HR

exp

erie

nce

and

of re

leva

nt e

xper

ienc

e)

2 cu

stom

er s

ervi

ce o

rien

tati

on)

Lear

ning

& O

D M

anag

ers

(wit

h f

expe

rien

ce)

2

a st

rong

com

mun

icat

or)

2

Bac

helo

rs a

nd 5

+ yr

s. of

le

ader

- 2

sh

ip a

nd d

esig

n &

dev

elop

men

t

Lear

ning

Spe

cial

ist (w

ith B

ache

lors

an

d 2-

3 yr

s. ex

peri

ence

in

P 5 z 2 5

Inst

ruct

ion

Des

ign

or H

R a

nd

Res

ourc

es

- - - $3

M o

verh

ead

allo

catio

n (n

o $4

00K

ove

rhea

d al

loca

tion

$lM

ove

rhea

d al

loca

tion

4

incr

ease

) 5

FTEs

-

(5%

inc

reas

e)

(ISo

/, in

crea

se)

Z

7 FT

Es (

no in

crea

se)

13 F

TEs

(no

incr

ease

)

Rece

nt I

nter

vent

ions

Im

plem

ente

d ba

lanc

ed s

core

card

s fo

r to

p 23

6 le

ader

s ac

ross

the

bu

sines

s to

mea

sure

the

ir ac

hiev

e-

men

t to

war

d co

rpor

ate

mis

sion

Im

plem

ente

d C

orpo

rate

Uni

ver-

sity

for

man

agem

ent

deve

lop-

m

ent

to d

rive

chan

ge f

rom

ex

istin

g cu

lture

Im

plem

ente

d "s

hare

d se

rvic

es"

appr

oach

to

supp

ort

grea

ter

auto

nom

y fo

r bu

sine

ss u

nits

and

sh

ift t

he b

alan

ce o

f po

wer

aw

ay

from

cor

pora

te

Lead

cos

t-red

uctio

n in

itiat

ive

in

old

bure

aucr

atic

cul

ture

with

in

whi

ch t

here

was

no

owne

rshi

p of

the

pro

blem

A

naly

sis o

f fa

iling

Per

form

ance

M

anag

emen

t pr

oces

s, w

hich

led

to

im

plem

enta

tion

of cu

stom

ized

PM

pro

cess

in

each

bus

ines

s un

it an

d ul

timat

ely

to i

mpr

oved

pe

rfor

man

ce

desi

gned

to

impr

ove

inte

rnal

cu

stom

er s

ervi

ce

Trai

ning

-bas

ed i

nter

vent

ion

Stre

ngth

s H

as t

he s

uppo

rt o

f th

e Ex

ecu-

tiv

e C

omm

ittee

, w

hich

get

s th

ings

don

e H

as e

stab

lishe

d cr

edib

ility

with

th

e or

gani

zatio

n, w

hich

has

m

ade

it po

ssib

le t

o co

nvin

ce

man

agem

ent

that

the

sof

t iss

ues

are

busi

ness

rel

evan

t

alig

ned,

it

is ve

ry c

atal

ytic

m

ovin

g fo

rwar

d

Ove

rall

cultu

re .

. . on

ce

Kno

w o

rgan

izat

ion

wel

l, so

it

take

s lit

tle t

ime

to g

et u

p to

sp

eed

on i

ssue

s C

usto

mer

ori

enta

tion

. . .

we

find

a w

ay t

o m

ake

it w

ork,

no

mat

ter

wha

t La

rge

team

of

peop

le a

ddre

ssin

g si

mila

r iss

ues,

so w

e ca

n lo

cate

ex

perti

se q

uick

ly w

hen

we

need

it

Des

igne

d an

d im

plem

ente

d re

tail

impl

emen

tatio

n pr

oces

s to

pr

ovid

e or

der

and

cons

iste

ncy

to r

etai

l op

erat

ions

Re

desig

n of

cor

e le

arni

ng

proc

ess

for

key

role

to

spee

d le

arni

ng a

nd t

rans

fer

and

ultim

atel

y im

prov

e co

nsis

tenc

y of

per

form

ance

deve

lopm

ent

syst

em f

ocus

ing

on o

pera

tions

, sk

ills,

prac

tices

, be

havi

or a

nd f

unct

iona

l in

tegr

atio

n

Cre

ated

new

man

agem

ent

z D

esig

n of

lear

ning

sys

tem

s fo

r

Cen

traliz

ed p

ositi

ons

acro

ss

X

orga

niza

tion

to d

evel

op

>

7

m z 0

impr

oved

per

form

ance

cons

iste

nt m

essa

ge

Abl

e to

rec

ogni

ze o

rgan

izat

iona

l pa

ttern

s an

d de

velo

p ap

prop

riat

e so

lutio

ns t

hat

have

a

grea

ter

impa

ct f

or l

ess

of a

n in

vest

men

t

w

P

Y

SYN

OPS

IS O

F IN

DIV

IDU

AL

HP

IC-F

UN

CT

ION

IN

TE

RV

IEW

S (c

onti

nu

ed)

Wea

knes

ses

Reso

urce

s . .

. op

erat

e w

ith a

sh

oe-s

tring

bud

get

Lim

ited

time

to s

how

res

ults

be

fore

com

mitm

ent

wav

ers

Whe

n cu

rren

t (s

hort

-ter

m)

busi

ness

per

form

ance

is

soft,

pe

ople

rev

ert

to o

ld m

etho

ds

of be

havi

or

Une

ven

expe

rien

ce a

mon

g co

n-

sulti

ng t

eam

mem

bers

, so

we

ofte

n se

e th

e pr

oble

ms

diff

eren

tly

Peop

le a

re u

nder

utili

zed,

so

we

don’

t ha

ve t

he i

mpa

ct o

n re

sults

th

at w

e co

uld

if tr

ying

to

max

imiz

e po

tent

ial

from

max

imiz

ing

utili

zatio

n of

pr

ofes

sion

al s

taff

Reg

iona

l si

lo b

arri

ers

keep

us

Not

eno

ugh

reso

urce

s, s

o on

ly

high

pri

ority

iss

ues

rece

ive

atte

ntio

n . .

. us

e so

me

outs

ide

reso

urce

s w

hen

nece

ssar

y M

anag

emen

t de

velo

pmen

t sy

stem

is

still

not

as

fast

and

ef

fect

ive

as it

nee

ds t

o be

Ca

n’t

get

the

$ ne

eded

to

mee

t or

gani

zatio

n’s

need

s

Cor

pora

te c

ultu

re

Prof

essi

onal

(pr

oces

s de

sign

, cu

stom

er f

ocus

ed,

skill

-bas

ed,

prof

icie

ncy-

orie

nted

)

Mac

hine

(fu

nctio

nal d

esig

n, p

rove

n m

etho

ds,

stan

dard

izat

ion,

effi

cien

cy-

orie

nted

) . .

. an

d in

th

e pr

oces

s of

mov

ing

to .

. . P

rofe

ssio

nal

(pro

cess

des

ign,

cus

tom

er f

ocus

ed,

skill

-bas

ed, p

rofic

ienc

y-or

ient

ed)

Cur

rent

stra

tegi

c Q

ualit

y-si

x-si

gma

proc

ess

Red

uce

over

head

cos

ts (

C&

A)

initi

ativ

es

man

agem

ent

Ret

entio

n of

empl

oyee

(re

duce

G

row

th a

nd p

enet

ratio

n of

Build

ing

cust

omer

loy

alty

A

cqui

sitio

n o

f ne

w p

ortf

olio

s

turn

over

)

prof

itabl

e ar

eas

exis

ring

clie

nts

Gro

w b

usin

ess

in m

ore

of b

usin

ess

w

P

h,

Barr

iers

to

incr

ease

d pr

oduc

tivity

0

0

Hig

h tu

rnov

er (

30-6

0%),

in

part

due

to

stee

p le

arni

ng c

urve

(i

n tig

ht l

abor

mar

ket)

Se

lect

ion

of t

he r

ight

peo

ple

. . .

tend

to

focu

s on

vol

ume

Syst

ems

and

tech

nolo

gy-o

ften

man

agem

ent

lack

the

ava

ilabl

e to

ols

that

w

ould

mak

e it

eas

ier

for

peop

le

to g

et t

heir

wor

k do

ne

Stab

ility

of

wor

kfor

ce,

part

icu-

la

dy i

n ce

ntra

l op

erat

ions

C

ompl

exity

of

serv

ices

with

w

hich

key

rol

es m

ust

oper

ate

Lack

of

lead

ersh

ip s

kills

in

FU

NC

TIO

N D

AT

A

Purp

ose

To i

mpr

ove

wor

kpla

ce p

erfo

r-

To d

eal

with

cor

pora

te-w

ide

man

ce w

ithin

bus

ines

s un

its

perf

orm

ance

iss

ues

and

supp

ort

the

roll-

out

of m

ajor

ini

tiativ

es

z C

ultu

re

Prof

essi

onal

(pr

oces

s de

sign

, Pr

ofes

sion

al (

proc

ess

desi

gn,

z

cust

omer

foc

used

, ski

ll-ba

sed,

cu

stom

er f

ocus

ed,

skill

-bas

ed,

X

prof

icie

ncy-

orie

nted

) . .

. bu

t pr

ofic

ienc

y-or

ient

ed)

>

3

rn

0

shift

ing

due

to 4

0% s

taff

dow

n-

sizi

ng t

o Te

amw

ork

(net

wor

k de

sign

, sy

nerg

y-fo

cuse

d, n

eed-

ba

sed,

agr

eed-

goal

s or

ient

ed)

Stru

ctur

e R

epor

ts t

o Sr

.VP

of

HR

(w

ith

dotte

d-lin

e re

port

ing

to a

bu

sine

ss-u

nit

pres

iden

t, an

d di

rect

-line

rep

ortin

g to

EV

P H

R

at c

orpo

rate

leve

l)

Rep

orts

to

Cor

pora

te H

R

Serv

ices

(w

hich

rep

orts

to

CEO

) Su

ppor

ts 1

4 R

egio

nal

HR

fu

nctio

ns w

hich

fac

ilita

te a

nd

coor

dina

te f

ield

act

ivity

Mgm

t. Sy

stem

s Fu

nctio

n le

ader

ear

ns $

140K

/yr.

Not

ava

ilabl

e (p

lus

$30-

40K

pe

rfor

man

ce

(h,

bonu

s)

(c,

P

SYN

OP

SIS

OF

IND

IVID

UA

L H

PIC

-FU

NC

TIO

N I

NT

ER

VIE

WS

(con

tin

ued

) ir,

P

P

Key

Rol

es

Sr.

Perf

orm

ance

Dev

elop

men

t M

anag

ers

(Ser

vice

Qua

lity,

C

usto

mer

Ser

vice

or

Ret

ail)

(w

ith B

ache

lors

[M

aste

rs

pref

erre

d] a

nd 5

-10

yrs.

expe

rien

ce in

OD

cons

ultin

g,

trai

ning

lea

ders

hip,

des

ign

&

deve

lopm

ent,

etc.

)

Man

ager

s (w

ith

Bach

elor

s an

d 3-

5 yr

s. ex

peri

ence

in

cons

ult-

in

g, i

nflu

enci

ng,

lead

ersh

ip,

etc.

)

Spec

ialis

ts (

wit

h B

ache

lors

and

3-5

yrs.

expe

rien

ce i

n co

nsul

t-

ing,

inf

luen

cing

, lea

ders

hip,

etc

.)

Perf

orm

ance

Dev

elop

men

t

Perf

orm

ance

Dev

elop

men

t

Man

ager

of

Trai

ning

(w

ith

iMas

ters

in

HR

D o

r M

BA

) Pr

ojec

t M

anag

er (

wit

h M

aste

rs

and

5 yr

s. e

xper

ienc

e w

ith

inte

rnal

ope

ratio

ns,

HR

D,

ISD

, or

OD

Bac

helo

rs a

nd 1

yea

r ex

peri

ence

w

ith I

SD,

HR

D o

r In

stru

ctio

nal

Tech

nolo

gy)

Ana

lysts

(w

ith M

aste

rs a

nd 5+

yrs.

expe

rien

ce i

n la

rge

orga

niza

tion

of s

imila

r em

ploy

ee m

akeu

p)

Proj

ect

Supe

rvis

or (

wit

h

Res

ourc

es

$16M

ove

rhea

d al

loca

tion

($21

M

befo

re r

ecen

tly c

entr

aliz

ed)

86 F

TEs

(101

FTE

s be

fore

ce

ntra

lized

) (1

0% in

crea

se)

$10.

6M b

udge

t is

60%

ove

r-

head

allo

catio

n an

d 4

0%

fee

ch

arge

back

for

pro

ject

wor

k

11 F

TEs

Rece

nt I

nter

vent

ions

D

esig

ned

and

impl

emen

ted

Not

uva

ilub

le

com

preh

ensi

ve s

yste

m-w

ide

Serv

ice

Qua

lity

Lear

ning

in

itiat

ive

to c

reat

e se

rvic

e cu

lture

D

esig

ned

and

impl

emen

ted

web

- ba

sed

Mul

ti-ra

ter

Ass

essm

ent

Syst

em a

nd D

evel

opm

ent

Plan

- 3

P z - z c

Stre

ngth

s A

naly

sis

and

diag

nosi

s of

per

- fo

rman

ce i

ssue

s an

d de

sign

of

targ

eted

int

erve

ntio

ns (

vs.

bein

g ac

tivity

bas

ed)

Clie

nt f

ocus

. .

. get

the

clie

nt

invo

lved

, de

velo

p sp

onso

rshi

p an

d re

info

rcem

ent

for

syst

emic

im

prov

emen

ts

Exce

llent

qua

lity

in o

ur w

ork

. .

we

achi

eve

the

desi

red

beha

vior

ch

ange

s

stan

d an

d us

e it

partn

er .

. . a

llow

s us t

o be

ful

ly

invo

lved

in

solv

ing

perf

orm

ance

- re

late

d bu

sine

ss p

robl

ems

Mea

sure

men

t . .

. we

unde

r-

Look

ed u

pon

as a

bus

ines

s

Ana

lysis

tha

t al

low

s m

anag

e-

men

t to

add

ress

the

cor

rect

pr

oble

m a

nd i

mpa

ct p

erfo

r-

man

ce .

. . le

adin

g to

red

uctio

ns

in c

osts

In

stru

ctio

nal

desig

n ch

ange

s ar

e a

key

appr

oach

for

lea

ding

the

ch

ange

in

cultu

re

bette

r de

fine

jobs

and

ski

ll se

ts

requ

ired

so

the

com

pany

get

s th

e rig

ht p

eopl

e in

to t

he r

ight

jo

bs

OD

con

sulti

ng a

llow

s us

to

?

7

m

Z 0

X

Wea

knes

ses

Can’

t ke

ep u

p w

ith f

ast-p

aced

To

o m

uch

to d

o an

d no

t cu

lture

. .

. can

pro

duce

ex

celle

nce

or s

peed

but

not

bot

h en

ough

peo

ple

. . .

whi

ch m

akes

us

vul

nera

ble

to i

mpa

ct q

ualit

y an

d bu

rn-o

ut o

ur p

eopl

e

peer

tra

inin

g to

OD

inte

rven

tions

can

do e

ffect

ivel

y

Res

ista

nce

to t

rans

ition

fro

m

Taki

ng o

n m

ore

wor

k th

an w

e

w

P

tn

A P P E N D I X B

Project Report

346

DEV

ELO

PIN

G A

STR

ATE

GY

TO

IM

PRO

VE

FIEL

D S

ALES

PER

FOR

MA

NC

E A

Sum

mar

y of

Fin

ding

s an

d R

ecom

men

dati

ons

from

a P

relim

inar

y P

rofe

ssio

nal

Ana

lysi

s o

f th

e P

ersi

sten

t D

eclin

e in

Sal

es G

row

th

at S

pare

Par

ts W

hole

sale

Au

to S

uppl

y

Follo

win

g is

an e

xam

ple

of a

sum

mar

y re

port

on a

pre

limin

ary

perf

orm

ance

-impr

ovem

ent a

naly

sis. T

houg

h al

l pro

ject

s and

thei

r re

ports

will

be

uniq

ue if

inte

nded

to s

quar

ely

addr

ess

clie

nt n

eeds

, thi

s re

port

illus

trate

s th

e he

lpfu

l app

licat

ion

of th

e “e

nter

pris

e de

sign

fra

mew

ork”

(se

e Fi

gure

7-2

) to

wea

ve to

geth

er th

e br

eadt

h of

inf

orm

atio

n an

d in

sigh

t fr

eque

ntly

gat

here

d w

ith e

ven

limite

d re

sear

ch.

This

rep

ort

also

illu

stra

tes

the

effe

ctiv

e us

e of

the

exer

cise

out

lined

in C

hapt

er 1

0 as

an

inte

rvie

win

g te

chni

que

for

unco

verin

g m

isal

ignm

ents

in

wor

k de

sign.

It i

s th

e so

urce

for

Tab

le 1

0-1.

5 ? 7

cn

c*,

P

00

RE

POR

T T

OPI

CS

Thi

s pr

ojec

t re

port

is

orga

nize

d as

fol

low

s:

I. In

trod

ucti

on a

nd M

etho

dolo

gy ...

........

........

........

........

........

........

........

........

........

........

........

........

....

349

11.

Exe

cuti

ve S

umm

ary ....

........

........

........

........

........

........

........

........

........

........

........

........

........

........

......

352

111.

Ana

lysi

s of

Res

earc

h F

indi

ngs ..

........

........

........

........

........

........

........

........

........

........

........

........

.......

358

IV.

Rec

omm

enda

tion

s 38

1 1

C

Z

........

........

........

........

........

........

........

........

........

........

........

........

........

........

........

.....

I V

. A

ppen

dix

7

Foc

us G

roup

Par

tici

pant

Que

stio

nnai

re D

ata ....

........

........

........

........

........

........

........

........

........

....

388

Key

Ele

men

ts f

or H

igh

Per

form

ance

Wor

k (b

y W

este

rn R

egio

n D

SM

s)

Sum

mar

y of

Foc

us G

roup

Obs

erva

tion

Not

es (

by

Bill

Shie

lds)

.......

........

........

........

........

........

....

402

G

........

........

........

........

.....

I 4

00

z !! 5 c z r. - 2

I. IN

TR

OD

UC

TIO

N A

ND

ME

TH

OD

OL

OG

Y

Intr

oduc

tion

This

pro

ject

was

ini

tiate

d to

mak

e a

limite

d ex

amin

atio

n of

Spa

rePa

rts’

field

sal

es f

orce

act

ivity

in

a se

arch

for

the

con

trib

utin

g ca

uses

for

a p

ersi

sten

t de

clin

e in

Spa

rePa

rts’

sale

s gr

owth

. Sp

areP

arts

w

as a

lso

seek

ing

imm

edia

te r

ecom

men

datio

ns f

or r

educ

ing

or r

emov

ing

thes

e ca

uses

. A

prof

essi

onal

ana

lysi

s w

as c

ondu

cted

in

orde

r to

:

0 F

ollo

w t

hrou

gh o

n th

e Sa

les

Trai

ning

& D

evel

opm

ent

(ST&

D)

goal

of

prov

idin

g m

ore

com

pre-

he

nsiv

e an

d he

lpfu

l as

sist

ance

to

its in

tern

al c

usto

mer

s, w

ith t

he g

oal o

f m

akin

g a

mor

e si

gnifi

cant

st

rate

gic

cont

ribu

tion

to S

pare

Parts

’ bu

sine

ss

0 R

espo

nd t

o th

e su

ppor

t re

ques

ted

by t

he S

pare

Part

s M

idw

est

Reg

ion

(Bob

Bak

er)

to p

inpo

int

the

driv

ers

of th

e co

mpa

ny’s

dec

linin

g sa

les

grow

th a

nd t

o su

gges

t st

rate

gies

for

rev

ersi

ng t

his

pers

iste

nt t

rend

0 E

ngag

e th

e as

sist

ance

of

a pr

ofes

sion

al c

onsu

ltant

who

cou

ld b

ring

rele

vant

exp

ertis

e, a

fre

sh

pers

pect

ive

and

obje

ctiv

ity t

o re

sear

ch a

nd a

naly

sis

of t

his

cond

ition

, an

d to

the

dev

elop

men

t of

ef

fect

ive

stra

tegy

for

rev

ersi

ng t

he d

ownw

ard

tren

d

c z X m

7

m

Z

0 A

ccel

erat

e th

e im

plem

enta

tion

of a

n ef

fect

ive

stra

tegy

for

inc

reas

ing

sale

s gr

owth

This

rep

ort

prov

ides

an

over

view

of

this

pro

ject

’s m

etho

dolo

gy,

findi

ngs,

conc

lusi

ons

and

reco

m-

men

datio

ns,

and

is in

tend

ed t

o su

ppor

t a

verb

al p

rese

ntat

ion

to s

enio

r ex

ecut

ives

of

the

com

pany

.

w

P

\o

bJ

bl

0

I. IN

TR

OD

UC

TIO

N A

ND

ME

TH

OD

OL

OG

Y (

con

tin

ued

)

Met

hodo

logy

The

proj

ect

incl

uded

thr

ee (

3)

brie

f ph

ases

of

wor

k:

I. P

robl

em D

efin

ition

a.

PEP

ITO

NE

BERK

SHIR

E PI

AG

ET W

orld

wid

e’s

cons

ulta

nt, J

im P

epito

ne (

Pepi

tone

) int

ervi

ewed

I

ST&

D l

eade

rs a

nd s

taff

(B

ob B

aker

, Bi

ll Sh

ield

s (S

hiel

ds),

Mik

e Jo

hnso

n an

d D

enny

Gib

son)

5

in o

rder

to

defin

e th

e pr

esen

ting

prob

lem

. z

b. P

epito

ne a

nd S

hiel

ds c

ondu

cted

int

ervi

ews

with

rep

rese

ntat

ives

of

sale

s m

anag

emen

t (B

ob B

aker

z

and

Ceci

l C

arbo

nni)

to u

nder

stan

d in

fur

ther

dep

th th

e na

ture

of

the

prob

lem

and

eff

orts

that

F

had

been

mad

e to

im

prov

e th

e si

tuat

ion.

2.

Res

earc

h an

d A

naly

sis

n

a. P

epito

ne o

bser

ved

Mid

wes

t Reg

ion

“Mid

-Yea

r R

e-Pl

anni

ng M

eetin

g” (

faci

litat

ed b

y Ba

ker

and

9 Sh

ield

s) th

at e

ngag

ed a

ll Re

gion

al S

ales

Man

ager

s (R

SMs)

and

Reg

iona

l O

pera

tions

Man

ager

s $

(RO

Ms)

in r

e-st

rate

gizi

ng h

ow y

early

goa

ls w

ould

be

achi

eved

. Pe

pito

ne a

lso

pres

ente

d pr

oven

5

met

hods

for

im

prov

ing

hum

an w

ork

perf

orm

ance

to

asse

ss l

evel

s of

und

erst

andi

ng a

mon

g th

e RS

Ms

and

RO

Ms.

C

z

z

r: - -

b. Pe

pito

ne c

ondu

cted

foc

us g

roup

inte

rvie

ws

in th

e M

idw

est a

nd W

este

rn R

egio

ns to

gat

her

insi

ght

into

the

cur

rent

act

ivity

and

thi

nkin

g of

Sp

areP

arts

’ fie

ld s

ales

peo

ple.

The

se s

essi

ons

wer

e ob

serv

ed b

y Sh

ield

s. M

id W

est

Regi

on D

istri

ct S

ales

Man

ager

s (D

SMs)

-1

grou

p M

id W

est

Regi

on T

errit

ory

Man

ager

s (T

Ms)

-2

grou

ps/d

istri

cts

Wes

tern

Reg

ion

Dis

trict

Sal

es M

anag

ers

(DSM

s)-1

gr

oup

Wes

tern

Reg

ion

Terr

itory

Man

ager

s (T

Ms)

-2

grou

ps/d

istri

cts

c. Pe

pito

ne a

nd S

hiel

ds d

iscu

ssed

“to

plin

e” f

indi

ngs

with

Bob

Bak

er a

nd R

icha

rd M

alko

vick

, the

pr

ojec

t sp

onso

rs.

d. P

EPIT

ON

E BE

RKSH

IRE

PIA

GET

Wor

ldw

ide’

s an

alys

ts t

abul

ated

the

que

stio

nnai

res

that

wer

e co

mpl

eted

by

the

focu

s gr

oup

parti

cipa

nts

in o

rder

to

prov

ide

a m

ore

thor

ough

exa

min

atio

n of

the

dat

a co

llect

ed, a

nd s

ubse

quen

tly p

erfo

rmed

an

inde

pend

ent a

naly

sis

of th

is d

ata

to s

uppo

rt

or r

efut

e th

e pr

elim

inar

y fin

ding

s 5 rn Z 0

X

- 3.

Con

clus

ions

and

Rec

omm

enda

tions

W

a. P

epito

ne c

ondu

cted

an

inde

pend

ent

revi

ew o

f th

e da

ta a

nd p

relim

inar

y fin

ding

s to

arr

ive

at

b. Pe

pito

ne p

repa

red

this

form

al r

epor

t to

sum

mar

ize

the

proj

ect

for

Spar

ePar

ts’ s

enio

r man

agem

ent.

the

firm

’s fin

al c

oncl

usio

ns,

and

to f

orm

ulat

e its

pro

fess

iona

l re

com

men

datio

ns.

bJ

cI1

h,

11.

EX

EC

UT

IVE

SU

MM

AR

Y

This

res

earc

h id

entif

ied

num

erou

s st

reng

ths

that

fue

l Sp

areP

arts

’ co

ntin

uing

suc

cess

, in

clud

ing

its

dedi

cate

d an

d hi

ghly

cap

able

org

aniz

atio

n, u

niqu

e bu

sine

ss m

odel

, an

d en

duri

ng v

alue

pro

posi

tion.

N

otw

ithst

andi

ng t

hese

stre

ngth

s, w

e di

d fin

d th

at s

ome

mor

e re

cent

str

ateg

ic in

itiat

ives

hav

e le

d to

un

inte

nded

con

ditio

ns t

hat

are

depr

essi

ng f

ield

sel

ling

effe

ctiv

enes

s. T

hese

rec

ent

initi

ativ

es i

nclu

de th

e re

allo

catio

n of

the

fie

ld s

ales

for

ce,

addi

tion

and

expa

nsio

n of

sal

es c

hann

els

(Spu

reP

arts

.com

, W

C

Cal

l Cen

ter,

natio

nal

acco

unts

, etc

.), e

xpan

ded

maj

or-s

uppl

ier

sale

s in

itiat

ives

, an

d th

e U

ltim

ate

ente

rpris

e in

form

atio

n sy

stem

. Fu

rther

mor

e, w

e co

nclu

de t

hat

it is

the

im

plem

enta

tion

of t

hese

ini

tiativ

es,

not

the

initi

ativ

es t

hem

selv

es,

that

is

the

sour

ce o

f pr

oble

ms.

In

othe

r w

ords

, th

e st

rate

gy m

akes

per

fect

se

nse,

yet

in

the

man

ner

of i

ts i

mpl

emen

tatio

n is

cont

ribu

ting

to a

sub

stan

tial

redu

ctio

n in

im

med

iate

This

Exe

cutiv

e Su

mm

ary

outli

nes

spec

ific

cond

ition

s th

at a

re c

ontr

ibut

ing

to d

epre

ssed

fie

ld s

ales

ef

fect

iven

ess

that

wer

e id

entif

ied

by t

his

rese

arch

, an

d it

furt

her

note

s th

e po

tent

ial

for

each

con

ditio

n to

redu

ce f

ield

sal

es fo

rce

perf

orm

ance

. W

e fr

ame

thes

e co

mm

ents

with

in a

n en

terp

rise

des

ign

fram

ewor

k in

ord

er t

o di

stin

guis

h th

e re

lativ

e in

fluen

ce o

f ea

ch c

ondi

tion

note

d an

d to

sup

port

our

sub

sequ

ent

reco

mm

enda

tions

.

I

5 ;

$ C

sale

s re

venu

e.

2 5 5 i

z r.

RE

SEA

RC

H F

IND

ING

S IM

PL

ICA

TIO

NS

FOR

A

lignm

ent

and

opti

miz

atio

n r

elat

ive

SAL

ES

PE

RF

OR

MA

NC

E

Lik

ely

impa

ct o

n fi

eld

sale

s pe

rfor

man

ce

DE

SIG

N E

LE

ME

NT

S to

bus

ines

s po

tent

ial

PRIN

CIPL

ES

No

signi

fican

t iss

ues

Qua

lity

of lif

e, m

eani

ng

of w

ork,

eth

ics,

etc.

MIS

SIO

N

Org

aniz

atio

n pu

rpos

e,

goal

s, ob

ject

ives

, vi

sion,

etc

.

1. T

houg

h no s

ingl

e iss

ue p

oses

a t

hrea

t to

A

lack

of

clar

ity a

roun

d co

mpa

ny v

ision

is

disc

oura

ging

TM

s, a

nd p

artic

ular

ly s

ome

of th

e m

ore

capa

ble

ones

, fr

om t

akin

g em

pow

ered

ac

tion

to a

chie

ve c

ompa

ny o

bjec

tives

.

Spar

epar

ts a

t thi

s le

vel o

f in

fluen

ce,

the

cum

ulat

ive

impa

ct o

f th

e iss

ues

note

d be

low

is

caus

ing

TMs

to d

oubt

whe

ther

the

y un

ders

tand

Spa

repa

rts

man

agem

ent's

visi

on

z fo

r th

e co

mpa

ny.

z

3

rn I? X

W

2. I

mpl

emen

tatio

n of

the

stra

tegi

c in

itiat

ive

to

rest

ruct

ure

the

field

sal

es o

rgan

izat

ion

(maj

or

acco

unts

, ge

ogra

phic

ter

ritor

ies,

exp

ande

d sa

les

chan

nels

) di

d no

t in

clud

e m

eani

ngfu

l bu

y-in

for

thes

e ch

ange

s by

the

fie

ld s

ales

for

ce.

Man

y TM

s co

ntin

ue t

o re

spon

d to

cha

lleng

es w

ith

both

rat

iona

l an

d irr

atio

nal

conc

erns

and

with

re

duce

d tru

st an

d les

s co

nfid

ence

in

man

agem

ent,

whi

ch w

eake

ns m

otiv

atio

n an

d re

solv

e fo

r de

alin

g w

ith t

he p

robl

ems

that

nat

ural

ly a

ccom

pany

the

im

plem

enta

tion

of an

y ne

w s

trate

gy.

STRA

TEG

Y

Plan

ning

, co

mpe

titiv

e in

itiat

ives

, ta

ctic

s, de

fined

val

ues,

etc.

CULT

URE

* Re

al v

alue

s, cu

stom

s, be

liefs

, no

rms,

etc.

3. M

any

mem

bers

of

the

field

sal

es o

rgan

izat

ion

now

fee

l di

sem

pow

ered

and

les

s m

otiv

ated

, if

not

vict

imiz

ed,

as a

res

ult

of th

e or

gani

za-

tiona

l re

stru

ctur

ing

and

the

man

ner

in w

hich

it

was

im

plem

ente

d.

This

fee

ling

redu

ces

the

unde

rsta

ndin

g, c

onfid

ence

an

d su

ppor

t tha

t th

ese

peop

le h

ave

avai

labl

e fo

r de

alin

g w

ith t

heir

curr

ent

chal

leng

es s

uch

as n

ew

terr

itory

dev

elop

men

t, U

ltim

ate-

indu

ced

serv

ice

prob

lem

s, u

ncle

ar l

ines

of

auth

ority

, fr

agm

ente

d m

arke

ting

dire

ctio

n, e

tc.

w

clr w

* C

ultu

re i

s a

syste

m o

utpu

t (n

ot a

n in

put)

, and

the

refo

re i

s no

t su

bjec

t to

dire

ct c

ontr

ol.

bJ

ul P

11.

EX

EC

UT

IVE

SU

MM

AR

Y (

con

tin

ued

)

RE

SEA

RC

H F

IND

ING

S IM

PL

ICA

TIO

NS

FO

R

Ali

gnm

ent

and

opti

miz

atio

n r

elat

ive

SAL

ES

PE

RF

OR

MA

NC

E

Lik

ely

impa

ct o

n f

ield

sal

es p

erfo

rman

ce

DE

SIG

N E

LE

ME

NT

S to

bu

sin

ess

pote

nti

al

4. T

he r

equi

rem

ent

for

TM

s ro

focu

s on

new

sa

les

terr

itorie

s cr

eate

d a

3 to

9 m

onth

proc

esse

s an

d de

laye

d sa

les

grow

th a

ccor

ding

ly.

Mos

t T

Ms

wer

e re

quire

d to

mak

e a

fresh

sta

rt i

n I

PRO

CESS

M

acro

-wor

k de

sign,

th

e te

rrito

ry d

evel

opm

ent

proc

ess

. . .

to l

earn

C

z

reen

gine

erin

g, o

pera

tions

in

terr

uptio

n in

the

new

-bus

ines

s de

velo

pmen

t ne

w m

arke

ts,

iden

tify

new

bus

ines

s po

tent

ials

, f

acco

unta

bilit

y, e

tc.

Spar

ePar

ts’

valu

e pr

opos

ition

, su

ppor

t in

itial

2

man

agem

ent,

deve

lop

new

cus

tom

er r

elat

ions

hips

, co

nvey

trial

s, a

nd so

on . .

. gre

atly

inc

reas

ing

the

chal

- z z

leng

e to

ach

ieve

tra

ditio

nal

sale

s gr

owth

tar

gets

. P

5.

Spar

ePar

ts d

oes

not

have

a s

yste

mat

ic

TM

s ha

ve h

ad t

o re

ly o

n th

eir

own,

ofte

n ve

ry

limite

d, e

xper

ienc

e an

d ex

perti

se f

or d

evel

opin

g th

e bu

sine

ss p

oten

tial

with

in t

heir

new

ter

ritor

y,

and

little

or

noth

ing

has

been

pro

vide

d in

the

w

ay o

f an

eff

ectiv

e pr

oces

s, sy

stem

s, tra

inin

g or

ot

her

supp

ort f

or th

is c

halle

nge.

Fur

ther

mor

e, T

Ms

have

bee

n di

stra

cted

, an

d in

som

e ca

ses

driv

en,

by a

flu

rry

of m

arke

ting

dire

ctiv

es t

hat

ofte

n co

nflic

t w

ith e

ffect

ive

terr

itory

dev

elop

men

t stra

tegy

.

appr

oach

for

the

eff

ectiv

e de

velo

pmen

t of

sa

les

terr

itory

bus

ines

s po

tent

ial,

or f

or t

he

inte

grat

ion

of m

arke

ting

initi

ativ

es d

irect

ed a

t th

e fie

ld s

ales

org

aniz

atio

n fo

r im

plem

enta

tion.

STR

UC

TUR

E O

rgan

izat

ion

desig

n, w

ork

units

, hi

erar

chy,

etc

.

6. T

he li

nes

of a

utho

rity

for

the

fie

ld s

ales

Th

is f

lood

of

dire

ctio

n fr

om v

ario

us f

unct

ions

an

d le

vels

of m

anag

emen

t, so

me

of w

hich

is

conf

lictin

g or

com

prom

ises

the

TM

s ju

dgem

ent,

resu

lts i

n co

nsid

erab

le c

onfu

sion

and

a “

wai

t-an

d-

see”

atti

tude

fro

m T

Ms.

orga

niza

tion

are

conf

usin

g be

caus

e of

the

ro

utin

e re

ceip

t of

ins

truct

ions

fro

m m

any

leve

ls of

aut

hori

ty f

rom

bot

h w

ithin

and

ou

tsid

e th

e fo

rmal

sal

es o

rgan

izat

ion.

L 2

ORG

AN

IZA

TIO

NA

L SYSTEMS

Dec

ision

mak

ing,

re

crui

ting,

rep

ortin

g,

com

pens

atio

n, e

tc.

7. C

omm

unic

atio

n to

the

fie

ld s

ales

org

aniz

atio

n is

exce

ssiv

e an

d un

orga

nize

d (p

erso

nal,

mai

l, m

essa

ges,

mee

tings

, et

c.),

and

it ro

bs t

he s

ales

fo

rce

at a

ll le

vels

of su

bsta

ntia

l se

lling

tim

e.

8. T

he s

ales

for

ce a

ccur

atel

y pe

rcei

ves

ineq

uitie

s in

the

inc

entiv

e co

mpe

nsat

ion

prog

ram

be

caus

e it

is ba

sed

on a

com

mon

sal

es g

row

th

targ

et f

or g

eogr

aphi

cally

def

ined

ter

ritor

ies

of

unev

en b

usin

ess

pote

ntia

l an

d ch

alle

nge.

9. P

oor

first

-hal

f pe

rfor

man

ce f

or m

ost

TM

s ha

s co

nvin

ced

them

to

back

off

in t

heir

selli

ng

effo

rts f

or t

he b

alan

ce o

f th

e ye

ar b

ecau

se a

re

ason

able

cha

nce

of

ince

ntiv

e co

mpe

nsat

ion

is ou

t of

the

ir re

ach

in l

ight

of

thei

r ch

alle

nges

(ne

w te

rrito

ry,

Ulti

mat

e se

rvic

e pr

oble

ms,

con

fusi

ng l

eade

rshi

p, e

tc.).

The

aver

age

TM

is o

verw

helm

ed b

y th

is

info

rmat

ion-

muc

h of

whi

ch i

s no

t hi

ghly

re

leva

nt o

r su

ppor

tive

to t

heir

dire

ct

resp

onsib

ilitie

s-su

ch

that

the

mor

e co

nsci

entio

us T

M c

an e

asily

spe

nd o

ne t

o fo

ur

hour

s of

eac

h da

y si

mpl

y st

ayin

g in

form

ed

(rat

her t

han

selli

ng).

The

uneq

ual

sale

s ch

alle

nge

of c

urre

nt t

errit

ory

assi

gnm

ents

is n

ot f

acto

red

into

ince

ntiv

e co

mpe

nsat

ion,

thu

s m

akin

g th

e cu

rren

t sy

stem

in

equi

tabl

e. T

his

effe

ctiv

ely

dem

otiv

ates

TM

s th

at h

ave

terr

itorie

s th

at a

re e

asily

rec

ogni

zed

as

depr

esse

d o

r de

clin

ing

in p

oten

tial

(due

to n

o fa

ult

of t

heir

own)

bec

ause

the

y ha

ve t

o m

aste

r a

muc

h gr

eate

r ch

alle

nge

for

equi

vale

nt f

inan

cial

5-

gain

(in

a s

yste

m t

hat

is im

plie

d to

be

fair

and

equi

tabl

e to

all)

. X

Z F

Z

ca

Ther

e is

not

an e

ffec

tive

ince

ntiv

e in

pla

ce t

o ex

tern

ally

mot

ivat

e m

ost

TM

s to

sel

l ag

gres

sivel

y fo

r th

e ba

lanc

e of

’97

. Com

bine

d w

ith t

he f

act

that

thi

s ye

ar’s

ach

ieve

men

t w

ill

beco

me

next

yea

r’s c

halle

nge,

it

is na

tura

l fo

r sa

les

peop

le t

o ho

ld b

ack

in t

heir

perf

orm

ance

.

k,

ul cn

11.

EX

EC

UT

IVE

SU

MM

AR

Y (

con

tin

ued

)

RE

SEA

RC

H F

IND

ING

S IM

PL

ICA

TIO

NS

FOR

A

lignm

ent

and

opti

miz

atio

n r

elat

ive

SAL

ES

PE

RF

OR

MA

NC

E

Lik

ely

impa

ct o

n fi

eld

sale

s pe

rfor

man

ce

DE

SIG

N E

LE

ME

NT

S to

bus

ines

s po

tent

ial

Resp

onsi

bilit

ies,

assi

gnm

ents

, fu

nctio

ns,

rela

tions

hips

, etc

.

11

RO

LE

S/JO

BS

10.

Man

y T

Ms

are

now

unc

lear

abo

ut th

eir

Con

fusi

on e

xist

s am

ong

the

rank

s of

TM

s as

to

thei

r ro

le a

nd t

he b

est

use

of th

eir

time.

Thi

s pu

rpos

e-th

e re

sult

of co

nflic

ting

dire

ctio

n z

~~ th

ey r

ecei

ve f

rom

var

ious

sou

rces

in

the

5 or

gani

zatio

n.

impo

ssib

le.

Z G f

that

TM

s ar

e ro

utin

ely

dire

cted

to

do m

ore

wor

k th

an t

here

is

time

avai

labl

e.

and

unpr

ofes

sion

al b

ehav

ior.

2 n

mak

es a

ggre

ssiv

e ac

tion

and

skill

ed e

ffor

t ne

arly

J

P

rn

Dire

ctio

n is

pro

vide

d to

the

fie

ld s

ales

for

ce

wit

hout

reg

ard

for

wor

kloa

d pa

ram

eter

s, s

uch

Mak

ing

unre

ason

able

dem

ands

of

TM

s cr

eate

s fr

ustr

atio

n an

d re

duce

s m

otiv

atio

n, a

nd g

ener

ally

le

ads

to w

aste

d tim

e an

d ef

fort,

ine

ffec

tive

wor

k,

Z

12.

Spar

ePar

ts' c

ompl

ex a

nd e

volv

ing

mar

ket

offe

ring,

and

the

val

ue p

ropo

sitio

n it

repr

esen

ts t

o di

ffer

ent

mar

kets

and

typ

es o

f cu

stom

ers,

is

a su

bsta

ntia

l ch

alle

nge

that

m

any

TM

s do

not

im

plem

ent

effe

ctiv

ely

and

mos

t do

not

im

plem

ent

to i

ts f

ulle

st p

oten

tial.

The

volu

me

of p

rodu

cts

and

acco

unts

, va

riety

of

cust

omer

typ

es,

chal

leng

e of

new

ter

rito

ries

and

co

mpe

titor

s, a

nd r

ange

of

mar

ket

oppo

rtun

ities

is

pote

ntia

lly o

verw

helm

ing

to e

ven

expe

rienc

ed T

Ms.

Th

e co

ntin

uous

flo

od o

f pr

omot

iona

l in

itiat

ives

, co

nspi

cuou

s la

ck o

f co

ntro

l an

d nu

mer

ous

dis-

tr

actio

ns f

aced

by

TM

s on

ly m

akes

thi

s w

orse

. To

cop

e w

ith t

his

com

plex

ity a

nd c

hang

e, m

any

TM

s fo

cus

on o

nly

cert

ain

oppo

rtun

ities

and

se

lling

stra

tegi

es-o

nes

they

und

erst

and

and

use

conf

iden

tly-w

hich

le

aves

con

side

rabl

e pr

ime

busi

ness

opp

ortu

nity

und

erde

velo

ped.

"

z z

i .. r Z

r.

TA

SKS/

SKIL

LS

Mic

ro-w

ork

desig

n,

qual

ity m

anag

emen

t, du

ties,

activ

ities

, be

havi

ors,

attit

udes

13.

Man

y T

Ms

lack

exp

erie

nce

and

expe

rtise

in

effe

ctiv

e te

rrito

ry d

evel

opm

ent,

and

they

are

gi

ven

little

or

no e

ncou

rage

men

t an

d su

ppor

t fo

r de

velo

ping

a m

ore

stra

tegi

c fo

cus

to t

heir

deve

lopm

ent o

f Sp

areP

arts

’ bu

sine

ss p

oten

tial.

Ther

e is

wid

e va

riatio

n am

ong

TMs

in t

heir

appr

oach

es t

o te

rrito

ry d

evel

opm

ent,

and

mos

t of

the

se s

trate

gies

and

met

hods

are

cap

able

of

subs

tant

ial

impr

ovem

ent.

A c

ontin

uous

flo

w o

f pr

omot

iona

l di

rect

ives

to

impl

emen

t ke

eps

TM

s su

ffic

ient

ly b

usy

that

it

de-e

mph

asiz

es t

heir

resp

onsi

bilit

y to

opt

imiz

e th

eir

prod

uctiv

ity b

y de

velo

ping

the

gre

ater

bus

ines

s op

port

uniti

es i

n th

eir

assi

gned

ter

ritor

ies.

RE

SOU

RC

ES

Equi

pmen

t, to

ols,

peop

le,

tech

nolo

gy,

mat

eria

ls,

sche

dule

s, et

c.

14.

TMs

are

aske

d to

per

form

at

cons

iste

ntly

Sp

areP

arts

has

dev

elop

ed a

ver

y ca

pabl

e an

d hi

gher

lev

els

in a

bus

ines

s sy

stem

tha

t is

beco

min

g m

uch

mor

e co

mpl

ex a

nd d

eman

ding

to

exe

cute

, an

d th

eref

ore

requ

ires

of t

hem

ev

en m

ore

prof

essi

onal

lev

els

of k

now

ledg

e,

sion

al d

evel

opm

ent).

dedi

cate

d fie

ld s

ales

for

ce,

yet

with

out

prov

idin

g th

ese

peop

le w

ith t

ruly

hel

pful

and

sup

porti

ve

train

ing

and

deve

lopm

ent o

ppor

tuni

ties

the

Com

pany

rec

eive

s pe

rhap

s th

e m

inim

um l

evel

of

2

7

rn

skill

s an

d at

titud

e (i.

e.,

pers

onal

and

pro

fes-

pe

rfor

man

ce f

or w

hich

the

y ar

e na

tura

lly c

apab

le.

Z

X w

E!

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

For

disc

ussi

on a

nd p

lann

ing,

we

will

now

exp

and

on t

he c

oncl

usio

ns o

utlin

ed i

n th

e Ex

ecut

ive

Sum

mar

y by

pro

vidi

ng d

ata,

com

men

tary

, an

d re

ason

ing

that

inf

luen

ced

our

judg

emen

t. O

ur a

naly

sis

draw

s pr

imar

ily o

n re

sear

ch t

hat

we

cond

ucte

d sp

ecifi

cally

to

exam

ine

man

agem

ent’s

pr

esen

ting

conc

erns

, yet

als

o ta

ps a

wor

king

kno

wle

dge

of Sp

areP

arts

that

has

dev

elop

ed d

urin

g pr

ior

wor

k fo

r th

e C

ompa

ny d

urin

g th

e pa

st f

our

year

s.

The

rese

arch

con

duct

ed f

or t

his

proj

ect

is o

utlin

ed i

n th

e In

trod

uctio

n an

d M

etho

dolo

gy s

ectio

n of

th

is r

epor

t. W

e qu

ote

the

data

and

com

men

tary

tha

t w

as g

ener

ated

, ofte

n re

ferr

ing

to q

uote

s fr

om t

he

mor

e de

taile

d re

sear

ch f

indi

ngs

incl

uded

in

the

App

endi

x of

thi

s re

port

. Th

ese

incl

ude

the

follo

w-

ing

sour

ces:

Key

Ele

men

ts f

or H

igh

Perf

orm

ance

Wor

k (b

y W

este

rn R

egio

n D

SMs)

Sum

mar

y of

Foc

us G

roup

Obs

erva

tion

Not

es (

by B

ill S

hiel

ds)

Focu

s G

roup

Par

ticip

ant

Que

stio

nnai

re D

ata

brie

f re

view

of

this

dat

a (in

the

App

endi

x) b

efor

e pr

ocee

ding

will

enh

ance

the

read

er’s

com

preh

ensi

on.

1. M

ISSI

ON

=+ T

houg

h no

sin

gle

issue

pos

es a

thr

eat

to S

pare

Parts

, th

e cu

mul

ativ

e im

pact

of

the

issu

es t

hat

follo

w i

s ca

usin

g so

me

TMs

to q

uest

ion

whe

ther

the

y un

ders

tand

Spa

rePa

rts

man

agem

ent’s

vis

ion

for

the

com

pany

.

A l

ack

of c

larit

y ar

ound

com

pany

’s v

isio

n is

disc

oura

ging

TM

s, a

nd p

artic

ular

ly s

ome

of t

he

mor

e ca

pabl

e on

es,

from

taki

ng e

mpo

wer

ed a

ctio

n to

ach

ieve

com

pany

obj

ectiv

es.

Thi

s te

rrito

ry is

a d

ying

mar

ket. . .

you

try t

o g

et 7

% g

row

th fr

om it.

Ulti

mat

e-in

duce

d se

rvic

e pr

oble

ms

are

runn

ing my

cust

omel

s aw

ay.

Wha

t’s th

e d

ij/c

nce

, m

anag

emen

t do

esn’

t tru

st u

s. . .

they

don

’1 a

sk,

they

/uS

r do

wan

t the

y w

an&

t Th

ere o

re to

o m

any

mee

tings

on

d m

essa

ges.

. . the

re’s

no

the

lep f

or s

ellin

g.

I It

take

s tim

e to

dev

elop

bus

ines

s in

a ne

w t

erri

tory

,flr

st th

ere’

s lo

catin

g th

e pot

entia

l, an

d th

en

you

have

to ta

ke th

e bu

sine

ss

away

from

som

eone

else

.

Too

muc

h to

p-do

wn

dire

ctio

n m

akes

it

hard

for me t

o be

resp

onsi

ble f

or

sole

s re

sulls

. J

I

The

cont

inuo

usJl

d of

mar

ketin

g pr

omot

ions

ac

fua

l~

prew

nrs

me

from

dev

elop

ing

my

terr

ilory

.

We

con ’I su

ccee

d w

ith u

ncom

petit

ive

pric

ing

on n

ew b

usin

ess

oppo

rtuni

ties . . .

I’

m w

astin

g m

y tim

e tr

ying

.

The y

ear’s

ove

r for

my

ince

ntiv

e . . .

it mak

es m

ore

sens

e to

focu

s on

opp

orru

nitle

s for

ne

t yea

r.

m

z

X 0

co

G,

h

\o

(c,

o\

0

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

(con

tin

ued

)

2. S

TRA

TEG

Y +

Impl

emen

tatio

n of

the

stra

tegi

c in

itiat

ive

to r

estr

uctu

re th

e fie

ld s

ales

org

aniz

atio

n (m

ajor

acc

ount

s, g

eogr

aphi

c te

rrito

ries,

exp

ande

d sa

les

chan

nels

) did

not

incl

ude

mea

ning

ful

buy-

in

for

the

se c

hang

es b

y th

e fie

ld s

ales

for

ce.

Man

y T

Ms

cont

inue

to

resp

ond

with

bot

h ra

tiona

l an

d ir

ratio

nal

conc

erns

and

with

red

uced

tru

st a

nd le

ss c

onfid

ence

in m

anag

emen

t, w

hich

wea

kens

mot

ivat

ion

and

reso

lve

for

deal

ing

with

C

the

prob

lem

s th

at n

atur

ally

acc

ompa

ny t

he i

mpl

emen

tatio

n of

any

new

stra

tegy

. >

3

Z

Key

Ele

men

ts f

or H

igh

Perf

orm

ance

Work:

n

i

DSM

s re

cogn

ize

r.

4/

that

TM

s ar

e n

ot

resp

ecte

d, t

rust

ed,

,/ em

pow

ered

,or

supp

orte

d in

/ do

ing

thei

r w

ork

.

z

Sum

mar

y of

Foc

us G

roup

Obs

erva

tion

Not

es:

0 T

Ms

effo

rts

are

bein

g dr

iven

fro

m t

op d

own

impl

emen

tati

on o

f ac

tiviti

es

0 T

he n

umbe

r of

pro

gram

s ro

lled

out

and

follo

wed

up

on b

y se

nior

man

agem

ent i

s de

bili

tat-

TM

s pe

rcei

ve t

hat

corp

orat

e is

say

ing

“sh

ut u

p ab

out

Ult

imat

e an

d m

ake

mor

e ca

lls”

0 T

Ms

feel

tha

t D

etro

it i

s te

lling

the

m t

o m

ake

10-1

5 ca

lls a

day

(th

is w

ould

not

inc

lude

ca

lls t

o di

ffer

ent

cont

acts

at

the

sam

e lo

cati

on)

and

that

the

# o

f ca

lls i

s im

port

ant,

not

the

qual

ity

of t

he c

alls

0 T

M’s

focu

s is

dri

ven

by “

flavo

r of

the

mon

th”

pro

gram

s, w

hich

kee

ps t

he T

M f

rom

wor

king

a

busi

ness

pla

n. T

Ms

feel

tha

t th

ey a

re n

ot a

ble

to r

un t

heir

ow

n bu

sine

ss.

The

fie

ld’s

pe

rcep

tion

is t

hat

prom

o di

rect

ives

fly

in

the

face

of

thei

r m

arke

t pl

ans

as o

ppos

ed t

o

ing

to t

he T

Ms

2

7

m

supp

ortin

g th

em

Z 0

X w

w

Q\

h,

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

(con

tin

ued

)

3. C

ULT

URE

-+ M

any

mem

bers

of

the

field

sal

es o

rgan

izat

ion

now

fee

l di

sem

pow

ered

and

les

s m

otiv

ated

, if

not

vict

imiz

ed,

as a

res

ult

of t

he o

rgan

izat

iona

l re

stru

ctur

ing

and

the

man

ner

in

whi

ch i

t w

as i

mpl

emen

ted.

This

feel

ing

redu

ces

the

unde

rsta

ndin

g, c

onfi

denc

e an

d su

ppor

t tha

t th

ese

peop

le h

ave

avai

labl

e fo

r de

alin

g w

ith t

heir

cur

rent

cha

lleng

es s

uch

as n

ew t

erri

tory

dev

elop

men

t, U

ltim

ate-

indu

ced

serv

ice

prob

lem

s, u

ncle

ar l

ines

of

auth

ority

, fr

agm

ente

d m

arke

ting

dire

ctio

n, e

tc.

s f z 2 z s - f P z 2 5 s i

Foc

us G

roup

Que

stio

nnai

re D

ata:

Top

10

chal

leng

es t

hat

get

in t

he w

ay o

f yo

ur

perf

orm

ance

. . .

that

pr

even

t yo

u fr

om

achi

evin

g ev

en m

ore

(com

bine

d re

spon

ses

in

orde

r of

fre

quen

cy):

DSM

s Q

uota

tions

(tim

e an

d en

ergy

it

take

s to

get

co

mpe

titiv

e pr

icin

g) M

eetin

gs (

take

way

too

m

uch

time

for

a fie

ld s

ales

job

) Te

rrito

ries

(siz

e an

d fr

eque

nt c

hang

es p

reve

nt d

evel

opm

ent)

A

dmin

istr

atio

n (l

imits

tim

e fo

r st

aff

and

cust

omer

s) M

arke

ting

Prom

otio

ns (

way

too

m

any

& o

ften

low

-val

ue)

Lack

of

Empo

wer

men

t (t

oo

man

y or

ders

to

follo

w)

Ope

ratio

nal

Cha

lleng

es

(inve

ntor

y, c

ompu

ters

and

pol

icie

s) D

irec

tion

(cha

nges

freq

uent

ly a

nd w

ithou

t no

tice)

Ser

vice

St

aff

(una

ble

to s

erve

cus

tom

ers

prom

ptly

) R

esou

rces

(av

aila

ble

to s

uppo

rt l

ocal

dec

isio

ns)

TM

s Pr

oduc

t A

vaila

bilit

y (n

ot o

f th

e rig

ht i

nven

tory

for

im

port

ant

acco

unts

) U

ltim

ate

Impl

emen

tatio

n (s

ervi

ce p

robl

ems

are

killi

ng n

ew b

usin

ess)

Mar

ketin

g Pr

omot

ions

(t

oo m

any

& o

ften

a di

stra

ctio

n fr

om d

evel

opm

ent)

Ser

vice

Lev

el (

inab

ility

to

proc

ess

and

fill

orde

rs p

rom

ptly

and

acc

urat

ely)

Pric

ing

(gen

eral

ly n

ot c

ompe

titiv

e fo

r de

velo

ped

busi

ness

opp

ortu

nitie

s) Q

uota

tions

(in

tern

al f

ight

for

pric

ing

&

slow

tur

naro

und

time)

Ser

vice

Sta

ff (u

nabl

e to

ser

ve c

usto

mer

s pr

ompt

ly)

I/S

Com

pute

r Li

mita

tions

(em

ail a

nd d

ata

inac

cess

ible

rem

otel

y) L

imite

d Ti

me

to S

ell

(mee

tings

, pap

erw

ork,

pro

mot

ions

, se

rvic

e pr

oble

ms)

Low

Mor

ale

(sta

ff's

tired

. .

. to

o m

any

prob

lem

s, c

hang

es,

dire

ctio

ns)

4-.

Res

pons

es f

rom

bot

h DSMs a

nd T

Ms

indi

cate

a s

ense

d la

ck o

f in

flue

nce

or

cont

rol

rega

rdin

g is

sues

tha

t di

rect

ly

impa

ct t

heir

abi

lity

to p

erfo

m their w

ork.

JJJ

5- 7

m

z X

ta

0

w

G,

b4

Q

\ P

11

1. A

NA

LY

SIS

OF

RE

SEA

RC

H F

IND

ING

S (c

onti

nu

ed)

4.

PRO

CESS

+ Th

e re

quir

emen

t fo

r T

Ms

to f

ocus

on

new

sal

es te

rrito

ries

cre

ated

a 3

- to

9-m

onth

in

terr

uptio

n in

new

-bus

ines

s de

velo

pmen

t an

d de

laye

d sa

les

grow

th a

ccor

ding

ly.

Mos

t T

Ms

wer

e re

quire

d to

mak

e a

fres

h st

art

in t

heir

ter

rito

ry d

evel

opm

ent

proc

ess

. . .

to

lear

n ne

w m

arke

ts,

iden

tify

new

bus

ines

s po

tent

ials

, de

velo

p ne

w c

usto

mer

rel

atio

nshi

ps, c

onve

y Sp

areP

arts

’ val

ue p

ropo

sitio

n, s

uppo

rt in

itial

tria

ls,

and

so o

n . .

. gre

atly

incr

easi

ng t

he c

halle

nge

to a

chie

ve r

outin

e sa

les

grow

th t

arge

ts.

I: F P 5 2 2

2000

+ ac

coun

ts.

z

0 T

he a

mou

nt o

f ti

me

a TM

spe

nds

proa

ctiv

ely

selli

ng i

s re

duce

d si

gnif

ican

tly

due

to p

utti

ng

out

fires

and

com

mun

icat

ing

the

high

num

ber

of m

onth

ly “

prom

os”

. In

som

e ca

ses

thei

r pr

oact

ive

selli

ng a

ctiv

ities

are

red

uced

by

as m

uch

as 3

0% t

o 5

0% o

f th

eir

tim

e.

0 T

MS

focu

s is

dri

ven

by ‘

‘fla

vor o

f the

mon

th”

prog

ram

s, w

hich

kee

ps t

he T

M fr

om w

orki

ng

a bu

sine

ss p

lan.

TM

s fe

el t

hat

they

are

not

abl

e to

run

the

ir o

wn

busi

ness

. T

he f

ield

’s

perc

eptio

n is

tha

t pr

omo

dire

ctiv

es f

ly i

n th

e fa

ce o

f th

eir

mar

ket

plan

s as

opp

osed

to

supp

ortin

g th

em

c

Z

J

m

Sum

mar

y of

Foc

us G

roup

Obs

erva

tion

Not

es:

c 17 W

ith

2000

acc

ount

s it

is d

iffi

cult

to

kno

w w

hich

acc

ount

s to

go

to

and

whe

re t

o go

wit

hin

0 T

Ms

are

chal

leng

ed w

ith

iden

tify

ing

qual

ity

Spar

ePar

ts o

ppor

tuni

ties

wit

hin

terr

itori

es o

f z

acco

unts

C

0 T

Ms

are

choo

sing

acc

ount

s by

his

tory

, no

t op

port

unit

y 5 5

Foc

us G

roup

Que

stio

nnai

re D

ata:

1 Prin

cipa

l ob

ject

ives

of

1 you

r po

sitio

n:

Gro

w S

ales

Rev

enue

M

anag

e Te

rrito

ry P

erso

nnel

Te

amw

ork

Unc

over

Mar

ket

Dat

a an

d Tr

ends

D

evel

op N

ew B

usin

ess

Opp

ortu

nitie

s

Gro

w S

ales

Rev

enue

D

evel

op N

ew B

usin

ess

Opp

ortu

nitie

s M

aint

ain

Cur

rent

Bus

ines

s Te

ach

Cus

tom

ers

Abo

ut S

pare

Parts

Cus

tom

er R

elat

ions

Pr

omot

e Sp

ecia

ls &

Eve

nts

Prod

ucts

DSM

s 89

%

89%

f--

TM

s 85

% /

45 yo

42

%

36?4

0 34

% /

14%

Ther

e is

no l

ack

of c

larit

y ab

out

the

resu

lts

requ

ired,

how

ever

th

is d

oes

not

less

en t

he ti

me

it ta

kes

to s

tart

ov

er a

nd t

o ac

hiev

e tr

aditi

onal

st

anda

rds

of

perf

orm

ance

.

LJ

o\

o\

111.

AN

ALY

SIS

OF

RES

EAR

CH

FIN

DIN

GS

(con

tinue

d)

5. P

ROCE

SS +

Spar

ePar

ts d

oes

not

have

a s

yste

mat

ic a

ppro

ach

for

the

effe

ctiv

e de

velo

pmen

t of

sale

s te

rrito

ry b

usin

ess

pote

ntia

l, or

for

the

int

egra

tion

of

mar

keti

ng i

nitia

tives

dir

ecte

d at

the

fie

ld s

ales

org

aniz

atio

n fo

r im

plem

enta

tion.

TMs

have

had

to

rely

on

thei

r ow

n, o

ften

ver

y lim

ited,

exp

erie

nce

and

expe

rtis

e fo

r de

velo

ping

th

e bu

sine

ss p

oten

tial

with

the

ir n

ew t

errit

ory,

and

litt

le h

as b

een

prov

ided

in

the

way

of

an

- ef

fect

ive

proc

ess,

syst

ems,

tra

inin

g or

oth

er s

uppo

rt f

or t

heir

cha

lleng

e.

I z

Key

Ele

men

ts f

or H

igh

Perf

orm

ance

Wor

k:

7

F

-2. h

Ope

ratin

g w

ithou

t p

a sy

stem

atic

c z

appr

oach

for

5 > -

effe

ctiv

e te

rrito

ry

9

7 -

deve

lopm

ent

-

lead

s to

the

Z

7 -

dise

mpo

wer

men

t

TM

s, w

aste

d bu

sines

s po

tent

ial,

subs

tain

tial

non-

va

lue-

addi

ng

wor

k, a

nd l

onge

r de

velo

pmen

t cy

cle-

times

.

-of

DSM

s an

d .

A/

Sum

mar

y of

Foc

us G

roup

Obs

erva

tion

Not

es:

0 T

Ms

are

chal

leng

ed w

ith

iden

tify

ing

qual

ity

Spar

epar

ts o

ppor

tuni

ties

wit

hin

terr

itori

es o

f 20

00+

acco

unts

. 0 T

he T

Ms

are

not

prov

idin

g cu

stom

er s

ervi

ce (

mee

ting

cus

tom

er n

eeds

), t

heir

eff

orts

are

m

ore

acti

vity

foc

used

0 S

ales

peo

ple

are

oper

atin

g at

a l

evel

of

effe

ctiv

enes

s an

d ef

ficie

ncy

that

is

belo

w t

heir

po

tent

ia 1

0 T

he a

mou

nt o

f ti

me

a TM

spe

nds

proa

ctiv

ely

selli

ng i

s re

duce

d si

gnifi

cant

ly d

ue t

o p

utti

ng

out

fires

and

com

mun

icat

ing

the

high

num

ber

of m

onth

ly “

prom

os”

. In

som

e ca

ses

thei

r pr

oact

ive

selli

ng a

ctiv

ities

are

red

uced

by

as m

uch

as 3

0% t

o 5

0% o

f th

eir

tim

e.

5 5 0 In

vent

ory

posi

tion

doe

s no

t su

ppor

t th

e lo

cal

cust

omer

’s n

eeds

0 T

Ms

focu

s dr

iven

by

“fl

avor

of

the

mon

th”

pro

gram

s ke

eps

the

TM f

rom

wor

king

a

busi

ness

pla

n. T

Ms

feel

tha

t th

ey a

re n

ot a

ble

to r

un t

heir

ow

n b

usin

ess.

The

fie

ld’s

pe

rcep

tion

is t

hat

prom

o di

rect

ives

fly

in

the

face

of

thei

r m

arke

t pl

ans

as o

ppos

ed t

o

supp

ortin

g th

em

0 T

Ms

effo

rts

are

bein

g dr

iven

fro

m t

op d

own

impl

emen

tati

on o

f ac

tiviti

es

ihl

o\

00

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

(con

tin

ued

)

6. S

TR

UC

TU

RE

+ T

he li

nes

of a

utho

rity

for

the

fie

ld s

ales

org

aniz

atio

n ar

e co

nfus

ing

beca

use

of t

he r

outin

e re

ceip

t of

ins

truct

ions

fro

m m

any

leve

ls of

aut

hori

ty f

rom

bot

h w

ithin

and

out

side

th

e fo

rmal

sal

es o

rgan

izat

ion.

This

flo

od o

f di

rect

ion

from

var

ious

fun

ctio

ns a

nd l

evel

s of

man

agem

ent,

som

e of

whi

ch i

s co

nflic

ting

or c

ompr

omis

es t

he T

Ms

judg

emen

t, re

sults

in

cons

ider

able

con

fusi

on a

nd a

“w

ait-

an

d-se

e” a

ttitu

de f

rom

TM

s.

2 5 z K

ey E

lem

ents

for

Hig

h Pe

rfor

man

ce W

ork:

;;?

DSM

s re

cogn

ize

P th

at T

Ms

have

to

t.

boss

es,

whi

ch

c.

posi

tion

som

e-

i

z an

swer

to m

any

- makes t

he

A/

wha

t pa

raly

zing

.

Sum

mar

y o

f F

ocus

Gro

up O

bser

vati

on N

otes

:

0 T

Ms

effo

rts

are

bein

g dr

iven

fro

m t

op d

own

impl

emen

tati

on o

f ac

tiviti

es

0 T

he a

mou

nt o

f ti

me

a TM

spe

nds

proa

ctiv

ely

selli

ng i

s re

duce

d si

gnifi

cant

ly d

ue t

o pu

ttin

g ou

t fir

es a

nd c

omm

unic

atin

g th

e hi

gh n

umbe

r of

mon

thly

“pr

omos

”. I

n so

me

case

s th

eir

proa

ctiv

e se

lling

act

iviti

es a

re r

educ

ed b

y as

muc

h as

30%

to

50%

of

thei

r ti

me.

0 T

Ms

focu

s dr

iven

by

“fl

avor

of

the

mon

th”

pro

gram

s ke

eps

the

TM f

rom

wor

king

a

busi

ness

pla

n. T

Ms

feel

tha

t th

ey a

re n

ot a

ble

to r

un t

heir

ow

n bu

sine

ss.

The

fie

ld’s

pe

rcep

tion

is t

hat

prom

o di

rect

ives

fly

in

the

face

of

thei

r m

arke

t pl

ans

as o

ppos

ed t

o su

ppor

ting

them

0 T

he fi

eld

perc

eive

s W

orkl

oad

man

agem

ent

as i

mpl

emen

ting

dl t

he p

rogr

ams

from

Det

roit

w

ith

avai

labl

e re

sour

ces;

not

cho

osin

g th

e pr

ogra

ms

base

d on

im

pact

to

the

ir s

ales

goa

l 0 D

etro

it pr

ogra

ms

are

seen

as

bein

g so

bro

ad t

hat

they

do

not

addr

ess

oppo

rtun

itie

s th

at

5 0 ar

e sp

ecifi

c to

loc

al t

erri

tori

es a

nd d

o no

t fo

cus

on

sus

tain

ed t

op-l

ine

sale

s gr

owth

. X

Ca

w

Q\

W

111.

AN

ALY

SIS

OF

RES

EAR

CH

FIN

DIN

GS

(con

tinue

d)

7. O

RG

AN

IZA

TIO

NA

L SY

STEM

S +

Com

mun

icat

ion

to t

he f

ield

sal

es o

rgan

izat

ion

is e

xces

sive

an

d un

orga

nize

d (p

erso

nal,

mai

l, m

essa

ges,

mee

tings

, et

c.),

and

it r

obs

the

sale

s fo

rce

at a

ll le

vels

of

sub

stan

tial

sel

ling

time.

The

aver

age

TM is

ove

rwhe

lmed

by

this

inf

orm

atio

n-m

uch

of w

hich

is

not

high

ly r

elev

ant

or

supp

ortiv

e to

thei

r di

rect

res

pons

i bili

ties-

such

th

at th

e m

ore

cons

cien

tious

TM

can

eas

ily s

pend

on

e to

fou

r ho

urs

of e

ach

day

sim

ply

stay

ing

info

rmed

(ra

ther

tha

n se

lling

).

Focu

s G

roup

Que

stio

nnai

re D

ata:

Sugg

estio

ns fo

r re

mov

ing

the

barr

iers

to

your

hi

gher

wor

k pe

rfor

man

ce

(com

bine

d re

spon

ses

in

orde

r of

fre

quen

cy):

DSM

s N

on-s

ellin

g tim

e sh

ould

be

- R

educ

e Ti

me

Spen

t in

Mee

tings

M

ake

Dire

ctio

nal

Cha

nges

Les

s O

ften

C

onsi

der

Wor

kloa

d or

Qui

t D

iscu

ssin

g It

Laun

ch F

ewer

Ini

tiativ

es

kept

to

a m

inim

um if

the

pr

iorit

y is

sale

s gr

owth

. T

he

rese

arch

sug

gest

s tha

t to

o --

St

ream

line

and

Impr

ove

Quo

tati

on P

roce

ss

little

impo

rtanc

e is

plac

ed o

n fr

eein

g th

e tim

e of

the

fie

ld

Cre

ate

a Re

alis

tic S

ales

Pla

n an

d St

ick

with

It

TM

s /

sale

s fo

rce

for

actu

al s

ellin

g.

Mor

e Se

rvic

e St

aff

Stop

Hea

ping

on

Mor

e Pr

omot

ions

and

Spe

cial

s Im

prov

e an

d R

educ

e C

omm

unic

atio

ns (

voic

emai

l, em

ail

and

mai

l fr

om D

etro

it)

Cre

ate

a R

ealis

ticN

iabl

e Sa

les

Plan

and

Stic

k w

ith I

t A

dvan

ced

List

ing

of P

rom

os f

or P

lann

ing

Let

Us F

ocus

on

Mor

e Lo

cal

Initi

ativ

es

Stre

amlin

e an

d Im

prov

e Q

uota

tion

Pro

cess

R

educ

e Ti

me

Spen

t in

Mee

tings

A

llow

Mor

e Ti

me

for

Cus

tom

er R

elat

ions

hip

Build

ing

Aut

omat

e M

onth

ly a

nd Q

uart

erly

Rep

ortin

g Le

ss D

irect

ion

and

Cha

nges

A/

8. O

RG

AN

IZA

TIO

NA

L SY

STEM

S +

The

sale

s fo

rce

accu

rate

ly p

erce

ives

ineq

uitie

s in

the

ince

ntiv

e co

mpe

nsat

ion

prog

ram

bec

ause

it i

s ba

sed

on a

com

mon

sal

es g

row

th ta

rget

for

geo

grap

hica

lly

defin

ed t

errit

orie

s of

unev

en b

usin

ess

pote

ntia

l an

d ch

alle

nge.

The

une

qual

sal

es c

halle

nge

of

curr

ent

terr

itory

ass

ignm

ents

is

not

fact

ored

int

o in

cent

ive

com

pens

atio

n, th

us m

akin

g th

e cu

rren

t sys

tem

ine

quita

ble.

Thi

s ef

fect

ivel

y &

mot

ivat

es T

Ms

that

ha

ve t

erri

tori

es th

at a

re e

asily

rec

ogni

zed

as d

epre

ssed

or

decl

inin

g in

pot

entia

l (d

ue to

no

faul

t of

the

ir ow

n) b

ecau

se t

hey

have

to

mas

ter

a m

uch

grea

ter c

halle

nge

for e

quiv

alen

t fin

anci

al g

ain.

Key

Elem

ents

for

Hig

h Pe

rfor

man

ce W

ork:

Now

a

char

acte

ristic

of

the

curr

ent

wor

k

Work c

hara

cter

istic

s th

at h

elpe

d Q

r allo

wed

us

to d

emon

stra

te

the

high

-per

form

ance

”

and

wor

k de

sign

) al

igne

d w

ith

busi

ness

Sum

mar

y of

Focu

s G

roup

Obs

erva

tion

Not

es:

This

issu

e su

rfac

as

sub

stan

tially

de

mot

ivat

ing

durin

g ea

ch o

f th

e fo

cus

grou

p in

terv

iew

s, ye

t w

as n

ot f

ully

ca

ptur

ed i

n th

e da

ta c

olle

cted

. O

ur e

xper

ienc

e

:ed

~ su

gges

ts t

hat

the

ineq

uity

is

havi

ng

a gr

eate

r im

pact

on

sal

es p

erfo

rm-

ance

tha

n is

indi

- ca

ted b

y its

rela

tive

3

0 T

he c

urre

nt c

ompe

nsat

ion

plan

(la

ck o

f co

mm

issi

on d

olla

rs)

is

faili

ng t

o m

otiv

ate

TM

s Y

lack

of

men

tion.

C

-L

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

(con

tin

ued

)

9. O

RG

AN

IZA

TIO

NA

L SY

STEM

S +

Poo

r fir

st-h

alf

perf

orm

ance

for

mos

t T

Ms

has

conv

ince

d th

em t

o ba

ck o

ff in

the

ir se

lling

eff

orts

for

the

bal

ance

of

the

year

bec

ause

a r

easo

nabl

e ch

ance

of

inc

entiv

e co

mpe

nsat

ion

is ou

t of

thei

r re

ach

in li

ght o

f th

eir

chal

leng

es (

new

terr

itory

, U

ltim

ate

serv

ice

prob

lem

s, c

onfu

sing

lea

ders

hip,

etc

.).

Ther

e is

not

an e

ffect

ive

ince

ntiv

e in

pla

ce t

o ex

tern

ally

mot

ivat

e m

ost

TM

s to

sel

l agg

ress

ivel

y fo

r th

e ba

lanc

e of

‘97

. Com

bine

d w

ith t

he f

act

that

thi

s ye

ar’s

ach

ieve

men

t w

ill b

ecom

e ne

xt

year

’s c

halle

nge,

it

is na

tura

l fo

r sa

les

peop

le t

o ho

ld b

ack

in t

heir

perf

orm

ance

.

Sum

mar

y of

Focu

s G

roup

Obs

erva

tion

Not

es:

0 B

ased

on

the

curr

ent

syst

ems

chal

leng

es a

nd t

he p

oor

sale

s nu

mbe

rs,

TM

s ar

e w

ritin

g of

f th

e re

st o

f th

is y

ear,

wai

ting

for

1998

. TM

s fe

el t

hat

any

effo

rt n

ow w

ill n

ot b

e en

ough

fo

r th

em t

o ge

t co

mm

issi

on t

his

year

and

will

onl

y hu

rt

them

in

1998

. 0 lr

nple

men

t a c

ompe

nsat

ion

syst

em t

hat

enco

urag

es T

Ms

to

wor

k ha

rd t

hrou

gh t

he b

alan

ce o

f ’9

7. T

his

prog

ram

will

ne

ed t

o re

war

d cu

rren

t ab

ove-

goal

per

form

ers.

INC

EN

TIV

ES

To

be a

n ef

fect

ive

mot

ivat

or,

ince

ntiv

es n

eed

to a

chie

ve a

po

sitiv

e va

lenc

e ba

sed

on

the

pote

ntia

l ga

in a

nd t

he

requ

ired

cha

lleng

e. R

ela-

tiv

e to

eac

h ot

her,

if th

e po

tent

ial

gain

is

too

little

or

the

chal

leng

e is

too

grea

t, th

en t

he i

ncen

tive

will

si

mpl

y fa

il to

mot

ivat

e.

10.

RO

LE

S/JO

BS

+ M

any

TM

s ar

e no

w u

ncle

ar a

bout

the

ir p

urpo

se-th

e re

sult

of c

onfl

ictin

g di

rect

ion

they

rec

eive

fro

m v

ario

us s

ourc

es i

n th

e or

gani

zatio

n.

Con

fusi

on e

xist

s am

ong

the

rank

s of

TM

s as

to

thei

r ro

le a

nd t

he b

est

use

of t

heir

time.

Thi

s m

akes

agg

ress

ive

actio

n an

d sk

illed

eff

ort

near

ly i

mpo

ssib

le.

Key

Ele

men

ts fo

r H

igh

Perf

orm

ance

Wor

k:

Man

y T

Ms

are

som

ewat

be

wild

ered

wit

h +

the w

aste

ful

man

ner

in w

hich

th

ey a

re u

tiliz

ed.

~ an

d in

effi

cien

cies

ar

e al

low

ed t

o L/

rem

ain

i+ni

tely

. .

. we (TMs)

mus

t no

t be

im

port

ant

enou

gh

to r

esol

ve t

hem

. W

hat

oth

er

conc

lusi

on c

an

you

dra

w?

5

Obv

iou

s co

nflic

ts

W

-J

m

Z

X 0 w

w

LJ

P

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

(con

tin

ued

)

Sum

mar

y of

Foc

us G

roup

Obs

erva

tion

Not

es:

0 T

M’s

foc

us d

rive

n by

“fl

avor

of

the

mon

th”

prog

ram

s ke

eps

the

TM

fro

m w

orki

ng a

bu

sine

ss p

lan.

T

Ms

feel

tha

t th

ey a

re n

ot a

ble

to r

un

the

ir o

wn

bus

ines

s. T

he

field

’s

perc

epti

on i

s th

at p

rom

o di

rect

ives

fly

in

the

face

of

thei

r m

arke

t pl

ans

as o

ppos

ed t

o su

ppor

ting

the

m

T

0 T

Ms

effo

rts

are

bein

g dr

iven

fro

m t

op d

own

impl

emen

tati

on o

f ac

tivi

ties

c

0 T

he a

mou

nt o

f ti

me

a TM

spe

nds

proa

ctiv

ely

selli

ng i

s re

duce

d si

gnif

ican

tly

due

to p

utti

ng

out

fires

and

com

mun

icat

ing

the

high

num

ber

of m

onth

ly “

prom

os”

. In

som

e ca

ses

thei

r $ 2

5 pr

oact

ive

selli

ng a

ctiv

itie

s ar

e re

duce

d by

as

muc

h as

30%

to

50%

of

thei

r ti

me.

- d 5 p 6

5 m

,-.

L - i

-

L

11.

RO

LE

S/JO

BS +

Dire

ctio

n is

pro

vide

d to

the

fie

ld s

ales

forc

e w

itho

ut re

gard

for

Wor

kloa

d, s

uch

that

TM

s ar

e ro

utin

ely

dire

cted

to

do m

ore

wor

k th

at t

here

is

tim

e av

aila

ble.

Mak

ing

unre

ason

able

dem

ands

of T

Ms

crea

tes

frus

trat

ion

and

redu

ces

mot

ivat

ion,

and

gen

eral

ly

lead

s to

was

ted

tim

e an

d ef

fort,

and

unp

rofe

ssio

nal

beha

vior

.

Sum

mar

y of

Foc

us G

roup

Obs

erva

tion

Not

es:

0 T

he fi

eld

expe

rien

ces

Wor

kloa

d m

anag

emen

t as

im

plem

entin

g all

the

pro

gram

s fr

om D

etro

it

wit

h av

aila

ble

reso

urce

s; n

ot c

hoos

ing

the

prog

ram

s ba

sed

on i

mpa

ct t

o th

eir

sale

s go

al

0 T

M’s

fo

cus

driv

en b

y fl

avor

of

the

mon

th

prog

ram

s ke

eps

the

TM f

rom

wor

king

a b

usi-

ne

ss p

lan.

TM

s fe

el t

hat

they

are

not

abl

e to

ru

n th

eir

own

busi

ness

. T

he fi

eld’

s pe

rcep

tion

is th

at p

rom

o di

rect

ives

fly

in

the

face

of

thei

r m

arke

t pl

ans

as o

ppos

ed t

o su

ppor

ting

the

m

0 T

Ms

effo

rts

are

bein

g dr

iven

fro

m t

op d

own

impl

emen

tati

on o

f ac

tiviti

es

0 T

he n

umbe

r of

pro

gram

s ro

lled

out

and

fol-

lo

wed

up

on b

y se

nior

man

agem

ent

is d

ebili

- ta

ting

to t

he T

Ms

JOB

SA

TIS

FAC

TIO

N

Peop

le w

ork

to m

eet

four

bas

ic n

eeds

, an

d ar

e sa

tisfie

d w

ith t

heir

wor

k an

d co

mpe

lled

to p

erfo

rm b

ased

on

how

wel

l th

ese

need

s ar

e m

et:

1. S

ecur

ity-m

eet

basic

eco

nom

ic n

eeds

2.

Affi

liatio

n-fo

rm

rela

tions

hips

3.

Pow

er-d

o m

eani

ngfu

l w

ork

4. A

chie

vem

ent-a

ccom

plish

go

als

Whe

n pe

ople

’s w

ork

does

not

offe

r th

ese

attri

bute

s, t

hey

are

natu

rally

mot

ivat

ed t

o se

ek t

hem

else

whe

re-e

ither

fr

om a

ctiv

ity

outs

ide

of w

ork

(thu

s le

avin

g lim

ited

mot

ivat

ion

for

thei

r w

ork)

or

from

an

othe

r jo

b th

at d

oes

offe

r th

em.

0 C

orpo

rate

(M

arke

ting

, Nat

iona

l A

ccou

nts,

Pro

duct

Man

agem

ent,

etc.

) at

tem

pts

to s

up-

port

the

sal

es f

orce

is

met

wit

h re

sist

ance

, cyn

icis

m, a

nd h

osti

lity

. 0 B

ased

on

the

curr

ent

syst

ems

chal

leng

es a

nd t

he p

oor

sale

s nu

mbe

rs,

TM

s ar

e w

riti

ng o

ff

the

rest

of

this

yea

r, w

aitin

g fo

r 19

98.

TM

s fe

el t

hat

any

effo

rt n

ow w

ill n

ot b

e en

ough

fo

r th

em t

o ge

t a

com

mis

sion

thi

s ye

ar a

nd w

ill o

nly

hurt

the

m i

n 19

98.

%

w

bJ

\I

Q\

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

(con

tin

ued

)

12.

RO

LE

S/JO

BS

..)

Spar

ePar

ts’

com

plex

and

evo

lvin

g m

arke

t of

ferin

g, a

nd t

he v

alue

pro

posi

tion

it re

pres

ents

to

diff

eren

t m

arke

ts a

nd t

ypes

of

cust

omer

s, i

s a

subs

tant

ial

chal

leng

e th

at m

any

TM

s do

not

ful

ly g

rasp

or

impl

emen

t ef

fect

ivel

y . .

. cer

tain

ly n

ot t

o its

ful

lest

pot

entia

l.

The

volu

me

of p

rodu

cts

and

acco

unts

, var

iety

of

cust

omer

typ

es,

chal

leng

e of

new

com

petit

ors,

an

d ra

nge

of m

arke

t op

port

uniti

es i

s po

tent

ially

ove

rwhe

lmin

g to

eve

n ex

perie

nced

TM

s. T

he

cont

inuo

us f

lood

of

prom

otio

nal

initi

ativ

es, c

onsp

icuo

us l

ack

of c

ontr

ol a

nd n

umer

ous

dist

rac-

tio

ns f

aced

by

TMs

only

mak

es t

his

wor

se.

To c

ope

with

thi

s co

mpl

exity

and

cha

nge,

man

y T

Ms

focu

s on

onl

y ce

rtai

n op

port

uniti

es a

nd s

ellin

g str

ateg

ies-

ones

th

ey u

nder

stan

d an

d us

e

F 5 $ P F co

nfid

ently

-whi

ch

leav

es c

onsi

dera

ble

prim

e bu

sine

ss o

ppor

tuni

ty u

nder

deve

lope

d.

Sum

mar

y of

Foc

us G

roup

Obs

erva

tion

Not

es:

z 2 -

0 0

b’ 5 5

Th

e sa

les

forc

e do

es n

ot u

nde

rsta

nd

Spar

ePar

ts’

com

peti

tive

adv

anta

ge.

z C T

Ms

are

foll

owin

g u

p on

all

cust

omer

req

ues

ts r

egar

dles

s of

nee

d or

dol

lar

oppo

rtu

nit

y T

Ms

are

chal

leng

ed w

ith

ide

nti

fyin

g qu

alit

y Sp

areP

arts

opp

ortu

nit

ies

wit

hin

ter

rito

ries

of

2000

+ ac

cou

nts

. 0 T

he

TM

s ar

e n

ot p

rovi

din

g cu

stom

er s

ervi

ce

(mee

tin

g cu

stom

er n

eeds

), t

heir

eff

orts

are

m

ore

acti

vity

foc

use

d

0 T

he f

ield

per

ceiv

es t

hat

ever

y pr

ogra

m i

s a

#I

prio

rity

To

p lin

e sa

les

Spar

ePar

ts.c

om

Con

sign

men

t Zn

vent

ory

Pro

gram

P

rogr

ams

that

foc

us a

n A

and

B a

ccou

nts

acco

unts

0 W

ith

2000

acc

ount

s it

is d

iffic

ult

to k

now

whi

ch a

ccou

nts

to g

o to

and

whe

re t

o g

o w

ithi

n

0 T

Ms

are

choo

sing

acc

ount

s by

his

tory

, no

t op

port

unit

y 0 S

ales

peo

ple

are

oper

atin

g at

a l

evel

of

effe

ctiv

enes

s an

d ef

ficie

ncy

that

is

belo

w t

heir

po

tent

ial

a

w

<

00

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

(con

tin

ued

)

DSM

s T

Ms

Fre

quen

tly

22%

22

%

Spar

ePar

ts is

und

erca

pita

lizin

g R

egul

arly

33

%

20%

4

its

fiel

d sa

les

forc

e in

vest

men

t,

As

Nee

ded

0%

14

%

in p

art

by p

ayin

g re

lati

vely

In

freq

uent

ly

0 Yo

18%

lit

tle

atte

ntio

n to

the

dev

elop

- R

arel

y 44

%

23%

/ m

ent

of i

ts p

oten

tial

. N

ever

0 Y

o 4

yo

/

DSM

s F

requ

entl

y 1 1

Yo

As

Nee

ded

22%

In

freq

uent

ly

0%

Reg

ular

ly

44 yo

13.

TASK

S/SK

ILLS

+ M

any

TM

s la

ck e

xper

ienc

e an

d ex

pert

ise

in e

ffec

tive

terr

itory

dev

elop

men

t, an

d th

ey a

re g

iven

litt

le o

r no

enc

oura

gem

ent

and

supp

ort f

or d

evel

opin

g a

mor

e st

rate

gic

focu

s to

the

ir d

evel

opm

ent

of S

pare

Part

s' bu

sine

ss p

oten

tial.

4

P

5 z r. 5 g ?

- - Z

I

4

-

Ther

e is

wid

e va

riat

ion

amon

g T

Ms

in t

heir

app

roac

hes

to t

erri

tory

dev

elop

men

t, an

d m

ost

of th

ese

stra

tegi

es a

nd m

etho

ds a

re c

apab

le o

f su

bsta

ntia

l im

prov

emen

t. A

cont

inuo

us f

low

of

prom

otio

nal

dire

ctiv

es t

o im

plem

ent

keep

s TM

s su

ffic

ient

ly b

usy

that

it

de-e

mph

asiz

es t

heir

re

spon

sibi

lity

to o

ptim

ize

thei

r pr

oduc

tivity

by

deve

lopi

ng th

e gr

eate

r bu

sine

ss o

ppor

tuni

ties

in

thei

r as

sign

ed t

errit

orie

s.

I

f. - * - - r r

Fre

quen

cy y

ou r

ecei

ve

mea

ning

ful

feed

back

on

yo

ur p

erfo

rman

ce:

Fre

quen

cy y

ou r

ecei

ve

help

ful

supp

ort

for

impr

ovin

g yo

ur w

ork

perf

orm

ance

:

Rar

ely

22 Yo

24

yo

Nev

er

0%

5%

14.

RESO

URC

ES +

TM

s ar

e as

ked

to p

erfo

rm a

t co

nsis

tent

ly h

ighe

r le

vels

in a

bus

ines

s sy

stem

th

at i

s be

com

ing

muc

h m

ore

com

plex

and

dem

andi

ng t

o ex

ecut

e, a

nd t

here

fore

req

uire

s of

th

em e

ven

mor

e pr

ofes

sion

al l

evel

s of

kn

owle

dge,

ski

lls a

nd a

ttit

ude

(i.e.

, pe

rson

al a

nd

prof

essi

onal

dev

elop

men

t).

Spar

ePar

ts h

as d

evel

oped

a v

ery

capa

ble

and

dedi

cate

d fie

ld s

ales

for

ce,

yet

with

out

prov

idin

g th

ese

peop

le w

ith t

ruly

hel

pful

and

sup

port

ive

trai

ning

and

dev

elop

men

t op

port

uniti

es t

he

Com

pany

rec

eive

s pe

rhap

s th

e m

inim

um le

vel o

f pe

rfor

man

ce f

or w

hich

the

y ar

e na

tura

lly c

apab

le.

Man

y TM

s la

ck e

xper

ienc

e an

d ex

perti

se in

effe

ctiv

e te

rrito

ry d

evel

opm

ent,

and

they

are

giv

en

little

or

no e

ncou

rage

men

t and

sup

port

for

dev

elop

ing

a m

ore

stra

tegi

c fo

cus

to th

eir

deve

lopm

ent

of S

pare

Parts

’ bu

sine

ss p

oten

tial.

Ther

e is

wid

e va

riat

ion

amon

g T

Ms

in t

heir

appr

oach

es t

o te

rrito

ry d

evel

opm

ent,

and

mos

t of

the

se s

trat

egie

s an

d m

etho

ds a

re c

apab

le o

f su

bsta

ntia

l im

prov

emen

t. A

cont

inuo

us f

low

of

prom

otio

nal

dire

ctiv

es to

impl

emen

t ke

eps

TM

s su

ffic

ient

ly

busy

tha

t it

de-e

mph

asiz

es t

heir

resp

onsi

bilit

y to

opt

imiz

e pr

oduc

tivity

by

deve

lopi

ng th

e gr

eate

r bu

sines

s op

port

uniti

es i

n th

eir

assi

gned

ter

ritor

ies.

$ z ;

rn

0

111.

AN

AL

YSI

S O

F R

ESE

AR

CH

FIN

DIN

GS

(con

tin

ued

)

Focu

s G

roup

Que

stio

nnai

re D

ata:

Add

ition

al t

rain

ing

and

skill

dev

elop

men

t th

at

wou

ld h

elp

you

the

mos

t to

im

prov

e yo

ur w

ork

perf

orm

ance

(co

mbi

ned

resp

onse

s in

ord

er o

f fr

eque

ncy)

TM

s Pr

oduc

t K

now

ledg

e 4-

TM

s ha

ve n

eeds

C

ompu

ter

Trai

ning

(SA

P, U

ltim

ate

& o

vera

ll sy

stem

s) - tude

tha

t ar

e no

t Ti

mem

erri

tory

Man

agem

ent

Mar

ket

Pene

trat

ion

Plan

ning

& I

mpl

emen

tatio

n Se

lling

Ski

lls

bein

g su

ppor

ted.

Pr

ofes

sion

al/P

erso

nal

Dev

elop

men

t F

It’

s no w

onde

r M

otiv

atio

nal

Spea

kers

(to

rais

e m

oral

e)

they

ask

, “D

oes

Neg

otia

tion

Skill

s /

anyb

ody

real

ly

Gov

ernm

ent

Con

trac

t Pr

ocur

emen

t an

d Pr

oces

sing

C

are

how

O

rgan

izat

ion

Skill

s (g

ettin

g or

gani

zed)

I

do m

y w

ork?

”

for

know

ledg

e,

skill

s an

d at

ti-

IV.

RE

CO

MM

EN

DA

TIO

NS

From

the

res

earc

h an

d an

alys

is c

ompl

eted

, w

e re

com

men

d m

anag

emen

t ta

ke t

he f

ollo

win

g ac

tions

to

re-

esta

blis

h its

incr

easi

ng r

ate

of s

ales

gro

wth

. . .

pote

ntia

lly a

t a

subs

tant

ially

gre

ater

rat

e th

an i

t ha

s be

en a

ccus

tom

ed.

We

utili

ze t

he s

ame

ente

rpri

se d

esig

n fr

amew

ork

to a

dd c

onte

xt a

nd c

larit

y to

th

ese

spec

ific

reco

mm

enda

tions

.

A.

MIS

SIO

N I) R

evita

lize

Spar

ePar

ts’

field

sal

es o

rgan

izat

ion

Befo

re s

ubst

antia

l pr

ogre

ss c

an b

e m

ade

to im

prov

e th

e sa

les

perf

orm

ance

of

Spar

ePar

ts’ v

ery

capa

ble

field

sal

es o

rgan

izat

ion,

man

agem

ent

will

nee

d to

res

tore

vita

lity

to i

ts m

embe

rs.

Stem

min

g fr

om a

la

ck o

f cl

arity

and

con

fiden

ce w

ith r

egar

d to

the

ir ro

le,

valu

e an

d fu

ture

, the

se p

eopl

e (in

divi

dual

ly

It is

eas

y, i

f no

t co

mm

on,

for

man

agem

ent

to u

nder

estim

ate

the

impa

ct o

n pe

ople

, pa

rtic

ular

ly

on th

e su

rviv

ors,

of

forc

ed o

rgan

izat

iona

l ch

ange

. Int

endi

ng t

o si

mpl

y m

ake

need

ed a

djus

tmen

ts t

o a

busin

ess

orga

niza

tion-

proc

esse

s, st

ruct

ure

and

polic

ies-

man

ager

s of

ten

disr

upt

the

less

visi

ble

aspe

cts

of h

uman

sys

tem

s th

at a

re c

ritic

al t

o ac

hiev

ing

high

lev

els

of w

ork

perf

orm

ance

. Sp

areP

arts

’ fie

ld s

ales

for

ce i

s op

erat

ing

wel

l be

low

its

pot

entia

l-ess

entia

lly

unde

rem

ploy

ed i

n lig

ht o

f its

cap

acity

. In

fin

anci

al te

rms,

the

orga

niza

tion

is an

und

er-p

erfo

rmin

g as

set i

n th

e co

ntex

t of

the

inv

estm

ent

repr

esen

ted

and

the

avai

labl

e m

arke

t op

port

unity

. M

anag

emen

t ne

eds

first

to

re-e

stab

lish,

with

com

plet

e cl

arity

, th

e pu

rpos

e an

d de

sign

of

the

Spar

ePar

ts f

ield

sal

es f

orce

. A

s th

e su

rviv

ing

orga

niza

tion

from

a c

orpo

rate

ini

tiativ

e to

car

ve o

ut

an e

lite

sale

s gr

oup

to f

ocus

on

high

-pot

entia

l ac

coun

ts,

this

org

aniz

atio

nal

unit

mus

t re

defin

e its

elf

from

sta

rt t

o fin

ish-fr

om

its m

issi

on a

nd s

trate

gy;

to i

ts p

roce

sses

, st

ruct

ure

and

orga

niza

tiona

l sy

stem

s; to

its

spec

ific

role

s, ta

sks

and

reso

urce

s-if

it in

tend

s to

per

form

at t

he h

igh

leve

ls to

whi

ch

its m

embe

rs a

re c

apab

le.

5 P

X z

and

as a

n or

gani

zatio

n) a

re p

erfo

rmin

g w

ell

belo

w t

heir

pote

ntia

l.

2

CI,

00

N

IV.

RE

CO

MM

EN

DA

TIO

NS

(con

tin

ued

)

B.

STR

AT

EG

Y +

Opt

imiz

e sa

les

forc

e po

tent

ial

by f

ocus

ing

on m

arke

t/cus

tom

er d

evel

opm

ent

Onc

e th

e in

tend

ed p

urpo

se o

f th

e fie

ld s

ales

org

aniz

atio

n is

def

ined

, th

en m

anag

emen

t ca

n de

velo

p a

stra

tegy

to

optim

ize

the

exec

utio

n of

thi

s fu

nctio

n.

The

curr

ent

sale

s fo

rce

has

man

y of

th

e ha

rd-t

o-fi

nd i

ngre

dien

ts (

capa

ble

peop

le,

stro

ng w

ork

ethi

c, w

ides

prea

d na

me

reco

gniti

on,

uniq

ue s

ervi

ce c

apab

ilitie

s, v

ersa

tile

valu

e pr

opos

ition

, an

d ot

hers

) th

at w

ould

all

ow i

t to

bec

ome

a po

wer

ful

mar

ketk

usto

mer

dev

elop

men

t m

achi

ne f

or

Spar

ePar

ts-th

at

is,

an o

rgan

izat

iona

l un

it fo

cusi

ng o

n th

e de

velo

pmen

t of

hig

her-

valu

e-ad

ding

pu

rcha

se p

oten

tial t

hrou

ghou

t th

e m

arke

tpla

ce.

In t

his

capa

city

, the

sal

es f

orce

wou

ld g

ive

Spar

ePar

ts

Alte

rnat

ivel

y, t

he s

ales

for

ce c

ould

foc

us o

n ex

ecut

ing

spec

ial

mar

ket

prom

otio

ns t

o en

hanc

e th

e op

tions

ava

ilabl

e to

Spa

rePa

rts’

corp

orat

e m

arke

ting

func

tion.

Ano

ther

opt

ion

is t

o de

dica

te t

his

orga

niza

tion

to tr

oubl

esho

otin

g se

rvic

e pr

oble

ms

that

occ

ur f

or a

ccou

nts

that

rou

tinel

y or

der

from

Sp

areP

arts

with

out

the

prom

ptin

g of

a pe

rson

al s

ellin

g in

itiat

ive.

Or

the

sale

s fo

rce

coul

d do

all

of

thes

e co

mbi

ned,

whi

ch a

ppea

rs t

o us

to

be t

he c

urre

nt s

trate

gy.

If m

anag

emen

t w

ants

to

optim

ize

the

valu

e-cr

eatio

n po

tent

ial

of t

he c

urre

nt s

ales

for

ce a

nd t

o be

tter

tap

avai

labl

e m

arke

tkus

tom

er p

oten

tial

(of

acco

unts

tha

t re

quir

e a

pers

onal

sel

ling

effo

rt)-

in o

rder

to

reve

rse

the

decl

inin

g tr

end

in s

ales

gro

wth

-we

reco

mm

end

that

Spa

rePa

rts

focu

s its

ca

pabl

e fo

rce

of D

SMs

and

TM

s on

the

com

preh

ensi

ve ta

sk o

f de

velo

ping

mar

ketk

usto

mer

pot

entia

l. Th

is m

ay r

equi

re th

e pe

riodi

c st

affin

g of

the

se o

ther

fun

ctio

ns w

ith i

nter

ns,

prom

otio

nal

tem

ps,

or

serv

ice

agen

ts,

how

ever

the

inv

estm

ent

in t

his

supp

ort

will

be

muc

h m

ore

in l

ine

with

the

val

ue

crea

ted.

The

cur

rent

use

of

the

sale

s or

gani

zatio

n fo

r th

ese

anci

llary

fun

ctio

ns .

. . t

houg

h pr

obab

ly

a gr

eat

conv

enie

nce

to o

ther

fun

ctio

ns .

. . n

ot o

nly

dilu

tes

selli

ng e

ffec

tiven

ess,

mar

ket/c

usto

mer

7

$ f - f 5

a po

wer

ful

chan

nel

for

culti

vatin

g m

arke

tkus

tom

er p

oten

tial.

It p

artly

ser

ves

in t

his

role

now

.

r.

i

z

C

deve

lopm

ent,

and

sale

s gr

owth

, it

is fu

elin

g th

e cu

rren

t ro

le c

onfu

sion

, dis

empo

wer

men

t, de

mot

iva-

tio

n an

d di

ssat

isfa

ctio

n of

TM

s.

C. C

ULT

URE

-b

Obs

erve

, lis

ten

and

lear

n fr

om t

he o

rgan

izat

ion’

s cu

lture

Tech

nica

lly s

peak

ing,

no

dire

ct a

ctio

n ca

n be

mad

e to

cha

nge

cultu

re b

ecau

se i

t is,

by

defin

ition

, a

soci

al m

anife

stat

ion

or r

esul

t of

wha

t ex

ists

nat

ural

ly p

lus

hum

an b

ehav

ior

in r

espo

nse

to p

er-

ceiv

ed r

ealit

y.

Wha

t is

mos

t he

lpfu

l to

man

agem

ent

with

reg

ard

to th

eir

orga

niza

tion’

s cu

lture

is

the

pote

ntia

l to

obs

erve

, lis

ten

and

lear

n ab

out

it fr

om t

ime

to t

ime

thro

ugh

prof

essi

onal

ly c

ondu

cted

org

ani-

zatio

nal

surv

eys.

Use

d as

a “

litm

us t

est”

of

orga

niza

tiona

l sa

tisfa

ctio

n le

vels,

the

se s

urve

ys c

an

prov

ide

both

a b

ench

mar

k an

d pe

riodi

c in

dica

tions

of

the

cultu

ral i

mpa

ct o

f m

anag

emen

t’s d

ecisi

ons.

5 f 0 D.

PRO

CESS

+ C

reat

e a

syst

emat

ic p

roce

ss f

or e

ffec

tive

mar

ket/c

usto

mer

dev

elop

men

t X

w

Spar

ePar

ts c

an s

ubst

antia

lly in

crea

se th

e ac

hiev

emen

t of

its f

ield

sal

es o

rgan

izat

ion

with

the

crea

tion

of a

sys

tem

atic

pro

cess

for

effe

ctiv

e m

arke

tkus

tom

er d

evel

opm

ent.

At a

mac

ro le

vel,

such

a p

roce

ss

will

ass

ure

the

effe

ctiv

e an

d ef

ficie

nt in

tegr

atio

n of

mar

ketin

g an

d fie

ld s

ales

act

ivity

. And

at a

mic

ro

level,

it w

ill p

rovi

de s

ales

peo

ple

with

bes

t-pra

ctic

e m

etho

ds f

or v

alue

cre

atio

n, te

rrito

ry d

evel

opm

ent,

mar

ketk

usto

mer

dev

elop

men

t, an

d se

lling

and

ser

vici

ng c

usto

mer

s. E

ffec

tivel

y de

ploy

ed,

this

sy

stem

atic

pro

cess

will

hel

p fie

ld s

ales

peo

ple

know

whe

re a

nd h

ow to

bes

t spe

nd th

eir

time;

whe

re,

who

, wha

t and

how

they

can

bes

t sel

l Spa

rePa

rts’ v

alue

pro

posi

tion;

whe

n an

d ho

w o

ther

fun

ctio

ns

can

best

wor

k w

ith t

he f

ield

sal

es f

orce

, et

c.

w

00

w

IV.

RE

CO

MM

EN

DA

TIO

NS

(con

tin

ued

)

E.

We

coul

d no

t de

tect

wel

l-def

ined

pro

cess

es f

or a

ny f

ield

sal

es a

ctiv

ities

oth

er t

han

repo

rtin

g an

d pa

perw

ork,

and

IT

syst

em-b

ased

tas

ks.

As

a re

sult,

the

org

aniz

atio

n w

aste

s co

nsid

erab

le p

oten

tial,

time

and

othe

r re

sour

ces

as p

eopl

e go

abo

ut d

oing

“th

eir

thin

g.”

This

is

not

to s

ay t

hat

peop

le

seek

or

perf

orm

wel

l in

the

fie

ld s

ales

rol

e . .

. w

hich

is

high

ly d

iscr

etio

nary

by

natu

re .

. . w

ith

over

ly r

igid

pro

cedu

res,

how

ever

som

e un

ifor

m u

nder

stan

ding

of

wha

t w

orks

“be

tter”

doe

s pr

ovid

e ne

eded

dir

ectio

n an

d co

ordi

natio

n to

the

org

aniz

atio

n. S

uch

proc

ess

defi

nitio

n is

esse

ntia

l fo

r op

timiz

ing

the

wor

k pe

rfor

man

ce .

. . an

d sa

les

grow

th r

esul

ts .

. . of

the

gro

win

g fie

ld s

ales

forc

e.

And

in

the

shor

t te

rm,

it is

also

an

effe

ctiv

e ap

proa

ch t

o su

ppor

t D

SMs

and

TM

s as

they

stri

ve t

o de

velo

p th

eir

new

199

8-ac

coun

t te

rrito

ries.

STR

UC

TU

RE

-+ P

atte

rn l

ines

of

auth

ority

and

com

mun

icat

ion

to s

uppo

rt t

he f

ield

sal

es p

roce

ss

Onc

e a

miss

ion-

driv

en f

ield

sal

es p

roce

ss i

s de

sign

ed,

appr

opri

ate

stru

ctur

e an

d lin

es o

f au

thor

ity

and

com

mun

icat

ion

will

be

appa

rent

. M

anag

emen

t w

ill n

eed

to m

ake

a sp

ecia

l ef

fort

to

see

that

re

quire

d ch

ange

s to

cur

rent

com

mun

icat

ion

patte

rs a

re f

ully

im

plem

ente

d, a

s th

e na

tura

l te

nden

cy

of p

eopl

e w

ill b

e to

con

tinue

the

ir ex

istin

g be

havi

or.

Satis

fact

ory

alte

rnat

ives

can

be

help

ful

whe

n im

plem

entin

g th

ese

chan

ges.

F. O

RG

AN

IZA

TIO

NA

L S

YST

EM

S +

Des

ign

com

mun

icat

ion

and

ince

ntiv

e sy

stem

s to

opt

imiz

e fie

ld

sale

s pe

rfor

man

ce

Thre

e or

gani

zatio

nal-s

yste

m i

ssue

s w

arra

nt m

anag

emen

t’s a

ttent

ion:

0 C

omm

unic

atio

n be

twee

n D

etro

it an

d th

e fie

ld s

ales

org

aniz

atio

n 0 In

equi

ties

in t

he T

M in

cent

ive

com

pens

atio

n pr

ogra

m

0 L

ack

of e

ffec

tive

finan

cial

inc

entiv

e fo

r th

e ba

lanc

e of

’97

To o

ptim

ize

the

perf

orm

ance

of

field

sal

es p

eopl

e, d

irect

ive

and

inst

ruct

ive

com

mun

icat

ion

shou

ld

be c

onso

lidat

ed,

inte

grat

ed a

nd s

umm

ariz

ed in

to

a fo

rm t

hat r

equi

res

a m

inim

um o

f tim

e an

d ef

fort

to

dig

est,

and

it sh

ould

be

dist

ribu

ted

on a

reg

ular

sch

edul

e su

ch a

s w

eekl

y, b

iwee

kly

or m

onth

ly.

Com

mun

icat

ion

in th

is m

anne

r of

ten

prov

ides

a h

elpf

ul “

drum

beat

” fo

r ne

w in

form

atio

n an

d ch

ange

, an

d al

low

s sa

les

peop

le t

o ot

herw

ise

focu

s on

thei

r pr

inci

pal

func

tion.

Thi

s ob

viou

sly

requ

ires

som

e ef

fort

and

disc

iplin

e fr

om m

anag

emen

t, ho

wev

er t

he b

enef

its in

sal

es f

orce

effi

cien

cy a

nd p

erfo

rman

ce

gain

s ou

twei

gh t

he c

halle

nge

for

man

agem

ent.

The

curr

ent i

nequ

ities

in

TM

ince

ntiv

e co

mpe

nsat

ion

can

be r

esol

ved

by e

qual

izin

g th

e ch

alle

nge/

re

war

d va

lanc

e fo

r te

rrito

ry a

ssig

nmen

ts.

This

is

ofte

n ac

com

plis

hed

by r

elat

ing

ince

ntiv

es t

o pe

netr

atio

n or

sha

re o

f m

arke

t, or

oth

er c

halle

nge-

rela

tive

mea

sure

s. D

ue t

o th

e co

mpl

exity

of

Spar

ePar

ts’

busi

ness

and

the

lac

k of

defin

itive

inf

orm

atio

n on

mar

ket

pote

ntia

l, m

anag

emen

t ca

n us

e a

surr

ogat

e m

easu

re o

f “c

halle

nge”

for

eac

h te

rrito

ry.

For

inst

ance

, D

SMs

can

assi

gn e

ach

terr

itory

a m

easu

re (

i.e.,

fact

or,

inde

x, e

tc.)

of d

iffic

ulty

tha

t w

ould

the

n be

use

d to

det

erm

ine

the

rela

tive

sale

s gro

wth

req

uire

d to

ear

n a

spec

ific

amou

nt o

f in

cent

ive

com

pens

atio

n. D

SM p

eer

revi

ew

and

RSM

app

rova

l ca

n be

use

d to

ass

ure

cons

iste

ncy

in t

he a

ssig

nmen

t of

thes

e m

easu

res.

g

-3 T x 0

m

bJ

00

cI1

w

00

o\

IV.

RE

CO

MM

EN

DA

TIO

NS

(con

tin

ued

)

The

lack

of

effe

ctiv

e fi

nanc

ial

ince

ntiv

e fo

r th

e ba

lanc

e of

the

year

can

be

corr

ecte

d in

sev

eral

w

ays,

incl

udin

g re

duce

d ta

rget

s, s

econ

d-ha

lf-on

ly t

arge

ts, i

ncre

ased

inc

entiv

e ra

tes,

and

oth

ers.

Key

, ho

wev

er,

is th

at T

Ms

in f

act

feel

the

y ha

ve a

rea

l in

cent

ive

to w

ork

extr

a ha

rd a

nd t

hat

doin

g so

w

ill r

esul

t in

sal

es g

row

th t

hat

will

yie

ld i

ncen

tive

com

pens

atio

n. M

anag

emen

t ca

n lo

ok f

or a

de

mon

stra

ted

chan

ge i

n at

titu

de f

rom

“I’

ll w

ait

until

nex

t ye

ar”

to “

Get

out

of

my

way

” to

kno

w

that

the

cha

nges

mad

e w

ere

effe

ctiv

e.

F 3

G.

RO

LE/J

OB

+ L

et t

he f

ield

sal

es f

orce

do

thei

r “n

ew”

wor

k D z fJ - z

The

curr

ent

perf

orm

ance

bar

rier

s re

late

d to

the

TM

rol

e (u

ncle

ar p

urpo

se o

f T

Ms,

dis

rega

rd f

or

Wor

kloa

d pa

ram

eter

s, a

nd c

ompl

exity

of

TM

per

form

ance

cha

lleng

e) c

an b

est

be r

esol

ved

thro

ugh

the

effe

ctiv

e im

plem

enta

tion

of t

he M

issi

on, S

trate

gy, P

roce

ss,

and

Stru

ctur

e re

com

men

datio

ns a

lread

y no

ted.

The

“ne

w”

wor

k of

TM

s th

at w

ill e

mer

ge w

ill n

ot s

uffe

r fr

om th

ese

situ

atio

ns. A

ttem

pts

to

impr

ove

thes

e sp

ecifi

c si

tuat

ions

wit

h on

ly c

ompe

nsat

ing

chan

ges

will

not

wor

k be

caus

e th

is

appr

oach

doe

s no

t de

al w

ith t

he s

yste

m f

orce

s th

at c

reat

e th

ese

prob

lem

s.

S $ 2 3 L?

5

z 2 c

H.

TASK

/SK

ILL

+ E

stab

lish

cons

iste

nt o

ppor

tuni

ties

for

TM

and

DSM

sup

port

and

dev

elop

men

t

The

“ne

w w

ork”

of

TM

s (a

nd D

SMs)

will

nee

d to

be

supp

orte

d, b

oth

with

fee

dbac

k an

d co

achi

ng

from

thei

r D

SMs

(and

RSM

s), a

nd w

ith t

rain

ing

and

deve

lopm

ent

on th

e ne

w s

trat

egy

and

proc

ess

that

def

ine

this

wor

k. T

here

is c

onsi

dera

ble

vari

atio

n in

the

sup

port

rec

eive

d by

TM

s an

d D

SMs-

pr

obab

ly d

ue a

s m

uch

to t

he u

nder

stan

dabl

e di

ffer

ence

s in

per

sona

litie

s, s

kills

, an

d ex

peri

ence

of

thei

r m

anag

ers-

how

ever

th

is i

s un

acce

ptab

le w

hen

it r

esul

ts i

n a

nega

tive

impa

ct o

n w

ork

I.

perf

orm

ance

. N

ew s

tand

ards

for

gre

ater

con

sist

ency

and

qua

lity

of s

uppo

rt f

or t

he p

erfo

rman

ce o

f in

divi

dual

TM

s an

d D

SMs

will

yie

ld i

mpr

oved

sal

es p

erfo

rman

ce.

RESO

URC

ES +

Prov

ide

trai

ning

and

dev

elop

men

t th

at c

reat

es a

mea

sura

ble

impr

ovem

ent

in s

ales

pe

rfor

man

ce

The

kno

wle

dge,

ski

lls a

nd a

ttit

ude

of

indi

vidu

al T

Ms

and

DSM

s ha

s a

dire

ct i

mpa

ct o

n th

e ef

fect

iven

ess

of t

heir

wor

k. T

houg

h m

ost

trai

ning

doe

s no

t le

ad t

o su

bsta

ntia

l im

prov

emen

ts i

n pe

rfor

man

ce,

it is

wel

l w

ithin

the

ST&

D’s

cap

abili

ty t

o cr

eate

or

find

outs

tand

ing

trai

ning

and

de

velo

pmen

t pr

ogra

mm

ing

that

will

mak

e a

dram

atic

diff

eren

ce.

We

reco

gniz

e th

at r

esou

rces

are

gen

eral

ly a

con

stra

inin

g fa

ctor

whe

n sa

les

forc

e su

ppor

t is

co

nsid

ered

. Non

ethe

less

, w

e re

com

men

d th

at m

anag

emen

t pr

ovid

e su

bsta

ntia

l tr

aini

ng d

evel

opm

ent

for

the

field

sal

es f

orce

and

dem

and

perf

orm

ance

im

prov

emen

t as

a r

esul

t. If

the

reso

urce

s ar

e no

t re

ason

ably

ava

ilabl

e, t

hen

redu

ce o

ther

for

ms

of su

ppor

t or

less

-pro

mis

ing

peop

le i

n or

der

to f

ree-

up

ade

quat

e re

sour

ces

to f

ully

sup

port

a v

ery

effe

ctiv

e sa

les

forc

e.

5 F x E

W

w

00

w

00

00

V.

AP

PE

ND

IX

This

App

endi

x co

ntai

ns t

he f

ollo

win

g re

sear

ch d

ata

sum

mar

ies

that

are

ref

eren

ced

thro

ugho

ut

this

rep

ort:

0 F

ocus

Gro

up P

artic

ipan

t Q

uest

ionn

aire

Dat

a 0 K

ey E

lem

ents

for

Hig

h Pe

rfor

man

ce W

ork

(by

Wes

t C

oast

DSM

s)

0 S

umm

ary

of F

ocus

Gro

up O

bser

vatio

n N

otes

(by

Bill

Shi

elds

) F 3 3.

FOC

US

GR

OU

P PA

RT

ICIP

AN

T Q

UE

STIO

NN

AIR

E D

AT

A

z 2 z g f fi z F

At t

he b

egin

ning

of

the

focu

s gr

oup

inte

rvie

ws,

DSM

s an

d T

Ms

[inte

rvie

wed

sep

arat

ely]

wer

e as

ked

to c

ompl

ete

a br

ief

ques

tionn

aire

. Th

is q

uest

ionn

aire

mak

es i

t po

ssib

le t

o ga

ther

con

side

rabl

y m

ore

info

rmat

ion

from

eac

h pa

rtici

pant

, to

col

lect

det

aile

d de

mog

raph

ic a

nd p

sych

ogra

phic

(i.e

., pe

rson

al

pref

eren

ce)

data

, an

d to

hea

r co

nsid

erab

ly m

ore

cand

id e

xpre

ssio

n be

caus

e of

its

fre

edom

fro

m t

he

pres

sure

s an

d in

hibi

tions

pre

vale

nt i

n op

en c

omm

unic

atio

n.

i

z c1

Yea

rs i

n cu

rren

t po

siti

on:

.5-2

ye

ars

2.5-

5 ye

ars

6-9

year

s 10

-27

year

s

DSM

s T

Ms

4 20

3

20

2 8

0 7

(all

in

Hou

ston

)

Tot

al r

espo

nden

ts

9 55

posi

tion

: .5

-2

year

s 0

2

6-9

year

s 3

12

28-3

5 ye

ars

0 1

Tot

al r

espo

nden

ts

9 55

z 7 m z Y

ears

wit

h Sp

areP

arts

in a

ny

DSM

s T

Ms

0

X ca

2.5-

5 ye

ars

1 24

10-2

7 ye

ars

5 16

W

\c)

V.

APP

EN

DIX

(co

nti

nu

ed)

0

Bigg

est

pote

ntia

l op

portu

nitie

s fo

r bu

sine

ss i

n yo

ur t

errit

ory:

C

ombi

ned

DSM

s &

TM

s M

id W

est

Wes

tern

C

urre

nt A

ccou

nts

40%

26

%

New

Car

Dea

lers

27

%

23%

R

epai

r Sh

ops

23%

23

%

New

Acc

ount

s 37

%

11%

Fe

dera

l G

over

nmen

t 13

%

26%

F F

Stat

e an

d C

ity (

loca

l) G

over

nmen

t 13

%

23%

Z

Indu

stria

l 10

%

17%

2

13%

11

%

z s C

omm

erci

al

f K

ey A

ccou

nts

0%

17%

10

%

4%

z fi

Ren

tals

? 5 0%

4

%

s D

SMs

TM

s c

Web

site

(Sp

areP

arts

.com

) 0 Y

o 9%

Sa

fety

Pro

duct

s 7 y

o 4%

5

Res

elle

rs

z

Farth

est

ahea

d yo

u pl

an y

our

wor

k:

12

wee

ks

0 Yo

22%

2 qu

arte

rs

33%

5%

1

year

3 3

O/O 4

O/O

5 ye

ars

1 1 Yo

0 Yo

1 m

onth

0 Y

o 42

%

1 qu

arte

r 2 2

O/O

27%

DSM

s Pr

inci

pal

obje

ctiv

es o

f yo

ur

posit

ion:

G

row

Sal

es R

even

ue

89%

M

anag

e Te

rrito

ry P

erso

nnel

89

%

Team

wor

k 55

%

44 70

Unc

over

Mar

ket

Dat

a an

d Tr

ends

Cus

tom

er R

elat

ions

D

evel

op N

ew B

usin

ess

Opp

ortu

nitie

s 22

%

Expe

nse,

Tim

e an

d Re

sour

ce M

gmt.

Supp

ort O

ther

Com

pany

Ini

tiativ

es

Dev

elop

New

Bus

ines

s O

ppor

tuni

ties

45%

22%

11

%

11 Yo

TM

s 85

%

42%

36

%

34%

14

%

Gro

w S

ales

Rev

enue

Mai

ntai

n C

urre

nt B

usin

ess

Teac

h C

usto

mer

s A

bout

Spa

repa

rts P

rodu

cts

Cus

tom

er R

elat

ions

Pr

omot

e Sp

ecia

ls &

Eve

nts

Unc

over

Mar

ket

Dat

a an

d Tr

ends

Te

amw

ork

13%

Expe

nse,

Tim

e an

d Re

sour

ce M

gmt.

Mee

t C

ompa

ny G

oals

, Pl

ans

& O

bjec

tives

Rep

orts

and

Pap

erw

ork

7 %

9 yo

9%

9%

7%

Pr

omot

e N

atio

nal

Acc

ount

Agr

eem

ents

5 a m z P

x

W

bJ

\o

h,

V.

APP

EN

DIX

(co

nti

nu

ed)

How

you

r w

ork

perf

orm

ance

D

SMs

is m

easu

red:

Sa

les

Gro

wth

90

%

33%

D

eliv

ery

on P

lans

, G

oals

and

Obj

ecti

ves

Nat

iona

l A

ccou

nt S

ales

11

%

TM

s Sa

les

Gro

wth

93

%

I

c F

Par

tici

pati

on i

n Sa

les

Pro

mot

ions

13

%

z

Nat

iona

l A

ccou

nt S

ales

N

ew L

eads

Clo

sed

7%

B F P

rodu

ct K

now

ledg

e 4 y

o G n

Sale

s E

xper

ienc

e 4

Yo

2 K

ey V

endo

r P

rodu

ct

4%

i

Num

ber

of C

alls

2

Yo

c.

Del

iver

y on

Pla

ns,

Goa

ls a

nd O

bjec

tive

s 33

%

1 1 Yo

2 z Z

N

umbe

r of

Pre

sent

atio

ns

4 yo

0

c

L

Tea

mw

ork

wit

h V

endo

rs

4 yo

-

Fre

quen

cy y

ou r

ecei

ve

mea

ning

ful

feed

back

on

yo

ur p

erfo

rman

ce:

DSM

s T

Ms

Fre

quen

tly

22%

22

%

Reg

ular

ly

33%

20

%

As

Nee

ded

0 Yo

14

%

Infr

eque

ntly

0

Yo

18%

R

arel

y 44

yo

23%

N

ever

0%

4%

Fre

quen

cy y

ou r

ecei

ve h

elpf

ul

DSMs

TM

s

wor

k pe

rfor

man

ce:

Reg

ular

ly

44 yo

16%

A

s N

eede

d 22

%

24 %

supp

ort

for

impr

ovin

g yo

ur

Fre

quen

tly

1 1 Yo

27

%

z- In

freq

uent

ly

0 Yo

4%

Rar

ely

22%

24

%

Z

Nev

er

0 %

5

yo X

7

m il w

w

\o

w

ch) u

P

V.

APP

EN

DIX

(co

nti

nu

ed)

Top

10

natu

ral

abili

ties

that

ar

e m

ost

help

ful

to y

ou i

n do

ing

your

cur

rent

wor

k M

otiv

ator

(c

ombi

ned

resp

onse

s in

ord

er

of i

mpo

rtan

ce):

G

ood

List

ener

DSM

s G

ood

Com

mun

icat

or (

verb

al)

Prof

essi

onal

App

roac

h

Team

Pla

yer

Res

ults

Ori

ente

d D

etai

l O

rien

ted

Org

aniz

ed

Goo

d Pe

ople

Ski

lls

Goo

d B

usin

ess

Sens

e

TM

s G

ood

With

Peo

ple

Prof

essi

onal

App

roac

h Se

lf-M

otiv

ated

G

ood

Com

mun

icat

or (

verb

al)

Focu

sed/

Goa

l-O

rien

ted

Perc

eptiv

e/R

ead

Situ

atio

ns W

ell

Faid

Ethi

cal

Self-

Star

tedD

riven

O

rgan

ized

/Det

aile

d G

ood

List

ener

Top

10 w

ork

skil

ls th

at a

re

mos

t he

lpfu

l to

you

in

doin

g yo

ur c

urre

nt w

ork

(com

bine

d re

spon

ses

in o

rder

of

freq

uenc

y):

DSM

s Pr

ojec

t M

anag

emen

t Pe

ople

Man

agem

ent

Com

mun

icat

ion

Org

aniz

atio

n Fi

nanc

ial

Ana

lysi

s Pr

esen

tatio

n Sa

les

Neg

otia

tion

Ach

ieve

men

t Te

amw

orki

ng

TM

s O

rgan

izat

ion

Proj

ect

Man

agem

ent

Ach

ieve

men

t C

ompu

ter

Sale

s R

elat

ions

hip

Com

mun

icat

ion

Pres

enta

tion

List

enin

g M

anag

emen

t

z ?

m

z

x 0

W

bJ

w

o\

V.

APP

EN

DIX

(co

nti

nu

ed)

Top

10

chal

leng

es t

hat

get

in

the

way

of

your

per

form

ance

. .

. tha

t pr

even

t yo

u fr

om

achi

evin

g ev

en m

ore

(com

bine

d re

spon

ses

in o

rder

of

fre

quen

cy):

DSM

s Q

uota

tions

(tim

e an

d en

ergy

it

take

s to

get

com

petit

ive

pric

ing)

M

eetin

gs (

take

way

too

muc

h tim

e fo

r a

field

sal

es j

ob)

Terr

itorie

s (s

ize

and

freq

uent

cha

nges

pre

vent

dev

elop

men

t)

Adm

inis

trat

ion

(lim

its ti

me

for

staf

f an

d cu

stom

ers)

M

arke

ting

Prom

otio

ns (

way

too

man

y &

oft

en l

ow-v

alue

) 1

Lack

of

Empo

wer

men

t (t

oo m

any

orde

rs t

o fo

llow

) O

pera

tiona

l C

halle

nges

(in

vent

ory,

com

pute

rs a

nd p

olic

ies)

D

irect

ion

(cha

nges

freq

uent

ly a

nd w

ithou

t no

tice)

Se

rvic

e St

aff

(una

ble

to s

erve

cus

tom

ers

prom

ptly

) R

esou

rces

(av

aila

ble

to s

uppo

rt lo

cal

deci

sion

s)

TM

s z n

Prod

uct

Ava

ilabi

lity

(not

of

the

right

inv

ento

ry f

or i

mpo

rtan

t ac

coun

ts)

z U

ltim

ate

Impl

emen

tatio

n (s

ervi

ce p

robl

ems

are

killi

ng n

ew b

usin

ess)

M

arke

ting

Prom

otio

ns (

too

man

y &

oft

en a

dis

trac

tion

from

dev

elop

men

t)

3 Se

rvic

e Le

vel

(ina

bilit

y to

pro

cess

and

fill

ord

ers

prom

ptly

and

acc

urat

ely)

r.

Pr

icin

g (g

ener

ally

not

com

petit

ive

for

deve

lope

d bu

sine

ss o

ppor

tuni

ties)

Q

uota

tions

(in

tern

al fi

ght

for

pric

ing

& s

low

tur

naro

und

time)

Se

rvic

e St

aff

(una

ble

to s

erve

cus

tom

ers

prom

ptly

) I/S

Com

pute

r Li

mita

tions

(em

ail a

nd d

ata

inac

cess

ible

rem

otel

y)

Lim

ited

Tim

e to

Sel

l (m

eetin

gs,

pape

rwor

k, p

rom

otio

ns,

serv

ice

prob

lem

s)

Low

Mor

ale

(sta

ff’s

tire

d . . . t

oo m

any

prob

lem

s, c

hang

es,

dire

ctio

ns)

C z F 2

$,

3

z

Z

3

C

Z

Add

ition

al t

rain

ing

and

skill

D

SMs

deve

lopm

ent

that

wou

ld h

elp

you

the

mos

t to

im

prov

e yo

ur

wor

k pe

rfor

man

ce (

com

bine

d re

spon

ses

in o

rder

of

freq

uenc

y)

Lead

ersh

ip a

nd T

eam

Bui

ldin

g Sk

ills

Selli

ng S

kills

M

arke

t Pe

netr

atio

n Pl

anni

ng &

Im

plem

enta

tion

Neg

otia

tion

Skill

s B

ranc

h O

pera

tions

M

otiv

atio

nal T

rain

ingh

uppo

rt

Fina

nce

Prod

uct

Kno

wle

dge

Pres

enta

tion

Skill

s Ti

mem

erri

tory

Man

agem

ent

Com

pute

r Tr

aini

ng (S

AP, U

ltim

ate

& o

vera

ll sy

stem

s)

List

enin

g Sk

ills

TM

s Pr

oduc

t K

now

ledg

e C

ompu

ter

Trai

ning

(SAP

, Ulti

mat

e &

ove

rall

syst

ems)

Ti

mem

emito

ry M

anag

emen

t M

arke

t Pe

netr

atio

n Pl

anni

ng &

Im

plem

enta

tion

Selli

ng S

kills

Pr

ofes

sion

al/P

erso

na1

Dev

elop

men

t M

otiv

atio

nal

Spea

kers

(to

rais

e m

oral

e)

Neg

otia

tion

Skill

s G

over

nmen

t C

ontr

act

Proc

urem

ent

and

Proc

essi

ng

Org

aniz

atio

n Sk

ills

(get

ting

orga

nize

d)

w

\o

‘\1

W

V.

AP

PE

ND

IX (

con

tin

ued

) w

\o

CQ

~ Sugg

estio

ns f

or r

emov

ing

the

DSM

s ba

rrie

rs t

o yo

ur h

ighe

r w

ork

perf

orm

ance

(co

mbi

ned

resp

onse

s in

ord

er o

f fr

eque

ncy)

:

Red

uce

Tim

e Sp

ent

in M

eetin

gs

Mak

e D

irec

tiona

l C

hang

es L

ess

Oft

en

Follo

w t

he A

IP P

roce

ss o

r A

band

on I

t Fo

cus

Res

ourc

es o

n th

e C

usto

mer

La

unch

Few

er I

nitia

tives

St

abili

ze U

ltim

ate

(or i

ts s

ervi

ce i

mpa

ct)

Prov

ide

Acc

urat

eNer

ifia

ble

Rep

ortin

g St

ream

line

and

Impr

ove

Quo

tatio

n Pr

oces

s C

reat

e a

Rea

listic

Sal

es P

lan

and

Stic

k w

ith I

t A

llow

Us

to b

e Bu

sines

s M

grs.

(sa

les

and

ops)

Em

pow

er U

s w

ith V

endo

rs a

nd P

ricin

g Im

prov

e Pr

oduc

t A

vaila

bilit

y (i

nven

tory

) A

utom

ate

Mon

thly

/Qua

rter

ly R

epor

ting

Impr

ove

Com

pute

r C

apab

ilitie

s In

crea

se S

ervi

ce S

taff

Red

uce

Tim

e Sp

ent

on R

epor

ting

and

Pape

rwor

k

F F z

TM

s M

ore

Serv

ice

Staf

f St

op H

eapi

ng o

n M

ore

Prom

otio

ns a

nd S

peci

als

Impr

ove

Prod

uct A

vaila

bilit

y (i

nven

tory

) Fi

x U

ltim

ate

Glit

ches

and

Spe

ed

Impr

ove

and

Redu

ce C

omm

unic

atio

ns (v

oice

mai

l, em

ail a

nd m

ail

from

Impr

oved

Com

pute

r C

apab

ilitie

s H

ire

Mor

e Ca

ll C

ente

r Re

ps

Let

Us

Wor

k w

ith V

endo

rs a

nd P

ricin

g C

reat

e a

Rea

listic

Nia

ble

Sale

s Pl

an a

nd S

tick

with

It

Adv

ance

d Li

stin

g of

Pro

mos

for

Pla

nnin

g Le

t Us

Focu

s on

Mor

e Lo

cal

Initi

ativ

es

Stre

amlin

e an

d Im

prov

e Q

uota

tion

Proc

ess

Esta

blis

h Pr

icin

g Co

nsis

tenc

y (n

ot o

ne-m

onth

spe

cial

s)

Redu

ce T

ime

Spen

t in

Mee

tings

A

llow

Mor

e Ti

me

for

Cus

tom

er R

elat

ions

hip

Build

ing

Use

On-

line

Lapt

op W

hile

Mak

ing

Sale

s Ca

lls

Full

Prod

uct

List

ing

on C

D

Aut

omat

e M

onth

ly a

nd Q

uart

erly

Rep

ortin

g Le

ss D

irect

ion

and

Cha

nges

C

reat

e a

Fast

er a

nd B

ette

r O

rder

Tak

ing

Syste

m

Re-o

pen

Loca

l Q

uote

s D

ept.

Clos

er C

oord

inat

ion

of S

ervi

ce S

taff

and

Sale

s M

oral

e Im

prov

emen

t

Det

roit)

e -J

rn

z x 0

V.

APP

EN

DIX

(co

nti

nu

ed)

KE

Y E

LE

ME

NT

S FO

R H

IGH

PE

RF

OR

MA

NC

E W

OR

K (

by W

est

Coa

st D

SMs)

The

Wes

t C

oast

DSM

s w

ere

aske

d to

ide

ntify

the

con

ditio

ns t

hat

fost

er h

igh

perf

orm

ance

wor

k,

and

then

to

indi

cate

of

the

wor

k of

thei

r w

e th

ink

back

to

the

thos

e ch

arac

teris

tics

are

thei

r re

spon

ses:

the

exte

nt t

o w

hich

the

se c

ondi

tions

are

cha

ract

eris

tic o

f th

eir

curr

ent

wor

k, a

nd

TMs.

The

con

ditio

ns t

hat

fost

er h

igh-

perf

orm

ance

wor

k be

com

e ev

iden

t to

us

if w

ork

situ

atio

n in

we

wer

e do

ing

our

best

wor

k ev

er, a

nd id

entif

y fr

om o

ur m

emor

y of

tha

t si

tuat

ion

that

hel

ped

or a

llow

ed u

s to

be

that

“hi

gh p

erfo

rmer

.” T

hese

Res

pons

es f

rom

the

Wes

t C

oast

DSM

s on

7/1

/97

401

i?!

P

0

N

V.

AP

PE

ND

IX (

con

tin

ued

)

SUM

MA

RY

OF

FOC

US

GR

OU

P O

BSE

RV

AT

ION

NO

TE

S (b

y B

ill S

hiel

ds)

The

fol

low

ing

outl

ine

sum

mar

izes

the

not

es t

aken

by

Bill

Shie

lds

who

obs

erve

d th

e fo

cus

grou

p di

scus

sion

s co

nduc

ted

with

Mid

Wes

t an

d W

este

rn R

egio

n D

SMs

and

TM

s on

Jun

e 30

th an

d Ju

ly l

",

1997

:

Fie

ld S

ales

Per

form

ance

Cha

lleng

e:

Sale

s ar

e gr

owin

g at

a d

ecre

asin

g ra

te d

espi

te f

ield

eff

orts

. Ter

rito

ry M

anag

ers

are

chal

leng

ed w

ith

focu

sing

on

activ

ities

tha

t will

hav

e th

e gr

eate

st im

pact

on

top

line

sale

s. D

ue to

cus

tom

er se

rvic

e is

sues

$

5 5 $ 5 3

2 p 2 - ac

coun

ts.

- < - i;

and

the

inab

ility

to

mee

t sa

les

goal

s th

e T

Ms

mor

ale

is at

an

all-t

ime

low

. z

Spec

ific

iss

ues

iden

tifie

d by

the

DSM

s an

d T

Ms

incl

ude:

0 T

Ms

are

chal

leng

ed w

ith i

dent

ifyin

g qu

ality

Spa

rePa

rts

oppo

rtun

ities

with

in t

erri

tori

es o

f 20

00+

0 T

he T

Ms

are

not

prov

idin

g cu

stom

er s

ervi

ce (

mee

ting

cust

omer

nee

ds),

thei

r ef

fort

s ar

e m

ore

0 S

ales

peo

ple

are

oper

atin

g at

a l

evel

of

effe

ctiv

enes

s an

d ef

ficie

ncy

that

is

belo

w t

heir

pot

entia

l 0 C

orpo

rate

(M

arke

ting,

Nat

iona

l A

ccou

nts,

Pro

duct

Man

agem

ent,

etc.

) at

tem

pts

to s

uppo

rt t

he

sale

s fo

rce

is m

et w

ith r

esis

tanc

e, c

ynic

ism

, an

d ho

stili

ty.

0 B

ased

on

the

curr

ent

syst

ems

chal

leng

es a

nd t

he p

oor

sale

s nu

mbe

rs,

TM

s ar

e w

ritin

g of

f th

e re

st o

f th

is y

ear,

wai

ting

for

1998

. TM

s fe

el t

hat

any

effo

rt n

ow w

ill n

ot b

e en

ough

for

the

m t

o ge

t co

mm

issi

on t

his

year

and

will

onl

y hu

rt t

hem

in

1998

-

activ

ity f

ocus

ed

0 T

he a

mou

nt o

f tim

e a

TM

spe

nds

proa

ctiv

ely

selli

ng i

s re

duce

d si

gnifi

cant

ly d

ue t

o pu

tting

out

fir

es a

nd c

omm

unic

atin

g th

e hi

gh n

umbe

r of

mon

thly

“pr

omos

”. I

n so

me

case

s th

eir

proa

ctiv

e se

lling

act

iviti

es a

re r

educ

ed b

y as

muc

h as

30%

to

50%

of

thei

r tim

e.

0 In

vent

ory

posi

tion

does

not

sup

port

the

loc

al c

usto

mer

’s n

eeds

lssu

es t

hat

cont

ribu

te t

o th

ese

prob

lem

s in

clud

e:

0 D

etro

it pr

ogra

ms

are

seen

as

bein

g so

bro

ad t

hat t

hey

do n

ot a

ddre

ss o

ppor

tuni

ties

that

are

spe

cific

to

loca

l te

rrito

ries

and

do n

ot f

ocus

on

sust

aine

d to

p-lin

e sa

les

grow

th.

0 S

ome

prog

ram

s ar

e se

en a

s su

ppor

ting

a de

partm

ent’s

goa

ls r

athe

r th

en s

uppo

rtin

g th

e TM

’s g

oal

of 7

% s

ales

gro

wth

(i.e

. Spa

rePa

rts.c

om)

0 T

he fi

eld

expe

rienc

es W

orkl

oad

man

agem

ent

as im

plem

entin

g all

the

prog

ram

s fr

om D

etro

it w

ith

avai

labl

e re

sour

ces;

not

cho

osin

g th

e pr

ogra

ms

base

d on

im

pact

to

thei

r sa

les

goal

0 T

M’s

foc

us d

riven

by

“fla

vor

of t

he m

onth

’’ pr

ogra

ms

keep

s th

e T

M f

rom

wor

king

a b

usin

ess

plan

. TM

s fe

el t

hat

they

are

not

abl

e to

run

the

ir ow

n bu

sine

ss.

The

field

’s p

erce

ptio

n is

that

pr

omo

dire

ctiv

es f

ly i

n th

e fa

ce o

f th

eir

mar

ket

plan

s as

opp

osed

to

supp

ortin

g th

em

TI

m

z a

0 T

Ms

effo

rts a

re b

eing

driv

en f

rom

top

dow

n im

plem

enta

tion

of a

ctiv

ities

0 T

he s

ales

for

ce d

oes

not

unde

rsta

nd S

pare

Parts

’ co

mpe

titiv

e ad

vant

age.

0 T

he c

urre

nt c

ompe

nsat

ion

plan

(la

ck o

f co

mm

issi

on d

olla

rs)

is fa

iling

to

mot

ivat

e T

Ms

0 T

he n

umbe

r of

pro

gram

s ro

lled

out

and

follo

wed

up

on b

y se

nior

man

agem

ent

is de

bilit

atin

g to

0 C

orpo

rate

ini

tiativ

es a

re p

erce

ived

to

be S

pare

Part

s fo

cuse

d, n

ot c

usto

mer

foc

used

0 T

he f

ield

per

ceiv

es t

hat

ever

y pr

ogra

m i

s a

#1 p

rior

ity

the

TMs

Top

line

sale

s Sp

areP

arts

.com

C

onsi

gnm

ent

Inve

ntor

y Pr

ogra

m

Prog

ram

s th

at f

ocus

an

A a

nd B

acc

ount

s

P

0

w

P

0

P

V.

APP

EN

DIX

(co

nti

nu

ed)

0 T

Ms

are

spen

ding

a l

arge

am

ount

of

time

putti

ng o

ut o

pera

tion

al f

ires

due

to U

ltim

ate

0 T

he l

ack

of u

nder

stan

ding

of

the

time

fram

e fo

r th

e U

ltim

ate

prob

lem

, or

the

val

ue o

f fu

ture

0 T

he n

umbe

rs l

acki

ng a

ny v

alid

ity w

hen

ther

e ar

e pr

oces

sed

only

con

trib

ute

to t

he T

Ms

mor

ale

0 W

ith 2

000

acco

unts

it

is di

ffic

ult

to k

now

whi

ch a

ccou

nts

to g

o to

and

whe

re t

o go

with

in

0 T

Ms

are

choo

sing

acc

ount

s by

his

tory

, no

t op

port

unit

y 0 N

on-U

ltim

ate

cust

omer

sup

port

is c

ompl

ex a

nd n

ot u

ser

frie

ndly

(i.e

. te

ch s

uppo

rt, q

uote

s, e

tc.)

upgr

ades

fro

m a

cus

tom

er s

ervi

ce s

tand

poin

t, is

cont

ribu

ting

to t

he m

oral

e is

sues

prob

lem

s

F ac

coun

ts

5 2

g

z

0 T

Ms

perc

eive

tha

t co

rpor

ate

is sa

ying

“sh

ut u

p ab

out

Ulti

mat

e an

d m

ake

mor

e ca

lls”

0 C

usto

mer

’s n

eeds

are

bei

ng l

ost

in t

he n

umbe

r of

pro

gram

s, t

he m

essa

ge o

f th

e pr

ogra

ms,

etc

. f > z

0 T

Ms

feel

tha

t D

etro

it is

telli

ng t

hem

to

mak

e 10

-15

calls

a d

ay (

this

wou

ld n

ot i

nclu

de c

alls

to

diff

eren

t co

ntac

ts a

t th

e sa

me

loca

tion)

and

tha

t th

e #

of c

alls

is

impo

rtan

t, no

t th

e qu

ality

of

the

calls

‘ 1/. 5 7 - Z r

0 T

Ms

are

follo

win

g up

on

all

cust

omer

req

uest

s re

gard

less

of

need

or

dolla

r op

port

unit

y 0 S

enio

r M

anag

emen

t may

be

send

ing

the

mes

sage

to

add

bodi

es t

o su

ppor

t cur

rent

cus

tom

er s

ervi

ce

need

s, bu

t R

OM

s m

ay n

ot b

elie

ve t

hat

they

can

.

Pos

sibl

e so

lutio

ns:

0 F

acili

tate

Wor

kloa

d m

anag

emen

t thr

ough

the

FTs

, PC

s an

d B

Zs.

Thi

s sh

ould

be

done

with

in t

he

load

ing

proc

ess/

pro

ject

man

agem

ent

proc

ess.

The

key

poi

nt is

to e

nabl

e th

e fie

ld t

o m

ake

deci

sion

s ba

sed

on t

heir

mar

ket

need

s

0 M

arke

t com

mitt

ee s

houl

d sh

ift f

rom

loa

ding

pro

mos

to

rolli

ng p

rogr

ams

that

foc

us o

n a

sust

aine

d co

mpe

titiv

e ad

vant

age

0 T

he p

rogr

ams

load

ed b

y th

e M

arke

t com

mitt

ee s

houl

d no

t ha

ve m

easu

re t

hat e

ncou

rage

the

foc

us

of t

he T

Ms

(ran

king

s, b

road

cast

ove

r vo

ice

mai

l, et

c.)

but

shou

ld b

e av

aila

ble

on re

ques

t to

asse

ss

the

effe

ctiv

enes

s of

the

im

plem

enta

tion

0 A

ll pr

ogra

ms

shou

ld b

e al

igne

d to

the

con

trib

utio

n th

e pr

ogra

m h

as t

o to

p lin

e sa

les

(not

## o

f si

gn-u

ps, #

# of

ord

ers

take

n, #

of

retr

o fi

ts, e

tc.)

as i

t so

le m

easu

re o

f fie

ld i

mpl

emen

tatio

n 0 P

rogr

ams

shou

ld b

e co

mm

unic

ated

so

that

the

Sal

es f

orce

can

qua

lify

cust

omer

opp

ortu

nitie

s,

iden

tify

cust

omer

nee

ds a

nd u

nder

stan

d th

e Sp

arep

arts

solu

tions

to m

eet t

he n

eed

(see

Opp

ortu

nity

Pr

ofile

s)

0 Im

plem

ent

a co

mpe

nsat

ion

syst

em t

hat

enco

urag

es T

Ms

to w

ork

hard

thr

ough

the

bal

ance

of

0 D

o no

t sh

are

num

bers

use

d to

ass

ess

a T

Ms

effe

ctiv

enes

s if

they

are

not

acc

urat

e 0 T

hird

and

fou

rth

quar

ter

expe

ctat

ions

sho

uld

refle

ct t

he r

eal

need

to

have

TM

s no

t ju

st f

ocus

ing

on i

ncre

asin

g sa

les

pene

trat

ion

but

also

on

prot

ectin

g bu

sine

ss t

hat

is t

hrea

tene

d by

cur

rent

cu

stom

er s

ervi

ce i

ssue

s 0 B

oth

sale

s an

d cu

stom

er s

ervi

ce e

ffor

ts s

houl

d be

alig

ned

to o

ppor

tuni

ties

that

will

hav

e th

e gr

eate

st i

mpa

ct o

n to

p lin

e sa

les.

0 R

educ

e no

n-va

lue

adde

d pa

per-

wor

khep

orts

0 C

omm

unic

ate

thor

ough

ly t

he p

roje

ct p

lan

for

Ulti

mat

e in

clud

ing

upda

tes

base

d on

cha

ngin

g ch

alle

nges

. Bu

ild a

n un

ders

tand

ing

of

the

pote

ntia

l va

lue

of U

ltim

ate

as a

com

petit

ive

serv

ice

adva

ntag

e on

ce t

he p

rogr

am i

s fu

lly i

mpl

emen

ted

and

upda

ted.

5 2 7

m

'97.

Thi

s pr

ogra

m w

ill n

eed

to r

ewar

d cu

rren

t ab

ove

goal

per

form

ers.

z z P

0

cn

Index

A function name, 292-294

Ability, application of human, function purpose, 290-291 goals, 277-278

46 intervention strategies, Adaptability, 45, 155 311-316 Advantage, competitive, 83-91 interview findings, 280-316 Andersen Consulting, 148 Aristotle, 129 Assessment (management

methods), 234-235 Assessment and diagnosis

(performance), 19 1-205 Authority, 8 Automation, 53, 72

B

Barney, Jay, 88-89 Beckhard, Richard, 23 Behavior, human, 47, 125

adaptation of, 155 group influence on, 23

Behaviorist methods, 231 Benchmarking study report,

data synopsis, 3 17-341 enterprise demographics,

function leader, 294-297

272-341

281-283

intra-organization alignment, 302

key roles, 307-309 methodology, 278-279 organizational

characteristics, 300-306, 308-309

organizational placement,

performance measures, 310 principal resources, 298-299 professional organization

reporting levels, 287-288 staffing, 299 strategic opportunities, 283 strengths and weaknesses,

triggering issues, 286-287

2 8 7-2 8 9

design, 303

316

Bennis, Warren, 23 Best practices, 272, 276

Bibbentuckers, 146 ineffectiveness of, 140-141

406

INDEX 407

Biological systems theory, 4 Boyd, Nancy, 89-90 Bureaucracy, 137

C

Capability, definition of, 49 Capital resources, 88-89 Causal look diagram, 203 Centralization, 8 Change

technology-induced, 26 whole-system, 26

Change management, stake-

Change process, Lewin’s, 23 Cinemark, 148 Classical management (or

organization) theory, 7 Classification of work, 144-156 Coca-Cola, 99-101 Columbo approach, 200 Command, unity of, 8 Compensation, definition of, 50 Competency

holder participation in, 23

characteristics, 259-261,

organizational, 89-90 support for development,

263, 265

81-83 Competitive advantage,

establishing organizational, 83-91

Complexity consulting, 256 of competencies, 90

Computers, personal, 4 Consideration, 252-253 Constructivist theories,

125-126

Consultants challenges, 246-250 compensation, 297 competency, 255-266 description, 240 knowledge, 265 maturity, 265 partnering with

political considerations, 258 professionalism, 253-254 roles, 240, 249-250,

selection, 26 1-266 temperament, 266 wisdom, 254, 265

management, 112-1 13

3 07-3 0 9

Consulting process, 250-254, 305

value-based, 11 1-1 15

freedom, 58 the new, 56-57

Consumer. See also Customer.

Continuous consulting

Control management style,

Corporate strategy, 84-91 Crafts, 5 Cross-training, 185 Culture, as design element,

Customer. See also Consumer. definition of, 49-50 relationships, 59-62, 146 value, maximizing, 60-61,

process, 251-254

233

133-134

148, 152

level of, 150-152 mass, 62 product/service, 56-60

Customization

408 HUMAN PERFORMANCr C O N S U L T I N L

D

Data synopsis, 3 17-341 Deadlines, 164 Dell Computer, 58, 146 Deming, J. Edwards, 14,

Departmentalization of work,

Departments, employment, 9 Design of work. See Work

Development efforts, 227-228 Development training, 187 Digital information

technology, 57-58 Direction, unity of, 8 Discipline, 8 Discretion, worker, 1 4 1-1 44,

work discretion scale, 154

129-1 3 1

137

design.

148-156

Disney World, 148 Division of labor, 8 Downsizing, 4, 83 Drucker, Peter, 4, 41, 79, 119,

121

E

Economic value-added (EVA). See Value-added.

Economies of scale, 53-54 Edict approach, 230-231 Emotions, 236 Employment departments,

establishment of, 9 Employment management, 7, 9 Employment shift, 56

Engineering-based methods,

Enterprise 157, 231

demographics, 281-283 design framework, 195-1 9 7 globalization of, 56 management process, 1 3 1 objectives, 171-1 72 strategy, 172, 181 structure, 132-1 37 subsystems, 132-136,

179-181, 182 operational subsystem,

organizational

strategic subsystem,

134-136

subsystem, 133-134

133-1 34 work systems, 43-46

natural order in, 128-139 Enterprises

implications of knowledge workers for, 61-63

nature of, 42-46 people and, 45 success of, 61

Entrepreneurial Work Design,

Equilibrium, 235-236 Equilibrium movement, 236 Equity, 8 Esprit de corps (principle), 8 Evaluation, 253

using value-added, 104-105 Exxon (ExxonMobil), 99-100

65-66

F

Factor assessment, 194, Empowerment management style, 233 201-203

INDEX 409

Fanuc (robot manufacturer),

Fayol, Henri, 7, 8, 119 Federal Express, 58, 146 Field theory, 23 Fifth Discipline, The, 129 Financial value. See also

Value and Value-added. accounting for, 98-102 comparison of major com-

creating, 93-1 15 creation potential, 99-101 giving managers information

regarding, 96-97 management’s role

regarding, 103 proving, 94-95

Flexibility job, 34 of hierarchy, 136

Force-field theory, 201 Ford, Henry, 9, 52 Frameworks

72

panies’ premiums, 99

enterprise design, 195-1 97 high performer, 198-1 99 whole work design,

Frederick the Great, 6 Function leader, 294-297 Function name, 292-294 Function purpose, 290-291 Functional principle, 7 Future Training, xviii

197-198

G

General Electric (GE),

Global competition, 55-56 99-100

H

Habit breaking, 236 Hansen, Gary, 87-88 Harvard University, 148 Heuristic scanning, 194 Hierarchy, in enterprise

Hierarchy of needs, Maslow’s,

High-discretion work, 149-152 High performance attributes,

structure, 132-138

80-8 1

162-1 63 defining for various jobs, 154

systems (HPWS), 32-35 High-performance work

design of, 124 High performer, 159-165,

Hiring, 187-188 Home Depot, 146 Human capital, 88 Human performance, new

Human performance

196, 198-199

perspective on, 119-127

consulting, 239, 245-246, 256, 263

improvement. See Performance improvement.

Human resource systems

Human performance

accounting for value of,

importance of, 101-102 productivity in, 73-74

Human work. See Work,

Humaneered work design, 127,

Humaneers, 168

98-1 02

human.

168, 170-189, 214, 216

410 H U M A N I’CKIORMANCI CONIlll r lNC

I

Industrial enterprise, history

Industrial Revolution, 5-6, 51, 53

Industry characteristics (type of workplace), 146-148

Information technology, evolution of, 4

Initiative, 8

of, 51-54

composing value-based proposals for, 113-1 14

evaluation using value- added, 104-105

Innovation, 45, 74

Instructional technology,

Intel, 99-100 Intellectual horsepower, 262,

International trade, 55-56 Intervention, 253 Intervention strategies,

Interview findings, 280-316 Interviewing (performance

assessment), 199-200 Involvement initiatives, 230,

Issue identification, 194,

creating environment for, 76

advances in, 4

265

311-316

232-233

195-20 1

Joint optimization, 175-1 79 Juran, Joseph, 14 Just-in-time production, 58

K

Knowledge application of, 46 as key economic resource,

Knowledge and service work, 120

10-11, 17-18, 42-46, 54, 5 5

customization and, 59-60 difference from production

and logistics work, 142-143

effective management of,

strategies for productivity 67, 123-124

in, 73 Knowledge and service

workers, 38-69 challenges for, 63-64 growing ranks of, 40-41 in production and logistics

industries, 144 management of, 41-42, 60 maximizing value-added

role of, 39-40 support requirements for,

technology and, 40

with, 62-63

124

J L

Jigsaw-puzzle metaphor,

Job flexibility, 34 Joblrole. See Role/job.

256-259 Labor, division of, 8 Lado, Augustine, 89-90 Lands’ End, 146

I N D E X 41 1

Learning creating environment for, 76 difference between training

experience-based, 23 responsibility for, 123-124

Learning environment, 184 Learning organization, 8 1-83 Lewin, Kurt, 22-23 Logistics workers, 39 Low-discretion work, 149, 150

and, 70

M

Machine bureaucracy, 137 Machine labor, 39

problems with, 140 Machine technology, 5-6 Machine Work Design, 65-66 Management

challenge facing today’s,

dialogue, 193-194 expectations, 236-238 future of, 124-126 methods, 121, 225-227 new approaches to, 41-42 new work of, 119-121 of knowledge and service

122-127

workers/specialists, 4 1, 60, 123-124

of knowledge-based work, 67 of people, rethinking,

of work, new approaches

partnering with, 112-1 13 principles, Fayol’s fourteen,

process of enterprise, 131

122-123

to, 63-66

7, 8

reports for, 114-1 15 role regarding creating

financial value, 103 support, 34, 239-242 system design, choosing,

systems, as design element,

technology, 4 theories

31-32, 145

134-1 35

classical, 7 emerging, 13-14

to increase productivity,

training, in human relations 69-92

skills, 21 Manager

competencies of, 89 description, 225 role in performance

improvement, 231-235 Managerial initiatives, 229 Maslow’s hierarchy of needs,

Mass customization, 62 Mass marketers, success of,

Mass production, 52 Mayo, Elton, 80 Mayo Clinic, 148 McCregor, Douglas, 23-24, 27 Mechanistic work, 157-158,

Mechanistic work systems,

Mechanized system design, 214 Microsoft, 99-100 Mintzberg, Henry, 64 Model, consulting process,

80-81

57

166, 171, 172

27-32, 43-46

250-251


Model T, mass production of,

Motivational problems, 21 52

N

New Rules: Searching for Self-fulfillment in a World Turned Upside Down, 79

Nissan Corporation, 62 Nonfinancial value, fallacies of

using argument for, 95-96

0

Operational service, 240-241 Operational subsystem, 134-

Optimized work systems, 33 Order, 8 Organic work, 158-159, 166,

Organic work systems, 27-32,

Organization design, 32-35,

136, 184-185

171, 172-173

43-46

64-66 and management,

innovations in, 21-26 Organization development, 23 Organization science, 17

Organizational developments in, 20-37

capital, 88-89 competitive advantage,

establishing, 83-9 1 placement, 287-289 strategy, 182 subsystem, 133-1 34,

technology, 167, 169-170 183-184, 212

theory, classical, 7

effective (per Eric Trist), 27 evolution of, 42 how to energize, 79-80 learning, 81-83 shift in importance of, 42

Output-based competencies, 90

Organizations

P

Partnering with management,

Peak performance, achieving,

Performance, 47-49

112-113

184-1 85

assessment and diagnosis,

challenges, 127, 190-205 factor assessment, 201-203 fundamental changes in

nature of, 50-51 impact of work design on,

key variables in, 48-49 measures, 3 10 optimization of, 73-74 support, 34 system diagramming,

191-205

130-1 32

203-205 Performance improvement, 25,

118-219 design, 208 first recorded attempts, 7 hierarchy, 2 17 history of, 9-11 importance of operational

objectives for initiatives, 97-98

industrial roots of, 3-19

INDEX 413

instruments of, 242-243 linking initiatives to

managerial methods, 229-230 opportunity for, 155-156 pilot testing, 208-209 principles, 235-236 rethinking, 126-127 standard solutions

(avoidance of), 209 strategies, 206-222 systemic approach, 21 1 systems approach, 138-139 valuing initiatives, 102-105 work design (weaknesses

work environment (weak-

financial effects of, 110

of), 214-217

nesses of), 212-213 Personal computers,

introduction of, 4 Personal interests,

subordination of, 8 Physical capital, 88 Porter, Michael, 88-89 Post-Capitalist Society, 41 Practice of Management , The,

Preparation, 253 Process

4, 119

as design element, 134-135 -based consulting function

consultation, 23, 244-245 -focused consultants,

-level design, 26

roles, 264

241-242

Process, structure, and management systems design, 214

Production

knowledge workers as

means of, 63-64 means of, 38-68

Production and logistics work,

difference from knowledge and service work,

in knowledge and service

productivity strategies for, 72

definition of, 69 discretionary nature of, 83 improving, 18, 22, 25, 40,

54 innovating processes for

increased, 75-76 management to increase,

meeting the challenge of,

shared responsibility for,

Professional Work Design,

Proposals, composing value- based initiative, 113-114

Psychology in the workplace, 21

43-46

142-1 43

industries, 144

Productivity, 183

69-92

72-76

74-75

64-66

Quality improvement initiatives, 14-15

R

Reciprocity, 80 Recruiting, 187-188

“Red bead” exercise,

Reengineering, 15-16 Deming’s, 129-130

business processes for

of work, 76-83

index, 296

increased productivity, 76

Relationship performance

Relationships with customers,

Remuneration, 8 Reports for management,

compiling, 114-1 15 Research Center for Group

Dynamics at MIT, 23 Resistance, 236 Resource-based competencies,

Resources, as design element,

Responsible autonomy, 26 Robots as workers, 72 Role

59-62

89-90

134-1 36

competence, 262, 265 definition of, 49

as design element, 134-136 level of work, 173-175, 197 level work design, 214

Role/j o b

S

Satisfaction, employee, 22 Scalar chain, 8, 63 Scale, economies of, 53-54 Schein, Edgar, 2 3 Scientific management, 9, 10 Selecting consultants, 261-266 Self-betterment, drive for, 80-81 Self-direction, 26

Senge, Peter, 129 Service process, 263, 304 Service workers. See

Knowledge and service workers.

Size, production increases in, 52 Smith, Adam, 80 Social science

development of, 4 influence of, 21

Socio-technical system, 26 “Sociological Department,”

Specialists, new emphasis on,

Specificity, 90 Speed, production increases

in, 52-53 Stability of tenure, 8 Staffing, 299 Standardization, 5 1-52

Henry Ford’s, 9

120-12 1

and training, 71 creates inefficiency, 6 2

Steam engine, introduction of,

Strategic subsystem, 133-134,

Strategy

53

182-183, 212

corporate, 84-91 for organizational

advantage, 86-91 Structure, as design element,

Subordination of personal

Support requirements for

Supportive competencies,

System alignment, 138

134-135

interests, 8

workers, 124

2 65-26 6

INDEX 415

System diagramming, 194,

Systemic initiatives, 230,

Systems theory biological, 4 general, 126

203-205

2 3 3-2 3 4

Systems thinking, 126, 128-132

T

Tacitness, 90 Task, as design element, 134,

136 Task level work design, 214 Task training, 185, 186 Taylor, Frederick, 9-1 1, 25-26,

77, 119, 137, 140-141, 155, 223

Team Work Design, 64-66 Teamwork, 26 Technology

impact of, 123 in automation, 53 -induced change, 26 information, 4 instructional, 4 interdependence with

people, 24-26 machine, 5-6 management, 4 robots, 72

Tenure, stability of, 8 Theories X and Y, 23-24, 27 Total Quality Management

(TQM), 15, 139 Training, 185, 186-187

and standardization, 71 difference between learning

and, 70

inadequacy of, 70-72,

institutionalization of, 11-12 misapplications of, 12-13

Training function, creation of,

Training initiatives, 230,

Transformation-based strategies, 90

Transformation stages, 306 Trist, Eric, 24-27

140-14 1

12-13

231-232

U

Uncontrollable challenges,

Unity of command, 8 Unity of direction, 8 UPS, 58

23 8-23 9

V

Value. See also Financial value, Nonfinancial value, and Value-added.

-based consulting, 11 1-1 15 -based initiative proposals,

definition of, 49, 102 maximizing customer, 60-61,

113-114

148, 152 Value-added, 103-104. See

also Financial value, Nonfinancial value, and Value.

benefits of adopting

benefits of calculating, company-wide, 104

107-1 0 8

416 H~JMAN PERFOKMANCF CONWI r iNL,

calculating, 105-1 11 creating, 18, 38-40 determining, 105-1 11 evaluating initiatives by

using, 104-105 maximizing with knowledge

workers, 62-63 Von Bertalanffy, Ludwig, 25

W

Wal-Mart, 58 Wealth of Nations, The, 80-81 Welfarism, 7, 9 Wernerfelt, Birger, 87-88 White-collar workers, 20, 29,

Whole-system change, 26 Whole work design, 165,

56, 77

171-1 8 1 design elements, 176-1 79 framework, 197-198

departmentalization of, 137 high-discretion, 149-1 52 high-performance, defining,

human, 47-51 low-discretion, 149, 150 types of, distinguishing,

Work classification, 143-156 Work design, 10, 210-211,

214-217. See also Humaneered work design.

Work

154

148-156

and organizations, 64-66 framework, 136-137 high-performance, 123-1 24 impact on performance,

130-132

new approaches, 63-66 Work discretion scale, 154 Work environment, 2 10,

Work management, 22-23 new approaches, 63-66

Work organization, 22-23 Work performance. See

Work processes, redesign of,

Work support, 213 Work system framework,

Work systems

212-23 3

Performance.

34, 76-81

2 14-2 15

high-performance (HPWS),

interdependence of people and technology in,

32-35

24-26 mechanistic and organic,

optimized, 33 Work teams, 34 Workers

26-32

ability to exercise discretion over work. See Discretion, worker.

benefits for, 54 fulfillment of, 79-80

Workers (focus on), 210, 211,

Workplace training. See

Wright, Peter, 89-90

2 17-2 19

Tr a i n i ng .

Y

Yankelovich, Daniel, 79

About the Author

James S . (Jim) Pepitone is chairman and chief scientist for PEPITONE BERKSHIRE PIAGET Worldwide (PEPITONE World- wide) and a 22-year veteran in management consulting. He is recognized as a pioneer and leading authority in human work- systems design. In the mid-l980s, Jim acquired the nickname “the architect of high-performance work.”

Jim is perhaps now best known for his work in establishing competitive advantage for major companies through the creation of substantial improvements in human performance, productivity, and employee satisfaction. Jim’s current work includes the formation and support of internal “performance consulting” functions within major companies, in part through the enhancement and repositioning of traditional corporate human resources and training/ HRD/OD functions. With his guidance, major corporations are substantially enhancing their capability ( i ) to develop employee competence, performance, and productivity, (i i) to generate continuous human performance improvement, and (ii i) to provide strategic performance improvement consulting internally.

In addition to a full schedule of client work, Jim directs the firm’s Advanced Human Performance Technology Lab and main- tains an aggressive schedule of research, lectures, and writing. He served on the adjunct faculty a t the Cox School of Business at Southern Methodist University for several years and has been a guest lecturer a t numerous colleges and universities. Jim has authored two seminal books in his field: Future Training: A Roadmap for Restructuring the Training Function (1995) and Improving Productivity: N e w Rules for Managing Knowledge- Based Work (2000).

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41 8 H U M A N PEIIFORMANCI CONUJI .TINC

Prior to consulting, Pepitone worked in industry as a market manager, VP of sales, and division general manager for major NASDAQ- and NYSE-listed firms. He has a bachelor’s degree in industrial management and an MBA from The University of Texas at Austin, and an MS in organization development from Pepperdine University.

Jim can be contacted a t his Dallas office:

James S. Pepitone Chairman and Chief Scientist PEPITONE BERKSHIRE PIAGET Worldwide Three Lincoln Centre, Suite 210 5430 LBJ Freeway Dallas, T X 75240 Phone (214) 343-3500 x300 Facsimile (214) 343-3519 [email protected] http://www.pepitone.com

Human Performance Consulting. Transforming Human Potential Into Productive Business Performance

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