ICANS 2011
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Transcript of ICANS 2011
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PERFORMANCE LEADERSHIP
I.C.A.N.S.
2011
Leading People for Greater Performance
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The Challenge:
The top challenges for leaders in 2011…
1. Excellence in execution
2. Improvements to profitability
3. Engaging workforce
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Canada shows a lack of urgency and leadership in resolving their productivity and competitiveness
issues.
The Situation:
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The Result:
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Our Objective Today
Translating Potential to Performance
PotentialFrom PerformanceTo
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The Role of Leaders
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“Key elements of Canada’s history and industrial structure may have nurtured a complacent business
culture.”Don Drummond, TD Bank
Execution remains the top challenge for
all organizational leaders.
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The Productivity Imperative
Productivity is often understood to be working harder or working longer.
“Nothing can be farther from the truth, it’s deriving more output from the same
amount of time and effort.”Don Drummond, TD Bank
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Where is performance going now?
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Approximately 78% of execution losses are due
to issues of people performance.
How can organizations support people to perform at higher levels to execute
against the strategy?
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Organizations achieve 63% of their potential performance!
HBR Study 2009
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Execution is more important than strategy – 85% of bottom line
results are due to people performance via execution than the
strategy itself.
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The leader who understands how to maximize return on execution depends on an
awareness of the strengths of the team’s talent in order to
execute the game plan.
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The levers to increase the return on execution are
business alignment and people performance.
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Define the strategic drivers
What are the performance
elements that if done better would most impact
the execution of the strategy (positions or
actions).
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Know Your People
The greater the leader’s insight into the
performance capability of the team (and individual members) the more likely an increase in execution
will occur.
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People Performance
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The performance leadership framework evaluates the three
fundamental elements of team/organizational performance:
The Leadership alignment
The Productive synergy
The Strategic Focus
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The Execution Advantage
The productivity economy will reward “do it smarter” organizations that build a better business model.
Smart organizations will increase their return on execution by focusing on drivers to achieve alignment and
productive synergy.
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The Performance
Leader
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Where do you focus to be an effective performance
leader?
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“Only when you know yourself and operate from your strengths can you achieve true
excellence as a manager.”
Peter Drucker
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What do people need to be successful in their new role as performance-based leaders?
“Help me understand what success is going to look like in my new role, show me with examples, help me think differently so I can apply these things to the development of my people and the appropriate influencing of the organization.”
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Skills most needed for performance leaders:
• Self-awareness and Emotional Intelligence
• Vision and Strategy• Communication• Tactical Management• Leading Others 3.0 – coaching,
delegating, and feedback
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The three steps to developing individual operational leadership:
• Individual– Know Yourself
Clarity
• Strategic – Know Where & Who
Focus • Tactical- Know What, When and How
Follow Through
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Becoming a Performance
Leader
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Organizational strategy is a learning process that includes five elements:
1. Assessing where we are2. Understanding who we are and
where we want to go3. Learning how to get there4. Making the journey5. Checking progress
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Leaders display performance leadership when they think, act,
and influence in ways that promote the sustainable
competitive advantage of the organization.
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Only 27% of organizations integrate strategy and
tactics.
Benchmarking Solutions Study
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Leaders need to focus on the strategic drivers of the organization …
• The relatively few determinants of sustainable competitive advantage for a particular organization in a particular industry or environment.
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Most organizations have 3 to 5 strategic drivers at any
point in time.
Drivers can change – or the relative emphasis – over
time.
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Business strategy is the pattern of choices an organization makes to
sustainable competitive advantage.
Leadership strategy describes the organizational and human capabilities needed to fulfill the business strategy
effectively.
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Strategic Thinking
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Strategic thinking revolves around the ability of a leader to help people make sense of the world around them – the challenges they collectively face and how they will face
them together.
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Strategic Acting
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Strategic acting is committing resources to
build sustainable competitive advantage.
Not every action is strategic – it is critical to apply actions that will
impact the strategic drivers of the organization.
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Strategic decisions always involve uncertainty …
The key is not to make quick decisions but to make timely decisions.
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Without strategic clarity and focus it is nearly impossible to make sound tactical decisions.
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Strategic Influencing
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Forging relationships inside and outside the organization, inviting
others to the process, building and sustaining momentum, and
purposefully using organizational systems and culture.
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Influence must be used in all directions … up to senior
executives, laterally to peers, down to reports, and outside to
stakeholders and customers.
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Key strategic influencing tactics…
-Influence others by involving them in the process
-Create common understanding, create champions, demonstrate others are valued
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Key strategic influencing tactics…
-Influence others by connecting on an emotional level
-Learn what is important to others
-Use the power of language-Connect to aspirations
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Developing Performance Leadership:
• Assessing where you are, to• Understand who you are and where
you want to go, to• Learn how to get there, to• Make the journey, and• Check your progress
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The Evolution of Strategic
Management
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Strategy arose as a managerial discipline in the 1960s.
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Models were developed to define
strategy.
Boston Consulting Group and McKinsey & Company were
key in developing frameworks to explain
strategy.
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The Definition of Strategy:
An integrated set of actions designed to create a sustainable advantage over competitors.
PotentialFrom PerformanceTo
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The Evolution of Strategic Management – four phases …
Potential
Performanc
e
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Planning routinely progresses through four discrete phases of development.
At each phase, a company adopts attitudes and gains capabilities needed
in the phases to come.
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Phase One
Financial Planning
Annual budgeting process to forecast revenue, costs, and capital needs over the next year.1
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Phase Two
Forecast-based Planning
Extend the financial budgeting beyond the one-year time horizon
Start using trend analysis, regression models, and simulation models2
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Phase Three
Externally Oriented Planning
Issues orientation – responsibility to lay out the key issues facing the organization3
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Attention is shifted externally to customers, suppliers, and competitors.
Resource allocation becomes dynamic and plans are adaptive
Portfolio analysis is used to focus on competitive attractiveness and strengths
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Phase Four
Strategic Management
Planning techniques are cascaded throughout the organization and strategic thinking is linked to operational decision making4
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Discussions are defined by tomorrow’s strategic issues rather
than today’s organizational structure
Systems are in place to negotiate trade-offs, review progress, and
motivate and reward performance
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The Performance
EdgeStrategy for a Bigger
Future
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For achievers and teams, the struggle is focus.
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The Dip Between Potential and Performance
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How do we bridge the gap between potential and
performance?Potential
Performance
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Strategy is the North Star that drives action and
performance.
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Strategy …
• Builds prepared minds• Provides a framework for effective
decision-making• Acts as a catalyst for team engagement
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STRATEGY is the real competitive advantage.
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Most individuals and teams don’t do strategy well:
• Only 8% of strategies achieve results as planned
• 37% of strategies fail outright• Teams assess leaders as 69%
effective at performing against plans
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Why is strategy so difficult?
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It is human nature to talk about the future and then
move directly to short-term tactics.
We skip strategy!
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Without strategy, we become distracted by…
• Shiny Object Syndrome• Commitment Creep
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The results:
• The short term takes over• The pace is accelerated• Work is reactive rather than proactive• We are tactical not strategic
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Defining Strategy:The plan that a team takes to differentiate itself positively from the competition using
its strengths to provide value to satisfy customer needs now and in the future.
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Strategy involves:• Clear, concise and measurable statement
of 3-5 objectives• Realistic assessment of key factors
guiding team actions• Description of key approaches used to
realize results
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We need to resist the urge to hit the ground running.
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The Strategy Perspective:Bridging the Performance
Gap
Diagnose before the cure
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The Strategy Triangle:Working the Sweet Spot
Understand the interaction of the three key influencers on your performance …
your team, your clients, and your competitors.
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The Strategic Sweet Spot
The strategic sweet spot of a company is where it meets customers’ needs in a way that rivals can’t, given the context in which it competes.
CONTEXT(Technology, Industry demographics,
regulation, and so on)
COMPETITORS’offerings
CUSTOMERS’needs
COMPANY’Scapabilities
SweetSpot
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The Strategic Drivers:The Art of Focus
Mindpower over manpower.
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Start with the end in mind and clarify your results – then work
back.
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Focus on five key strategies – gives a great feeling of
motivation for everyone.
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The Performance Scorecard:
Measuring for Success
“What gets measured gets better”
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The Performance Scorecard is an instrument to navigate your future success, and a means of effective communication and motivation.
You link cause and effect.
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The Strategic Roadmap
A two-page summary of your strategy.
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The solution to connect potential to performance is
to proactively set up the environment for success.
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The Strategic RoadmapThe Performance Scorecard
Critical to your success.
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The benefits:
• Create a winning team• Sharpen your client focus• Add value• Consistent and coordinated action
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The Performance Edge:
Mindset for progress not perfection.
Focus strategically to achieve best results.
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Creating A Vision
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If you want to be an effective
leader – at any level – you should pay attention to
vision.
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You’re busy managing others, delivering on objectives,
implementing plans, building a team, and focusing on financial performance – creating a vision
is not your priority.
Right?
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Leaders who communicate a strong vision are seen by their bosses and co-workers as more
effective.
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The Vision Advantage:
The content of your vision affects employees’ perception
of your organization. Your articulation of the vision affects
their perception of your leadership effectiveness.
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The Vision Advantage:
Vision content and communication give your
employees, colleagues, and other stakeholders a powerful
image of how you your organization is and how skilled
you are as a leader.
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The process of creating a clear and compelling vision is not widely understood.
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A strong vision is correlated with:
• The ability to lead change• Competence in strategic planning• Inspiring commitment• Having a strong executive image
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As a leadership characteristic, having vision usually entails the ability to come up with a direction and the ability to sell that direction.
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The Elements of a Compelling Vision:
• The Big Idea• The Values• The Story• The Growth Factor• The Change Factor
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Success in today’s organizations requires some
level of shared direction, alignment, and commitment
among people.
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• Direction is agreement on goals• Alignment is coordination of
work• Commitment is dedication to
success
The starting point comes from a leader’s vision.
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Whatever the size or scope of your work, leadership begins with defining and connecting
to a vision.
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The Big Idea:
1. Provides overall direction to employees and guides their work toward long-term goals
2. It represents the ideal state3. It speaks to the impact the
work and the peoplehave on others
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The Big Idea is the “ideological goal”
• What is the fundamental, enduring ideal on which your work is built?
• Source: DDI 2009
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This is element where leaders struggle the most
with vision.
• Executives tend to be too tactical rather than inspirational.
• An ideological goal is the strongest predictor of a strong vision – a vision statement should be exhilarating.
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Don’t describe the status quo.
Do express ideals.
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The Values
• The question for leaders is what deeply held values underpin – or should underpin- the daily life of the organization.
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Vision statements should represent the primary value – core values often focus on
people, customers, products, or business.
What are the values that liveat the core of your organization?
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Don’t focus on financials.
Do factor in people.
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The Story
“Five years ago today, this division began as a small offshoot when a
customer requested a customized order and we scrambled to pull it off –
because no one else could. Today we are the most innovative,
most profitable segment of the company.”
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Every powerful vision includes a frame of
reference – a story – that reveals something about the environment of the
business. It should touch on the past,
present, and future. It should resonate with the culture.
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What is your story?
• Don’t isolate goals.• Do create context.
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The Growth Factor
Growth is associated with success and seen as an essential for a strong vision.
What is important is defining growth so that it makes sense to the organization.
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Why are we growing?
Where are we growing?
How are we growing?
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Don’t be vague.
Do clarify expectations.
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The Change Factor
The vision should incorporate themes that reflect the changing times. How is the organization going from where it is to where it needs to be in the future? What will need to change and why?
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• Don’t ignore the future.
• Do describe the drivers of change.
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Putting it all together.
A clear and compelling vision that uses all five
factors in fewer than sixty words.
Think about the impact of the vision on employees
and customers.
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The strength of the vision is the relevance.
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The C-level View
75% of senior leaders selected developing and
communicating a strong and compelling vision as the critical factor for their
success.
Vision was seen as more important than financials,
talent, communications, and strategy.
CCL
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Using Images
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Using images connects better to your audience – it
stimulates thinking and opens up new
possibilities.
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The Visual Explorer
How will the world look different as a result of your
vision?
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Vision and Resilience
The quality of your vision and your ability to pitch your
vision will have an impact on your effectiveness as a
leader.
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Vision is also a powerful component of resilience – the ability to adjust and
recover from adversity, challenge, and change.
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As a leader, you have a role to play in creating the vision and helping bring it to life – one that brings tangible benefits to yourself and your organization.
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Organizational Performance
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Organizations face a daunting and seemingly
contradictory set of goals:
• Provide a differentiated client experience at lower costs
• Generate significant growth while managing the bottom line
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Organizations face a daunting and seemingly
contradictory set of goals:
• Use technology for greater efficiency without losing personal client connection
• Standardize and … customize
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The Common Element:
People – people are more than ever a source of critical skill and knowledge as well as the foundation for sustainable competitive advantage.
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23%
44%
25%
7%
EngagedEnrolledDisenchatedDisengaged
The Global Engagement Gap
Where does Canada stand?
Source: Towers Perrin (2009)
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The engagement gap can be defined as:
the difference between the discretionary effort that
employers need for competitive advantage and employers’
ability to elicit this effort from a significant portion of their
workforce.
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Workforce Engagement is a Normal Distribution
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The Economics of Engagement
Part 1
Improving the engagement – and in turn the performance – of an
employee has the potential to increase overall productivity by up
to 23% on average.
Source: Cascio (2009)
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The Economics of Engagement
Part 2
Approximately 68% of your employees have the potential to increase overall engagement and
leverage productivity.
Source: Cascio (2009)
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The Economics of Engagement
Part 3
The key question is not which talent group has the greatest value
but rather in which talent group would a change in performance
variation have the greatest impact?
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The Economics of Engagement
Part 4
Performance varies across jobs.
• The nature and scope of the job
• The relative value of variations in performance of the job
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The Economics of Engagement
Part 5
Potential engagement / productivity enhancement is position dependent
Low complexity position … 15% boost Moderate complexity position … 25% boost High complexity position … 46% boost
Source: Cascio (2009)
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The Economics of Engagement
What are the high complexity positions in your organization that can be most highly leveraged with
an increase in engagement to a boost in productivity?
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The Economics of Engagement
Invest in positions where the value of performance variance is the highest and the organization gains the most
strategic return.
Find the most pivotal position.
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Leaders play a pivotal role in the engagement equation:
The need for effective leadership at the top
The need for customizing the culture and work environment to support employee engagement
Putting employees under the same microscope as customers to take actions
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Effective Management
Practices
Customer Satisfactio
n
Employee Satisfaction
Drive
Enables Drive
Long-TermProfitability and Growth
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Continued business productivity growth today depends on
closing the engagement gap and maximizing employee
input.
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How Engagement Affects Financial Performance
Source: Towers Perrin (2009)
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How engagement
affects individual
performance …
Source: Towers Perrin (2009)
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How Employees Rate Leaders on Key Engagement Supports
Source: Towers Perrin (2009)
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The Leadership Divide
Many senior leaders began their careers in specific professional /
technical positions with key analytical and rational skills.
Empathy, communication, and gaining perspective may not be
key strengths even now.
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The Five Steps
1. Start with the end in mind2. Specify the skills needed3. Develop the right skills the
right way4. Support the transition of pivot
positions5. Engage and inspire people to
meet business needs
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The Pivotal Investment
Overall workforce engagement can be increased with the greatest leverage through the right investment – leaders are the critical supporters needed for this investment.
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The Pivotal Investment
To move the productivity curve outward …
“An investment in knowledge pays the
best interest.”Benjamin Franklin
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People Performance
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People Performance
The leader’s ability to measure and manage the team’s (and
individual’s) instinctive approach to the drivers of the strategy will close
the gap.
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The Performance Process
Motivation Motivation
Reason
ProductiveAction
Affective Conative Cognitive
WillInstinctsInstincts
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The Five-Factor Framework™:Improving Execution through
People Performance
1. Define the strategic drivers2. Measure the instinctive leadership
approach3. Measure & assess the instinctive culture
to support the strategy and the organizational culture
4. Assess the organizational instinctive performance map
5. Identify and close gaps
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Define the strategic drivers
What are the performance
elements that if done better would most impact
the execution of the strategy (positions or
actions).
1
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Measure the
leader’s instinctive approach
2
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Measure the instinctive strategy culture
3
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Measure the instinctive organizational culture
3
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Measure the instinctive strategy and
organizational culture 3
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Assess the organizational instinctive performance
map 4
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Identify and close instinctive performance
gaps5
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Insights and Actions:
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