When will we understand?

I conducted an informal survey and found that most managers do not understand what their most important function is at work. Most managers feel that their most important function is to provide revenue, reduce costs or maintain margins. They do not realize that those things come from the results being produced by the organization through its people and processes not through anything else. Those metrics usually reflect the effectiveness of the organization.

So what makes an organization effective? Plain and simple; when a company focuses on it’s people and there is enhanced performance and improved productivity. In an article that I recently read, it was noted that in the software development industry, turnover rates approached 20%. Yet one company is that industry exhibited less than a 5% turnover! Imagine the savings to the company in terms of time saved in recruiting, training, and just plain managing.

We continue to find that middle management is most important ingredient to preserve good to great employees. First, an employee’s boss is the company to them and they will leave if they don’t receive positive feedback from the boss. Secondly, positive feedback must be timely. Most managers don’t realize that their role must be focused on their people and their performance is a direct reflection of their people’s success. People need to be engaged and if they aren’t engaged, they move on to another job. People will not stay in a job where engagement is not fulfilled, period. So what are you doing about it?

Your primary role as a manager is the development of your people. The CEO, President, HR Professional, and any decision maker in the company must realize that management training is the most important ingredient they can provide because the managers’ tasks revolve around making sure their people are well served and they understand the value of their work. If you don’t have an engaged workforce, then you have a workforce with their eyes on the door. Most managers do not exhibit good interpersonal skills with their staff but companies still are not responding to their training needs.

Please forward this article to back up the need for training.

Flight of the High Performer

It is estimated that 47 percent of high performing employees are actively looking for new jobs while just 19 percent of low performers and only 25 percent of middle performers said they were looking.[1]

Failing to take action against the potential loss of talent poses significant risks to companies. When your best people leave, it has been demonstrated that revenue drops, quality suffers, and problems increase.

Recommended Solutions:

• Implement a Career or Professional Development Process including Assessments to demonstrate areas of improvement or interests

• Implement Leadership Modeling or Leadership Training Processes that demonstrate the company’s interest and commitment to the growth and development of the high potential

• Implement a communication vehicle or forum for personal development and presentation of innovation

• Cross train in areas of interest as opposed to their current role and responsibility

What other suggestions would you have for solutions?

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[1]Flight of the High Performers, Risk & Insurance (10/08) Vol 19, No. 12, P.32 Michael O’brien

Where is your Focus? People or Process

In a recent article in the December 22nd issue of Investor’s Business Daily, Kevin Harlin points out that Employment consulting firms say it is vital to track and nurture promising leadership candidates even though the economy is sluggish. Steve Krupp, partner and leader of the executive talent management practice at Delta Organization & Leadership, asserts that if a company fails to engage and communicate its top performers, they might be inclined to depart.

Rather than focusing on your processes, focus on your people. They are your biggest asset. Remember that turnover can cost you double of just one employee’s salary. A survey from Delta found that most U.S. companies fail to monitor their best performers, even fewer communicate with these employees, and few top executives support such initiatives.

PPG Industries, a global glass, paint, and chemical firm, has been tracking its best employees for about a decade. Roughly 30 percent of workers are regarded as top talent, and just 1 percent is deemed suitable for the CEO position. Identified employees get first priority for training, special projects, and responsibilities. Executives also meet with these employees from time to time at informal settings like breakfast or lunch. Global business software firm SAP provides potential leaders with six-month fellowships in another division, typically in a different location, to ensure that these employees have adequate insight into the company.
The above synopsis of the article that appeared in Investor’s Business Daily demonstrates the need to evaluate talent from the first day of hire in terms of recognizing potential and people development as the priority for any organization. I really question whether companies today are focused on their future leadership and understand the need to develop people’s potential.

Innovative Leadership offers an Assessment Process called the Achiever Series that can not only assist not only with people development but also compliment certain aspects of succession planning, downsizing or transformation.

We are a company that is focused on helping companies develop their potential of their people that will result in organizational effectiveness. Please call us at your convenience to discuss our Assessment Processes that can make the difference in the future of your company at 609.390.2830.

Top End Turnover

Corporate Executives are on the move…..out the door. CEO turnover increased by 50% in 2007 compared to the previous year. Nearly a third of the departures were against the CEO’s will. The average tenure of CEO’s is down almost 25%. Tradition reasons accounted for some of the terminations but non-traditional reasons accounted for majority of departures. Turnover was highest in the telecommunications industry and financial services businesses. It should also be noted that this group also includes companies involved in the sub-prime meltdown.

In a separate survey printed in the Philadelphia Bizjournal (October 26-November 1, 2007), the CEO’s were asked to rate their own strengths and weaknesses with the following results:
Ranking

Strengths Weaknesses
Vision 1 6
Sales and Marketing 2 (tie) 5
Product Innovation 3 3
Managing People 2 (tie) 4
Information Technologies 5 2
Financial Strategies 4 1

It appears that the CEO has the vision but doesn’t always get there. I question whether or not the CEO has created a “dashboard” for himself that reflects both strengths and weaknesses and is using metrics to formulate benchmarks and to consistency re-evaluate his plan of action and implementation process along the way. It seems like many CEO’s are stuck when it comes to both the planning and implementation process. The statistics tell me that the CEO has a strong sense of awareness but for some reason the plan and implementation process are not giving the CEO the desired results.
I wrote a previous Blog on the formation of “dashboards” and this data tends to lend credence on the fact that CEO’s may not be focused on not only the “things that matter most”, but also don’t measure and monitor the metrics or trends that define the success of the organization. It could also relate that other key members of the executive leadership team are focused on the results that their departments contribute to the overall success of the organization. Sounds like our alignment with strategic objectives must be off or even non-existent. IF the disconnect occurs between the CEO and the people who work in the organization, then the end result is a “disconnect” between the CEO and the Board of Directors resulting in termination or resignation. Basically, we are back to the old adage, “Is it the People or the Process?” You can blame it on one or the other, but it is usually a combination of performance and people resulting in an ineffective process of measurement.
CEO’s better learn how leading companies measure performance and offer a goal and results-oriented culture. Ok, CEO’s, “Start your engines, monitor your dashboard, and stay focused on the finish line”…