Situation: A service company has been debating internally about which metrics they should use to evaluate company performance. This is important because it ties both to strategy, marketing, and bonus compensation. The CEO seeks advice based on the experience of others. What are good metrics for a service company?
Advice from the CEOs:
For a service company the key goal is delivery of a consistent quality product/service to the customer – as a company rather than as individual performers.
Instituting regular activities or meetings to infuse the company’s “special sauce” to projects will help assure consistent quality of service delivery.
To generate support and consensus within the company, ask employees what they would do to develop metrics to assure delivery of quality.
Have a clear view in mind of what the metrics should achieve – the result rather than the fully detailed process – before initiating this exercise and articulate this result as the desired objective.
Remain open to ideas from the group.
Use the exercise to establish a shared vision and to generate the best possible set of metrics to support the desired result.
Once both the metrics and a methodology for delivering the result have been selected – for example, weekly performance review meetings if this is the answer – then institutionalize these. It may be best to start with a “trial process” to refine details of the process.
An efficient regular process review meeting may save the company more than the 3 hours that it takes (preparation + travel + meeting) for this process.
If there are many “islands” of employees working at different company locations, consider organizing meetings into geographically convenient archipelagos.
Establish, within the service review process a “patented” company process that focuses on quality delivery. Publicize the existence of this process (not the details) when speaking with existing or potential clients. This is a key part of the company’s essential differentiation and “value add”.
Establish a definition of quality for the company.
Develop this as the company’s vision.
Develop the methodologies to consistently deliver this quality.
Long-term, drive this to professional training systems to consistently produce this quality.
Situation: Top managers of a company are all very experienced. All want to drive the company – but each in their own way. Overall objectives are not significantly different but the path forward varies considerably among the managers. Is this situation common? Should the CEO be doing things differently? How do you create management alignment?
Advice from the CEOs:
Strong differences among strong leaders are common. This is not necessarily a cause for concern or a problem. Rather, it means that you have a lot of options to help address opportunities or solve issues.
When you hire bright, talented people with good ideas, there will always be differences of opinion. This is healthy. You need this, particularly when sailing uncharted waters.
As CEO, sometimes you need a strong critic on your team to moderate your inclinations. Just because you are CEO doesn’t mean that you always have the answer. Rather, allowing the answer to come from the team strengthens the team as well as commitment to execution.
How do you leverage the strengths of this team to create the best future for your company?
First, assure that the broad roadmap is clear and that everyone agrees on this.
When addressing a choice, opportunity or challenge lay out the situation in broad terms. Allow all of the managers their say, and facilitate the discussion to identify commonalities and differences. Confirm the commonalities, and dig into the differences to understand the perspectives of each. Digging into differences can identify roadblocks as well as alternative options. Keep the discussion open instead of trying to drive toward a single, quick solution.
Summarize the options presented. If there are multiple alternatives, do a ranking exercise to see if one rises to the top. Be sure to credit the managers for their ideas and creative input.
In each situation there is a final decision maker. All must respect that after you’ve listened there will be a decision and that decision will be executed. Allow them to execute and focus on results.
Situation: A company wants to execute a strategic shift in direction – taking it into a new business which will diversify its offering to customers. The CEO needs to assure that everyone is on-board to both speed the shift and minimize cost. What are the keys to successful strategic change?
Advice from the CEOs:
Be front and center with your vision. State the vision clearly, in terms that everyone will understand. Focus on the benefits of the change for the company and employees and be realistic about the challenges involved.
Be enthusiastic. This is critical to all change efforts. Be cheerleader as well as leader.
Plan ahead and begin to communicate well in advance of the anticipated change. Plant seeds and encourage the team to generate options or solutions. Give all levels of the organization the opportunity to become involved and participate in both design and implementation of the change.
Be consistent in messaging and support across the team. Don’t vacillate or promise what you can’t deliver. Employees will watch for the presence or absence of consistency. If it’s absent, they won’t join in.
Conduct scenario analyses. This enables you to try out different futures and implementation options.
Identify critical issues. Look at possible results – first consider the “most likely”, then “best” and “worst” possible outcomes. Considering best and worst generates new alternatives, and improves the perspective on the most likely outcome.
Conduct visioning exercises. Create a graphic vision of possible futures.
This increases group participation and sparks creativity.
It improves group function, thereby enhancing results.
Visual representation is more memorable than standard bullets and lists.
Special thanks to Jan Richards of J G Richards Consulting – jgrichardsresults.com – for her insight on this topic.
Situation: A company is doing well, but the CEO is concerned about emerging hurdles that may stall momentum. The key issue from a systems development perspective is changing a “one-off” project based focus towards a modular mindset – essentially shifting a short-term to a long-term view. How do you align expectations across the company and transition to a broader focus?
Advice from the CEOs:
Start by clearly communicating your expectations. Work with your managers so that they communicate a consistent message to developers. Look for organizational changes to better align talents of individuals to roles taking advantage of these talents. You may want to refresh the gene pool by bringing on additional people.
One company with multiple teams creates healthy competition against performance objectives between teams with recognition and rewards to the top team.
If the change involves creating greater alignment between functions, create opportunities for individuals from different functional areas to work together. For example, have an engineer accompany a sales person on a critical call to close a deal. If the deal meets spec objectives, is closed, and the project completed on schedule and on budget, the engineer is bonused on the sale.
One company rents a lake cabin every year. Use of the cabin goes to teams recognized for meeting objectives, deadlines or other outstanding performance. An added benefit is that on the way to and from the cabin as well as while they are there, teams spend time talking about the next performance coup that will get them the next use of the cabin.
Look at your organization – both your Org Chart and the physical space. One CEO found that his engineering organization was stove-piped both in terms of reporting and incentives, and physical barriers prevented groups from easily interacting with one-another. To create better coordination between design engineering and manufacturing engineering, the teams were relocated to a new shared space, without physical barriers. Also, the Org Chart was adjusted to increase incentives for collaboration between the functions.
Situation: The CEO of a small company finds that whether he gives broad direction to employees or very specific instruction he gets the same result: they don’t seem to understand what he wants. He feels that they don’t have a sense of buy-in or urgency. What are best practices for effective delegation to improve results?
Advice from the CEOs:
You recently fired an employee for inconsistent performance but didn’t tell your staff. When you return to the office this afternoon, get the employees together and tell why the individual was fired. Let them know that this is part of a broader pattern that you see within the company and that if you see other cases of individuals not following through on their assigned responsibilities you will have to take additional action. Unless your employees understand that nonperformance has consequences, there will be no change.
In your operations, set subassembly goals and intermediate milestones coupled. Create and post a set of charts in the operations room so that employees have a regular visual reminder of how they are doing. Bring these charts to employee meetings and discuss how the company is doing. If deadlines aren’t being met, ask for input on how to improve performance. Celebrate successes with recognition for individuals or groups who demonstrate the ability to meet objectives.
Hire an operations manager with experience working with teams the size of yours. You want an individual who excels at motivating and getting results from people, and who has supervisory versus managerial experience. Think platoon leader – a person who excels at effectively running small teams.