高效組織的基石THE BUILDING BLOCKS OF HIGH-PERFORMING ORGANISATIONS

THEBUILDINGBLOCKSOFHIGH-PERFORMINGORGANISATIONSCaseStudy,ConceptsandDebatableIdeasKennyOngCNIHoldingsBerhad

Intro:CNI19yearsoldCoreBusiness:MLMOthers:ContractManufacturing,Export/Trading,eCommerce,F&BRetailMalaysia,Singapore,Brunei,Indonesia,India,China,HongKong,Philippines,Italy,TaiwanStaffforce:±500Distributors:200,000Products:ConsumerGoodsandServices

Howdoyourecognizeahigh-performingorganization?

“…inthepast18months,wehaveheardthatprofitismoreimportantthanrevenue,qualityismoreimportantthatprofit,peoplearemoreimportantthanprofit,customersaremoreimportantthanourpeople,bigcustomersaremoreimportantthansmallcustomers,andthatgrowthisthekeytooursuccess.Nowonderourperformanceisinconsistent"CEO,Anonymous

High-PerformanceCompanies?Businessisgood?Peoplearegood?Everyoneisgood?Missionisgood?Beverycarefulofyourcompany’sdefinitionofhigh-performancebeforeyouembarkonanything

Simple,selfishanddebatabledefinition:WhatisaHigh-PerformingOrganization?Anorganizationthatconsistentlyachieveswhatitwascreatedtodoorwhatitsetouttodo

High-PerformingOrganizations–TheBuildingBlocks

TheBuildingBlocks-startingfromHRSuccessionPlanning(BusinessContinuity)TalentManagementDifferentiationPerformanceManagementSystemBudgeting+PlanningKPIsBSCBusinessModel

TheBuildingBlocks-startingfromHRSuccessionPlanning(BusinessContinuity)TalentManagementDifferentiationPerformanceManagementSystemBudgeting+PlanningKPIsBSCBusinessModelTheHardwareTheSoftware

Summary:Today’spresentation1.BusinessModel2.Strategy3.Resources

1.BuildingBlock#1:GettherightBusinessModelfirst

Howtofailwithouttrying

1.WrongBusinessModel

TheRoadmaptoFailure

FredWiersemaand

MikeTreacyPerformanceTimeClearSailingToday’sperformanceAd-hocTacticsDenial&DefenseDoomProjectionsOverdueFailureTheMomentofTruthXPerformanceFreefallTomorrow’sactualperformanceDownpresureofUnclearStrategy

DenialandDefense“It’snotreallygoodvalueourcompetitorisoffering,becauseitdoesn’tincludealotofourfeatures.〞-ABCvsAirAsia“It’sgoodvaluebutnotinourpreferredcustomermarket.〞-ABCvsToyota“Surethey’rehurtingus,butwiththeirunfairadvantage,whatcanwedo?〞–ABCvsMILO“Therulesweareplayingbyhavealwaysworkedbefore〞–AMEXvsVISA

TheRoadmaptoFailure

FredWiersemaand

MikeTreacyPerformanceTimeClearSailingToday’sperformanceAd-hocTacticsDenial&DefenseDoomProjectionsOverdueFailureTheMomentofTruthXPerformanceFreefallTomorrow’sactualperformanceDownpresureofUnclearStrategy

AdHocTacticsSelectivelyholddiscountstoholdbusinessthathasstartedtogoelsewhereIntroducenewpromotions,terms,conditions,andofferstoconfuseandcloudthemarketBeefupcustomerservicebyaddingpeopletofixmess-upsandquickendelayedshipmentsDelaycapitalinvestmentsandadjustaccountingmethodstoportrayquarterlyfinancialresultsmorefavorablyIntroduce“newandimproved〞productsthatarenewinform,butnotinsubstantivewaysthatareofconsequencetopurchasersIntroduceBalancedScorecardsandPerformanceManagementSystems

TheRoadmaptoFailure

FredWiersemaand

MikeTreacyPerformanceTimeClearSailingToday’sperformanceAd-hocTacticsDenial&DefenseDoomProjectionsOverdueFailureTheMomentofTruthXPerformanceFreefallTomorrow’sactualperformanceDownpresureofUnclearStrategy

“Whatisthemoralofthestory?〞

WhatistheBusinessModel?USPMarketDisciplineProfitModel

Intro:MarketDisciplineMamakstall

Intro:MarketDiscipline"Theyarethemostinnovative""Constantlyrenewingandcreative""Alwaysontheleadingedge""Agreatdeal!" Excellent/attractiveprice Minimalacquisitioncostandhassle Lowestoverallcostofownership"Ano-hasslesfirm" Convenienceandspeed Reliableproductandservice"ExactlywhatIneed" Customizedproducts Personalizedcommunications"They'reveryresponsive" Preferentialserviceandflexibility RecommendswhatIneed"I'mveryloyaltothem" HelpsustobeasuccessProductLeadershipOperationalExcellenceCustomerIntimacy

Intro:MarketDiscipline*Treacy&Wiersema,TheDisciplineofMarketLeaders,1995Product/ServiceAttributesRelationshipImage

Intro:MarketDiscipline*Treacy&Wiersema,TheDisciplineofMarketLeaders,1995Product/ServiceAttributesPriceQualityTimeSelection√√SmartShopperRelationshipImageOperationalExcellence:Qualityandselectioninkeycategorieswithunbeatableprices

Intro:MarketDiscipline*Treacy&Wiersema,TheDisciplineofMarketLeaders,1995Product/ServiceAttributes√BrandTimeFunction√√BestProductRelationshipImageProductLeadership:Uniqueproductsandservicesthatpushthestandards

Intro:MarketDiscipline*Treacy&Wiersema,TheDisciplineofMarketLeaders,1995Product/ServiceAttributes√√√√ServiceTrustedBrandRelationshipImageCustomerIntimacy:Personalservicetailoredtoproduceresultsforcustomerandbuildlong-termrelationshipsRelations

OperationalExcellence(lowcostproducer)Ref:TheDisciplineofMarketLeaders,MichaelTreacy&FredWiersema;1995ProductLeadership

(bestproduct)CustomerIntimacy(besttotalsolution)Strategy:Disciplines

Summary:Today’spresentation1.BusinessModel2.Strategy3.Resources

Done

2.BuildingBlock#2:SettheStrategiesDangersofBSC,KPIsandotherevilssoldbyConsultants

“…inthepast18months,wehaveheardthatprofitismoreimportantthanrevenue,qualityismoreimportantthatprofit,peoplearemoreimportantthanprofit,customersaremoreimportantthanourpeople,bigcustomersaremoreimportantthansmallcustomers,andthatgrowthisthekeytooursuccess.Nowonderourperformanceisinconsistent"CEO,Anonymous

Beforewestart…IntheolddaysofHR…Averagetraininghoursperstaff%ofstaffattendingtraining#oftrainingprograms%oftrainingprogramsconductedTrainingneedsanalysisconductedCompetencymodelsdevelopedTrainingbudgetas%ofpayrollWhat’swrongwiththispicture?

Beforewestart…Moralofthestory…Innovation:BusinessmodelsProductsServicesMarketLeadershipCompetitivedifferentiationGetthepicture?

“Whatisthemoralofthestory?〞

WhatisStrategicPlanning?StrategicPlanningVariables:ResearchGrowthRisksStakeholdersConstraintsSWOTMisc.Output:PlansPrioritiesKPIs

Beforewestart…Whichcomesfirst?Strategies->KPI?KPI->Strategies?

Financial“Tosatisfyourstakeholders,whatFinancialobjectivesmustweaccomplish?〞InternalProcess“Tosatisfyourcustomers,inwhichinternalbusinessprocessesmustweexcel?"Customer“Whoareourtargetcustomers?Whatisourvalueproposition?”Learning&Growth“Whatcapabilitiesandtoolsdoouremployeesrequiretohelpthemexecuteourstrategy?Focus:CorporateAlignment

RevenueGrowthBaseRetentionShareGainPositioningAdjacentMarketNewBusinessOperationalExcellenceProductLeadershipCustomerIntimacyCompetenciesInformationSystemsMotivation,empowerment,alignmentFinancialLearning&GrowthInternalProcessCustomersInvestmentStrategyProductivityMarketValueLinkingBSCtoStrategy

FinancialLearning&GrowthInternalProcessCustomers/DistributorsRevenueGrowthProductivityMarketValueDepartmentOperationsSupplier&AlliancesExternalInvolvementTargetMarketsProducts/ServicesChannelStrategiesHumanResourcesTechnologyInformation&IntelligenceSystems&ProcessesFocus:CorporateAlignment

Example:SelectionofKPIsforBSCCustomersatisfactionCustomerloyaltyMarketshareCustomercomplaintsComplaintsresolvedonfirstcontactReturnratesResponsetimepercustomerrequestPricerelativetocompetitionTotalcosttocustomerAveragedurationofcustomerrelationshipCustomerslostCustomerretentionCustomeracquisitionratesPercentageofrevenueformnewcustomersNumberofcustomersAnnualsalesperturnoverWinrate(salesclosed/salescontact)CustomervisitstothecompanyHoursspentwithcustomersMarketingcostasapercentageofsalesNumberofadsplacedNumberofproposalsmadeBrandrecognitionResponserateNumberoftradeshowsattendedSalesvolumeShareoftargetcustomerspendingSalesperchannelAveragecustomersizeCustomersperemployeeCustomerserviceexpensepercustomerCustomerprofitabilityFrequency(numberofsalestransactions)

FinancialLearning&GrowthInternalProcessCustomers/DistributorsExample:1stLevelBSC&KPIsProfitafterTax.Revenue.Cash-to-cashcycle.OperatingcashflowCustomerComplaints.CustomerAcquisitionRate.ProductAvailability.ProductQuality&Service.RenewalAnnualSubscription.DistributorRankAchievement.No.ofActiveDistributor.No.DC/RegionalSales.DistributorwithcommissionCustomerDatabaseAvailability.AccuracyofForecastPlanning.ContinuousImprovement.ResponseTimetoCustomerNeeds.PerfectOrderFulfillment.InventoryTurnover.NumberofEffectiveSponsoringProgram.OnTimeDelivery.No.ofEffectiveTraining.NumberofEffectiveA&P%ofstaffevaluatedonCoreCompetencyFramework.%ofstaffwithCareerDevelopmentPlans.No.oftraininghourscompletedperstaff.%ofstaffwithaccesstostrategicinformation.Q12Index.%staffevaluatedonCulturealignment

Sample:Other1stLevelKPIsacrossindustries…FinancialServicesRetailTelecommunicationsMaximizeARPUMinimizeChurnMutichannelcustomerserviceUnderstandcustomerbehaviorrelatedtocustomerconversion,acquisition,andretentionSingleviewofcustomerMultichannelcustomerexperiencePersonalizedcustomerexperienceAnticipateandpreventchurndespitecompensationIncreasenumberofproductspercustomerTurncallcenterinformationopportunitytoup-sellandcross-sellIncreasecustomersatisfactionandloyaltyHospitalityTravel&LeisureManufacturingPersonalizedcustomerexperienceMaximizeshareofwalletPlayer/customerloyaltyMultichannelcustomerserviceIncreasecustomerloyaltyandpreferenceMaximizecustomerrevenueImproveservicequalityandefficiencyCaptureandclosesalesopportunitiesSingleviewofcustomersacrosssupplychainZero-errorordercaptureStreamlineopportunitytocashprocessesLeverageinvestmentinERPandbackofficesystems

LaggingandLeadingKPIsLaggingLeadingHistorical,Outcome,Results,1stLevel,UsuallyFinancialortangible,QuarterlyandAnnuallyCurrent,Indicators,Drivers,2ndLevelonwards,usuallynon-financialorintangible,Weekly,MonthlyandQuarterly

Developing‘Driver’KPIsCustomerRetention%Lagging,1stLevelCustomerSatisfactionIndexLeading,2ndLevelOntimedeliveryTimetomarketfornewproductsTNA%Defectlevels,warrantyclaimsLeading,3rdLevelonwards

WhatistheObjective?‘Do-or-Die’KPIsforCNIRevenueARPUSponsoringRetentionCommissionPlan(BDP)ProductCorporateImage

OperationalExcellence(lowcostproducer)Ref:TheDisciplineofMarketLeaders,MichaelTreacy&FredWiersema;1995ProductLeadership

(bestproduct)CustomerIntimacy(besttotalsolution)Strategy:Disciplines,Priorities,andKPIs

TheMcPlaybook*Makeiteasytoeat50%drive-thruMealsheldinonehandMakeiteasytoprepareHighTurnoverTaskssimpletolearn&repeatMakeitquick“FastFood〞TestsnewproductsforCookingTimesMakewhatcustomerswantProwlsmarketfornewproductsMonitoredfieldtests*Adaptedfrom:Businessweek,Februrary5th2007

OperationalExcellenceCompetitivepriceErrorfree,reliableFast(ondemand)SimpleResponsiveConsistentinformationforallTransactional'OnceandDone'CustomerIntimacyManagementbyFactEasytodobusinesswithHaveityourway(customization)MarketsegmentsofoneProactive,flexibleRelationshipandconsultativesellingCrosssellingProductLeadershipNew,stateoftheartproductsorservicesRisktakersMeetvolatilecustomerneedsFastconcept-to-counterNeversatisfied-obsoleteownandcompetitors'productsLearningorganizationStrategy:Disciplines,Priorities,andKPIs

OperationalExcellenceMoveknow-howfromtopperformingunitstoothersBenchmarkagainstbestinclassEnsureoperationstrainingforallemployeesUsedisciplineslikeTQMforcontinuouslearningtoreducecostsandimprovequalityStrategy:ValueDisciplines

Strategy:ValueDisciplinesCustomerIntimacyCaptureknowledgeaboutcustomersUnderstandcustomerneedsEmpowerfrontlineemployeesEnsurethateveryoneknowsthecustomerMakecompanyknowledgeavailabletocustomers

ProductLeadershipReducetimetomarketCommercializenewproductsfastEnsurethatideasflowReusewhatotherpartsofthecompanyhavealreadylearnedEnsuretherearemultiplesourcesoffundingStrategy:ValueDisciplines

OperationalExcellence(lowcostproducer)Ref:TheDisciplineofMarketLeaders,MichaelTreacy&FredWiersema;1995ProductLeadership

(bestproduct)CustomerIntimacy(besttotalsolution)Strategy:ValueDisciplines

OperationalExcellence(lowcostproducer)Ref:TheDisciplineofMarketLeaders,MichaelTreacy&FredWiersema;1995ProductLeadership

(bestproduct)CustomerIntimacy(besttotalsolution)Strategy:ValueDisciplines

SampleKPIsforEachDisciplineOperationalExcellencePriceSelectionConvenienceZeroDefectsGrowthCustomerIntimacyCustomerKnowledgeSolutionsOfferedPenetrationCustomerDataCustomer-successfocusProductLeadershipMarketingFunctionality#ofSuccesses#ofFailuresLearnfromkeyusersInterdisciplinaryteamsPipeline

MBO–SourcesofKRAsandKPIs,TargetsDepartmentScorecard[E3],Employee’sJobDescription,DepartmentSOP,DepartmentQualityObjectives,CorrectiveActionRequests(CAR),PreventiveActionRequests(PAR),orSpecialProjectsrelevanttotheemployee.

E3–DepartmentBSCFinancialPerspectiveGoalsMeasuresTargetsCAPEXOPEXQualityInnovationOnTimeDeliveryBudgeting

IndividualPerformance1.0KeyResultsArea(Max6)2.0GoalsandTargetsforQ13.0AchievementsandEffortsforQ14.0Merit*5.0Rating(MeritxWeight)6.0AppraiserOverallComments/Feedback

Summary:Today’spresentation1.BusinessModel2.Strategy3.Resources

Done

Done

3.BuildingBlock#3:ResourceManagementTheartandscienceofallocating,aligning,andmanagingResourcestostrategicplans

ResourceManagement:Somethoughts…TwomajorrolesofResourceManagement:Providereal-lifeCONSTRAINTStostrategicplanningProvideRESOURCEStorealizestrategicplans

ResourceManagement:Somethoughts…ResourceManagement=PerformanceManagementPerformanceManagement=ResourceManagement

ManagingPerformanceMonth1PerformancePlanningMonth12PerformanceAppraisalMonth2-11?

BeatingaDeadHorse

MostCommonDesperatePerformanceImprovementmethodsSendformoreTrainingEnforcemoreIncentives(positive/negative)

MagerandPipeAnalyzingPerformanceDiscrepancies

Alignment:4-WheelsModelCultureBusinessModelStrategicPlanningStructurePersonLeadershipResources

Alignment:FrameworkFocuspointAlignmentQualityInnovation&DifferentiationRisktakingPerformanceManagementCorporateobsessionDecisionmakingCulture

Alignment:FrameworkOrgStructureJobDesignC&BPolicies&proceduresDecisionmakingJobfitManagementSystemsBSCandKPIsDecentralized&EmpowerStructure

Strategy:FrameworkRolemodelingVision/Mission/PhilosophyLeadershipStyleDelegation&EmpowermentC&B,PromotionsSenseofUrgencySpeakregularlyaboutPerformanceLeadership

Strategy:FrameworkRecognitionRecruitmentTrainingProfitsharingValuesMotivationSelfEfficacyAwarenessUsefulCompetenciesCareeraspirationsAttribution(control)Person

Strategy:FrameworkEnablersTechnologyEquipmentMaterialsHumanIntellectualPropertyPartnersPropertyResourcesFunding

CAPEXOPEX

Alignment:4-WheelsModelCultureBusinessModelStrategicPlanningStructurePersonLeadershipResources

OperationalExcellenceCustomerIntimacyProductLeadershipOrganization,jobs,skillsManagementsystemsInformationandsystemsCulture,values,normsEachDisciplineRequiresDifferentPriorities&Resources

OperationalExcellenceCentralauthority,lowlevelofempowermentHighskillsatthecoreoftheorganizationDisciplinedTeamworkProcess,product-drivenConformance,'onesizefitsall'mindsetIntegrated,lowcosttransactionsystemsThesystemistheprocessCommandandcontrolQualitymanagementOrganization,jobs,skillsManagementsystemsInformationandsystemsCulture,values,normsEachDisciplineRequiresDifferentPriorities&Resources

Organization,jobs,skillsManagementsystemsInformationandsystemsCulture,values,normsProductLeadershipAdhoc,organicandcellularHighskillsaboundinloose-knitstructuresConcept,future-drivenExperimentationand'outofthebox'mindsetPerson-to-personcommunicationssystemsTechnologiesenablingcooperationRewardingindividuals'innovativecapacityRiskandexposuremanagementProductLifeCycleprofitabilityEachDisciplineRequiresDifferentPriorities&Resources

Organization,jobs,skillsManagementsystemsInformationandsystemsCulture,values,normsCustomerIntimacyEmpowermentclosetopointofcustomercontactHighskillsinthefieldandfront-lineCustomer-drivenVariationand'haveityourway'mindsetStrongcustomerdatabases,linkinginternalandexternalinformationStronganalyticaltoolsCustomerequitymeasureslikelifetimevalueSatisfactionandsharemanagementFocuson‘ShareofWallet’EachDisciplineRequiresDifferentPriorities&Resources

IncentiveProblemsProblemwithIncentivesinmanagingperformance:MostpeopleareconfusedorunsureaboutcompensationtoolsSomepeoplemisusecompensationtools

WhattoPay?PayforServicePayforJobPayforPerformance PayforCompetency

PerformanceandIncentivesInternalEquityInternalJobRatesPerformancedifferentials ExternalCompetitivenessExternalJobRates-BenchmarkingDemand&Supply

What’stheDifference?IncrementBonusPromotion

CompaRatioTableUsethisifyourcompany:PaysforPerformance,andPaysforJobratesDef:Mid-Point=MidPointofPayGradeGradeE2MinRM2,000MIDRM2,500MaxRM3,000

CompaRatioTable<0.7≥0.7-≤0.9>0.9-<1.1≥1.1-≤1.3>1.354321

CompaRatioTable<0.7≥0.7-≤0.9>0.9-<1.1≥1.1-≤1.3>1.35435%21

CompaRatioTable<0.7≥0.7-≤0.9>0.9-<1.1≥1.1-≤1.3>1.359473975%432210

CompaRatioTable<0.7≥0.7-≤0.9>0.9-<1.1≥1.1-≤1.3>1.35151298741297533975%43264210142000

DangersofDirectIncentiveslesseninternalmotivation,switchtomercenarymode,dosomethinganddonotdosomethingelse,bribeandfraudculture,e