Three Steps to a 2016 Performance Lift

performance lift 2 300x179 - Three Steps to a 2016 Performance Lift Last week, I spoke with a leader of a reputable financial company about steps organizations can take to boost performance. Here are three approaches that are certain to give your organization a big lift, if you have the discipline to execute well.

  1. Manage communication to improve results and add value rather than to just “get stuff out” or to “communicate to employees”.
  2. Open the books to connect people and their work to financial performance.
  3. Improve results by removing mixed messages caused by misaligned systems and processes.

Communicate to add value.
For the past 10 years or so, some business-minded communication functions have evolved from output generators to outcome producers. They’re rock stars in their organizations. But it’s been slow going. Why isn’t everyone doing it?

If you define value as a performance gain (e.g., an improvement in sales), which is greater than the cost of creating the gain, some communication functions add value. Their focus is on identifying and eliminating root causes of communication breakdowns that impede performance.

Others get stuck in the formal channel rut. All they know or think they’re expected to manage are low/non value-adding channels such as newsletters, social media, town hall meetings, posters and videos. These news disseminators start with “what shall we communicate?”

Naturally, an organization must communicate information to its employees. And it needs to make sure people have the information they need when they need it to perform at their peak. But ultimately, the role of the communication function should be to add value. Simply spreading “news” to employees is a value-draining exercise when results don’t change.

Open the books.
Open book management is a leadership philosophy that’s grounded in the notion of creating businesses of business people, where everyone in the organization thinks and acts like business owners.  People in open book companies are steeped in business literacy, work daily to improve the financials, have huge amounts of financial information available to them (hence, the term open book), and their rewards and recognition are tied to financial performance.

People who have clear line of sight between what they do every day and its impact on the cash flow or income statement perform better than people who have no idea if an action they took at 8:30 this morning did any good.

One of our clients focused on improving operating income. We created a guide that displayed how every department in the organization affected results such as material variance, labor variance, rework, scrap, sales, cost of goods sold and many other measures.Every employee learned how his or her actions affected the bottom line.

In six months, the organization improved on time delivery by 38 percent, total cycle time by 31 percent, gross inventory turns by 18 percent, productivity by seven percent and reduced recordable injuries from 13 to zero.

Because they now understand the consequences of their actions, they’re more willing to volunteer ideas that improve the performance metrics.

Align the systems and processes.
The CEO of a consumer package goods company told me he was frustrated that his leadership team didn’t work well together. “I’ve stressed the importance of collaboration but my team operates in defined silos,” he said. He asked me to explore the issue and recommend a fix.

I asked the HR department to see the leaders’ goals and incentives.  Some leaders on this CEO’s team had as many as 12 goals. None of them were weighted in a way that communicated that the leaders should work together. None of them encouraged interdependence–that the team was “in this together”. None of the goals encouraged these leaders to think that “my success is to some extent dependent on my team’s success”.

The “say” communicated that collaboration was important. The “do” communicated it wasn’t. Mixed messages can create a mess. We revised the goal-setting process and it dramatically improved collaboration and the results–such as improved new product development–that it can yield.

The head of a logistics company told employees that safety, quality, and productivity were important. But one of the company’s large distribution centers was experiencing significant quality problems in the form of damaged goods. We asked employees why.

“We hire people who have never run a fork lift and when they come to work we only give them a few hours training,” an employee said. “There’s no way you can have low damage levels if people don’t know how to do the work right,” she said.

In a few months we had realigned the recruiting and training for forklift operators and focused all the goals, continuous improvement processes and rewards equally on quality, productivity and safety.  Within five months after that, quality improved 65 percent, productivity improved 16 per cent and safety remained at zero injuries.

There you have it.  Act on any of these three areas and you’ll get a big lift, no matter how well you’re doing now.

Why not start today?

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