Archive for the ‘Employee Engagment’ Tag

On values-driven change management

Every business leader knows businesses must adapt to their environment or become discredited and irrelevant over time. But how do you do this as quickly and painlessly as possible?

While there are many leadership styles, the odds of a successful transformation improve when a leader’s values and behaviours are congruent with the mandate of the company, and are seen as aspirational.

Maurizio Bevilacqua, the mayor of Vaughan, Ont., is spearheading significant cultural change, transforming operational productivity, enhancing service levels and improving employee engagement while bringing newfound respect to city politics. His values-driven approach to leadership offers many lessons for people tasked with leading major transformation in any organization.
The mayor is no stranger to the public sector. He has served in government for many years, including as a Member of Parliament for Vaughan for 22 years. In 2010, he left federal politics and was elected mayor of the city. From the get go, Bevilacqua adopted a different leadership style from a typical politician. His approach relies less on command and control management and more on setting the right example and instilling in the culture aspirational, humanistic values.

Values-driven leadership is not new in the private sector. Many of the world’s most successful business leaders — Steve Jobs (Apple), Herb Kelleher (Southwest Airlines) and Jerry Greenfield and Ben Cohen (Ben & Jerry’s) — have imprinted similar values in their companies with great results.

Bevilacqua’s values-driven leadership is demonstrated through a variety of practices and programs. For example, positivity, servitude and goodness are regularly invoked as guiding principles from strategy development on down to personal actions at Vaughan City Hall.

The mayor believes in improving employee engagement through small but personal gestures such as praising the dedicated efforts of employees both privately and publicly, placing a personal phone call for special occasions or simply saying thank you. The commitment isn’t just lip service. He and the members of council provided written commitment to the Vaughan Accord — a 12-point document that defines the principles of public service — a promise of responsible, co-operative, transparent and effective governance.

So far, the mayor’s approach has paid off in spades. Vaughan is now among the top municipal performers in Canada in voter satisfaction, economic development and staff excellence. To wit, a recent Citizen Survey revealed that 90 per cent of Vaughan residents are “very” or “somewhat satisfied” with city services overall, while 95 per cent rated quality of life “good” or “very good.” These numbers have all increased during the Bevilacqua’s tenure.
Furthermore, a fresh, business-friendly environment has led to a 18.3 per cent increase in new business creation since he assumed office. Similarly, his values-driven change has had a positive effect on staff excellence; employee engagement and demonstrated leadership competencies are up 13 and 17 per cent, respectively, compared with 2009.

Mayor Bevilacqua’s leadership style and methods are congruent with other best practice change practices:

  • Develop an inspiring narrative and values Leaders need to appeal to their staff’s spirit as well as logical brain using a simple message communicated regularly;
  • Engage all stakeholders Ignoring some groups, especially skeptics, may short change the effort and create unwanted opponents;
  • Model desirable behaviours Credibility is everything. If leaders talk the talk, they need to walk the walk;
  • Support your staff Nothing slows momentum faster than a leader who does not help their team overcome roadblocks; and
  • Be patient Real change takes time, courage and perseverance

Without a doubt, Mayor Bevilacqua is on the right track to transforming Vaughan. Yet, he should be mindful of the sage words of Pericles, Athen’s leader during the Peloponnesian War. “What I fear more than the strategies of our enemies,” lamented Pericles, “is our own mistakes,” a warning all leaders should heed.

To discuss this topic please email me at mitchell.osak@ca.gt.com

The madness of metrics

Anyone familiar with large organizations has probably heard the phrase “you can’t manage what you can’t measure.”  For most of my management and consulting career, I took this as a truism.  Not any more.  A recent client engagement and a review of the latest research have taught me the dangers of relying too heavily on metrics, especially bad ones, to spur better business results.  This is not to say that metrics have no role; far from it. However, leaders should use them sparingly and consider alternative motivational tools.

Take, for example, work we recently did with a financial services institutions, which had historically earned above industry returns.  Since 2009, it faced two significant headwinds: first, mounting customer churn that marketers believed traced to product issues; and, secondly, shrinking margins, driven by steadily increasing costs and a perceived inability to raise prices. Not surprisingly, employee engagement scores were also floundering. The company was looking to understand what was really going on and improve operational performance.  After undertaking a root-cause analysis, we discovered that many of the problems stemmed from the poor choice and management of newly established metrics. Our fix was relatively simple (though a challenge to sell through parts of the organization): get rid of some (but not all) of the new metrics and focus on a few key performance indicators (KPIs).

CEOs looking to improve corporate performance without damaging employee engagement should heed the following lessons. They include:

Metrics mask problems

Companies often use a metric without understanding what they are trying to improve. For example, our client added a new metric, customer satisfaction, without thinking through what the internal and external drivers of the higher churn were. The first two customer surveys were telling: satisfaction went up but so did churn.  After a deeper analysis, we found that the churn traced primarily to poor service and communication of the product’s value not product performance, which the new metric was based on. This blunt metric led management to focus on the wrong things.

Metrics create conflict

Very often metrics are used in functional or divisional silos, with little consideration paid to how they negatively impact other group’s performance and results. For example, a procurement department’s metrics around cost reduction can put it into direct conflict with the manufacturing group, which is measured on just-in-time raw material supply. Manufacturing managers would understand that paying higher prices is necessary to achieve their objective.

Managers become overly focused on metrics and not performance

Many employees focus their efforts solely on the metrics by which they are measured on. However, their actions may not be congruent with what’s best for the business. This misalignment can be illustrated by the attention paid to measurement systems like scorecards. Many of my client’s managers spent upwards of 20% of their valuable time managing around scorecards — collecting data, positioning the numbers and lobbying their ‘story’.  Their efforts would have been better spent on other (non-measured) corporate goals like innovation and coaching.Advertisement

Metrics lack credibility

Some common measures like brand image and employee engagement lack sufficient credibility to motivate many workers and trigger improved performance. These metrics are often viewed as disconnected from everyday reality, obtuse or too blunt to be practically influenced.  This metrics-induced “credibility gap” contributed to the client’s low employee engagement scores.

Metrics can lead to unintended consequences

Unexpected things happen when organizations focus on some metrics. The pursuit of revenue goals led some members of the company’s sales and service teams to do things that were inconsistent with company values, teamwork and ethical behavior.

Where do we go from here?

To reiterate, metrics are not bad per se.  Bad metrics are bad.  We recommend firms take three steps to reduce metric madness:

Know thyself

Really understand your business and customers, and what drives performance.  Make sure existing metrics reflect these key drivers.  Furthermore, create new Key Performance Indicators (KPIs), if necessary, that can act as proxies for many essential activities. For example, a ‘ship on time, in full’ KPI illuminates a lot of information about a firm’s production, logistics, service and inventory management performance.

Less is more

There should be no more than four to five organization-wide (not siloed) measures that encompass all facets of the business.  Take care not to over-manage these through scorecard creation and reviews. However, changing metrics may require the organization to revamp its compensation and performance measurement systems.

Manage people not numbers

It’s people who generate value, not metrics. This fact may be inconvenient or difficult for some managers but it is a prerequisite for higher performance and engagement. Changing a status quo that benefits many people and is part of a legacy culture is tough. Leaders need to be bold and stick to their guns. It is well worth it.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.