Measuring & Managing High Performance Culture Transformation
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Measuring and Managing High Performance Culture Transformation Presented by: Rohn Rajen Partner Human Capital Group Asia Ltd Measuring and Managing High Performance Culture Transformation Basic questions: What is a high performance culture? Is performance linked to organizational culture? Can culture be measured? How to change culture? Good example? Case study High Performance Culture The Denison Model What is Culture? • Deeply held beliefs and assumptions • How people in our organization think and act, every day • “the way things are done around here” Dr Denison, IMD Result Performance Behavior Beliefs & Assumptions Mind set History Model developed by Prof. Daniel Denison of IMD Based on over 25 years of research linking organizational culture and leadership to performance measures such as Return on Equity (ROE) customer satisfaction sales growth employee satisfaction innovation quality and other performance measures Solutions Mergers & Acquisitions Transformation & Turnaround Aligning Strategy & Human Capital Talent Management & Leadership Development Leadership Transitions Services Denison Organizational Culture Survey Modules: Engagement, Innovation, Trust Denison Leadership Development Survey Change Monitors Pulse surveys build in accountability and check points On-line Dashboard and Action Planner Helps organizations translate survey results into actionable interventions Research & Consulting Group Services Custom questions and reports development Qualitative analysis Change management Global Benchmark 1086 companies in 48 Countries, >500,000 respondents 75% North American, 15% Europe, 7% Asian, 3% Africa/Middle East/Central & South America Different Industries and different Countries, on average, have very similar results to the global benchmark Using the Global Benchmark database Composites are available for many different Industries and Countries HIGH PERFORMANCE ORGANIZATIONS Organizational Interventions 1 2 Mission Adaptability Pattern..Trends.. Market “Are we listening to the marketplace?” Direction.. Purpose.. Blueprint “Do we know where we are going?” Involvement Consistency Commitment .. Ownership … Responsibility Systems.. Structures.. Processes “Are our people aligned and engaged?“ “Does our system create leverage?” This is one of the four key traits that impact business performance. This is one of the three indices that measure behaviors for this trait. Each of the twelve indices consists of five survey items. This is a percentile score. A percentile is organization’s score as benchmarked against the average of other organizations. This organization, for example, scored better than 68 percent of all of the companies in the database in the area of Goals and Objectives. The profile is colored to show the quartile in which the percentile falls. This score, for example, falls in the third quartile. A profile of a high performing culture More Color is Better! A profile of an average performing culture A profile of a low performing culture 12 The Link to Performance Culture Links to Performance Growth Stable Performance Over Time Profitability ROI, ROE Innovation & Customer Satisfaction Operating Performance Quality Employee Satisfaction Flexible and Stable Flexible Adaptability + Involvement A flexible organization has the capability to change in response to the environment Stable Mission + Consistency A stable orientation contributes to an organization’s capability to remain focused and predictable over time External Focus and Internal Focus External Focus: Adaptability + Mission The organization’s focus is on adapting and changing in response to the external environment Internal Focus: Involvement + Consistency The organization’s focus is on the dynamics of the internal integration of systems, structures, and processes Dynamic Tension: High performance organizations learn how to link the purpose, direction, and goals of the organization (top - down) to a shared sense of responsibility, ownership and commitment with all employees (bottom - up). Employees understand the relationship between their individual goals and the organization’s goals and are highly motivated to contribute. Dynamic Tension: Successful organizations learn how to cope with the dual problems of external adaptation (stimulate progress) and internal integration (preserve the core). It is not an either/or proposition - high performance organizations must be able to do both at the same time. Satisfying Your Customers • Study of Automotive Service Centers in the USA • Total of 338 dealerships and over 12,000 employees • Compares organizational culture and customer satisfaction Below 50% Highly Satisfied Above 80% Highly Satisfied Impact on Performance If we compare the 102 firms in the top and bottom 25% based on their overall average of the 12 indexes, companies with higher culture scores have greater profitability, sales growth, and market value than those with lower culture scores. Bottom 25% Top 25% Return-on-Assets 4.5% Return-on-Assets 6.3% Sales Growth .1% Sales Growth 15.1% Market-to-Book Ratio 3.5 Market-to-Book Ratio 4.4 Automotive Company 2004 2006 21 Changes in Automotive Company 2002 2003-006 Profit On plan 03-05 : Beat profit plan 06: NA Restructuring Quality 37 PPM Single Digit PPM New business wins 2 Non GM wins in prior 5 years Over 20 non GM wins Globalization No Asia presence •4 programs won in Asia •New plant established in China Global leadership 8 leaders in 5 years 1 leader Global coordination None Extensive global coordination Source : IMD-4-0309 ; 2009 22 “We have the same ingredients and use the same ovens, but it’s the skills, attitude and experience of the workforce that differentiates the brands. David Brandon Chairman and Chief Executive of Dominos Pizza PROTON CASE STUDY CHANGE MANAGEMENT PROJECT (PCMP) T0 (PROCESS SAMPLE ONLY, DATA NOT INCLUDED) Initiative T0: Change Management This initiative aims to transform the mindset and working behaviour of all PROTON employees across the business chain, in tandem with T1 – T13 process and operational excellence initiatives. Ultimately, aligning the company’s culture, values, people and robust processes, to create a high performing organisation. Process Change Management requires Behavioral Change Management to complement it. It is imperative that PROTON as an organisation to embrace both changes which eventually will result in a more agile, responsive, cohesive hence productive working culture • Working attitude • Communication channel • Legacy issue • We will attain an organisation receptive and resilient to changes for sake of betterment How will success look like? • We will forge a cohesive organisation which will strive and motivated for a common goal • We will possess a high performing work culture practising the best-in-class work processes What we need from the team? • Clearly understand Proton imperatives and the need to change • Focus more on the future and less on the past; focus more on finding solutions and less on lamenting on problems • Willingness and an unwavering commitment to change and be a part of a new Proton that will be the model for Malaysia’s global ambitions What the initiative is about? Why is it important? What should change? Change Management Framework Start Change A B • • • • • Collate and interpret results of survey Create & communicate a coherent vision, and empower team to execute • Create a change vision • Appointment of Champion and Program Manager • Appointment of external expert • Accuracy of results • Champions are • Results are not readily ineffective accessible • Delay appointment of external expert 12 months E D C • Tabling results to MD Climate survey and senior 360 degree survey management team Leadership survey Dennison survey Engagement survey • Not 100% participation Timeline Issue Key activities Conduct organisational effectiveness and leadership survey Implement & monitor change Deploy Change 6 months Wave 2 and beyond Wave 1 • Ensure that quick wins can be achieved to anchor sense of achievement and credibility • Institutionalize new working culture • Build a monitoring process to track change • Average 70% participation • No follow-up activitiies • TBD 42 ~ 48 months High performing organisation Paving the journey of cultural transformation PMO & Online Dashboard Action Planning Transformation Framework Denison Survey Results High Performance Leaders High Performance Teams High Performance Individuals Strategic Alignment High Performance Organization Adaptability: Line Item Analysis Perceived Strengths: Process flexibility; focus on continual learning and improvement The perception is that we continually attempt to learn and improve. However, attempts to make changes are usually met with resistance. It is not always clear how the interests of the customer are reflected in our decisions. We are generally ‘reactive’ when dealing with customer concerns 28 Mission: Line Item Analysis Perceived Strengths: Shared vision and strategic intent We have a clear shared vision and we are in a position to make decisions that can affect the industry. However there is a tendency to engage in short term thinking. This often leads to insufficient buy in among employees in achieving business strategies 29 HPL – High Performance Leaders HPT – High Performance Teams HPI – High Performance Individuals Leaders – Change leader Middle Manager – Change agent Self directed individuals – Empowered shared leadership Company wide score board and announcements, with Online dashboard – real time, accessible to all Quarterly review meeting with PMO, Trainers, Consultants, MCM, Change agents & Project team heads Rewards incentives, celebration, recognition and award ceremonies every month (celebrating success) Special workshops on “Execution Skills” for selected team leaders HR to look into talent development, PMS, Recruitment policies on performance, Incentives, Career development and World class human capability development. Change Management Long Term Strategy: Wave 1 & Wave 2 Transformation essence • Dismantle ‘silo structure’ • Move away from territorial behavior / attitude • Enhance sense of urgency and boost momentum to succeed Target Across all 10,000 employees involved in transformation process by end of 2014 1 5 6 7 8 Change Starts With Me (3,000 pax) 2011 Change Starts With Me (10,000 pax) Value Enhancement 2 Core Drive by Champions 3 Program “Turun Padang” 4 Dashboard Measurement Leadership Alignment & Development √√ √ Internal Communication Quarterly Review Yearly Denison Survey • SDI Profiling • EQ and Constructive Confrontation • Leadership coaching •Katzenbach Team 2012 2013 1. Quality 2. Customer Focus 3. Innovation Up to 10,00 0 emplo yees invol ved in transf T1 2014 4. 5. 6. 7. T2 T3 Teamwork Speed Caring Honesty T4 T5 T6 Proton’s KPIs 2010 T7 T8 T9 T1 0 T1 1 T1 2 T1 3 Bigger Picture - Measurement & Tracking (Projected “Change” in terms of %) 2010 2011 2012 2013 2014 Status Quo Projected YoY +5% Projected YoY +10% Projected YoY +25% Projected YoY +40% Measurable, Sustainable, Manageable Performance linked Culture High Performance Culture Measuring and Managing High Performance Culture Transformation Q&A Rohn Rajen rohn@humancapitalgroup.asia www.humancapitalgroup.asia Thank you 1) CEO as the number one CCO (Chief Change Officer) leading the whole program 2) Top buy in by all top mgmt members. Only 3 options acceptable; a) “fully support” b) “need more information, but supportive” c) doesn’t support and willing to leave on my own (not speaking up, not supporting or sabotaging are not acceptable at all) 3)Corporate philosophy of purpose, vision, direction is clear 4)Culture is measured (Denison) and all initiatives are measurable 5)Communication and open sharing to all (building trust and buying in) 6)Teach, coach and develop change leader in all levels to build trust (not trustworthiness/ loyalty) 7)Personal responsibility from everyone (leaders, teams, individuals, partners)
