EFFECTIVE STRATEGIES ON HOW TO IDENTIFY, DEVELOP AND SUSTAIN HIGH PERFORMANCE HUMAN CAPITAL TO DRIVE BUSINESSCase Study, Concepts and Debatable Ideas

Kenny OngTakaful IKHLAS Sdn Bhd

TAKAFUL IKHLAS CORPORATE PROFILE

• Shareholder : MNRB Holdings Berhad

(100%)

• Established Date : 18 September 2002

• Operational since : 2 July 2003

• Takaful Model : Al-Wakalah

• Business Portfolio : General and Family Takaful

• Number Products : More than 90

• Number of Participants : More than 1,800,000

• Number of Agents : More than 6,000

• Number of Staff : 490

• Regional Offices : 11

• Paid Up Capital : RM295 million

Referral

Employees

Specialist& Hospitals

Panel GP Clinics

EMPLOYEES & DEPENDANT• Claims Submission• Tracking of eligibility• Enquiries & Complaints • Employee benefit materials• Unions• Abuse of benefits

PANEL CLINICS•Processing Bills•Payment •Appointment and removal•Policies & Procedures•Tracking Entitlements •Issues & Complaints•Overcharging & Abuse •MC Verification

SPECIALIST & HOSPITALS•Issuance of GL•Hosp. Bank Guarantee/Deposit•Appointment and removal •Tracking Entitlements•Processing Bills•Payment •Hospital Reports

CLIENT

TISB

EASY ACCESS TO CARE•Panel of 2000 clinics

nationwide•All major hospitals recognises

our GLs•Appointment & management of

medical panel

1st CLASS SERVICE•Benefit & Procedure briefing

•Help Desk•Tri-annual Cost & Utilization

Report•Benchmarking

•Analysis & Recommendations

PEACE OF MIND•24/7 LOG Issuance •Cashless Admission

•Comments

IKHLAS Medical/Health (EB/GHS) Solutions

The New World…

13th April 2009

•Two Domino’s employees

•YouTube

•Apology from Domino’s after 48 hours

•1 million hits

•Twitter: questions on silence

•LinkedIn: suggestions by users in forum

BusinessWeek, May 4, 2009

Question 1: Human Capital - Who?

Excellent

Very Good

Average

Not Good

Commit Suicide

Question 2

What is the Objective?

Intro

Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”

Sergio Zyman

“Retention and Loyalty are useless if No Conversion is happening.”

Intro

“Retention and Loyalty are useless if No Conversion is happening.”

“Retention and Loyalty are useless if No Performance is happening.”

Intro

Loyalty is misleading…

• Heavy Consumption ≠ Loyalty

• Loyalty ≠ Heavy Consumption

• Good Performance ≠ Retention

• Retention ≠ Good Performance

Principles and Objectives

Principles Company’s Needs

1.Succession Planning of Key Leaders – Founding Directors (perpetual business theory)

2.Retention of Key Staff – especially younger ones

3.Transform into a Performance-based organization

Principles and Objectives

Principles HR Philosophy

1.Equal / Fair

2.Happy / Productive

3.Hire Low, Train High

4.Performance vs Potential

5.Retention / Engagement

Summary: Today’s presentation

1. Business Model

2. Building Blocks

#1: Get the right Business Model first

“Hope is not a strategy”John Maxwell

The McPlaybook*

Make it easy to eat• 50% drive-thru• Meals held in one

hand

Make it easy to prepare• High Turnover• Tasks simple to learn

& repeat

Make it quick• “Fast Food”• Tests new products

for Cooking Times

Make what customers want• Prowls market for new

products• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007

What is the Business Model?

USP

Market Discipline

Profit Model

•Google

•Tata Nano

Business Model: Profit Model

Revenue

Cost

MarginCash Flow

Assets

Market Discipline

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

OperationalExcellence

CustomerIntimacy•Air Asia

•LV

•Ramly

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Alignment & Consistency: Market Disciplines

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Market Disciplines

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Market Disciplines

HP well-balanced portfolio, mass customization

Acer super lean cost structure, aggressive pricing

Apple powerful products, premium

pricing, limited range

Still Doing well in 2009-2011

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Strategy: Market Disciplines

• Operational Excellence• Move know-how from top performing

units to others• Benchmark against best in class• Ensure operations training for all

employees• Use disciplines like TQM for continuous

learning to reduce costs and improve quality

Alignment & Consistency: Market Disciplines

Alignment & Consistency: Market Disciplines

• Customer Intimacy• Capture knowledge about customers• Understand customer needs• Empower front line employees• Ensure that everyone knows the

customer• Make company knowledge available to

customers

• Product Leadership• Reduce time to market• Commercialize new products fast• Ensure that ideas flow• Reuse what other parts of the company

have already learned• Ensure there are multiple sources of

funding

Alignment & Consistency: Market Disciplines

#2: Building Blocks

People, Strategies, Structures, Culture

Intro:

“Cow don’t drink water cannot push cow head down”

Operational Excellence

Operational Excellence

Customer Intimacy

Customer Intimacy

Product Leadership

Product Leadership

Organization, jobs,skills

Management systems

Information and systems

Culture, values,norms

Business Model vs. Talent & Performance Management

Operational Excellence

•Central authority, low level of empowerment•High skills at the core of the organization

•Disciplined Teamwork•Process, product- driven•Conformance, 'one size fits all' mindset

• Integrated, low cost transaction systems•The system is the process

•Command and control•Quality management

Operational Excellence

•Central authority, low level of empowerment•High skills at the core of the organization

•Disciplined Teamwork•Process, product- driven•Conformance, 'one size fits all' mindset

• Integrated, low cost transaction systems•The system is the process

•Command and control•Quality management

Organization, jobs, skills

Management systems

Information and systems

Culture, values,norms

Business Model vs. Talent & Performance Management

Organization, jobs,skills

Management systems

Information and systems

Culture, values,norms

Product Leadership

•Ad hoc, organic and cellular•High skills abound in loose-knit structures

•Concept, future-driven•Experimentation and 'out of the box' mindset

•Person-to-person communications systems•Technologies enabling cooperation

•Rewarding individuals' innovative capacity•Risk and exposure management•Product Life Cycle profitability

Product Leadership

•Ad hoc, organic and cellular•High skills abound in loose-knit structures

•Concept, future-driven•Experimentation and 'out of the box' mindset

•Person-to-person communications systems•Technologies enabling cooperation

•Rewarding individuals' innovative capacity•Risk and exposure management•Product Life Cycle profitability

Business Model vs. Talent & Performance Management

Organization, jobs,skills

Management systems

Information and systems

Culture, values,norms

Customer Intimacy

•Empowerment close to point of customer contact•High skills in the field and front-line

•Customer-driven•Variation and 'have it your way' mindset

•Strong customer databases, linking internal and external information

•Strong analytical tools

•Customer equity measures like life time value•Satisfaction and share management•Focus on ‘Share of Wallet’

Customer Intimacy

•Empowerment close to point of customer contact•High skills in the field and front-line

•Customer-driven•Variation and 'have it your way' mindset

•Strong customer databases, linking internal and external information

•Strong analytical tools

•Customer equity measures like life time value•Satisfaction and share management•Focus on ‘Share of Wallet’

Business Model vs. Talent & Performance Management

Alignment: 4-Wheels Model

Culture

Business

Model

Strategic Planning

StructurePerson

Leadership

Resources

Alignment: Framework

• Focus point• Alignment• Quality• Innovation & Differentiation• Risk taking• Performance Management• Corporate obsession• Decision making

Culture

Alignment: Framework

• Org Structure• Job Design• C&B• Policies & procedures• Decision making• Job fit• Management Systems• BSC and KPIs• Decentralized & Empower

Structure

Strategy: Framework

• Role modeling• Vision/Mission/Philosophy• Leadership Style• Delegation & Empowerment• C&B, Promotions• Sense of Urgency• Speak regularly about Performance

Leadership

Strategy: Framework

• Recognition• Recruitment• Training• Profit sharing• Values• Motivation• Self Efficacy• Awareness• Useful Competencies• Career aspirations• Attribution (control)

Person

Strategy: Framework

Enablers• Technology• Equipment• Materials• Human• Intellectual

Property• Partners• Property

Resources

Funding • CAPEX• OPEX

Alignment: 4-Wheels Model

Culture

Business

Model

Strategic Planning

StructurePerson

Leadership

Resources

Retention, Engagement and Motivation

Employees are not your assets. Good Employees are your assets

Background: The Four Desperates

1. Desperate Competition

2. Desperate Consumer

3. Desperate Achievers

4. Desperate Changes

Targeting: Identify and Attract

• Who are your Talents?

: A Talent for others does not mean a Talent for you

Example: ABC’s Talent Profile

• Unwanted by big MNCs• Small companies• Boring Environment• No Growth/Learning• No MBA• Passion, Values, IQ (streetsmart)• Appreciate Chaos• Multitask• Passion to Learn

Targeting: Identify and Attract

Group I

(Talent Pool)

23

45

PE

RF

OR

MA

NC

E

2 3 4 5

POTENTIAL• Identify

Targeting: Identify and Attract

Group I

(Talent Pool)

Group II

( Potential)

Group III

( Performance)

Group IV

(Counseling)

2 3 4 5

23

45

PE

RF

OR

MA

NC

E

POTENTIAL• Identify

MBO Standards

A Excellent

B Good

C Average

D Poor

E Useless

MBO Standards

A Excellent

B Good

C Average Good

D Poor

E Useless

MBO Standards

A Excellent Excellent

B Good Very Good

C Average Good

D Poor Not Good

E Useless Commit Suicide

MBO Standards

A Excellent Consistently achieved 4 for 3 quarters

B Very Good Higher than planned results

C Good Achieved Planned Results

D Not Good Did not fully meet planned results

E Commit Suicide

Unacceptable performance

Top Performers and the ‘No Contribution’ Problem

Lagging

Leading

Historical, Outcome, Results, 1st Level, Usually Financial or tangible, Quarterly and Annually

Current, Indicators, Drivers, 2nd Level onwards, usually non-financial or intangible, Weekly, Monthly and Quarterly

Top Performers and the ‘No Contribution’ Problem

Customer Retention % Lagging, 1st Level

Customer Satisfaction Index

Leading, 2nd Level

On time delivery

Time to market for new products

TNA %

Defect levels, warranty claims

Leading, 3rd Level onwards

Revenue Growth

Base Retention

Share Gain Positioning Adjacent Market

New Business

Operational Excellence

Product Leadership

Customer Intimacy

Competencies Information Systems

Motivation, empowerment,

alignment

Financial

Learning & Growth

Internal Process

Customers

Investment Strategy

Productivity Market Value

Linking Business Model, Strategy and Building Blocks

Before we continue…

Which comes first?

1. Strategies -> KPI?

2. KPI -> Strategies?

Before we continue …

Which comes first?

1. Strategies -> KPI?

2. KPI -> Strategies?

•already know our priorities, aware of all strategy options available

•creating something UNIQUE, INNOVATIVE and DISRUPTIVE e.g. Air Asia

•conducting a business Turnaround e.g. MAS

Before we continue …

Which comes first?

1. Strategies -> KPI?

2. KPI -> Strategies?

•want to find out possible strategies,

•determine our priorities first thru selection of important KPIs;

•growing through ‘normal’ business, not a Turnaround.

Competency Target Setting

1. Initiative

2. Teamwork

3. Problem Solving

4. Leadership

5. Integrity

What’s the problem here?

Competency Target Setting

Initiative

1. Minimize problems quickly without needing to be asked

2. Seeks personal growth and professional self-development

3. Doing more than is required/expected in a job

4. Seeks new and improved solutions and approaches to completing assignments

5. Looks for opportunities to help others and team

Competency Standards

3 Meets behavioral standards consistently. Is a good role model for others.

2 Meets behavioral standards some of the time. Needs improvement.

1 Does not meet behavioral standards. Require counseling or disciplinary actions.

Reminder…

Reality #1

Cash is King

Reminder …

Reality #2

Tangible C&B

Attraction

Reminder …

Reality #3

In-Tangible C&B

Retention

Reminder …

Reality #4

In-Tangible C&B

Tipping Point for Attraction/Retention

The 51.28% Theory

• Resign = Push + Pull > 51.28%

• If staff is Happy:=> 0 + Pull > 51.28%

Retention

Retention

Experience Swing Ex

Oppose

Retention 1: Experience

Loyalty = Experience vs. Expectations

Solution Strategy: Talent Management Plan

Loyalty 1: Experience• Talent

Management Plan

PhilosophyOJT, Mentoring, Big-5, LP, PDP, SDP, Projects,

P/P Grid, SP Table, PDP, Premium,

Q12, C&B, ACDP, SCL, Transfers, Events, Recognition

P/P Grid, Q12, PA, SDP, SP

Development

Motivation

Selection

Evaluation

Loyalty 2: Swing

Loyalty = Best alternative at the current moment until I find another alternative

Solution Strategy: Improve your Talent Management Plan, Try Your Best, or Live with It

Loyalty 2: Swing

Swing Talents are “loyal” because:• Individual Relationships• Convenience (at that point in time)• Contractually tied-up• Direct Incentives*• No better alternative• Subordinates• No known alternative• CV friendly

Post-Recession

Retention

Experience Swing Ex

Oppose

Post-Recession

Swing Loyalty: Try Your Best…

1. Over Promote

2. Loans

3. Spot Bonuses

4. Block recruiters

5. The Spouse

6. Toys

7. Glorified Titles

8. Forced Ambassador

9. “Position” the competition

10.Sell the Dream

11.Give them a Best Friend

12.Internal Trainer

SCL: Specialist Career Ladder

•Telco, •Outsourcing, •Aerospace, •Biotech,•Digital media, •Animation, •M&A•Financial forensics

Associate Specialist (2)

Specialist (4)

Consultant (4)

Principal Consultant (1)

Motivating Talent

Hope

Control

Motivating Talent

Passion Job

GrowthTalent

Minimum Motivation Target: 2 out of 4

Delegation

Curse of the Bell Curve

‘A’ Staff

‘B’ Staff

‘D’ Staff

‘E’ Staff

‘C’ Staff

End Notes & Start Up

The end of the Beginning

For Starting Up…

1. Get the Business Model right

2. Link HRM to Strategy (e.g. BSC)

3. Clarify the HRM Philosophy

4. Strengthen Performance Management System

5. Redirect Funds ($$)

6. Design simple processes

7. Develop and Reward focused on Talent groups

8. Communicate throughout

Which Company?

American Customer Satisfaction Index (ACSI) • 64 out of100-point scale: lower than IRS (Tax)• 2nd last among 30 companies surveyed• Lowest 5% among 223 companies surveyed• Bottom 5% of all measured private sector

companies

• 500 million customers2010 American Customer Satisfaction Index (ACSI) 

E-Business Report

Which Company?

American Customer Satisfaction Index (ACSI) • 64 out of100-point scale: lower than IRS (Tax)• 2nd last among 30 companies surveyed• Lowest 5% among 223 companies surveyed• Bottom 5% of all measured private sector

companies

• 500 million customers

2010 American Customer Satisfaction Index (ACSI) E-Business Report

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