Driving Results
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Transcript of Driving Results
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Driving Results Driving Results withwith
Breakthrough Breakthrough People Strategies
June, 2003June, 2003
Ravi Virmani, Managing Director, South AsiaHewitt Associates
Presented at HR Round Table organized by ISPe & UPES, Dehradun
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
“The old adage ‘People are your most important asset’ is wrong.
People are not your most important asset, the right people are”
- Jim Collins in Good to Great
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
What we know of the futureWhat we know of the future
Privatization and Deregulation of sector
Intensity of Competition
Environmental & Social Regulations
New frontiers and New technologies
Looking beyond borders
Structural Changes
Natural gas as an alternative
The unknown unknowns
Transform or Perish...Transform or Perish...
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Business Results & Strategies
Business Capabilities
People Requirements
Talent Strategies
Employee Needs
StaffingStaffing
RewardingRewarding
PerformingPerforming
OrganizingOrganizing
LearningLearning
Driving business results through people Driving business results through people
Business Interactions
Management Practices
Balanced Measureme
nt
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Bringing talent strategy to lifeBringing talent strategy to life
CrudeProcurement Refining Logistics Marketing
Do I have the right people doing the right
things
Am I creating the right environment for
success
How do I know
People Capability
Performance Drive
Structure
Reward Customer
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Strategy framework - an illustration Strategy framework - an illustration
Build emerging businesses
Extend & defend core businesses
Create viable options
Profi
tabl
e Gro
wth
Seed growth
options & test
business model
Manage for
profitability
Replicate proven business
model
Key elements required to drive/ achieve
growth and profitability for your
business model Structure
Capability
Performance
Reward
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Seed growth
Manage
Replicate
Organization structureOrganization structure
– Innovators
– Entrepreneurs
– Technical
specialists– Developers of emerging businesses
– Autonomy to run businesses
– High level interface with the Strategic
Group
– Strategic core to drive synergies
– Consolidation & Policy direction across
different Oil Industry ventures
– Highest level for Technical “Experts”also
Profi
tabl
e G
rowth
– Skill
hierarchies
– Career tracks
– Continuous
redefining of
jobs
– Provision for
“high
octane”specia
l projects
Key Elements– Scalability– Agility– Focus– Innovation & Process
Orientation
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Capability buildingCapability building
Seed growth
Replicate
Profi
tabl
e Gro
wth
Key Elements– Effective leadership– Knowledge and capability
development– Continuous skill
enhancement
– Defined
“leadership
culture”
– Behavioral
and technical
competency
framework
– Linkage to
hiring,
training,
performance
management
etc.
– Recruitment based on
competencies
– Performance
based differentiators
– Top-line focus and sharp decision
making
– Ability to strategize & run a
business
– Technical & creative skills
– Deep functional/ industry expertise
– Strong skill inventory and assessment/
upgradation mechanisms
– “No excuses” management style
Manage
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Leadership - the fulcrum of capability buildingLeadership - the fulcrum of capability building
Organisation Team
Individual
Self Awareness & Effectiveness
Leadership Systems Development Exercises
Complacence is a function of past success and lack of future visibility. Indian oil and gas companies will need inspired leadership in the next 3-5 years if they are to escape the complacence trap. Strategic paranoia will be the most critical lever available to the value chain integrator.
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
•Multi-Source Feedback
•Individual development action plans
•Coaching & Feedback
•Development Curriculum - Workshops, Simulations, Team Exercises
•Performance Management
•High potential Management - Succession Planning
Self-Awareness & Effectiveness
Leadership competencies
Identifying individual Strengths & development needs
How one is perceived by others
Team Development Exercises
Team effectiveness
Integrated dynamics
Addressing collective development needs
Supporting Leadership Systems
Integrated approach to manage the Leadership Life Cycle
Organisational dynamics
Systemic model
Leadership - the fulcrum of capability buildingLeadership - the fulcrum of capability building
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Build your talent pipelineBuild your talent pipeline
Senior LeadershipSenior Leadership
Emerging Leaders - Talent PoolEmerging Leaders - Talent Pool
Board and Board and CEOCEO
Future Leaders - Young TalentFuture Leaders - Young Talent
external sourcing
strategiesgroom from
within strategies
Get the “Right People” on the bus
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
– Differentiated
performance
parameters/
time horizons
– Feedback and
Coaching
mechanisms
– Review
completion to
have the
intensity &
focus of a
budget process
Key Elements– Alignment to business
strategy– Right measurement– Process orientation
and transparency– Culture of discipline
Performance managementPerformance management
Seed growth
Manage
Replicate
– Entrepreneurial drive, top-line focus,sharp decision making & self motivation
– Strategize, plan & run a business aggressively & profitably
– Organisation building capability– Consolidate/leverage technical & creative
skills
– Strong leadership
– Recognition of
innovation
– Long term time
horizon– Top-line and aggressive targets
– Strong linkages to training and
development
– Medium term time horizon
– “Clear penalties” for under-performance
– KRAs and targets based on bottomline growth
– Ongoing review and feedback
Profi
tabi
lity
&
Gro
wth
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Common Purposefocusing everyone on
the organization’s goals
Where are we headed?
Common Purposefocusing everyone on
the organization’s goals
Where are we headed?
Clear Expectationsfor individual andgroup contribution
What’s my role?
Clear Expectationsfor individual andgroup contribution
What’s my role?
Commitmentbased on meaningful
work and rewards
What’s in it for me?
Commitmentbased on meaningful
work and rewards
What’s in it for me?
Capabilitybuilt through
feedback and learning
What will it take?
Capabilitybuilt through
feedback and learning
What will it take?
Performance
Planning
PerformanceReviews
Rewardsand
CareerDevelopment
OngoingFeedback
Focus on the Key Outcomes more than the Process Steps
Develop performance systems Develop performance systems
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Ensure alignment….Ensure alignment….
Performance Scorecard
• Map objectives to the balanced scorecard framework
• Establish metrics, baseline, and set targets
Value Driver Mapping
• Identify value levers
• List metrics in view of short- and long-term business strategy, anchored to value creation requirements
Strategy Tree
• Articulate how the business will create value, from high- level strategies to specific initiatives that will support the business objectives
Scotia Capital - Value PropositionMaximize Return on Shareholder Capital
DRAFT3-Year CAGR: 16%1,200 Employees3 Businesses3 RegionsNI (2000) = $650M
Profitable Top-Line Growth ROEE
BSC
Imp
lica
tions
Cur
rent
Initi
ativ
es a
nd M
ea
sure
men
ts
Bus
ines
s Pl
an
and
Ta
ctic
s S
trate
gic
Fo
cus
New Markets and Products Grow Existing Revenue Sources and Market Share Return on Equity Capital Risk Management
Deepen CustomerRelationships
EffectivelyCross-Sell
Broaden Product &Service Offerings
Build/OptimizeMarkets
Maximize CustomerProfitability
CanadaFocus on key customers
Build lead relationships
Shift from product P&L tocustomer P&L (ROEE based)
Become financial advisorinstead of product provider
Strengthen reputation in themarketplace
Enhance collection and useof c lient information
USAdopt industry-focused c lientcoverage model
CanadaFocus on multiproduct sales
USCross sell broader range ofScotiabank Group products
EuropeHave CRMs integrate allproducts into marketingefforts
Engage in more active crossselling
CanadaOffer full menu of financialproducts
Leverage E-distribution
USBroaden product offeringsacross the board (equity andcredit derivatives)
EuropeBuild additional productcapability (especiallyderivatives)
CanadaStrengthen middle marketpresence
USFurther develop existingbusiness lines
EuropeImprove access toContinental Europe markets(add language skills)
Expand existing business lines
Expand industry focus inselect industries
AllImplement customerprofitability model (ROEEmethodology)
USModel projected customerprofitability
Tier client base by ROEE
Exit unprofitablerelationships
Retain key customers
Top 3 in each product line
Analyst rankings(e.g., Brendan Woods)
Cater to top 350 c lients inCanada
CRM structure
Calling activity measurement
Referral system (US andCanada)
Prospector Database
• Number of sales calls made
• Products pitched
• C lient “up-tiering”
ScotiaFX
ScotiaLive
Further develop:• Derivatives business (US)• High-yield capability (US)• Acquisition/securitization business (Europe)
Track number of deals, marketshare, senior-level coverage
INEA
Wall Street (tradingback-office system)
People Initiatives
Retain and recruit top talent (MBA level)
Provide product-knowledge training (classroom, web,job rotation) and support
Benchmark compensation levels to market
Identify and develop good CRM candidates
People Measurement ToolsEmployee Satisfaction Index (Viewpoint)Diversity Index (Viewpoint)Performance Evaluation Scorecard (Business Heads) Financial Performance (50%), C lient (15%),Franchise Enhancement (15%), Developing People (10%), Risk Management (10%)360 feedbackPerformance review (360, BSC, personal objectives)
People MetricsRecruiting offer acceptance rates
Turnover/attrition rates
Time to fill
Specific individual performanceplan measures
FinancialRROE
Revenue growth
ROEE
CustomersReputation
Customer satisfaction
Cross-sell; repeat business
Product development
OperationsSystems integration
Process development
EmployeesLeadership development
People management skills
Retention
Training
IssuesLack of complete buy-in atbusiness head level for BSC
Different considerations fordifferent business lines andregions
Simple vs. complicated
Leverage Technology/Streamline Processes
AllContinue to build financialand MIS systems
Centralize administrativefunctions to Canada
Integrate necessaryenabling technology (tosupport E-distribution)
USConsider organizing byindustry specialty groups
OptimizePricing
CanadaTarget high-marginproducts
USImprove spreads throughtiered c lient base
Strengthen profit-generating product base
MinimizeLoan Losses
AllRefine credit and riskmanagement techniques
Launch dedicated loanportfolio managementunit
USSell off bad loans
Implement structuredproblem loan forecastingsystem
All-bank economic capitalmodel
People & Infrastructure
Customer profitabilitymodel
Continued focus on returns
Industry survey cost andreliability
Information may be siloed inthe business
Long-TermShareholder
Value Creation
Long-TermShareholder
Value Creation
Scotia Capital - Balanced Scorecard Framework
Competitive Advantage:
GrowthGrowth
ReturnReturn
Key Business & People StrategiesPlease note if strategies are short-term or long-term in nature
Performance Measurement
Operations
Customer
Financial
People
• NI of $800 million (2004)• ROEE 16-18%• Increase deal revenue as a
percent of total revenue(60%–3 years)
• Portfolio quality/credit risk management– Maximum loan loss of XX bp on portfolio– Maintain weighted average IG Code of 80-85
• Satisfactory regulatory and internal audit ratings• Direct/support cost ratio through centralization and
technology continuous improvements
•Cross-sell pick-upXXX bp
•Increase share of walletfor Focus clients
• Improve employee survey results (using selectedquestions)
• Cross-divisional moves of high-potential people (5)• Achieve employee-relationship plan targets• First-choice offers to acceptance• Strengthen leadership skills of leadership team through
use of 360 degree feedback
Division wide goals as expressed in theTown Hall Meeting:
Financial•Net Income stretch goal•Consolidated ROEE stretch goal•New Asset Growth stretch goal
Clients•Increase cross sell and product count•Optimize client coverage priorities andcapabilities
•Enhance product execution capabilities•Continue to be top ranked by our clients insurveys
•Rank in top 3 in all products in Canada•Maintain top tier rankings in the Gold Sheetsin the U.S.
•Co-head led pitch
Technology•Continued modernization/upgrading
MIS•Enhanced client MIS
Employees•Provide necessary infrastructure formaximum development and advancement
•Particular focus on US this year (changemanagement)
•Effective implementation of U.S.repositioning strategy
Division wide goals as expressed in theTown Hall Meeting:
Financial•Net Income stretch goal•Consolidated ROEE stretch goal•New Asset Growth stretch goal
Clients•Increase cross sell and product count•Optimize client coverage priorities andcapabilities
•Enhance product execution capabilities•Continue to be top ranked by our clients insurveys
•Rank in top 3 in all products in Canada•Maintain top tier rankings in the Gold Sheetsin the U.S.
•Co-head led pitch
Technology•Continued modernization/upgrading
MIS•Enhanced client MIS
Employees•Provide necessary infrastructure formaximum development and advancement
•Particular focus on US this year (changemanagement)
•Effective implementation of U.S.repositioning strategy
•xyz
•xyz
•xyz
•xyz
MetricsShort-Term>>>>>>>>>>>>>>Long-term
TrackingMethod
Note: Short-term metrics typically apply to “business as usual” functions, while long-term metrics may be of a more transformational nature
DRAFT
• NI of $690 million (2002)• ROEE 13%• Increase deal revenue as a
percent of total revenue(50%)
•Cross-sell pick-upXX bp
•Increase product count per client by 10%•Quarterly contact of Focus clients at CFO level orhigher as appropriate - establish baseline
The ProcessTiers of Scorecards
Financial
Customer
Processes
Human Capital
Corporate Scorecard• -• -
Narrative Metrics/GoalsDivision
Narrative Metrics/GoalsDepartment
Financial
Customer
Processes
Human Capital
Narrative Metrics/GoalsSub-department
Financial
Customer
Processes
Human Capital
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
– Articulated
“compensation
strategy”
– Pay for person
& performance
– Differentiated
pay mix/ranges
and career
paths
– Standardized
pay delivery
Key Elements– Rewards for
continuous skill upgradation
– Flexibility and responsiveness
– Equity, fairness and transparency
RewardingRewarding
Seed growth
Manage
Replicate
– Immediate financial
rewards for “ideas”
– Open ended and broad
pay ranges
– Cash bonuses and equity
participation
– Skill acquisition adequately
rewarded
– Career paths dependent on growth
– Special incentives for
“exceptional” performance– Sharp incentives for meeting targets
– Clear penalties for under-performance
– Clearly defined and closed pay ranges
Profi
tabi
lity
& G
rowth
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Putting the building blocks in
place
Equity Participation
Skill based Pay
RewardingCreativity and
Innovation
RecognitionIncentives/
Benefits
Differentiated Career Paths
Make work a “rewarding” experienceMake work a “rewarding” experience• Define a
common language of success
• Share more to receive more
• Communicate possible rewards effectively
• Build flexibility in pay
• Recognize dedication and drive
• “Package” career management effectively
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
In summary… In summary…
Your agenda needs to be…
Build agility and alignment in your structure
Develop leaders and manage a steady pipeline of
talent
Drive performance down the organization
Create a common language of success
Create a culture of discipline
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Begin with …. Begin with ….
“The absence of execution is the biggest obstacle to success” —Larry Bossidy, Execution
Execution—Turning Ideas Into ActionFocus
• Target the Vital Few Initiatives• Demonstrate Impatient
Perseverance• Communicate Purpose and
Progress
Practicality
• Ensure Lean Design• Build Real World Tools• Enable With
Technology
Accountability
• Monomaniac on a Mission
• Enlist Active Sponsorship
• Measure What Matters
People Issues are complex…. People Issues are complex…. Managing them doesn’t have Managing them doesn’t have
to beto be
Improving Business Improving Business RESULTSRESULTS through through PEOPLEPEOPLE
Hewitt AssociatesHewitt Associateswww.hewitt.comwww.hewitt.com