Performance Magazine 12th edition

Issue No. 12 August/2018

COVER STORY HOW CAN YOU IMPROVE KEY PERFORMANCE INDICATOR REPORTING? ARTICLES UNDERSTANDING WHY YOUR ONLINE BUSINESS MIGHT BE LOSING CUSTOMERS THE CUSTOMER PERSPECTIVE WITHIN THE BALANCED SCORECARD MANAGING THE PERFORMANCE OF TOMORROW’S GRADUATES 4 TYPES OF BUDGET REWARDS TO ENGAGE AND MOTIVATE EMPLOYEES KPIs % NEW HIRE FAILURE $ COST OF SERVICES DELIVERED # BERRY RATIO + LIFESTYLE - HELPFUL HACKS TO BOOST YOUR MEMORY PORTRAIT

GAIL STOUT PERRY

Achieving results – the essence of Performance Management

INDEMNITY STATEMENT

Š 2018 The KPI Institute Ltd. All Rights Reserved.

ID Number: TKI0182091 ISBN-13: 978-1727050141 ISBN-10: 1727050142 An appropriate citation for this magazine is: The KPI Institute, Performance Magazine, Printed Edition, no. 12, vol. 5/2018, August, 2018, Melbourne, Australia Indemnity statement: The KPI Institute has taken due care in preparing the analysis contained in this publication. However, noting that some of the data used for the analysis has been provided by third parties, The KPI Institute gives no warranty to the accuracy, reliability, fitness for purpose, or otherwise of the information. The KPI Institute shall have no liability for errors, omissions, or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

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www.kpiinstitute.org AUGUST 2018

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CONTENTS

3 EDITOR'S NOTE 4 NEWS 12 COVER STORY 12 Storytelling with KPIs - How can you improve Key Performance Indicator reporting?

14 PERFORMANCE ANALYSIS 14 Can a performance-based culture be nourished in organizations with a long history of instability?

16 Tools for Success: The Strategy and Performance Management Audit 20 Performance Management: Less Theory, More Practice

23 PORTRAIT 23 Gail Stout Perry

28 ARTICLES 28 Health & Safety Management 28 The Essential Functions of Health and Safety Management Systems and Software Effectiveness 30 Techniques for Effective Environmental Health and Safety Management 32 Digital Performance 32 Web Design Trends for Success in 2018 34 Understanding Why Your Online Business Might Be Losing Customers

48 Boosting Performance Via World-Class Employee Engagement Events 50 4 Types of Budget Rewards to Engage and Motivate Employees 52 8 Ways to Write Effective Employee Performance Reviews 54 13 Inspiring Ways to Motivate Your Employees Out of a Rut

56 ASK THE EXPERT 56 Why do organizations struggle with strategy execution?

58 KPIs 58 Human Resources 58 # Management-to-staff ratio 58 % New hire failure 59 % Employee cost over sales revenue 60 Business Consulting 60 $ Cost of services delivered 60 $ Delivery overhead costs 61 % Consulting hours generating revenue 62 Accounting 62 # Days in accounts receivable 62 # Berry ratio 63 # Liquidity ratio

66 LIFESTYLE

36 Balanced Scorecard & Six Sigma – The Best Ways to Improve Performance

66 Personal purpose, mission and vision and how to live by your values

38 Communication, Planning and the Balanced Scorecard

67 Daily routines, productivity and personal performance

42 The customer perspective within the Balanced Scorecard 44 Balanced Scorecard software selection: making the right investment 46 Employee Performance

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47 Continuous Professional Development, Learning, And Your Earnings

36 Balanced Scorecard

40 Managing bank performance with the Balanced Scorecard

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46 Managing The Performance of Tomorrow’s Graduates

68 Helpful hacks to boost your memory

70 RECOMMENDATIONS 70 Books: The following is a list of must-haves for your 2018 reading list

Aurel Brudan CEO, The KPI Institute Andrei Costea Head of Publishing & Media

EDITORIAL TEAM Maria Juncu Andrei Ungureanu Ana Lechințan Andrea Minelli Oana Gavril Olivian Breda Paul Albu Andreea Vecerdea Marcela Presecan Cristina Mihăiloaie Adelina Chelniciuc Adela Tudorache

DESIGN

With these thoughts in mind, we proudly announce the launch of our twelfth issue of PERFORMANCE Magazine. PERFORMANCE Magazine is The KPI Institute’s prime resource for insights into the discipline of Performance Management.

The content published in PERFORMANCE Magazine pursues high and wide for some of the best, latest and most pressing topics of discussion in Performance Management and in adjacent areas of interest.

EDITOR’S NOTE

STAFF EDITORIAL COORDINATION

Encompassing The KPI Institute’s experience, research and expertise, PERFORMANCE Magazine – Printed Edition provides its readership with first-hand howto, resources, and insights from practice, so as to assist them in their performance endeavors and in becoming state-of-the art professionals.

This edition provides details on the subjects of Health & Safety, Digital Performance, Employee Performance, Balanced Scorecard, KPIs, among others.

Flip through pages of extensive research studies, concept presentations, insights from practice, alongside KPI in-practice examples, and books and movie recommendations, all related to performance management.

In our 12th issue of PERFORMANCE Magazine, we shall delve into the professional life of Gail Stout Perry, Chief Strategy Officer & VP – Sales, Corporater. Ms. Stout Perry a strategic planning and performance management professional with 25 years of corporate and consulting experience across multiple industries, disciplines and technologies. She has provided strategic consulting services for a wide variety of organizations from Fortune 500 to government agencies.

Furthermore, she has also co-authored a textbook on strategic planning and management using the balanced scorecard and has trained several hundred professionals in strategic management certification courses through George Washington University and Balanced Scorecard Institute.

So now we invite you to take part in a world dedicated to improving performance and all that is comprised in the search for improvement, in its smallest details. Enjoy this August’s PERFORMANCE Magazine!

Javier Rocha Head of Graphic Design

As we are always interested in gaining insights from practitioners who activate in a multitude of environments, contact us at editor@kpiinstitute.org if you are interested in becoming a Guest Post Editor, or having your interview featured in PERFORMANCE Magazine.

Andrei Costea Head of Publishing & Media, The KPI Institute AUGUST 2018

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1. Cost savings, through discounts of more than 50% of the current market price; 2. Organizational development, by benchmarking with regional leaders, learning best practices on strategy and performance through assessments, trainings programs, events or by becoming part of a community and keeping up to date with the latest developments in the field of performance measurement and management; 3. Reputational benefits, since a premium recognition of being part of a unique international performance improvement program will be granted.

> The KPI Institute and GCCIA: Partners for the Utilities Performance Program The KPI Institute and Gulf Cooperation Council Interconnection Authority (GCCIA) are proud to announce that they will be working together as institutional partners on implementing the newly outlined GCC Utilities Performance Program.

Any collaborative efforts in making this Utilities Performance Program a catalyst of improvement for GCC utilities companies are highly welcomed. As such, any parties that are interested in this framework can consider this an open invitation to join and take the program to the next level of development.

The program aims at creating a network of utilities companies where sharing best practice, collaboration and learning from each other’s experience is the key goal. The GCC Utilities Performance Program was created based on the GCCIA’s knowledge in the field and The KPI Institute’s first-hand experience in the industry, gained by working closely with some important utilities companies.

The program contains 5 modules, with any company interested in the program being given the option of choosing whether it wants only one module, multiple ones or all of them. The modules are as follows: 1. Strategy Execution Audit: provision of strategy and performance audit solutions to nurture an improvement of the maturity level of participating organizations.

2. Performance Benchmarking: a structured operational performance benchmarking project, customized to the GCC context, but anchored in international best practices.

3. Diploma in Performance Improvement: provision of a professional diploma in utilities performance improvement, with courses delivered both online and in a classroom environment.

4. Performance Improvement Conference: an annual one-day event dedicated to sharing of best practices in strategy execution, operational excellence and innovation among GCC electricity utilities.

5. Community of Practice: operate a series of quarterly meetings dedicated to performance improvement in electricity utilities, in both face to face and webinar format.

Moreover, any organization that wishes to partake in the program will benefit from several advantages: 4

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> Apple surpasses $1 trillion in stock market values Apple has managed to achieve an outstanding milestone. For the first time in history, a company has managed to attain a stock market value of over $1 trillion dollars.

Despite this impressive figure, CEO Tim Cook noted that financial returns are only the result of Apple’s innovation. However, this impressive value would not have attained without an equally impressive team.

Buzzfeed managed to get ahold of an e-mail, sent by Tim Cook, to his employees, following the amazing news. He noted that the reason why Apple has been so successful for the past decade and continues to be a powerhouse, is their team. Every Apple employee’s hard work, dedication, passion, creativity and wit brought them their present-day success.

In addition to this, Cook thanked every customer, for believing in their products and services, as well as their supplies and business partners, the developer community and every other party whose work has brought apple to never-before seen heights.

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“Steve founded Apple on the belief that the power of human creativity can solve even the biggest challenges, and that the people who are crazy enough to think they can change the world are the ones who do. In today’s work, our mission is more important than ever. Our products not only create moments of surprise and delight, but they also empower people all around the globe to enrich their lives and the lives of others.”

Apple has managed to attain an unprecedented level of success, topping leader scores over and over again. I suppose at this point, one needs to ask two questions: Can anyone else reach their level of success?, and if there will be another such company, who will it be?

> Blockchain, changing industries one at a time Blockchain has been quite the hot topic in the past years, becoming a game-changing phenomenon quite rapidly. Many industries can benefit from its innovative solutions, as they either patch up weaknesses or bring remedies to issues that have plagued an industry for a long time.

Some of the most interesting industries that can potentially reap great benefits from blockchain technology are supply chain management, customer loyalty programs and advertising.

Supply chain management This industry is founded on three core concepts – traceability, transparency and authenticity. With that being said, current database models, used for storing sensitive information, consume quite a bit of resources and are not completely foolproof.

Data can be quite easily manipulated, real-time updates are not always available, and on top of that, consumers don’t often get a chance to trace their goods as they’re being delivered.

Blockchain can repair some of these issues. An example provided by Nikolai Kuznetsov, financial analyst, highlights this perfectly.

If a drug is manufactured in Singapore and shipped to a U.S.-based patient, with a specific need to be stored below 4 degrees Celsius, placing a blockchain-supported RFID tag on the drug will cancel out the possibility of any damage or misuse occurring during transport.

Customer loyalty programs We’ve known for quite some time that it is currently more efficient and effective to retain your current customer base, rather than bring in completely fresh faces, whom have never ever laid eyes on your products or services.

In addition, we’ve also known that one of the best ways in which companies do this is by using loyalty scores or points.

However, this method also has a few drawbacks. What about overhead costs? What if many customers decide to cash in their points all at once? How many products can be purchased with loyalty points?

Blockchain comes to save the day once more. Instead of receiving company-specific loyalty points, clients can get blockchain tokens shared across a swath of companies. If several companies join up in a network, their overall costs will stabilize and even go down.

Furthermore, customers satisfaction with go sky-high, as they will now be able to use their points across several companies, offering different products and services. That’s a win-win right there.

Advertising Businesses and sellers alike have increasingly soaring costs when it comes to advertising, as the need for greater visibility is becoming more poignant, and as a result, they have to appeal to numerous third parties that might not have been needed a few years ago.

This creates somewhat of a spiral effect, as companies share info amongst themselves, with customers having little say in whether they want company A or B to receive their info.

As with the previous two industries, blockchain can offer a solution.

By using a blockchain-based advertising platform, advertisers and publishers get direct connections between themselves, allowing them the opportunity to look at a variety of data options and choose the one that suits them best.

Moreover, such a platform can also boast an open rating system, ensuring a high degree of transparency and clear feedback.

As we have noted, blockchain can shore up many weaknesses and account for factors that used to be a thorn in companies’ sides. As we move on towards the second half of 2018, we can only hope more and more companies decide to be pioneers and test the limits of this technology.

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Moreover, having your Alexa skill appear higher up on the Search Engine Results Page (SERP) is still a free endeavour, based on latest updates, but it might not be free for ever. As the device gets more traction, people assume that in the future, you’ll have to pay for your skill to appear higher in the SERP. Don’t wait until tomorrow comes and someone else snags what could have been your opportunity at publicity and authority. Alexa is and has been the new hotness for quite a bit of time, so embarking on the hype train is not as much of a risk as you may think.

> Building your Alexa skills In case you’ve never ever seen an Alexa commercial before, Amazon Alexa is a virtual assistant, developed by Amazon, first used in the Amazon Echo and Amazon Echo Dot smart speakers. Simply put, Alexa is just like Microsoft’s Cortana, but on a full-blown speaker, instead of just your mobile phone or Windows 10 OS. Alexa is capable of voice integration, music playback, registering todo lists, setting alarms, streaming podcasts, playing audiobooks and providing general information such as weather, traffic, sports and news.

If you want Alexa to do more, a user can install apps, which are known as “skills”. Skills are added functions, developed by third parties. Currently, Alexa is compatible with more than 30,000 different skills.

Among the most popular ones, you can find a conference and quick events schedule manager, e-mail assistant, daily task reminder and more.

The device can also go through your calendar and find the number you need to dial in your conference calls or look through your inbox to give you detailed info on your travel trip.

So why should businesses take into consideration Alexa? Well, a few reasons.

First off, voice is no longer the future. It’s quite the now and it’s here to stay. Based off of Google data, about 20% of mobile searches are done through voice command features. People are more inclined to ask Siri or their smart speaker for various information, before actually pulling out their mobile phone and looking it up.

With voice recognition growing at a steady speed, your company will have to see how it can integrate and make use of Alexa skills.

Secondly, by looking into ways to incorporate skills, you guarantee being ahead of the curve. Companies tend to be wary when it comes to new tech, especially one that starts flaring up everywhere, as it can sometimes be only a temporary flash, instead of a full on development.

With this in mind however, you need to remember that there are over 30,000 skills (or apps) for Alexa. This is evidence enough that the service and product is not going to disappear into the night and never come back. It’s fairly stabilized and ready to be used by any daring company or entrepreneur.

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Look to make use of its growing popularity and make your name known among your competitors – show them you are the first to embed this new tech into your organization. Creating Alexa skills based off of your company’s products/services will grant you authority as a pioneer in your industry, and also net you a good chunk of publicity too.

> Getting your business on the silver screen through reality TV Does anyone here remember full-page newspaper ads, of new up-andcoming business? Or sharing cards & tokens to strangers, on the corner street, in an attempt to grow awareness about your new company?

Most people should remember. What most people should also remember is that we are not in 1970-1980s anymore. In this day and age, marketing is a completely new beast, one that evolves, changes and shifts almost overnight.

In an article written by Carol Sankar, founder of The Confidence Factor for Women in Leadership, we find out that Jamie Siminoff, founder of Ring, appeared for a mere 8 minutes on Shark Tank, back in 2013, and that was more than enough for Amazon to decide they will acquire it for $1 billion, in 2018, despite him not scoring a deal with any of the judges.

Another name propelled to fame through reality TV was Bethenny Frankel, founder of Skinnygirl Liquor, which was sold for approximately $100 million to Beam Liquors, as a result of numerous brand mentions and features on Bravo.

Ryan Zamo, founder of Z Skin Cosmetics, recently appeared on American Idol. Although his voice didn’t impress the jury, his skin care line did, bringing him millions in sales as a result of his appearance on TV. Now, before you go on and start enlisting your employees in every reality show out there, remember that simply being on the screen does not mean you will also reel in a fortune. There’s a few factors you need to keep in mind when deciding to bring your products/services on TV shows.

A. Proper storytelling matters Kevin O’Leary of Shark Tank noted that the reason why Amazon

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decided to buy out Ring from Siminoff was the fact that he was an extraordinary sales person. Everything he did, the way he presented his company had “an aura of greatness” about it.

He knew how to make you want to get involved, how to convince you that even though you may not need that particular type of product, you want his nonetheless.

B. The right people, at the right time Just as we mentioned earlier, don’t try to be Mr. Showwide, enlisting your company and/or employees in every reality TV show. Do a little search beforehand and see which show producer is more inclined to want your specific product or service. Don’t go in blind, it won’t go well.

C. Think before you speak – watch before you pitch Let’s say you found the perfect show for your company. You are well aware that the producers are massive fans of your specific kind of product. However, do you know how the show is conducted or what type it is? Do you know when’s the high point of the show?

There are many reality shows out there – talk shows, game shows, competitions and so on. Every one is different and requires a different approach to pitching your product.

D. Creativity incarnate So now you know the show, you know its type. But how do you make sure you don’t get shoved aside as just another attentionseeker?

If you want to completely woo a producer, you will need to stand out. You have to get creative. If they believe you did not waste their air time and brought a positive return on it, you’re golden. Look to sell your personality or better yet, your company’s personality, if you can pull it off.

E. Show’s over, marketing begins The moment the curtain closes is also the moment when the ball goes from being in the producer’s court, to your court. It’s on you to go out on social media and let people know you were on that show.

Moreover, now that you’ve aired on one show, you have an inside track on potentially getting invited to others, so don’t waste time and start connecting with other producers.

> Indra Nooyi stepping down as PepsiCo’s CEO Nooyi, who will be leaving her role in October and remaining chairman until early 2019, will be succeeded by Ramon Laguarta, who was one of the more certain cadidates to take over, given his nomination as the group’s president, last year. Interestingly enough, Laguarta will be only the 6th CEO for PepsiCo, in the entire 53-year history of the company.

Nooyi is the first foreign-born CEO of PepsiCo, as well as the first woman to lead the industry giant. For the past 24 years as, including 12 as CEO, she made it her mission to grow the company as much as possible.

Some of her most notable achievements are helping out Frito-Lay’s unit succeed in a tough industry, as well as adding healthier drinks and snacks to the company’s portfolio, as consumer preferences shifted away from the mantra of “only Cheetos and Mountain Dew”.

With 11 core chip brands that contain no artificial ingredients, PepsiCo strived to break out of its traditional mold and make a new one, by getting into organic products. Sabra hummus, guacamole, naked coldpress juices and Lipton Pure Leaf tea are just some of the products that the company’s found great results with. Overall, with Nooyi at the helm, the organization’s shares grew by about 80%.

As she noted, “I’ve had a wonderful time being CEO, but at some point you sit back and say, look, it’s a responsible move to effect an orderly transition and to have somebody else take over the leadership of this company. Being a CEO requires strong legs and I feel like I ran two legs of a relay race and I want somebody else with nice strong legs and sharp eyes to come and lead this company.”

With that in mind, Robert Laguarta feels like the perfect candidate as successor. A 22-year PepsiCo veteran, he oversaw global operations, strategy, public policy and government affairs for the Europe SubSaharan Africa division.

Nooyi is more than confident in Laguarta’s ability to manage the company, as she stated in an interview that he has a keen bird’s-eye view of the entire organization and knows very well what moves he would need to make in order to become a disruptive force, as well as benefit from a more disruptive approach to productivity, so that PepsiCo enters the next era of growth.

Use your advantage in a timely fashion, as attention spans fade quickly and people will forget you were ever on air in the first place.

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2. Think backwards If you are really hellbent on keeping a two-worded name, try starting from the end. With most concepts, you start from an idea, build, refine and fine tune it, after which you send it for submission.

However, if your desired combination is unavailable, think about what your product or service will be. Will it bring greater connectivity or productivity to people? Will it offer a fresh point of view? Whom will it help, how will it do that, and what makes it special to you?

> Naming and Trademarking your Business Between 1985 and 2016, there have been more than 6.7 million trademark applications in the U.S., with some suggesting they might run out of trademark options soon.

Moreover, given that a large part of today’s generation wants things done quickly, maybe even as instant as pressing a button, companies have had to rethink their approach towards consumer expectations drastically.

It’s not easy satisfying clients that desire everything delivered immediately, the next day, as soon as possible, whom also have an extraordinary amount of content available at the mere press of a button. It’s even harder when you’re a newly created company, freshly trademarked, in a world with dwindling trademarking options.

So what can companies do achieve expectations, while demonstrating their eccentricity?

1. As corny, or even outdated as this may sound, try your best to reinvent the concept of unique.

Trademarking means uniqueness – your brand has to stand out from everyone else. However, with only 171,476 words at current in the English dictionary, putting in double time regarding uniqueness is a must. Most people try to go for one or two words that sum up their company, its services, products, values, mission, goals and so on.

How about you choose just one of all those and run with it? In today’s day and age, trying to encompass too many things will simply lead to a very generalized name tag – one of which there are actual millions, as we noted earlier on.

Pick one concept and just go with that. Look at Apple – the company has no business in hospitality, yet they serve people that work and use goods and services offered by businesses within the hospitality industry.

Another example is Razer. The company’s designs might be razor thin and possibly even a tad sharp, but they have no trade regarding cutlery, nor shaving products. By Razer, they meant the cutting edge, being way ahead of the pack.

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Take into account if you want your name to be classic, or something pragmatic. Maybe you want a modern trademark, or a fun one. The choice is yours, you just have to repriotize the way you think about the elements that make your company stand out.

3. Your trademark does not have to lay it all out People identify a trademark by whatever element stuck with them once that particular brand acquired their loyalty. Oftentimes, that is not the company’s name, logo or website. ”I’m lovin’ it” is as famous as McDonald’s; the same stands true for “Just do it” and Nike. If someone says “the colonel” when talking about fast food, it clicks inside most peoples’ minds that they meant KFC. Instead of focusing on ensuring your trademark is as comprehensive as humanly possible, try building your company’s story around multiple elements, like those mentioned beforehand – the logo, tagline, website & brand design, as well as any other elements, such as witty one-liners, as these may often gain more traction than your listed trademark.

> Snapchat business strategies that help you dominate the market Many people are claiming that Snapchat’s dying, due to the fact that Instagram Stories is now a thing. But consider this: Snapchat currently has 191 million daily active users. Is it really dying?

If your business appeals to that particular userbase, should you consider moving on, when you think about that number?

Moreover, let’s look at some other figures. According to a study done by Clutch and Smart Insights, 89% of businesses are on Facebook, 83% on LinkedIn, 80% on Twitter, 56% on Instagram, and only 21% on Snapchat.

191 million users, only 21% business coverage. Looks like a grand opportunity for new business to me.

Whether you build your following organically, or through Snap Ads, always ensure your content is engaging and refreshing.

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Look at brands that you personally enjoy, see what they’re doing right and mimic that.

Moreover, keep in mind Snapchat’s demographic. A Pew Research Center study showed that in 2018, 78% of people aged between 18-24 use snapchat, with only 45% of the same category using Twitter.

So, what does that mean for a business organization? Well, short, show your company’s human side. Allow users to get a real feel for your company, see what its people are like, how they view their own products, services and even their job.

Furthermore, look to educate your audience. There’s many opportunities to sell, even on Snapchat, but the best organizations know there’s a time to sell and a time to educate & inform people.

Ensuring you engage people, keep them informed and highlight how similar they are with your company’s employees will more likely grant you a great following than trying to constantly push sales onto them.

Speaking of sales, one example of how Snapchat can help you sell, at the appropriate time, is the Nike and Darkstore event.

These two companies teamed up to offer a pre-release of the Air Jordan “Tinker” shoes. People that attended the event could scan a snapcode displayed on a backboard to buy shoes that were unavailable from any other source, other than Snapchat.

Other ways in which the app helps businesses interact with users is by allowing people to do actions that weren’t traditionally associated with an app: initiate phone calls, make restaurant reservations, request deliveries, get an Uber ride. Thus, Snapchat provides greater visibility for your company. Greater visibility equals greater opportunities for sales.

So whenever you hear people saying that Snapchat is dying and you should abandon ship or don’t even board it in the first place, simply nod and move on. If you know your customers are among Snapchat’s demographic, there is absolutely no reason for you to call it quits; quite the contrary – whenever you see a competitor leaving, that’s simply more leeway for you to get new clients.

same period, in 2017.

However, despite the negative news, there’s still a silver lining on the horizon. Tesla’s free cash flow in the 2nd quarter was around $740 million less than expected, ending the quarter with $2.2 billion cash.

Furthermore, Elon Musk’s company reported higher-than-expected sales, of around $4 billion in this same quarter in which it experienced the losses mentioned earlier. This is a 46% increase, from their $2.8 billion in the same period, last year.

The first quarter also brought them $3.4 billion, with most people believing it has to do with an increase in the Model 3 sales this year, which just skyrocketed.

Tesla’s automotive gross margin has increased to about 20.6%, with its non-GAAP automotive gross margin increasing by 21%.

In an statement on its second quarter results, the company noted that they had hit their weekly production goal of about 5,000 Model 3s several times since it first managed to achieve this, in the last week of June. They’re now poised to increase its goal to 6,000 per week, with production looking to increase even further in the upcoming quarters, while keeping any additional capital expenditures at a minimum.

Although it may seem a bit farfetched, a shareholder letter mentioned that their reasoning behind this bold plan is to improve the use of its existing lines and make selective improvements to address bottlenecks, rather than creating new duplicated lines altogether.

The same letter also brought to the shareholder’s attention that the company’s looking to develop about 10,000 Model 3s per week as fast as it can, expecting to hit this rate sometime around 2019.

It’s quite a remarkable feat to see Tesla experience these kind of losses and still somehow salvage the situation so well, that they come up with a win instead of an outright failure. Now everyone’s eyes is on 2019. Can they hold their plan?

> Tesla loses, but in fact wins Even when it seems that Elon Musk is about to lose, he manages to swing it back and bring a win. In the second quarter of this year, Tesla reported a loss of $717.5 million, compared to their $336.4 million loss in the same period, last year.

So far, the company has only reported two profitable quarters since its inception, with the last one being in 2016. At this point, it has reached its 7th consecutive quarterly loss.

If we adjust for one-time items, its losses this year were $520 million - $3.06 per share, compared to $220 million - $1.33 per share, for the AUGUST 2018

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Uncover why users have resorted to pulling the report together from multiple sources.

Question #3: Where are the users getting the content/data for the reports?

It might surprise you, but the data is often compiled from information in emails, in people’s heads, in Word reports, etc.

Question #4: What does the report look like and how is it used?

> The reporting difference between CPM Heaven and Excel Hell Have you invested in expensive reporting systems, yet your business users are still doing a considerable amount of “cut, copy and paste” of information in order to create your Corporater Performance Management reports? Well, I have two words for you: Epic. Fail.

Research shows that: ▶▶ 95% of companies use Excel for Financial reporting ▶▶ 9 out of 10 spreadsheets contains errors ▶▶ JP Morgan reported USD 6 Billion loss due to Cut and Paste errors in 2013 ▶▶ Why do so many businesses still have tedious, labour-intensive, manual reporting processes in which they report the same information via various channels, month after month? It has everything to do with the tools that they have provided to their staff to use.

However, be careful not to jump too quickly to questions such as “what tool do we need?” Instead, start by pondering on what results you desire. Here are four key questions you should ask yourself and your team.

Question #1: What reports do you need?

Do your homework and find out what the business needs and why they are resorting to using “copy and paste” today.

Question #2: What are the content of the reports?

It might surprise you, but the content of a report is usually more than just the quantitative data from a data warehouse.

Try to decode the reports and see what is lacking from your data.

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In which format, in which style, with what branding and graphics? Does the user need it in PowerPoint or in Word format or both? Does the user need scheduled delivery at recurring dates/times or only when there are deviations requiring a report to support a meeting or other management action?

At Corporater, we followed the above approach, asking questions to uncover what results users desire, when building our Business Management Platform. We have ensured our system captures the variety of information users need for their reports – whether it is qualitative or quantitative data, manual input or automated data, text or numbers.

Our customers are in “Corporater Nirvana”, due to our strong reporting capabilities – a world which harnesses the power of MS Word and PPT functionality, without Cut/Copy & Paste.

With Corporater, our users get pixel-perfect reports (Word, PowerPoint, and other formats) with the click of a button, fully automated.

COVER EVENTS STORY

STORYTELLING WITH KPIS HOW CAN YOU IMPROVE KEY PERFORMANCE INDICATOR REPORTING? CRISTINA MIHÄ‚ILOAIE

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eporting is an important stage in the performance management process, although managers can sometimes fall into the trap of considering it as the end of the performance cycle. However, just reporting performance data will not ensure the improvement of results. Improvement is only possible when decisions are made based on the insights provided by data.

analyzing it before compiling the report. Frequent data audits ensure better accuracy;

Common issues in reporting are the overload of information, which makes it hard to focus on what is important, the unavailability of information in due time or the inaccuracy of data.

4. Display data in tables and graphs by maintaining a simple and appealing visual design of the report;

By following these 10 pieces of advice, you can solve the abovementioned problems, ensure a better reporting and, consequently, improve your decision-making process.

1. Ensure data timeliness by clarifying the responsibilities of data custodians and the data gathering process. Sending reminders also helps in receiving data on time; 2. Verify for data accuracy by requiring for raw data as well and 12 AUGUST 2018

3. Make sure performance results are accompanied by comments.

Data custodians should also provide the context in which either high or low levels of performance occurred;

5. Send the performance report to all stakeholders at least 3 days in advance of the performance review meeting, in order to ensure data is reviewed before the discussions; 6. Inform all participants about the performance review meeting agenda and make sure you stay on topic, in order to ensure the important issues are solved in due time. Should you be interested in conducting efficient and effective performance review meetings, make sure to include topics such as:

COVER STORY

▶▶ Presentation of results; ▶▶ Discussions on the KPIs that are far from reaching targets; ▶▶ Analysis of the possible causes of underperformance; ▶▶ Review of the portfolio of initiatives; ▶▶ Decisions upon the next steps.

7. Discuss the KPIs on red should with priority and identify the root cause of the problems; 8. Avoid finding responsible persons for poor performance.

Instead, focus on finding solutions and assigning accountability to make sure the initiatives agreed upon will be implemented; 9. Keep it short, by assigning a meeting coordinator to keep discussions on the right track! A performance review meeting should not last for more than 2 hours; 10. Send a follow-up email with the meeting minutes and all initiatives established, along with their responsible persons and deadlines.

Remember, when it comes to KPI reporting, improving this process represents the base of a better, more informed and efficient decisionmaking process!

AUGUST 2018 13

PERFORMANCE ANALYSIS

PERFORMANCE ANALYSIS EVENTS

CAN A PERFORMANCE-BASED CULTURE BE NOURISHED IN ORGANIZATIONS WITH A LONG HISTORY OF INSTABILITY? ALINA MIERTOIU are working in the type of organization Iorfthatyou lacks culture, continuity in decisions even documentation of events, you may

wonder how you can change this, or whether you can even do it to begin with, whilst ensuring continuity and stability are maintained within the organization.

Implementing the Balanced Scorecard approach or a KPIs based system might be considered too challenging of a solution, but in the end, it will help your organization become more structured, efficient and focused on what is important.

One thing you may be wondering by now is how does a tool which may seem burdening at first, due to the fact that it requires a lot or reporting, documenting and initiatives, help an organization that struggles to do exactly these activities? Shouldn’t these types of organizations start with baby steps and only once they’ve managed to have more stability and create a culture of reporting and documenting results, activities or important events, start implementing a structured KPI based system such as the Balanced Scorecard?

Well, one of our latest clients was a company just like the one I have described. Let me tell you their story and the main challenges of implementing the Balanced Scorecard approach in their company.

THE CONTEXT The company we will be discussing about is a family owned production business, with very loyal employees, since most of them worked there for more than 10 years. While the management was very concerned about their employees’ happiness and customer satisfaction, they were somehow overlooking 14 AUGUST 2018

the fact that the company grew through the years and it was now impossible to keep track of their employees’ performance, customers or employees’ complaints and even their processes performance just by talking to the people responsible.

Moreover, the decision-making process was biased by the lack of documentation of events and people’s subjectivity, so most decisions were taken with no solid foundation, which led to a decrease in employees’ satisfaction.

This also led to decisions changing fast, especially when another piece of information was discovered later, affecting stability.

One last issue identified was the lack of trust in the Department heads. Since no employee’s performance was measured, the same applied to Department heads, who couldn’t prove to higher management their capabilities and gain their trust. This only intensified their frustration.

In order to sort the issue of employees’ satisfaction which was considered to also affect their performance which will in turn influence the customer satisfaction, the management created several facilities and invested in the development of their employee. However, given that nothing was documented, management invested in what they considered right, hence it did not have the expected result.

CHALLENGES In this type of environment, when conducting a KPI selection workshop there are several challenges that might arise, and special attention should be paid in trying to overcome them, although it might take more time than the time planned and a lot of energy.

1. People will focus only on their part and miss the bigger picture.

In this type of environment where decisions are changed fast, and instability is the norm, people have the tendency to miss the bigger picture because they don’t know it. They were used to believe that whatever it is said can be changed and will be changed sooner or later with something that might be the exact opposite.

They might not even be aware of the strategy or where the organization wants to go, and they do not think as a whole, but each department things in terms of its own struggles or issues, which are often considered as more important than those of other departments.

In order to address this issue, the person conducting the selection workshop needs to make sure that everyone present is aware of where the organization wants to be and

PERFORMANCE ANALYSIS

agrees it has the capabilities to reach that.

Moreover, he needs to find ways of making sure everyone understands that each department or function is part of the success and they need to strive together to achieve it. After that, the strategy needs to be reinforced during the workshop to make sure that the objectives will align to the strategy.

Always take their focus from small things such as certain projects/events/tasks and make sure they focus on the bigger picture!

2. People will change their minds several times during the workshop because it is hard for them to stick to one decision.

During the workshop they will change their minds and try to come back to decisions already taken. If those decisions are good and in line with the strategy, then the conductor of the workshop has to emphasize on the importance of committing to one decision. One way this can be done is by stressing on the fact that everyone agreed to the prior decision and ask them to give sound arguments in case they wanted to review it.

3. They will have different views on the capabilities of the organization.

Considering an organization in which the “prophet”, as Miller calls the visionary person who got the organization started, and the “administrator”, namely the person who works on maximizing the efficiency and make full use of the profit, are both involved in the organization, they will surely have different views on where the organization should go or which should be its main objectives.

guide the discussions so that they reach an understanding on where the company can develop further.

4. Because they are not used to documenting anything, they will think everything is essential and worth measuring as key indicator for the performance of each level.

Keep them focus on the objectives they have already set and make sure they choose indicators that measure the objectives. Also, the number of objectives and indicators will have to be optimal, which will challenge the participants in identifying what is truly of importance for them.

▶▶ Because they will know what to focus on with the help of KPIs; ▶▶ Because the system will force them to change their old ways and keep records of the main events in order to be able to measure their achievement, thus helping the organization become more organized; ▶▶ Because decisions will be evidencebased, and this will foster stability and objectivity.

5. They will overcomplicate things.

People will tend to design their own overcomplicated indicators which will be both hard to measure and compute and, in most cases, they might not even show them what the management needs to see for measuring performance or for decision making.

This is common to most organizations and the person responsible needs to make sure they, at least in the first phase, keep it simple as it will simplify the data gathering phase.

Moreover, if the system is too complicated the employees will have the tendency to drop it because it takes too much time and energy to comply to it. If it is simple, however, they will not feel burdened and continue to use it.

FINAL THOUGHTS

The prophet is tempted by nature to think the organization can do much more than it does and don’t focus on details, while the administrator is more down-to-earth and evidence-based. In the case I have explained, the prophet was the CEO, while all the other managers were the administrator type.

In essence, to answer our first question, I would say yes, a performance-based culture can be nourished in organizations with a long history of instability. I would go even further and say that implementing Balanced Scorecard or any other approach based on performance measurement, in a correct manner and keeping in mind your current capabilities, will force organizations become stable and organized faster than if they follow a step-by-step approach. Why?

The coordinator of the process will have to make sure both types are well aware of the current capabilities of the organization and

▶▶ Because all employees will be aware of where the organization wants to be and how they can help it achieve its goals; AUGUST 2018 15

PERFORMANCE ANALYSIS

TOOLS FOR SUCCESS: THE STRATEGY AND PERFORMANCE MANAGEMENT AUDIT MARCELA PRESECAN

rganizations change forms. They either do so O in response to the external environment or as a result of organizational change. Much often

thrown around and bandied about, change is however no longer the buzzword in performance management. The word we have been faced with more frequently these days is transformation or transformation led change.

Organizational transformation refers to such activities as re-engineering, redesigning and redefining organizational systems and it can involve operational refinement, strategic reconfiguration or corporate self-renewal.

Of most interest in regards to the performance management discipline, strategic transformation can be defined as the process of redefining business objectives, developing new competencies and harnessing internal capabilities to drive sustainable competitive advantage and meet market opportunities.

MAJOR CHALLENGES ENCOUNTERED IN THE STRATEGIC TRANSFORMATION PROCESS In a world of fast-paced change, the requirement for swift adaptability is the most difficult to fulfill. Not only that organizations today seek transformation, but they expect a speedy completion cycle to come with it. This requires a level of alignment and integration that most organizations are not yet prepared to handle.

Major transformation challenges also come with the following: A) Mapping the transformation process Even if involved with leading the transformation 16 AUGUST 2018

process, most organizations fail to dive into the end-to-end roadmap and experiences that come with the transformation process itself, thereby increasing the potential for risk or failure.

B) Shaping a clear strategic identity with which the main stakeholders of the organization can identify With most organizations, the importance of an organizational identity is generally perceived from a marketing perspective, and seldom from a more intrinsic perspective, that is, a way to engage the internal and external stakeholders of the organization.

C) Employing the right framework and tools to lead the transformation process The main reason organizational transformation does not often deliver the value sought is because it does not follow through on a solid framework and comprehensive set of tools that link organizational strategy to transformation ambition to strategy execution.

D) Strengthening the internal capabilities that govern organizational transformation

Most organizations fail to engage and drive focus on the capabilities required to achieve transformational change. While pivoting on the preservation of their resources, many organizations tend to save on the most important cost of transformation: the cost of knowledge acquisition through training.

E) Adding communication best practices to transformation teams in charge of managing transformational change For most organizations, the transformation process does not manage to instill shared perspectives and agreed-upon objectives. This is mainly due to faulty or absent communication, that consequently leads to lack of transparency and common vision.

MANAGING STRATEGIC TRANSFORMATION WITH A STRATEGIC AUDIT In the process of transformation an audit provides a means to overcome transformation challenges. Traditionally, a performance audit refers to the examination of internal programs, management systems and procedures to assess whether the organization is achieving economic efficiency and effectiveness with the resources available.

A Strategy and Performance Management Audit is more specific in the sense that it assesses the design and application of the Performance Management System within an organization by analyzing several or all of its components.

Some of the main reasons the Strategy and Performance Management Audit can be a valuable tool for managing strategic transformation are as follows:

PERFORMANCE ANALYSIS

▶▶ Provides a solid framework that guides an organization through the transformation process;

on how to close them and achieve full integration;

▶▶ Enables comparison between the design of the Performance Management System as it is and the Performance Management System as it should be;

▶▶ Maximizes the added value generated through transformation by elevating current performance management practices to best performance management practices in terms of system design and functionality;

▶▶ Identifies the gaps in the current design of the Performance Management System while providing best practice recommendations

▶▶ Ensures sustainable progress with the transformation process by providing a roadmap for successful strategy

implementation and improvement thereon;

continuous

▶▶ Educates stakeholders to embrace communication, continuous learning and improvement; ▶▶ Justifies further investments in people training, process improvement and technological infrastructure to successfully conduct strategic transformation throughout the whole transformation cycle.

THE GPAU AND ITS STRATEGY & PERFORMANCE MANAGEMENT AUDIT Under the flag of its Global Performance Audit Unit, The KPI Institute is addressing organizational transformation through its Strategy and Performance Management Audit Framework.

The framework is build on maturity models that cover 5 components of a Strategy and Performance Management System with the ultimate purpose of achieving full integration among these components: Strategic Planning, Performance Measurement, Performance Management, Performance Culture and Employee Performance Management.

The purpose of the audit is to indicate the strengths and weaknesses of the existing strategy and performance management system within an organization, as well as improve current performance management practices to the point where integration is achieved.

The Performance Measurement Audit Report relies on insights collected from three sources: Evidence-based assessment; Perception-based analysis; Interviewbased analysis.

The methodology used includes primary research, both quantitative (survey) and qualitative (questionnaire), as well as, secondary research (documents analysis). These 3 perspectives provide a comprehensive overview on the maturity level of the strategy and performance management system wit hin t he organization.

AUGUST 2018 17

PERFORMANCE ANALYSIS

reflect on best practices and are rated on a scale from 1 to 5, based on the extent to which they are applied in the organization. ▶▶ Interview-Based Analysis The interview-based analysis is performed based on an interview guide which reflects both the evidence and perception-based analysis, designed to ensure consistency in results and to gain a better understanding of the audit findings.

The existence, use and characteristics of relevant internal documents are validated during the interviews, while statements with highest variation in the Perception-Based survey are further discussed in order to be clarified.

THE STRATEGY & PERFORMANCE MANAGEMENT MATURITY MODEL FRAMEWORK The maturity level of the strategy and performance management system is determined by the overall scores of both the evidence and perception-based assessments.

The evidence-based assessment weighs 75% of the final score, while the perception-based assessment 25%.

▶▶ Evidence-Based Assessment The evidence-based assessment relies on the submission and review of a comprehensive set of internal documents collected and submitted by the client organization.

The documents submitted are examined based on a set of 112 statements that reflect best practices on strategy and performance management and capture the main characteristics of the existing strategy and performance management system as scored by the Performance Audit Practitioner on a scale from 1 to 5.

The overall score is calculated as the average of the scores for each statement.

18 AUGUST 2018

Statements in both the evidence and the perception-based assessments are rated on a scale from 1 to 5 (1 – To a very small ▶▶ Perception-Based Analysis extent, 2- To a small extent, 3 – To a moderate extent, 4 – To a large extent, 5 – To a very The perception-based analysis is based on large extent), based on the extent to which a survey designed to reflect the opinion of they apply in the organization. employees on strategy and performance related practices within the organization.

Considering the survey’s overall score, the organization can fall under the following The survey contains 160 statements that levels of maturity:

PERFORMANCE ANALYSIS

STRATEGICALLY strategy, while ensuring company-wide The first step in creating internal capabilities TRANSFORMING EMERGENT acceptance of the performance measures that support the development and enabled to achieve the overall desired consolidation of a performance management ORGANIZATIONS The KPI Institute’s most recent study on the use of KPIs and performance improvement practices within organizations worldwide has revealed a majority of performance management systems, 37%, have been appreciated as emergent.

By our standards, an emergent strategy and performance management system is one that does not benefit from formally recognized and well-articulated strategic planning and execution processes.

Emergent organizations generally make random, ad-hoc use of performance measurement practices, while using little data in the decision-making process to ensure performance improvement.

So maybe the most important question to answer here is: “How does one successfully transform the emergent organization?”

Several pieces of advice are of note here, as they would be in the case of any Strategy and Performance Management Audit performed: 1. Connect strategic objectives to organizational KPIs. In many organizations strategy fails to deliver on its promises, and the most common reason for this is the misalignment between the strategic plan and the key performance indicators or the metrics the organization tracks.

2. Enable the use of Performance Management Tools to drive strategy implementation.

KPIs make objectives quantifiable, providing visibility into the performance of individuals, teams, departments and organizations and enabling decision makers to act in achieving the desired outcomes.

A scorecard draws together the most relevant KPIs selected for the organization and groups them under strategic objectives. The major strength of the Balanced Scorecard is that it articulates business vision and

performance for the organization.

Dashboards are used to easily grasp the pulse of the organization’s day to day operations and take actions based on KPI results. The benefit of the dashboard is that it invariably complements the scorecard by monitoring KPI data on a more granular level, with direct insight into the efficiency and effectiveness of operations.

The Portfolio of Initiatives can be used both at organizational and departmental level, having the purpose of improving the management of projects and to track the performance of each initiative.

3. Cascade the main Performance Management tools to all organizational levels.

Once defined, designed and developed, the main Performance Management Tools should be cascaded at lower levels of the organization.

system within the organization is to map/ document all the key processes related to strategy, performance measurement, performance management, employee performance management and performance culture within the organization.

6. Include all the key organizational performance improvement procedures and tools in the Performance Management Manual of the organization.

The manual should include: benefits of the performance improvement process for the organization; presentation of the performance improvement tools & techniques; performance improvement processes descriptions; approach to engaging stakeholders in different processes; the roles and responsibilities of all stakeholders involved in performance improvement.

Workshops, in this case, are recommended as they provide the ideal format to ensure that the objectives and KPIs selected for the organizational scorecard and dashboard are accurately cascaded down to department level, divisional and employee level.

4. Ensure alignment between the different levels and components of the Performance Management Architecture.

Considering the strong volatility of the corporate environment, organizations are required to dedicate time and resources in ensuring an alignment between the strategic direction intended to be pursued with selected KPIs and associated initiatives.

In many organizations strategy fails to deliver, due to the misalignment between the strategic plan and KPIs tracked by the organization, for this reason it is highly recommended to review and ensure realignment at least once during a performance management cycle.

5. Document and map all key processes related to performance management.

AUGUST 2018 19

PERFORMANCE ANALYSIS

PERFORMANCE MANAGEMENT: LESS THEORY, MORE PRACTICE MARCELA PRESECAN

In theory, there is no difference between theory and practice. In practice there is.

- Yogi Berra

T

here is a certain art in bridging theory and practice. It also takes a certain kind of mindset to take theory and turn it into practice. Practitioners, on the one hand, must always live the contradiction of practicing little of what is theorized, while preaching a slowly deteriorating set of rules.

Moreover, novice frameworks similar to The KPI Institute’s performance management and performance audit frameworks take time to be applied and tested in real-life contexts. A newly implemented performance management system takes years to mature, and it takes even more to assess the impact it has on the organization overall.

Theorists, on the other hand, take so much time in finding an application to their knowledge, one almost finds it almost impossible to contradict them. There’s an age-old story of theory versus practice and it has reigned over many disciplines, performance management included.

THE PRACTICE OF PERFORMANCE MANAGEMENT BEYOND ALL THEORETICAL CONCEPTS

WHY IT IS SO HARD TO SUBSTANTIATE PERFORMANCE MANAGEMENT THEORY WITH PRACTICE For starters, performance management is a very subjective discipline. There is little to no standard application of theoretical concepts and everything is open to interpretation. If one searches to find the one application that fits all organizational contexts, one is bound to embark on an almost endless search.

Even with a standard framework to use and apply universally, the results will differ from one circumstance to the other. Within the performance management discipline, every organization is a unique and independent case study.

20 AUGUST 2018

There is use of strategic planning, objectives, KPIs and initiatives in organizations worldwide. There is little to no standard application of these performance management tools in organizations nowadays.

There are as many performance management systems out there as there are organizations in the world. The Balanced Scorecard system, however, remains the most popular performance management systems around the globe. A top issue and most controversial item on the agenda of both public and private organizations today, employee engagement is one of the main reasons for KPI usage and performance improvement.

KPIs are now seen as an edge in driving engagement and communication within the organization. KPI target setting is one of the performance measurement processes that is most generally used and acknowledged

at the organizational level. There is a visible turn to process performance KPIs as an expression of increased insight into operations that can effect more significant change.

PERFORMANCE ANALYSIS

KPIS IN PRACTICE AS OPPOSED TO A SIGNIFICANTLY DEBATABLE KPI LIST There are lists of KPIs and then there are the real KPIs, used to build actual organizational scorecards. For comparison, we have taken a list of Human Resources KPIs on the left, and opposed them to the scorecard of an HR department developed for a client organization, on the right.

One can notice that in the real world, outside theory, KPIs cannot really function in the absence of organizational objectives. The Scorecard helps group objectives under relevant perspectives, on the one hand to maintain a balance between financial and non-financial KPIs, and on the other to help identify the areas of most concern for the organization.

In essence, it is all a complex exercise of simplifying elaborate organizational practices, of facilitating a language that makes it easier to skim through organizational layers and functions with the ultimate ability to understand what is happening.

Understanding what the organization does, the way its internal functions interact, gives you the practical side of KPIs.

SIMPLE DOES NOT MEAN EASY It all seems easy; however, it is far from it.

What performance management does is focus most of its practice on the human element. So much so, that there are people out there who actually always refer to employee performance management when they speak of performance management. It seems only suitable then that the newest keyword in performance management should therefore be “resilience”.

People are nice, but people are unpredictable, above all other things. People are different, and people choose to look at things differently. A Performance Management System is first and foremost build on homogeneity, which from a performance management point of view can mean any or all of the following:

# Employee engagement index # Time to fill a vacant position % Employee turnover

Financial Maintain financial discipline % HR budget variance $ Training budget

% Performance appraisals completed on time

Customer

# Training hours per full time equivalent (FTE)

Maintain high levels of internal customer satisfaction

% Training penetration rate

% Internal customers satisfaction

% Employee satisfaction # Management-to-staff ratio

# Concerns with HR services Internal Processes Ensure engagement of new hires

% Employee retention rate

% New hires satisfaction

% Internal promotion rate

% New hires turnover within the first year

# Employment brand strength # Supervisor to staff ratio

Ensure quality of payroll data % Payroll error rate due to HR data processing # Time in days for payroll processing

# Hours lost due to absenteeism

People, learning and growth

# Recruiter to open requisitions ratio

Promote a performance driven culture

% New hire failure

% Employees with individual performance plans in place

# Rookie ratio

% KPI review meetings held per schedule

% Job offer acceptance rate # Employee tenure # Fringe benefits to basic salary ratio $ Training investment per full time equivalent (FTE)

Nurture a environment

motivating

and

engaging

% Employee engagement % Absenteeism % Employee with high performance # Recruitment referrals received from staff

▶▶ A common understanding of the organization’s mission, vision and overall strategic identity;

▶▶ Full grasp of the role and responsibilities that come with being part of a community;

▶▶ Employee behaviors that harmoniously blend in with the organizational values;

▶▶ An honest predilection for continuous learning and development;

▶▶ An open, pro-active attitude towards using KPIs as the foundation of daily routines;

▶▶ An adamant drive to exceed expectations for the greater benefit of one’s self, one’s colleagues and the organization overall.

▶▶ A vision to see beyond the possibility of KPIs ever being or becoming a pressurizing tool; ▶▶ Enough self-sufficiency to take ownership of individual performance results; ▶▶ Self-propelled desire to act and progress for the benefit of the larger organization; ▶▶ Communication that exceeds the boundaries of formality and begets familiarity;

Many people do not even get to stay in the performance management business long enough to understand the difference between theory and practice. But those that do, get it.

There is truth in theory as much as there is in the deterritorialization of theory in practice, but there are also truths in practice that sometimes make theory seem like child’s play.

AUGUST 2018 21

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PORTRAIT

PORTRAIT EVENTS

GAIL STOUT PERRY

Chief Strategy Officer & VP - Sales COMPANY: CORPORATER

The beginning of a journey An engineer, specializing in robots and automation, conquering the world of management consulting – that is Gail Stout Perry. Corporater’s Chief Strategy Officer & VP of Sales could not have started further away from where her professional journey took her, but that mattered for little, as she skillfully made it through any challenge that was thrown her way.

The knowledge Ms. Stout Perry was able to garner from her specialization was a boon, as she could apply systems thinking to solving any business problems; however, it was not long before she felt the need to understand the vernacular of this field. As such, she enlisted into a Finance MBA, which gave her a more in-depth grasp on the terms and concepts used in the field of business management.

Her career is one of the few examples we can mention of full circle development.

Started out in software, implementing operational performance improvement systems. Then, she moved into consulting & teaching leadership teams how to develop and use strategic planning and performance management frameworks. After a while, it was back into software, where she could see the fruit of the industry’s labour – new methods, models and frameworks had been developed while she was in the land of consulting & teaching.

"Achieve results - the essence of Performance Management."

AUGUST 2018 23

PORTRAIT

The way towards better results is through better management. I honestly don’t know how organizations survive without Performance Management.

However, managing to conquer various business fields time and time again is not with its lack of challenges. When Ms. Stout Perry started her practice in the field for the first time, many people weren’t even sure how they should go about doing things, so their instructions to her were unclear – she had as little of an idea on how to get started as those who were asking her to accomplish their plans. That being said, she never backed down, she never said no.

“There have been three times in my career when I was offered a job that was ill-defined All three times I said yes and was able to shape my own future, by defining what success looks like, and then setting a series of goals and creating processes to achieve results.”

There are few things more invigorating in life than learning something new, having high expectations pressured onto you from people who await only the best results, while desiring that you know more than they do on the topic they have set their expectations. It is an exhilaring feeling – to have entered the business maze and successfully reach its end on the first try, whilst guiding a group.

A time for tales, a time for inspiration Ms. Stout Perry’s stalwart character was forged quite early on in life. Her father passed away while at a young age; however, he left an indelible influence. He shared with her the principles by which he conducted his life and made decisions.

These proved invaluable personal lessons, emboldened her to follow his example.

From a professional standpoint, she has worked with leaders from numerous sectors – from Fortune 500 Executives, 4-Star Generals, to astronauts.

She has had the opportunity to study those leaders who are most effective at their jobs, having noticed that the best ones are 24 AUGUST 2018

intellectually curious & results-driven, continuously seek knowledge and surround themselves with talented people whom they trust to make decisions if they were put on the spot.

ideas are built upon it. I realized that our performance improvement project was just another iteration of innovation - the foundation of our modernized manufacturing processes was still recognizable in that old book.”

Moreover, the same archetypes prove to be humble and caring about their employees – they ask and listen. In addition to that, they lead balanced lives, prioritizing their family over everything else, and whenever they are required to act, they do so boldly and decisively.

It was then that she realized the more you dig and inquire, the most you will find and understand. Understanding leads to learning.

You then use that knowledge to either innovate from scratch or integrate your newly-found ideas into different existing models, paving the way for radical innovation.

All of these individuals – starting from her father, to the leaders she has worked with, have influenced the way Ms. Stout Perry advises and coaches leadership teams, including her own at Corporater, as well as the way she handles her personal life decisions.

That being said, the steadfast characters in her life were not the only ones that left a long-lasting impression on our Chief Strategy Officer.

Being an avid reader, it was only natural that she’d find inspiration in business tomes.

“I remember being in a library stack and stumbling across a book written in the 1800’s about the industrialization of gun manufacturing and I sat on the floor, engrossed for hours, reading it.

I had just finished reading a book about Henry Ford’s manufacturing methods in 1913, a book about Frederick Winslow Taylor, and I was in the midst of a work project to implement a performance management system at an aircraft factory.

In the dusty old book, I recognized the genesis of Ford’s and Winslow’s work and in the methods still being used in the factory where I worked.

I began to see the historical storyline of how an idea is birthed (innovation) and then other

Many of today’s so-called new ideas are only just old ones, reshaped to embed our newer tech, or repurposed & combined in order to solve a present-day problem.

One of the best ways Ms. Stout Perry found to combine her two sources of inspiration – powerful leaders and inspiring books, was to read biographies. Steve Jobs - Apple, Howard Schultz – Starbucks or Harry Selfridge – Selfridge & Co, are just some of the figures which she has taken an interest in.

Their business models, the tools they have employed, their decision-making models, performance management techniques, analytics and employee motivation strategies have built either pseudo-empires or long-lasting legacies.

That knowledge can prove useful to the person that wishes to harness it.

Achieve results – the mantra of the business world On the topic of management, Corporater’s VP of Sales mentions that she started her career right from the get go – on her first day of college, she began working with a company known then as Arthur Andersen, currently Accenture.

In the last decade, following her studies and

PORTRAIT

apprenticeship, she began focusing more on strategic performance, rather than operational performance, as knowledge around this topic was underdeveloped, which proved to be quite a shocker for her.

“The first time I stood in front of some department heads and asked them what key metrics they were using, they looked at me as if I had three heads. I thought I’d asked a stupid question.

“The way towards better results is through better management. I honestly don’t know how organizations survive without Performance Management.”

30 years later, I realize that those department heads likely had never given formal thought to how their operational processes should work or even considered that they should measure performance. Most of them worked in silos, with little understanding of how their part of the organization fits into the big picture.”

When asked what she believes Performance Management – PM, to be, she noted that it determines what you are trying to accomplish – what, where and how to improve, how you are communicating those goals to the very people responsible for their execution, how engaged they are and how you hold them accountable for the plan’s execution and resultant performance improvement.

Oftentimes, we find that the goals simply mean maintaining current levels of performance.

However, even that necessitates communication.

Business processes are not bound by laws, like gravity is. You need to have a process for maintaining steady performance and a way to monitor, discuss and act upon deviations.

In addition to having a vision, objectives and a well-rounded communication plan, you also need metrics.

PM ensures your goals & business drivers are articulated properly, and that your entire business model comes together nicely in order to achieve results, but it cannot do that without something measuring all of these. That is why indicators or metrics are needed.

How can you improve results, if you do not know your current levels of performance?

Moreover, how can you be certain about your results, if you have no alignment of operational plans, divisions, individuals and initiatives – basically, if you are leaving everything up to chance?

Ms. Stout Perry mentions that in her many years of helping organizations develop and implement performance management, she has noticed that many directors/managers/ executives often overlook these core questions.

They simply don’t think about them. Even more so, they don’t think about performance in a system way, in general.

If business leaders want performance, they will need to educate themselves on how to achieve results. People need to understand performance management, they need to learn how to look at

At your eulogy, who will be speaking and what will they say? their company’s operations through the lens of PM, while taking note of value drivers.

Ms. Stout Perry believes this to be the biggest challenge in the field. Some leaders are born with the ability to understand performance and how to get there; many however have to learn it, through the school of hard knocks, by experiencing ups and downs, success and failure.

Nonetheless, they cannot relent – better results & performance will always be the mantra of the business world. You either make it your own or you won’t last long.

achieve a variety of strategic goals. Sometimes it is a purely financial goal such as a revenue, sales, or valuation goals.

Sometimes it is internally focused such as goal to shift the culture of the organization or to improve employee performance.”

Other times, the goal is to simply improve the company’s sustainability and ensure there are enough jobs during economic downturns. No matter the reason, any time an organization uses PM to achieve a goal, that is something noteworthy.

It should be said that goals need tools, processes and practices – they don’t just get completed by virtue of existing. With that in mind, Ms. Stout Perry believes that the best practice a company can employ is linking all performance, from all levels, to an overarching strategic plan.

As for tools, working at Corporater offers her a privilege few have, having the opportunity of working with one of the most robust PM platforms designed so far, which offers more functionality than most organizations even have the ability to take advantage of.

Nevertheless, she notes that their system can also be stripped down, for more simpler structures and requests, growing and adding functionalities as their clients mature in their performance management processes.

Additionally, most processes and methods shown in today’s literature/consulting manuals and academia are fairly robust and can be easily emulated by any company if they do not wish to embed a readily-available system.

However, the issue lies with adoption and acceptance - employees, whose behaviour you often have to predict and try to win over, in order to properly implement a PM system.

Generating value with tools and practices The human element Talking about generating results, performance and ultimately, value, the greatest pleasure our Chief Strategy Officer has is when she receives a phone call from a former client, telling her that their performance has improved significantly since their collaboration.

“I’ve been privileged to see organizations

When people enter a business relationship, they want to know what they’ll get out of it – “what’s in it for me?” asks each of them. Whether they’re two businessmen looking to collaborate, or an employer & employee, the same stands true.

So when it comes to performance management and buy-in, our VP of Sales says that believing AUGUST 2018 25

PORTRAIT

I’ve been privileged to see organizations achieve a variety of strategic goals. Sometimes it is a purely financial goal such as a revenue, sales, or valuation goals. in the higher purpose/goal that that PM system will enable, as well as feeling like they are a meaningful part of a team that’s working together to accomplish something, goes a very long way and is the key to success.

People nowadays care a little less about the financial aspect, and a little more about that feeling of belonging. On top of that, the pride of knowing your work is well done and appreciated is very much active in full force. Once a feeling that mostly craftsmen experienced, is now more widespread among the current generation of employees, at any level.

But what do you do in order to generate those emotions and that mindset? How should one approach individual performance management?

In short, create individual performance goals tried to strategic elements, such as specific objectives or performance targets and review their progress frequently.

“Currently, I am experimenting with the OKR framework and we hold strategic progress meetings every two weeks to ensure two things: 1.

Are these still the right things to be working on – things move fast and an organization must be agile; 2.

Accountability – are we doing what we committed to do? Do we need to reallocate resources to get things done?”

That being said, managing individuals and their performance varies not only on the region of the world you find yourself in, but also on each organization’s culture and the type of employees it attracts.

To give an example, a higher performer – the competitive type of employee, working in a fastgrowing company, as we’ve defined them in the 26 AUGUST 2018

USA, is likely to be motivated by achieving goals and targets and by being financially rewarded for doing so.

Yet not all companies have the luxury of offering financial performance bonuses, nor are they always appropriate. It is important to pay attention to what motivates your employees.

Some may want to seek training & development opportunities, to learn new skills, while others may wish to be given the opportunity of going ahead with a special project that they feel will show everyone just how good they are. Everyone is different and responds to different stimuli.

Ms. Stout Perry noted that she has recently spoken with a company that uses predictive analytics to help its clients reduce employee turnover, which can sometimes be seen as a side effect of poor talent management). While each factor can vary from business to business, she was struck by how simple some of the these were and how easily they could be solved.

Employees don’t require nuclear physics-level of strategies in order to keep content and engaged. They just need their employer to listen patiently and accept that a one-size-fits-all type of solution will simply not yield the results he or she may want.

End of the day, but not of the journey “At your eulogy, who will be speaking and what will they say? Will it be your family and will they be talking about precious memories of your time together? Or will it be your work colleagues talking about how awesome you were when you missed your kid’s graduation to get that report out on time?”

Ms. Stout Perry finds great joy in her work, however that may sometimes overwhelm her

day to day time, so she consciously has to strive to keep the bigger picture in mind.

For any professionals that are in love with their work, but also their families, do keep note – block out time on your calendar, to ensure you can keep your commitments to your family & friends, as well as those you made for yourself.

Personal care, or Me Time, is equally important.

You do need to finish that report, but you also need to go to the gym, to the movies or simply for a stroll, for your wellbeing.

It’s easy to lose track of time and just keep working on the task at hand. It’s harder to remember that your own health is as important as your professional one, so keep reminding yourself of that.

Moreover, if you’re not one for physical activities, then engage in more laid-back ones, such as learning something new. If new fields or foreign languages don’t seem particularly attractive to you, try learning about a different area within your own field, which you have never read about.

If you specialize in measurement and analytics, read something on leadership, communication, strategy, innovation or even business history. It’ll take some time off your regular focus and this way, you can win on two fronts.

You develop your knowledge, gaining a better understanding of your field in general while not tunnel-visioning, and might even find an idea to help in whatever endeavour’s giving you headaches at work.

Taking a break is always bound to bring great results, as it will give your mind some free time to wind down a little and think about things from a different perspective.

ARTICLES

HEALTH & SAFETY MANAGEMENT

THE ESSENTIAL FUNCTION OF HEALTH AND SAFETY MANAGEMENT SYSTEMS AND SOFTWARE EFFECTIVENESS TIM LOZIER

H

ealth and Safety Management Systems (H&SMS) perform a vital function in any organization. They are used by HR, compliance officers, and other stakeholders to manage all aspects of health and safety provision.

When implemented correctly, H&SMS will: ▶ ▶ Protect the health of the people covered by the system — typically employees or anyone else working on your organization’s premises. ▶ ▶ Ensure your organization complies with laws and regulations on health and safety at work such as the Occupational Safety and Health (OSHA) Act. Health and safety systems can deliver significant benefits to employers, such as: ▶ ▶ Reducing the likelihood and cost of absences due to injury or sickness. ▶ ▶ Reducing the risk of legislation due to

28 AUGUST 2018

work-related issues. ▶ ▶ Decreasing costs caused by property or other loss due to incidents. ▶ ▶ Enhancing the morale accountability of staff.

and

▶ ▶ Potentially positively impacting your employee benefits and healthcare costs.

If you want to get the most benefit from your H&SMS, you need to be sure it has all the right functions and features.

Here’s what to look for so you get the support, compliance, and capabilities you need.

Understand the Objectives and Targets of Health and Safety The goals of health and safety are primarily to reduce or eliminate workplace incidents, but some objectives will reach beyond that. You may want to introduce proactive health and safety, through initiatives like wellbeing programs, working environment

redesigns, and promoting positive health and nutrition with employees.

You will also have goals for compliance and auditing, to ensure you meet federal or other regulations. Good H&SMS will let you set and understand clear targets and metrics, together with tracking restorative actions if you fail to meet thresholds or KPIs. Promote Employee Training Behavior-Based Safety

and

Employee education is crucial to maintaining a safe working environment. From onboarding new employees through to refresher or specialized training, your H&SMS can track the qualifications, certifications, and requirements your employees need to meet.

It can offer a catalog of health and safety training, and ensure that the right people are trained in the right way, to the right standards, at the right time.

Ensure You Meet Compliance and

HEALTH & SAFETY MANAGEMENT

Audit Requirements The penalties for not meeting OSHA or other requirements can be severe. Your H&SMS can inform you of the relations you need to meet and allow you to track actions to ensure everyone is meeting those commitments.

It can also assist you in carrying out periodic audits of health and safety, together with tracking actions to become and stay compliant.

Help With Emergency Planning and Preparedness Although you hope it will never happen, it’s always smart to prepare for the worst.

Your health and safety system can help you create contingency and disaster recovery plans in the event of a major incident or other issues that could impact your workforce.

You can understand the likelihood and impact of health and safety risks, then

take active steps to mitigate those risks and put alternative approaches in place.

Report on Incidents, Accidents, and Safety In the event that you do have an incident, your H&SMS is essential to reporting on the issue and taking actions to ensure it does not happen again. You can track incidents over time, create a list of reparative actions, and ensure stakeholders are tasked with identifying root causes and preventing recurrence.

However, all of the above only scratch the surface of what a good health and safety management system can do. For example, our software doesn’t just meet these requirements, it offers a complete solution to health and safety needs.

About the author: Tim Lozier, Director of Product Strategy

This includes permit control, corrective actions, document control, industrial hygiene, change management, monitoring, inspections, data sheets, risk assessment, and much more.

Tim Lozier is the Director of Product Strategy at EtQ, with an extensive background in software technology and involvement in the creation of leading-edge technologies in user interface design and development.

AUGUST 2018 29

ARTICLES

TECHNIQUES FOR EFFECTIVE ENVIRONMENTAL HEALTH AND SAFETY MANAGEMENT TIM LOZIER

E

nvironmental Health and Safety (EHS) is a crucial discipline for organizations of all sizes. It protects your employees, helps you meet your regulatory goals, and reduces the impact on your business activities.

If you want to get the most out of your EHS system and processes, it’s useful to look at the techniques and tools you can use to follow best practice and optimize health and safety.

Here are some of the methods you can use to ensure robust EHS throughout your organization.

Ensure Proper Accountability and RACI for EHS throughout the organization Everyone has accountability for their own personal health and safety, but when it comes to other aspects of EHS, the lines can be more blurry. Make sure you have proper RACI (Responsible, Accountable, Consulted, Informed) roles

30 AUGUST 2018

and responsibilities at every level of your organization, and regularly check everyone is carrying out their roles and activities correctly.

Audit your Environmental Health and Safety Processes and Practices You need to make sure that your health and safety policies and processes are fit for purpose. The most effective way to do that is through comprehensive auditing and rigorous, tracked corrective actions & measurements.

Use an independent auditor to identify potential issues with EHS, and create actions on stakeholders and teams to resolve gaps. Track actions through to completion and ensure proper accountability and traceability throughout.

Meet All of Your Occupational Health and Safety and Other Compliance Requirements

Organizations have stringent compliance requirements they must meet to ensure employees and others are properly protected. Regularly review OSHA and other regulations to understand how they impact on your business. Immediately take corrective actions to address potential issues and risks.

Track these tasks through to completion so you can meet your compliance needs and avoid punitive action.

Ensure Any Incidents are Investigated for Root Cause and Addressed Every near miss, accident, or injury has a root cause. It’s vital that your organization investigates any incident to understand contributing factors and context. You should then establish the root cause of the incident and take proper steps to prevent it from recurring.

Align Risk Management with Environmental

HEALTH & SAFETY MANAGEMENT

Health and Safety

of them and their colleagues.

EHS does not exist in isolation, it touches on the people, policies, and processes across your business. It’s vital that you align EHS with your overall risk management.

Choose the Right Environmental Health and Safety Software

That way, you can tie your EHS practices to operational risks, and vice versa. This can prevent duplication, ensure proper accountability, and reduce the risk of incidents before they occur.

Embrace Proactive, Continual Improvement for Environmental Health and Safety Don’t wait for an incident to happen before you choose to act. Look at all of your operational policies and processes to understand the impact they will have on health and safety. If a process does not put employee health front and center, redesign or refine the process to reduce the risk of injury, accident, or environmental damage.

Share the philosophy and practice of continual improvement throughout your organization, and empower employees to make changes that protect the safety

Your EHS processes can be significantly enhanced by the right software or damaged by poorly-conceived technology. You need your EHS software solution to follow best practice, provide the functionality that all relevant operational areas and compliance areas need, be easy to use, and offer a comprehensive range of tools.

Use these tools and techniques, and you can significantly improve environmental health and safety throughout your organization.

That’s good for you, your employees, your organization, and your regulatory and compliance goals.

About the author: Tim Lozier, Director of Product Strategy Tim Lozier is the Director of Product Strategy at EtQ, with an extensive background in software technology and involvement in the creation of leading-edge technologies in user interface design and development.

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ARTICLES

DIGITAL PERFORMANCE

WEB DESIGN TRENDS FOR SUCCESS IN 2018 ANDREI COSTEA

creative design draws attention, while A intelligent content builds interest and develops passion. However, we need to

start with one step at a time. How do we draw attention?

First off, a website’s design has to be simple, functional and futuristic. 48% of people cite a website’s design as being the number one factor in deciding the credibility of that business. Moreover, a whopping 94% of individual credit a site’s design as their main reason for rejecting or mistrusting it.

In addition to this, 38% of people don’t actively engage with a website if its layout is boring or unappealing. Even more so, if given 15 minutes on any website of their choice, 67% of people would prefer reading something beautifully designed rather than something plain and dull.

Furthermore, 67% of online shoppers are more likely to buy from a website which is compatible with mobile phones.

So now that we know this, how can we use this newly-gained knowledge to enhance our own websites? Fortunately, the people at Fullestop.com have put together a nifty list of 10 essential web design trends to follow in 2018, in order to maximize your online potential.

to quickly grab a user’s attention.

2. Asymmetrical grid Supporting the ultra-modern design style, 2018 demands are built around neutral space and irregular layouts. While the appeal of an asymmetrical layout is distinctive and can be aesthetically pleasing, this is still quite experimental, so try it out and see how it goes for you.

3. Advanced scrolltriggered animations Use scroll-triggered animations in new ways, in 2018.

A minimalist, educational and strategically designed scroll-triggered animation will clean up the look and feel of your website, as well as help with increasing conversions.

1. Vibrant colours and bold font

4. Scalable vector graphics (SVG)

Bright hues and the bold font seem to be the design trends sticking around for now. Colours and fonts increase web recognition by about 80%, whilst serving

SVG is going to overtake all other graphical formats in 2018, given their incredible scaling and ability to deliver better multimedia experiences without

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DIGITAL PERFORMANCE

8. Internet of Things (IoT) and the chatbot

slowing down a website’s speed.

5. Voice and natural language search The future of web design does not have to be 100% visual. It can be audible as well. Although integrating the world of voice and language search/ detection has a long way to go still, we’re slowly but surely beginning to see it prop up in more and more places.

6. Progressive apps

web

Blending the best of web and app behaviours creates what is known as a progressive web app.

2018 will see many elements of mobile apps, like animated page transitions, push notifications and splash screens on websites, giving them the appearance of a web app.

7. Subtle animations Small, simple animations can always surprise and delight users. A little bit of movement within the design itself engages visitors and can act as a source of information as well.

Connecting web services to the IoT and integrating chatbots to better deal with customers will continue being one of the top trends in 2018. This interconnected and brilliant technology has brought a great paradigm shift in the design process.

9. VR videos Given the wide availability of VR setups on the market right now, expect more and more VR videos on websites in 2018. With short movies and video games already jumping on board, this technology has taken customer interaction to a whole new level.

10. Photo content A picture is worth a thousand words, as the saying goes. Likewise, a message conveyed through a picture will most certainly stick with a user for way longer than traditional, written messages. As such, photos or cinemagraphs will continue being an imperative part of design in 2018.

Before you go and start working on your website’s appearance, we wholeheartedly recommend trying your best to integrate at least some of the elements outlined in this article. It will be a process of trial and error, until you find out which one helps out the most with bringing users to your website, but once you figure that out, things only get better from thereon, as you will have something to build upon.

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ARTICLES

UNDERSTANDING WHY YOUR ONLINE BUSINESS MIGHT BE LOSING CUSTOMERS J MATT WOLLERSHEIM

ne of the hardest parts about running O a business is getting customers through the door. This is especially true

in the online world where users have access to a sea of competing options.

Therefore, it’s little wonder why e-merchants spend a fortune on search engine optimization (SEO), advertising and social media. But generating traffic is only half the battle. To succeed in e-commerce, you also must be able to keep and convert visitors once they arrive to your site.

If this is something you struggle with, below are some of the most likely reasons why your online business may be losing customers. This article also outlines proven strategies for keeping those visitors on your site for as long as possible.

1. Ugly Website Design Online customers have a plethora of options, so appearance matters. Users can afford to judge books by their covers. If your site’s design is sloppy or cluttered, there’s little reason for visitors to stick around.

The fix: Invest in a professional-looking site that combines seamless functionality with appealing aesthetics. Pay special attention to the navigation of your

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DIGITAL PERFORMANCE

website. Visitors should be able to quickly find what they need with as few clicks as possible.

2. Requiring Too Much What is your annual income? How did you hear about us? What are your hobbies?

It’s not uncommon to see questions like these during the checkout process.

The more information you request, the harder it becomes to convert potential customers.

The fix: Eliminate as much friction from the sales process as possible. You can do this by limiting fields to the essentials — i.e., names, billing addresses and payment information. Ask for anything else, and you’re just hurting your sales potential.

3. Hidden Costs Another way to kill conversions is to surprise customers with hidden costs such as shipping fees, taxes and convenience charges.

The fix: Provide all cost information upfront so there are never any surprises during checkout. One way or another, customers will eventually see the total price — so it’s best to be as transparent as possible, as early in the process as possible.

4.

Unappealing Content

Dry copy, syntax errors and grammar mistakes are immediate turnoffs for many potential customers. The same is true of boring stock images and low-quality product photos.

The fix: Invest in professional copywriting and graphic design services to make sure your content is as inviting (and error-free) as possible.

5. Outdated Technology If customers have to switch browsers, install plug-ins or agree to a bunch of “permissions” to use your website, you’ve already lost the battle. Each one of these steps represents unnecessary friction that will likely chase away users.

The fix: Make sure your site conforms to the latest protocols. If you feature a lot of videos, for example, you should adopt the HTML5 standard so users don’t have to pause their online experience to install plug-ins or add-ons.

6. Lack of Mobile Readiness Mobile browsing officially surpassed desktop browsing in 2016. In 2018, Google announced it would place greater emphasis on mobile-ready sites in its search results. This means if your website design isn’t compatible with smart devices, you’ll have a much harder time: Attracting users to your online store Converting them

once they arrive The fix: Invest in a responsive web design that looks as good on mobile devices as it does on desktop PCs. In fact, you should devote the majority of your attention to the mobile version of your site since this is where Google and your customers will spend most of their time.

7. Too Many Ads No one likes ads. Not you. Not your customers. No one. Yet, many online properties are littered with obtrusive banner ads, newsletter opt-ins and annoying pop-ups.

The fix: Keep only those ads that generate revenue. Remove everything else. The less clutter you have on your site, the more enjoyable the user experience and the easier it is to convert fence-sitters into customers.

Tying It All Together If you’re like most e-merchants, you’re probably guilty of at least one of the above conversion-killing mistakes.

That’s perfectly understandable. Online standards continue to evolve so rapidly that it can be difficult to stay on top of the latest best practices.

About the author: Matt Wollersheim is Vice President of Sales at Performance Card Service, where his focus is on general marketing, client relations and development of new processing channels.

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ARTICLES

BALANCED SCORECARD

BALANCED SCORECARD & SIX SIGMA – THE BEST WAYS TO IMPROVE PERFORMANCE RAMONA GLIGOREA

R. Kaplan and D. Norton’s article Sthatince “The Balanced Scorecard – Measures drive performance’”, published in

A case study from Duke University Hospital has demonstrated that these two performance systems can be successfully implemented into one organization.

1992 in the Harvard Business Review, the Balanced Scorecard (BSC) methodology has become one of the most popular performance management frameworks, used nowadays in both public and private organizations.

Another well-known management framework is the Six Sigma, a methodology that has its roots in Motorola’s quality improvement initiatives from the early 80s.

It focuses on improving the performance of processes and products against customers’ requirements.

Six Sigma has been successfully implemented in manufacturing and other industries were work processes are associated with higher levels of variance.

Generally, the BSC is described as a strategic management system, while Six Sigma is defined in terms of quality improvement related to internal business processes.

The Balanced Scorecard and Six Sigma relationship Throughout time, many researchers and academics analyzed the Six Sigma framework and implementation process, concluding that it resembles the Balanced Scorecard methodology in many aspects.

36 AUGUST 2018

They have used the BSC to focus on developing their mission, strategic goals, key performance indicators, and to link them to specific operational initiatives. The Six Sigma provided a solid performance improvement framework, by utilizing the DMAIC approach: define, measure, analyze, improve and control.

For instance, in 2005, Gupta identified several similarities between these two management frameworks. These similarities were related to the 4 balanced scorecard perspectives (financial, customer, internal processes, learning and growth), but also in terms of the vision and measuring system.

In 2008, Cheng and Pan analyzed several characteristics of the relationship between Six Sigma and BSC programs, reaching the conclusion that the implementation experience of a program belonging to the former assists in implementing one pertaining to the latter.

Integrating the BSC and Six Sigma into a business improvement system

According to Duke University Hospital, the BSC has led to a 236% increase in net margin, while the Six Sigma approach helped them to reduce the risk score in moderate sedation from 11.94 to 4.94.

After a 10-year experience of implementing these two performance systems, the hospital reached the conclusion that the BSC consolidates strategic initiatives, while Six Sigma facilitates focused improvement within the hospital’s operations.

To conclude, both Six Sigma and Balanced Scorecard can help practitioners to achieve a significant improvement in performance, by using similar best practices to design and implement these performance systems.

What is required, in order to attain this favourable result, is a dedicated top-level management support, along with strategic alignment and successful initiatives implementation.

ARTICLES

COMMUNICATION, PLANNING AND THE BALANCED SCORECARD RAMONA GLIGOREA

starting point of a communication Tandheplanobjectives. should be the company’s vision We must ask ourselves why are we launching a communication plan and what do we expect to achieve as a result.

What should be a primary focus, educating our key stakeholder groups or winning the support of front-line employees?

At Nova Scotia Power, a Canadian electrical utility, the Balanced Scorecard team used this vision to guide their communication efforts: “To present the concepts of the Balanced 38 AUGUST 2018

Scorecard (BSC) to the key constituents involved in both sponsoring and providing input to the implementation, and to provide all involved with regular updates regarding the team’s progress during the implementation.”

This simple statement provided the basis for all future communication efforts during the rollout.

Elements of the Communication Plan The simplest way to devise your plan is by utilizing the “W5” approach: who, what, when, where, and why. ▶▶ Purpose/message

(what/why).

This

describes the information content defined in the plan.

The Balanced Scorecard initiative may have a number of key messages: how the Scorecard aligns with strategy implementation and its role in relation to other change initiatives.

Other content defined in the communication plan may include timelines, development status, and issues; ▶ ▶ Audience (who). This refers to the specific individuals or groups identified who will require messages during the implementation.

BALANCED SCORECARD

Plan to include your senior management team, middle management group, all employees, and your Balanced Scorecard team; ▶ ▶ Frequency (when). The information needs of the audience groups will dictate the amount of communication you provide.

However, it is recommended to do more than you think is necessary to ensure you penetrate the attention zone of an often-overwhelmed employee base; ▶ ▶ Delivery vehicle (where/how).

This describes the method chosen to broadcast the message and will

depend on the needs of the audience.

With today’s technologies, choices of delivery vehicles are really just a function of the limits of one’s imagination.

Consider any or all of these as possibilities: face-to-face meetings, group presentations, project plans, workshops, video presentations, internal Web sites etc.

For example, the U.S. Army, which named its Scorecard implementation the Strategic Readiness System (SRS), used an internal Web site; it was accessible around the world and contained a vast librar y of

information resources; ▶ ▶ Communicator (who). This is the individual or group responsible for the content and distribution of the message.

If you are about to invest tremendous effort into building a new management tool, like the BSC, do not let a lack of communication explaining the concept and the benefits it will produce derail that effort.

A carefully constructed communication strategy and plan will prove to be a great ally in the struggle to enlighten all employees and win support throughout the BSC development process.

AUGUST 2018 39

ARTICLES

MANAGING BANK PERFORMANCE WITH THE BALANCED SCORECARD MARCELA PRESECAN

day, there are millions of cash EThevery transactions taking place around us. entities that allow for these cash

transactions to be conducted in secure conditions are commercial banks. The reason that banks can provide this security is not because they are blessed with the necessary infrastructure to do so, but because we, as people, gradually discovered the need for such an infrastructure.

The fact of the matter is, banks do not create money. They manage it. And while the concept of managing money may seem extremely profitable, it is not.

At least not without a strategic plan to ensure performance. In circumstances of intense competition, performance management has rendered its advantages in all industries, no less the banking business.

When we think of commercial banks, we envision money making machines, and some people use this expression figuratively. This may arise from the popular misconception that banks outlive entire systems because they print out money whenever they feel close to bankruptcy.

Moreover, while it seemed natural for banks to rely on financial indicators to report on performance, this strategy proved inadequate in measuring allaround bank performance. Therefore, a shift towards the Balanced Scorecard (BSC) has been gradually acknowledged within the banking industry. The Balanced

40 AUGUST 2018

Scorecard expanded the view on bank performance by aggregating both financial and non-financial indicators.

Indicators, old and new But, why is it important for banks to measure performance based on both financial and non-financial indicators?

Measuring performance exclusively on financial indicators has brought growing criticism. Although very important in measuring past performance, financial indicators mostly reflect past achievements, focusing on short term goals and tangible assets.

These types of indicators are all lagging indicators, which means they have no

BALANCED SCORECARD

perspective over the future alignment with a constantly changing business environment. What the BSC does, is, it complements financial indicators such as # Liquidity ratio, % Operating costs, % Adjusted return on assets (AROA) or % Capital adequacy ratio (CAR), with leading, non-financial indicators, real value drivers for long-term competitive performance.

A BSC looks upon business from four perspectives: financial, customer, internal processes and learning & growth. A balanced scorecard thus balances financial key performance indicators with indicators that reflect on all other perspectives.

Strategic objectives such as increasing service quality, optimizing infrastructure management systems and ensuring payroll accuracy are all pieces of a balanced scorecard that reflect bank performance from all possible angles. Because, in the end, a bank does not only “create money�, but also, strives for customer satisfaction, updated technologies in terms of payment methods and employment brand strength.

It may be that the branch of a certain bank has a great % Customer retention rate, and that is part of the vision and strategy of the bank as a whole, but it may not be so satisfying that the same branch has poor % ATM approval rate and, thus does not achieve % Customer acquisition.

Where do Balanced Scorecards come into play?

A balanced scorecard would emphasize the need for a higher % ATM approval rate, which is an internal processes indicator, as a means of attracting more customers. On the one hand, more ATM’s mean satisfied customers with bank territory coverage, which means customer advocacy.

On the other hand, ATM approval is based on choosing the right location, maximizing location potential and costeffective deals with the ATM acquirer.

In this case, the same key performance indicator, % ATM approval, can influence all perspectives: customer, because it is

a driver for customer advocacy; internal processes, because it reflects an overview of network optimization processes in regard to their implementation; financial, because it looks at maximizing location potential while being cost effective; learning and growth, because employees in the banking system benefit from a higher number of clients, and implicitly, sales.

The balanced scorecard is the perfect tool in measuring and evaluating performance because it allows us to look at performance from a 360-degree angle.

Kaplan and Norton underline the purpose of the balanced scorecard, and that is: to clarify and translate vision and strategy, to communicate and link strategic objectives and measures, to set targets and align strategic initiatives, to enhance strategic feedback and learning.

Furthermore, managing performance with the help of the balanced scorecard, assists banks in appreciating whether their growth strategies are successful or not, and which new initiatives are required to achieve their strategic objectives in the future.

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ARTICLES

THE CUSTOMER PERSPECTIVE WITHIN THE BALANCED SCORECARD MARCELA PRESECAN

T

he customer perspective within the Balanced Scorecard – BSC for short, enables organizations to target the market segments in which they have chosen to succeed. Correctly pinpointing the right market segment an organization wants to address helps the same organization develop strategies that maximize outcomes, and, ultimately, financial rewards.

In the past, the customer perspective was not a focal point of the Balanced Scorecard, as companies believed product performance and technology innovation to be the backbones of business success.

Ne ve r t h e l e s s , customer

behavioral trends have gradually emphasized the necessity for understanding what customers need.

The customer is always right There are many circumstances in which organizations find it critical to create the best product in the industry, or achieve peerless financial performance, but the truth of the matter is that the customer rules over all other things, when it comes to business. An organization cannot achieve any unmatched performances if it does not look at its customers’ needs.

As much as a customer loves an end product he has never experienced before, he/she can also find a million reasons not to purchase it. It may be that this customer finds the product too expensive, too unreliable, too pretentious, or simply too colorful. It may also be that this customer does not like the way he/ she was counseled into buying it or that the same customer does not appreciate its functionality.

It all leads

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to creating value that clients can be satisfied with. Satisfied clients are one of the key components of a company’s strategy for performance.

The question is: How do we keep customers satisfied, in order for them to buy our products, so that the company increases its profitability? Ultimately, profitability is about growth, and with growth, processes can be advanced and improved, while employees are incentivized into developing skills for performance.

Another issue that an organization must tackle is retaining customers that are profitable and attracting new customers that can help maintain financial gain.

Developing loyalty from all perspectives Before building its Balanced Scorecard, an organization must define the segment of the industry’s market it wants to tackle.

Market research can be a very useful tool in developing customer strategy.

Out of the entire population purchasing our product, market research helps us identify those clients that are beneficial

BALANCED SCORECARD

to our organization. Once a business has identified its market segments it can set up the objectives and indicators to be monitored within the Balanced Scorecard.

According to Kaplan and Norton, customer perspective indicators can be divided into two categories: the customer core group and the differentiators. The customer core indicators are the ones that all companies want to use, namely: % Market share, % Customer satisfaction, % Customer retention, % Customer acquisition and, last but not least, $

Customer profitability.

The differentiators are performance driver indicators, the ones that the company monitors in order to maximize the value of the core indicators. The latter indicators focus on product attributes, customer relationship, the image and reputation of the company. The selection of the performance driver indicators, as opposed to the customer core indicators, is more sensitive to strategy authenticity.

There

is

no

balance

scorecard

that

standardizes differentiators. These indicators have to be determined and optimized in direct accordance to one particular organization’s unique customer strategy. These indicators, ultimately, focus on providing value to customers while nurturing the competitive advantage an organization has over the other.

The Balanced Scorecard is not a standardized template. Organizations have to put it to work independently.

Effective use of the customer perspective can contribute to maximizing the benefits of all other perspectives within the BSC.

AUGUST 2018 43

ARTICLES

BALANCED SCORECARD SOFTWARE SELECTION: MAKING THE RIGHT INVESTMENT MARCELA PRESECAN

hen choosing the right Balanced W Scorecard software for an organization, there are a few issues to

be considered. Software set-up, design, configuration and technicality are some of the dimensions to be analyzed during the Balanced Scorecard software selection process.

Information security and execution costs are also elements of concern when it comes to an optimal Balanced Scorecard implementation.

44 MAY AUGUST 2018 2018

Set-up and design considerations 1) Time and resources: When selecting the adequate Balanced Scorecard software for your organization, the time and resources required for a full implementation should be thoroughly examined.

2) Flexibility: There are various Balanced Scorecard designs that we can choose from. However, the flexibility of the design, adapted to pre-existing scorecard models practiced in the organizations, should be

one of the criteria organizations base their selection on.

Using an already established infrastructure can lead to an economical optimization of systems and processes.

3) User interface: In the competition for making their portals user-attractive, Balanced Scorecard software providers may drift away from the simplicity of a realistic design. The adequate software must present information and data in manageable

BALANCED SCORECARD

fractions, so as to facilitate learning.

4) Number of performance indicators: New Balanced Scorecard software technologies, allow for an unlimited number of KPIs to be entered, measured and tracked. This is not a bad feature at all.

Selecting a software that enables monitoring of large volumes of KPIs is an indicator of that software’s flexibility to house reporting from across all levels of an organization.

However, practitioners must not get distracted from maintaining focus on the most relevant KPIs for the organization itself.

5) Functionality: Balanced Scorecard software vary in the manner they assemble constituent elements of a performance management system. Some software may focus on presentation tools such as Scorecards and Dashboards, while others may find it more important to link Key Performance Indicators to strategy maps.

Finding a software that best connects objectives to perspectives, KPIs to objectives and targets, and initiatives to targets should become a priority. Quickscore, for example, connects the Balanced Scorecard to Strategy Maps, Dashboards Individual Reports, an Action Planner and a Document Manager, within a comprehensive performance information system.

6) Owner allocation: The optimal Balanced Scorecard software will allow the user to assign owners to the KPIs they are responsible for.

7) Access to detailed information: A software that provides room for the description and definition of various KPIs is one option to be examined. The first thing a KPI owner will do, when analyzing data for its communication, is its definition and description.

8) Unit type availability: Key Performance Indicators are usually measured by different unit types such as: “#” for number, “%” for percentage, “$” for monetary value regardless of currency. The Balanced Scorecard software must provide use of these different unit types for KPI measurement.

9) Corresponding weights: Key Performance Indicators are tuned according to the needs of the organization.

That’s why they are all important to the Balanced Scorecard.

However, it is not unusual for organizations to place, or shift, emphasis from one group of indicators to another, when adapting to changes in their business environment.

An ideal Balanced Scorecard software will provide means of weighing key performance indicators relative to their importance.

10) Benchmarking and comparison: When evaluating performance, the most comprehensive way to do it, is not by measuring key performance indicators only relative to targets, but also by comparing with previous results, and benchmarking to results of the same indicators in other organizations active in the same industry or functional area.

A Balanced Scorecard software that allows KPI comparison and benchmarking to be achieved is one to be considered for implementation.

11) Threshold achievement indicators: Even though we are more than familiar with the traffic light representation of target threshold achievements, the decision of acquiring a Balanced Scorecard software should be based on its ability to provide easy-to-understand threshold status indicators.

12) Automatic link to e-mail: In order for them to be improved, Balanced Scorecard results must be communicated. A suitable Balanced Scorecard software automatically connects to e-mail, communicating results and encouraging staff to participate to their improvement.

Technical features ▶▶ Software compatibility to operating systems: The Balanced Scorecard software should be compatible with the existing technical environment, so that additional implementation costs will be avoided. ▶▶ Operational integration: The optimal

Balanced Scorecard software allows for data to be collected from a multitude of additional sources such as the financial statements, customer relationship management system, or the ERP system. Automatically outsourcing data without duplicating it, is one of the main functionalities organizations should search for when selecting a Balanced Scorecard software. ▶▶ Data import and export: The ideal Balanced Scorecard software should have the potential to retrieve data from various third-party sources, such as spreadsheets or excel templates, as well as facilitate the export of data to management boards, shareholders and stakeholders. ▶▶ Uploading and sharing: When selecting the right Balanced Scorecard software organizations should consider the importance of mean time accessibility and instant data sharing.

This aids the organization to provide all its employees with access to the information presented in the Balanced Scorecard.

Information security Making sure that data is safe and protected, is a crucial concern with all the companies activating in the extremely competitive business environment of today. This is the main reason most of today’s organizations prefer processing their data on their local servers.

However, this makes it difficult for information to be shared across the organization at low costs. Nonetheless, there are Balanced Scorecard software that provide availability of both internal and online storage with great licensing costs.

Implementation cost The implementation cost of a Balanced Scorecard software must be the best reflection of the product’s ability to deliver what the organization needs. When this happens, the Balanced Scorecard software becomes more than an expenditure. It becomes an investment.

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ARTICLES

EMPLOYEE PERFORMANCE

MANAGING THE PERFORMANCE OF TOMORROW’S GRADUATES CASSIE STEELE

erformance management is undergoing P huge overhauls, given that what businesses define as success shifts seemingly every year. A study by Psycnet reported that performance management improves only 28% of staff and is overall a sunk cost.

However, with modern businesses demanding high performance and graduates moving on from university, being influenced by a new set of values, it can be a confusing time for organizations.

The fact is, performance management is no longer a single-faceted exercise in getting the most out of your workers. Today’s and tomorrow’s graduates value their own wellbeing, have a less money-focused worldview than previous generations and are seeking to be part of a modern, ethical world.

Business management demands a wide range of skills, in short. Deploying your discretion is key to properly managing performance.

Today’s big player: wellbeing High performing business units have always had a hard balance of maintaining success and guaranteeing employee happiness. For businesses having difficulty aligning their goals with employee wellbeing, it can be helpful to consider it as a risk.

Whilst it has always been important, it is 46 AUGUST 2018

arguable that the modern day has generated more risk than ever before. Even if they seem esoteric, the threat of climate change, geopolitical divides and cyber-crime are absolutely pressing to many businesses.

This theory has been confirmed by the World Economic Forum 2017 annual risk report, which found 59% of businesses forecast increased risk, against just 7% reporting a reduction.

Given the inherent stress in graduate life, from planning their life as an independent adult to being responsible for calculating the best product on their student loans and insurance products without the help of parents, it can pay to mindful of their happiness.

Developing your eye for employee management will mark you as a wise and forward-thinking performance assessor.

Applying discretion for life’s stresses and offering aid will build your popularity. For the higher-ups, presenting wellbeing as risk is likely to make a positive impression.

Managing communication Much performance management falls down in communication, which has seen rapid development over the past decade.

Before the internet became omnipresent, communication was managed through

whatever was available.

Now, there are dozens of different ways to get through to your target audience, colleagues and clients. Despite this, the increasing choice makes good communication arguably more difficult and potentially more intrusive.

America’s Inc magazine found that Australian workers spend 78% of their time on email, and a large percentage of those found it to be wasted time. At a time when work hours are crunched, the next generation will value their time and demand it be respected.

Performance management professionals should strive for simplicity, ease and clarity in their schedules. Make your sessions feel like a benefit to the employee, and focus on the quality of your interaction, rather than the quantity.

Tomorrow’s professionals will not have the same single-mindedness towards performance and achieving monetary gain; their health and happiness is paramount.

What’s more, your business might benefit from realizing this, as studies have shown classic PM is not effective.

Tailoring your approach and people skills may help you achieve great productivity from your staff.

EMPLOYEE PERFORMANCE

CONTINUOUS PROFESSIONAL DEVELOPMENT, LEARNING, AND YOUR EARNINGS CASSIE STEELE

ontinuous professional development, C CPD for short, is a building block to any successful career today, and many

is fulfilling in the first instance. Flexibility here relies on you identifying what you need to be successful.

Australian employers mandate it as part of their terms and conditions.

For example, a lower level office role may require little advanced interaction with IT, but you may have skills from your own home life and personal development that could benefit the business and put you on the right track.

However, quite apart from a bureaucratic hoop, CPD can hugely benefit the employee, with the University of Malaysia Sarawak finding that lifelong learning creates salary increments in technical skills, and a better of quality of life and extra income with nontechnical skills. Clearly, pushing yourself to learn continuously throughout life is a surefire way to maximize earnings in the long run.

How that learning takes shape is another matter, however. You may excel in a job role and find it enriching, which is an important part of happiness, but there’s no guarantee that there’s a progression for that particular skill set.

Underlying any self-improvement is attitude, though, so with the right mindset in place you can go far.

The link between CPD and your salary With the amount of work that’s done in CPD, there are surprisingly few studies to clearly outline the earnings benefit. However, a study by Ausmed found that Australian nurses benefit monetarily from CPD. This has been outlined by using a comparison with the UK; the comparatively higher rate granted to nurses (20 hours per year as opposed to 11 on average for British nurses) has led to average salaries that are AUS$20,000 higher on average.

Considering average clerical salaries in Australia ranges from AU$35-59k, according to Glassdoor, and IT technicians can earn north of $100k, this is a great example of where your own skills can be enhanced through CPD. Staying relevant in the workplace

According to the study by Malaysia Sarawak, there are holistic benefits for the person’s income, too. For example, CPD can often offer personal finance and accounting training, helping those undergoing self-improvement to get their house into good financial order, creating an uplift in available money.

Identifying the learning you need Australia has a rapidly growing job market, with 1 million Australian jobs added since 2013 according to ABC. Your CPD should, therefore, be tailored to your requirements to make sure that you’re able to get exactly where you need to be.

Your training will likely be employer-led and therefore dedicated to a certain set of skills you require to perform within your job. This is unavoidable, but you should be in a role that

The other aspect of why CPD is so important to your lifetime earnings is the relevancy factor in your industry. As a side effect, poor lifelong learning can cause business instability; according to News.com.au, insufficient efforts to keep senior staff upskilled (or insufficient effort on their part) has led to a skills gap as young workers lack the skills and experience to get into the industry.

Making an active effort to develop yourself will keep you relevant in the eyes of senior management in your organization and contribute to your development going forward, raising the prospect of promotion or raises.

CPD is not just a tickbox for HR and management professionals – it’s a vehicle to make your own career stronger. Studies prove that adhering to CPD will improve salary, and even happiness, through personal life learning.

Take advantage of your workplace scheme today and reap the rewards.

AUGUST 2018 47

ARTICLES

BOOSTING PERFORMANCE VIA WORLD-CLASS EMPLOYEE ENGAGEMENT EVENTS MICHAEL BUNGAY STANIER

costs of disengagement with your employees are Tthat,heeconomically startling, with The Australian reporting over in the US, companies lost $300bn to employee

Three main aspects define a great event outcome: planning, innovation, and feedback.

apathy in 2017.

Engaging with employees from step one

The cause of this economic damage comes from a few sources, from attrition via jumping ship, poor performance and lost hours. As such, ever since HR and L&D functions have become standard in global companies, so have engagement events, designed to bring employees into the fold – en masse.

While a menace to some HR planners, procrastination is a key element in Australian workers lives in terms of their work happiness. In 2017, workers reacted angrily when ministers threatened procrastinating city staff with sacking.

To the event planner, this tells you a lot about what’s necessary for the pre-event stage. Time is precious to workers, and the more Employee events are undoubtedly an excellent way to bring time spent figuring out the system will be detrimental to morale, the entire business network together, and it’s well understood as will being peppered with any sort of emails. that improving manager engagement is key to improving it across the board. What not all professionals do understand One German company reported an uplift in morale after enforcing email deletion for out-of-office workers. Clearly are the crucial elements to creating a worthwhile event.

48 AUGUST 2018

EMPLOYEE PERFORMANCE

and effectively outline the purpose of the event and how to get involved, use digital technology to automate entry via online ticketing, and provide passive reminders, rather than an active survey or in-your-face email campaigns.

Provide respites via budget permissible gaming opportunities, and add a level of competition to interactive events. This will help to keep employee heads up and engaged and reduce any sense of continuing boredom.

Delivering the event

Gathering worthwhile feedback

An event that employees will come away from feeling bored will be a detriment to engagement. It can feel unavoidable when delivering an important corporate message, however.

Moreover, consider including games in your event. According to the Smithsonian, gamification increases engagement in classrooms and that principle can be applied to a corporate space.

feedback and preach absolute anonymity, benefiting from the open nature of a company-wide event. You can bring this to a digital level, too – use mass messaging apps to deliver engagement throughout the event and encourage real-time feedback.

This also gives employees the opportunity to fill out responses later, An event well planned and engaged is less likely to attract cynical or malicious should they prefer having time to mull feedback via the normal routes. As a result, the event over. you should have a majority of responses that are constructive and can give you a Engagement is key to preventing losses in solid idea of where the problems lie with the workplace. A motivated and engaged engagement from the best possible source workforce is a happy one, and effective corporate events are key to maintaining of information – the employees involved. the quality of communication with your Obtaining the right level of feedback staff. Plan, deliver and recoup feedback is crucial. Encourage 360-degree style in an effective, efficient and streamlined manner to keep your staff smiling.

AUGUST 2018 49

ARTICLES

4 TYPES OF BUDGET REWARDS TO ENGAGE AND MOTIVATE EMPLOYEES OLIVIA RYAN

hat’s the greatest motivator for W employees? Most people would answer money. Yes; bonuses are

motivating. They show that you really appreciate the engagement and input of your employees. When they contribute towards business growth, you’re happy to let them experience the financial benefits, too.

Unfortunately, financial incentives are not always an option. You can’t afford such motivation whenever you notice engagement levels dropping. Sometimes your business is struggling, and sometimes you and your employees must be patient before you can see some bonuses. What do you do then?

Are there any budget-friendly ways to motivate employees? Of course there are!

We’ll suggest 4 really effective ones!

1. Give Them an Opportunity Are you wondering what Millennials expect from their jobs? According to a

50 AUGUST 2018

survey of 1700 workers in the USA, most of them feel that the opportunity to learn and grow is an extremely important factor for job satisfaction. Their motivation to work is not focused around finances; they are mostly after opportunities.

One of the most meaningful recognitions for well-performing employees is an opportunity. For example, you can invite a successful employee to sit on a panel discussion on your behalf. You may send them to an industry conference on your behalf, or you may offer an incredible mentoring opportunity with an influencer from your industry.

2. Engage in Teamwork Activities A healthy competitive environment will clearly inspire your employees to give their best. When most business owners think of team-building activities, the idea of a weekend in nature comes to mind. If you don’t have finances to invest in an entire team-building weekend away, you may opt for options that will

EMPLOYEE PERFORMANCE

be friendlier to your budget.

How about a book club? You can all choose a monthly book and discuss it during breaks. Such an activity will improve the connections within the team. With that, they will be more motivated to come to work every day.

You want something more competitive?

How about the AussieWritings.com essay contest? Encourage everyone to write an essay related to an issue from your industry, and they will get a chance to win a prize. This will encourage your employees to research and learn about the industry.

Eventually, that will make them like their jobs a bit more.

3. Acknowledge Great Performance When you think of rewards, money should not be the first association. A personalized thank-you note and some chocolate can

make an employee feel good about being part of your company.

Personal thank-you notes and emails are powerful because they show the manager notices and appreciates the good work. The employees don’t feel like they are making all that effort for nothing. When they know the management appreciates their contributions, they are more motivated to give their best.

4. Emphasize the Social Impact Millennials, who currently make up for the biggest part of the job market, are the driving force behind social responsibility.

They are labeled as the giving generation for a good reason. They see the greater impact of their actions, which is why they want to work for socially-responsible brands.

You should emphasize the social impact of your brand. You may do that by

encouraging the entire team to become part of a charitable event. You should continuously show what changes your business is making in people’s lives and how it’s contributing towards the growth of a better society.

Nowadays, people have high expectations from their jobs. Of course, they seek employment because they need finances, but it’s not all about the money. They want the job to bring professional and personal satisfaction. If they don’t find it in your company, they will look for it elsewhere.

That’s why you shouldn’t limit your motivational techniques to bonuses.

There are many other options that your employees will truly appreciate. You’ll definitely appreciate them too, since they are not associated to spending more money for the sake of motivating your employees to perform better.

About the author: Olivia is a passionate blogger, who writes on topics of digital marketing, career, and self-development.

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ARTICLES

8 WAYS TO WRITE EFFECTIVE EMPLOYEE PERFORMANCE REVIEWS GRACE CARTER

erformance review methods differ P from organization to organization, but the basic principles of how to properly

You don’t need to specifically go over each goal, but it is a good idea to write down their notable accomplishments. You may have time later to talk about the rest in person.

Focus on the accomplishments that had the most significant impact on their department or business overall, advises Victor Brubaker, HR at Assignment Help.

Neal also believes communication, creativity, improvement, and management are also useful words for discussing an employee’s performance. Richard Grote, author of How to Be Good at Performance Appraisals, recommends using measurement-oriented words like ‘excels,’ ‘possesses,’ and ‘directs’ rather than words such as ‘good’ or ‘excellent.’

Identify goals that were not met

Get help with writing performance reviews Writing doesn’t come easily to everyone, so don’t be afraid to get some help from the professionals. Here are some good resources to get you started:

Start on a positive note

After talking about some of your employee’s victories, it’s time to talk about elements they can improve on. Be fair in your written remarks, making it clear whether or not their deficiencies were acceptable, given the circumstances.

Begin every employee review by bringing up some of their accomplishments and positive qualities. Almost every employee has some good traits. Even if their overall performance was quite unsatisfactory, it is good to mention the positives first.

Sometimes other priorities get in the way, or challenges arise. Make it clear to your employee you are aware of these factors, should they be in play. It’s not necessary to nitpick every incident, unless you are doing so in preparation for taking further action.

Be specific when writing these comments.

When you are specific, it tells your employee you noticed their contributions, while being vague comes off as impersonal and may be interpreted as you not noticing their contributions.

Use your words carefully

communicate with an employee about his or her performance remain the same.

Always begin on a positive note, recognize goals that were met, identify goals that were not met, use your words carefully, get help writing your review, have a discussion, talk about future expectations, and end it positively.

Here are eight ways to write an effective employee performance review.

Recognize goals that were met Next, go over some goals your employee accomplished during the evaluation period.

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The way you phrase things and the words you choose are important. In his book, Effective Phrases for Performance Appraisals, James E. Neal talks about five words and phrases that are useful for highlighting an employee’s contributions. He mentions ‘achievement’, and recommends inserting it into sentences such as ‘achieves optimal performance levels.’

▶▶ Via Writing and SimpleGrad – These are helpful grammar resources you can use to ensure your grammar is flawless. It’s important that, as a manager, you show you care about the details of your review. ▶▶ UKWritings and BoomEssays – These are proofreading tools, suggested by UK Essay Writing Service, will help you write a performance review that is polished and error-free. ▶▶ StudyDemic and WritingPopulist – These are useful writing communities you can check out for ideas and advice on writing your performance review. Get some help from other writers if you get stuck. ▶▶ EssayRoo and Assignment Writing Service – These are online editing tools,

EMPLOYEE PERFORMANCE

reviewed by BestAustralianWriters in Australian Help review, to help you ensure your review has a good flow and is free of errors. ▶▶ MyWritingWay and AcademAdvisor – These are useful writing guides that will help you write a review that is wellwritten, properly structured, and flows well.

Have a discussion Your written review brings up some important points, but it’s best to continue the discussion in person, and in more depth.

Encourage your employees to give some feedback on the points you raised. Take some time to talk about solutions to the problems identified in your review.

If the discussion becomes heated, it’s a good idea to stop before words are said and regretted. Consider continuing the discussion later, in person, or even over email.

Talk about expectations for next year Look ahead to future goals and developments for the employee. This section isn’t a formal development plan, but rather a starting point for further conversation about the employee’s career development in the next year. Unless the employee had a significantly unsatisfactory performance, keep this part positive.

End it positively End your employee’s performance review on a positive note. Let the employee know

you appreciate their efforts and encourage them. Ending on this note will be a bonus to an already positive review, or cheer up an employee who received a less than positive evaluation. Positive reinforcement is a powerful motivator.

If you take these tips to heart and practice them, you will develop a significant tool for managing your employees. Performance reviews can be a valuable tool for both managers and employees.

Follow these eight keys to write effective employee performance reviews.

About the author: Grace Carter is a writer at Big Assignments and Australian Help, where she proofreads content and consults about email marketing. Moreover, she also writes for Revieweal, an online website that reviews writing services.

AUGUST 2018 53

ARTICLES

13 INSPIRING WAYS TO MOTIVATE YOUR EMPLOYEES OUT OF A RUT JAMES CUMMINGS

mployees can easily become stuck in Eroutine a rut when they complete the same tasks daily. Typically, they don’t feel challenged, so their creative juices dry up somewhat. This in turn makes them less creative, demotivated and dissatisfied with their job, which leads to poor performance and low productivity at work.

It’s not easy to create motivation – especially if you employ minimal staff, have a limited budget and can’t sustain downtime.

You’ll need every employee to perform at optimum levels during working hours to meet your organizational goals. So, just how can Management motivate employees, when they are stuck in a rut, without overshooting their budget?

1. Push your teams to improve performance: People get into a rut because they are performing routine tasks that require minimal brain work and they’re not learning. It’s important to cultivate a work environment where learning is continuous.

No matter how successful you are, never kick back or relax because you’re at the top, but instead set new goals and provide opportunities for your employees to develop. Send them out on workshops and training, so that they are on top of all the latest findings and innovations within your field.

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things work and after a while, it becomes boring and harder to find inspiration.

2. Create a special day: Give your employees something to look forward to. It could be a day where they just sit around and bond, share jokes or socialize. In short, let them have some fun.

Expert Christina Galoozis suggests video games after work as a way to foster bonds and relax. It is inexpensive, motivates employees and subsequently yields results.

3. Offer extra perks: It’s no coincidence that some of the top organizations in the world are those that take care of their employees, right down to small perks such as free workplace lunches, haircuts, as well as recreational and lounge areas.

Allow employees to place items on their desk or office that might enhance their creative thinking. This includes a plant, artwork, colours on the walls or even pictures.

4. Help them figure out why they’re in a rut: 55% of individuals in the workforce feel they have a job, not a career. You get used to how

Your manager could switch your team or project to see if that’s the specific cause of the slump. Sometimes, it could involve moving you to a different unit when you feel like a fresh challenge.

5. Focus on what’s going well: You might be feeling dissatisfied with your job right now, but don’t rush to hand in your resignation letter just yet.

Take a few minutes each day to identify a few things that you’re thankful for in your current job. Gratitude is a robust antidote to adaptation.

6. Offer employees the chance to improve a particular skill: It’s important to identify the type of work you enjoy, against that you perform as a task. If you’re constantly being asked to compromise on a task you have no interest in, you could easily fall into a rut.

Therefore, offer employees the chance to improve skills in which they’re interested.

This improves output, enhances job satisfaction and increases their ability to

EMPLOYEE PERFORMANCE

aren’t good enough. The fear of failure is crippling and hinders innovation.

It’s important that you master the art of brainstorming by creating a safe environment where team members feel comfortable sharing their ideas and learning at the same time.

grow your business.

7. Ask your employees what they want: It might seem daunting, but sometimes, this is the simplest way to get to the root of the problem.

You can conduct a survey, hold a brainstorming session or ask them directly during performance reviews. This helps you set a clearer goal that is beneficial to both the employee and the company.

8. Step out of your comfort zone: New challenges are inspiring in their own way. There is no sense of feeling challenged if you’re at the top of your field and performing work functions that feel monotonous.

During the launch of Umbrellar Azure Stack, Robert Rolls, Head of Online Business at Umbrellar (a New Zealand Web Hosting Provider) admonished business owners in attendance to always encourage their employees to switch things up by moving across various departments.

He stated that it is an act he carries out to reenergize employees’ attitude to work, sparks excitement and make them eager to learn, improve and deliver.

9. Build a sense of community: Community is very important for any gathering of people. Companies where employees feel interconnected, enjoy better performance, because employees are happier.

Feeling stuck in your own world or isolated in a project you’re carrying out alone leads to a slump in performance. Involve your colleagues in conversations, host social gatherings, ask them what’s going on in their lives outside of work and foster workplace connections amongst team members.

10. Become a better motivator: As a team leader or employer, it’s important to listen and understand what your employees say, foster internal motivation amongst team members and create environments of mastery, autonomy and purpose.

11. Conquer the fear of failure: A common reason why your employees might be in a rut is the fear that their ideas

12. Incorporate Maslow’s Hierarchy of Needs: Research has shown that contrary to public opinion, reward decreases productivity, narrows the possibilities of performance, and dulls thinking.

You must understand the core desires that push your employees to take action. Maslow suggests that the needs of people must be met in a specific order for motivation to be successful. Work your way up from the most basic needs and examine the core behaviours that fuel motivation.

13. Expose your team to different perspectives: It’s easy to dwell in a filtered world where you listen to the same podcast, Ted Talks, watch the same news and read the same feeds.

This is a dangerous situation that doesn’t let you gain new perspectives. Therefore, expose your team to different perspectives within your field. By touching upon varying schools of thought, numerous skills and ideas collide to form a brilliant idea, that is sometime out of the box.

Conclusion Most of these steps won’t cost a penny. You can help your employees improve performance simply by showing them that you care and making the workplace fun and exciting so they feel inspired and eager to come to work.

When employees view their jobs as a longterm career in which they want to grow, it’s much easier to motivate them out of a rut.

AUGUST 2018 55

ASK THE EXPERTS

ASK THE EXPERTS

WHY DO ORGANIZATIONS STRUGGLE WITH STRATEGY EXECUTION? GAIL STOUT PERRY

I

’ve received a lot of questions regarding why I made a seemingly radical career change at the age of 50.

It was due to an epiphany as I searched for an answer to “why organizations struggle with strategy execution”.

March 2016 – that’s when I hit the wall. I’d spent over a decade providing strategic consulting to some of the most prestigious organizations in the world. I was wrapping up an engagement with a client for whom failure to execute would potentially result in high-profile disaster, even death. And this client was struggling

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with strategy execution.

top five objectives.”

I had other clients struggle with strategy execution, but now “why do organizations fail at strategy execution?” became an obsession for me. No one, not even the most notable “thought leaders,” could answer with substance.

In other words, most were pointing to root causes within the human domain (culture and communication). None offered up a clear answer to what could be done to ensure strategy execution.

I found truisms regarding why organizations fail such as “culture eats strategy for breakfast” and studies that pointed to various root causes such as “55% of managers can’t name even one of their company’s

I went on a quest to find a real answer.

I am an Industrial Engineer, so I tend to look at problems through the lenses of human factors, methods/processes, and technology. And I knew that even if the root cause of strategy execution failure was “human factors,” the solution to the problem would

ASK THE EXPERTS

likely reside somewhere in the interplay between people, methods/processes, and technology.

There typically wasn’t a lack of ability, understanding, or motivation at my clients.

Could we do more to shore up the “methods and processes” that enable strategy execution? Not only did we help our clients formulate a strategy using a proven framework, we also helped them to create processes to ensure focus and accountability, to implement a cadence of reporting and to conduct strategy-focused meetings.

Could the problem be solved by doing more to equip and enable people? I didn’t see how I could reasonably do more with my clients – our methodology included a tremendous amount of change management (inclusion, collaboration, training, integration with individual performance plans, and continuous two-way communication), thoughtful consideration of the corporate culture (and changes needed), as well as careful attention to leadership capabilities.

We taught them the methods to plan and execute initiatives. We showed them which of their own internal processes were key to strategy execution and how to improve them.

and “meets fundamental requirements”.

Several products on the market met these general requirements and I wrongly assumed that the choice of product was irrelevant. I was “software agnostic” and independent of any vendor. But as I delved into various software products and how they are used, I realized that most strategy execution software systems are simply data repositories to enable periodic check-ins to report on progress.

That left one stone unturned: “technology”.

Moreover, they only capture one dimension of performance (strategy dimension) versus integrating strategy across all operational functions (e.g., silos) whether it be departmental operations or functional domains such as risk management, compliance, and project and portfolio management.

This where I need to make a confession. My clients typically used strategy management software but I’d never paid careful attention to the differences between products beyond “contains functional components found in a best practice strategic management system”, “provides ease and speed of implementation”,

In other words, these systems reduced strategy execution to a “side of desk” periodic reporting activity rather than ensuring strategy became an integral part of the operational cadence of the business. No wonder my clients were struggling with strategy execution!

AUGUST 2018 57

HUMAN RESOURCES

KPIs

or the fact that a company is under-managed. Nonetheless, this may have negative effects on succession planning, as there are fewer opportunities to prepare the next generation of executives.

Depending on type and size, each organization is responsible for finding the proper balance in its # Management-to-staffratio. While some organizations may find it suitable to have a 20:1 ratio, others may find a 5:1 ratio just as satisfactory.

An effective # Management-to-staff ratio will reflect on the most adequate distribution of employees per manager or supervisor, while taking into consideration all other factors that may contribute to that distribution: line of work, nature of tasks, entailed responsibilities, demand for supervision etc.

The elements that generally contribute to finding a suitable span of control include: ▶▶ Budget considerations;

# Management-to-staff ratio Definition Measures the ratio between the number of employees in managerial positions and the headcount of the organization.

▶▶ Workload assessment; ▶▶ Team distributions; ▶▶ Staff turnover.

Purpose To assess the organizational structure and optimize the hierarchical balance.

Recommendations # Management-to-staff ratio reflects the career path development outlook, the organizational approach to personnel management, being therefore an important indicator of HR cost containment. It should be calculated at organizational level as well as for each department or functional area, not just for the whole organization.

Overall, there are various factors that can influence this ratio: industry, organizational structure, combination of job functions, approach to internal talent development and cost constraints.

A high ratio can indicate that a particular department or division is top-heavy. For companies with many layers of management, it may complicate communication and lengthen response times for critical decisions. However, it may also reflect an organizational approach to employee retention and development, by providing staff with many managerial level opportunities.

A low ratio generally reflects a flat organizational structure, 58 AUGUST 2018

% New hire failure Definition Measures the rate at which new employees left the organization (voluntary or by being terminated) in a short time period after being hired (e.g. under 30, 90 or 180 days).

KPIs

Purpose

% Employee cost over sales revenue

To assess the effectiveness level of the recruiting process. It reflects the new hire quality and fit with the role and the organization.

Definition

Recommendations According to the Society for Human Resources Management, 50% of all hourly workers leave their new positions within 4 months of hire. New hire failures are commonly consequences of employee attitude rather than employee skill. Technical skills, as well as soft skills are generally easy to assess and invariably test before a new hire. Therefore, it is behavior that either reinforces or undermines skill.

New hire failure has negative effects due to the loss of know-how, the cost of replacing employees and the duration of the replacement process. A high failure rate for new employees requires root-cause analysis to determine and address its causes.

Programs designed to improve skills have proven to be successful, but they have seldom been responsible for changes in employee behavior. A successful onboarding process ensures that all new employees acquire the behaviors that best reflect the values of the organization.

Recommended practices on mastering the onboarding process of new employees include the following: ▶▶ Abiding by a formal induction process that explicitly communicates the core policies and procedures of the organization; ▶▶ Providing new hires with all the necessary information that concerns the role and their responsibilities within the organization; ▶▶ Granting new employees, the human resources education that they need to fully understand vacation and leave policies, employee benefits, the company’s code of conduct, bonus and reward systems;

Measures the amount of money spent by the organization with the workforce employed relative to the total sales revenue generated from workforce employed activities conducted during the measurement period of time.

Purpose To monitor the efficiency in the utilization of employees to generate revenue.

Recommendations Business wise, % Employee cost over sales revenue reflects on the amount of gross revenue that goes to payroll. Having that payroll is an important cost to any organization, it is essential that a balance is achieved between having enough people to keep revenue going and not hiring employees the organization doesn’t really need.

This indicator is useful to compare companies operating in the same business. If the ratio is used for international comparison, major variations can be expected, because wage levels, social security and other benefit charges differ.

One other important factor to keep in mind is that the lower this figure ends up being, the better it is for the company. If less of each unit of revenue is devoted to employee remuneration, there will be more money available for other purposes. Furthermore, accurate reporting on % Employee cost over sales revenue relies on payroll records from a sound financial management system.

Achieving the desired value in labor costs over revenue, highly depends on human resources management strategies such as: ▶▶ Clearly defining hiring policies that best suit the organization;

▶▶ Training new hires into the functional area of their job;

▶▶ Establishing an optimal value for the labor costs one organization can handle;

▶▶ Giving new hires the opportunity of freely communicating anything to their internal peers.

▶▶ Deciding on a labor margin that is ideal for effectively running the business.

AUGUST 2018 59

BUSINESS CONSULTING

KPIs

$ Cost of services delivered Definition Measures the overall cost of delivering a service to customers. It includes all costs directly related to that service (cost of labor plus delivery overhead costs).

Purpose To indicate the efficiency in using the resources for service provision, further on extracting the cost of services from the revenue to obtain the gross margin.

Recommendations Every service-related business would want to maximize its allocated resources and operate efficiently. One of the ways to do so is by monitoring the $ Costs of services delivered. Managers are expected to calculate the total cost of delivering the service, and they can do so by looking into the company’s financials, i.e. the income statement.

$ Delivery overhead costs

Upon collecting the data, managers should be aware of the costs that are included in and excluded from the indicator. For example, direct labor such as employee wages should be considered as the cost of revenue, as well as the sales commissions of the employees.

Definition

However, overhead costs such as rent, phone service and utilities are commonly excluded from the indicator.

Such expenses are incurred even if the services were not delivered. In conclusion, managers are expected to fully understand the costs and expenses made by their company, as well as the classification of such expenses.

Purpose

Several recommendations to maximize the use of the $ Costs of services delivered are as follows: ▶▶ Ensure real-time visibility into performance and profitability;

the

company’s

▶▶ Electronically record expenses for better access to time and expense management; ▶▶ Motivate employees to improve on-time service delivery and save on costs.

There are opinions that consider equal the cost of services, to the cost of goods sold (considered for a services company). However, services firms prefer to calculate cost of services, these being directly attributable to the services and being different from other costs incurred by the services, but not in a direct manner (the delivery overhead costs).

60 AUGUST 2018

Measures the overhead costs (fringe benefits for the consultants, recruiters or lawyers, travel expense) that are integral part of any consulting project or service delivery.

To indicate the value of the inherent resources consumed for the provision of the service, additional to the direct costs of delivery (those of labor). It helps measure the full cost of service delivery.

Recommendations Companies in the business consulting industry are especially interested in their $ Delivery overhead costs. These refer to the non-labor expenses required to ensure business continuity.

Either fixed – rent, mortgage, insurance, utilities, etc. – or variable – marketing expenses, telephone bills, office supplies – the $ Delivery overhead costs can have a significant impact on bottom lines.

In short, this KPI provides insight into the amount of overhead the company is carrying to support service delivery. Inflated overhead costs can negatively impact $ Revenue, up to the point that the company can no longer cover its expenses and it is forced to declare bankruptcy.

However, containing $ Delivery overhead costs, whilst maintaining high quality service levels can be challenging.

Regardless of their activity, every company seeks to employ management talent that can effectively administer and control

KPIs

% Consulting hours generating revenue

overhead costs. Moreover, many companies have employed logistic planning and sought optimization through use of integrated software solutions.

Definition

Some recommendations on optimizing $ Delivery overhead costs include:

Measures the percentage of consulting hours that are charged, thus generating revenue.

▶▶ External benchmarking to reveal gaps in cost structures and processes;

Purpose

▶▶ Providing value beyond efficiency through quantitative assessment of value drivers; ▶▶ Reviewing and recalibrating targets for operational improvement levers; ▶▶ Stakeholder interview for organizational complexities.

a

qualitative

perception

on

This KPI completes the analysis of the total cost of services delivered, as it captures the costs that are inherent to the service, other than the cost of labor. Obtaining good values for the overhead costs indicates efficiency in using resources and organizing the delivery of services.

Measurement values depend on the company’s profile (size, industry) and mostly on its volume of activity. Although cost of labor has to be paid, no matter the volume of activity, the delivery overhead costs are usually proportional to the activity.

To indicate the company’s maturity, as a well-developed company can charge for each interaction with a client or potential client.

Recommendations The main goal for companies in the consulting business and not only, is to achieve higher revenues and thus, continuously improve profitability levels. It is also true of the consulting industry – consultants are expected to generate income for the organization, so as to justify the costs of having them employed.

Young companies usually do not charge potential clients until a formal agreement is signed, because their unknown position on the market makes it difficult for them to charge for informal meetings.

To be as relevant as possible, this indicator should be completed with % Average revenue per consulting hour. There should be a balance between the number of consulting hours and the average revenue generated per consulting hour.

As much as it is far from realistic that consultants gain revenue on all of the consulting hours held, managers are expected to ensure that their teams produce enough revenue for the business. One of the more popular practices in this respect involve consultant derogation of administrative tasks and time-consuming bureaucratic issues.

Many successful managers usually address such issues by efficiently organizing workloads and effectively delegating additional tasks.

Targets for this KPI depend on the company’s maturity and whether it is able to charge every minute spent with a potential client. Most companies begin charging only after signing a contract with the client.

The fact that it bears a consultancy profile might influence how long it takes to gain a client. A high-level profile ensures consulting hours are well planned and the process of winning clients is well developed.

Several other recommendations to increase the % Consulting hours generating revenue are as follows: ▶▶ Encourage consultants to charge higher fees for a more complex project to generate higher revenue; ▶▶ Streamline internal procedures to encourage efficiency and maximize individual productivity; ▶▶ Offer mentoring and supervision to effectively plan on activities during peak times for projects; ▶▶ Invest in staff training to elevate individual skills and project management expertise.

AUGUST 2018 61

ACCOUNTING

KPIs

accurate performance evaluation; ▶ ▶ Writing off claims that have aged long past their collection period (90 or 120 days); ▶ ▶ Optimization of the order-to-cash business cycle.

It is possible that within the accounts receivable, there are some accounts which are 90 days or even more overdue.

Using an average figure hides this information, as the average may include some accounts that were paid early.

Therefore, the aging of accounts receivable by customer should be reviewed in order to understand the profit from each day of business.

# Days in accounts receivable Definition Measures the average number of days it takes companies to collect their payment.

Purpose To indicate how well the revenue cycle is functioning.

More specifically, to indicate how good the credit and collection policies are.

Recommendations There are several key performance indicators that best reflect on business revenue cycles and # Days in accounts receivable is one of them. By measuring the average number of days it takes companies to collect their payments, # Days in accounts receivable helps determine the efficiency and effectiveness of company business revenue cycle processes.

Driving focus onto the timeliness of cash collection processes, close analysis of # Days in accounts receivable can aid a company build on its most reliable revenue sources.

Some points to consider when trying to optimize revenue cycles include: ▶▶ Automated invoice tracking systems; ▶▶ Electronic invoice processing mechanisms; ▶▶ Close monitoring of aging accounts and accounts in collection; ▶▶ Appropriate implementation of personalized payment plans; ▶▶ Subtraction of credits from accounts receivables for an 62 AUGUST 2018

Moreover, the value of this KPI should not greatly exceed the credit period (the time allowed for payment). Targets that are much lower than 40 indicate a too strict credit policy that might prevent the company from obtaining high sales revenue. They may also indicate a response to cash problems.

# Berry ratio Definition Measures the ratio of an organization’s gross profits to operating expenses.

Purpose To assess the organization’s profitability.

Recommendations Although, the # Berry ratio is a simple profitability measure, it is probably one of the most misused ratios in the context of transfer pricing analysis. Interpretation errors may appear if analysts do not understand this indicator’s limitations. The Berry ratio cannot be applied to distributors that also perform manufacturing functions, as it cannot capture the additional return earned by the manufacturing function.

Empirical studies have shown that distributors with low operating expense intensity (less than 10%-15% relative to sales ratios) show very high # Berry ratios when compared with distributors with higher operating expenses.

Therefore, extra caution should be taken when comparing two distributors with very different operating expenses.

The selection of the adequate Profit Level Indicators (PLI) to measure a company’s return on investment commonly requires a thorough analysis. For the # Berry ratio to become a reliable Profit Level Indicator it should be applied when several conditions are met:

KPIs

▶▶ A valid link between the $ Operating expenses and the $ Gross profit is identified; ▶▶ The measurement of the KPI is performed when no intangible assets are employed; ▶▶ Inventories and cost of sales are divested from company funds; ▶▶ $ Operating expenses are the only expenses yielded by the enterprise.

Under these circumstances it is recommended that the # Berry ratio is mostly used with low risk procurement and distribution service providers which have no funds blocked in inventories and employ no intangible assets.

The # Berry ratio is also frequently referenced for the Transactional Net Margin Method. The Transactional Net Margin Method or TNMM examines the net profit margin relative to costs, assets or sales. The selection of # Berry ratio for this particular method, should, however, be based on a rigorous analysis focusing on the criteria of risk and value drivers.

Furthermore, given the universality of the measure, it suits benchmarking very well. Targets may vary based on industry profile. A ratio of 1 or more indicates that the company is making profit above all operating expenses, whereas a ratio below 1 indicates that the firm is losing money.

# Liquidity ratio Definition Measures the available cash or other assets easily convertible into cash that could cover short-term payables. Short-term payables represent the total amount of payments forecasted between zero and three months, from the time of the calculation.

Purpose To assess the program or institution’s capacity to pay its short term claims and expense obligations.

glean information on how well a company can pay its short-term bills. The three most common of these ratios are the current ratio, quick ratio and cash flow ratio.

A. The current ratio is defined as current assets divided by current liabilities – both available from the balance sheet.

B. The quick ratio, which is similar to the current ratio, only takes into account what the company can use to pay off its current liabilities as fast as possible.

C. The cash flow ratio offers an indication of whether or not a company has enough money from its current operations to pay off its current liabilities. Liquidity measures can be static (spot historical position) or predictive (projected over a one year horizon).

The best practices for organizations to consider when basing their decisions on liquidity ratios would be: ▶ ▶ Analyzing ratios based on historical trends and top competitor achievements for this indicator; ▶ ▶ Consider ratios in relationship to other key performance indicators such as, cash conversion cycle; ▶ ▶ Taking both accounts receivables and accounts payable into consideration when trying to achieve high liquidity ratio targets; ▶ ▶ Measuring key performance indicators such as the # Defensive interval alongside liquidity ratios; the # Defensive interval or the # Defensive interval ratio (DIR) measures how long a company can survive with no cash coming in.

As a final note, you should keep in mind that interpretations for # Liquidity ratio are varied and they highly depend on the available data for this KPI. Stockholders look at liquidity ratios as part of a company’s investment strategy. Banks and lenders, in general, make their credit extension decisions based on the same liquidity ratios.

Recommendations It may prove rather difficult to benchmark an organization’s health on liquidity ratios. On the one hand, a high ratio commonly indicates a large amount of cash on hand, maintaining a high liquidity ratio for a long period of time may prove inconsistent with the company’s need for growth.

On the other hand, companies with low ratios, might find it difficult to meet their financial obligations, placing themselves at risk of default.

Liquidity ratios can be seen as a way to use financial statements to AUGUST 2018 63

KPIs

SCHEDULED COURSES Fees Course

Date

City

Country

C-DA

3rd - 5th Sept

Kuala Lumpur

Malaysia

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23-27 September

Dubai

UAE

C-B

24-26 Sep

Kuala Lumpur

C-DV

14-16 Oct

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TBD

12-Jul

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7-9 Oct

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TBD

7-Sep

The H Hotel

Early bird

29-Mar

Register Standard Members

Kuala Lumpur

Malaysia

C-KPIPP 21-25 October

Dubai

UAE

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6 - 8 Nov

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C-B

13-15 Nov

Dubai

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C-BSC

6 - 8 Nov

Dubai

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C-SBP

13-15 Nov

Dubai

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C-KPIPP

9-13 Dec

Dubai

UAE

C-BSC

10-12 Dec

Kuala Lumpur

Malaysia

The H Hotel

The H Hotel

21-Sep

13-Oct

Early bird

2+

15-Aug

$1,290

$1,190

$1,090

$990

24-Apr

$4,700

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$1,290

$1,190

$1,090

$990

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$3,000

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$2,700

$2,500

10-Oct

$3,000

$2,900

$2,700

$2,500

22-Sept

$1,490

$1,390

$1,290

$1,190

17-Oct

$4,700

$4,600

$4,300

$3,000

$2,900

$2,700

$2,500

$3,000

$2,900

$2,700

$2,500

$3,000

$2,900

$2,700

$2,500

Malaysia GMHKL

C-KPIPP 22-26 October

64 AUGUST 2018

Venue

6-Nov

$2,500 The H Hotel 10-Nov

$4,700

$4,600

$4,300

$4,000

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$1,090

$990

For more details visit our store at: marketplace.kpiinstitute.org/scheduled-courses

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Framework v 2.0 2015

This program is meant to improve the practical skills in working with KPIs and developing instruments like scorecards and dashboards. Participants will acquire a sound framework to measure KPIs, starting from the moment they are selected, until results are collected in performance reports.

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The two-day interactive program will help you understand personal performance, by explaining the benefits and clarifying the process of measuring it. It focuses on identifying ways to boost your performance outside working hours.

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65

LIFESTYLE

LIFESTYLE

PERSONAL PURPOSE, MISSION AND VISION AND HOW TO LIVE BY YOUR VALUES ADELINA COTFAS

ersonal life is that area in which one should benefit from the P greatest amount of freedom, where choices should be made according to one’s pure preferences and desires. Although you

should not live by very specific, or restrictive standards, having a clear direction of where you’re heading to is, nonetheless, an important aspect.

What do you want to achieve? Today, tomorrow, in the next 5 years? How do you contribute to the society you live in? How do you intend to achieve that? How should you change, in order to do attain that status, and what values will guide you all throughout the process?

Although answering these questions is not an easy task to complete, once you have your answers, you will have actually set some very important statements for your future and sense of direction, namely your purpose, mission, vision and values.

Now, why do you need these elements? Some of the most important reasons, although not the only ones, are: 1. Direction: channeling your energy and activities in such manner as to serve your purpose, mission and vision and to help you attain balance and fulfillment in your life.

Eliminating unnecessary activities, in order to save energy and fight for your goals is good advice.

However, never mistake these activities with leisure!

Relaxation related actions are necessary in everyone’s life, and they should remain a matter of your choice and preferences; 2. Making more appropriate choices to meet your aspirations: decision-making is never an easy process, neither within the organizational, nor the personal contexts.

However, knowing exactly what your ultimate purpose is can help you choose the options that lead you closer to it;

66 AUGUST 2018

3. Enabling motivation: having a clear purpose in mind will affect action, by motivating and energizing you to achieve it.

For example, when setting goals, the bolder the objective, the harder you will work to achieve it.

The same principle should be applied when it comes to establishing the above-mentioned statements as well, with one mention: they should be formulated in such manner as to inspire you to become the best version of yourself; 4. Better awareness of your contribution: our existence, as human beings, is strongly correlated to the overall reality. Thus, understanding your place and your contribution within the huge picture can motivate you to perform better and to achieve your purpose.

What about after setting your purpose, mission, vision and values?

Simply thinking about some statements is not enough. First of all, put them down, all together, and keep them within your sight. Once you have established these statements, they are not out of reach. You should review them every time you feel they don’t inspire you anymore.

Major changes in your career or family life might influence what you want to achieve on a medium to long term, so make sure your Envisioning statements still represent your life aspirations.

Fully understand your purpose, mission, vision and values statements, use them to your favor, formulate them in such manner as to feel inspired and motivated by them, embrace these statements and really internalize them!

In order to get closer to the vision of your ideal self, make sure at least two of your daily activities serve these elements and begin to live in a culture of personal purpose, starting today!

LIFESTYLE

DAILY ROUTINES, PRODUCTIVITY AND PERSONAL PERFORMANCE ADELINA COTFAS

is the most important resource that Tlost,ime companies and individuals have. Once it cannot be recovered, nor can it be

substituted by other means. Having to work under strict deadlines, with not enough time to complete all the tasks, or having difficulties in finding the right balance between personal and professional life are two common problems that individuals are struggling with today.

One way to solve these problems and to achieve performance at personal level is to develop productive routines. Routines are activities done on a daily basis, they have a great persistence in time, and as time passes they become automated habits.

There are good and bad routines, all of them influencing our lives. Watching TV every morning for 2 hours for a period of 2 years and practicing sports for the same amount of time are two activities that have dramatically different impacts on the person’s health.

The important lesson here is that working daily on the important tasks, reducing timeconsuming distractions and finding a balance between work and social activities is the key in achieving personal performance.

Furthermore, routines are not one-size-fitsall models. Sure, you can always take note of someone’s routine, but you may not always find success if you try to replicate it point by point. If you enjoy someone’s daily habit, try adapting it to suit your particular case.

A noteworthy example here is Evan Williams, founder of Blogger, Twitter and Medium.

Williams always take a break during the very middle of the day, in order to go to the gym.

“My focus is usually great first thing in the

morning, so going to the gym first is a tradeoff of very productive time. Instead, I’ve started going mid-morning or late afternoon (especially on days I work late). It felt weird at first to leave the office in the middle of the day, but total time spent is nearly the same with higher energy and focus across the board.”

You might not have the same results as Williams if you go the gym mid-day, but you might if you went there either in the morning, or late afternoon. You might not even need the gym – you could go for a snack, take a short walk or read a newspaper.

Experiment and see what routine fits you best, in order to reap the maximum amount of daily performance.EssayRoo and Assignment Writing Service – These are online editing tools,

Thus, it is important to distinguish clearly between ‘good’ and ‘bad’ routines. Good routines help people feel better and reach their desired personal development goals, while bad routines eat away at any progress achieved by the first.

Mason Currey’s book, Daily Rituals: How artists work, reveals us that there are many differences between the lifestyles of these great personalities. Some work in the early morning, some work better late at night.

Some function best when music’s blasting at max volume, while others require complete silence to focus.

AUGUST 2018 67

LIFESTYLE

HELPFUL HACKS TO BOOST YOUR MEMORY CASSIE STEELE

hen it comes to maximizing your W performance – whether that be in the workplace, studying or pursuing a hobby,

having a good memory is crucial. We have probably all found ourselves experiencing ‘brain fog’ at some point or another, when our mind goes blank and we can’t remember things we have learnt a short time ago.

This is because, like any muscle, the human brain needs exercise and careful conditioning in order to gain strength and stamina. These things are vital for optimum productivity at work, for which sound memory skills are also needed. Luckily, there are various tools and techniques you can use to keep your memory in great shape.

Make sleep a priority It may come as a surprise to know that getting enough sleep is crucial when it comes to improving your memory. This is thanks to the physiological changes that occur during sleep.

Research has indicated that memory consolidation takes place while we sleep – that is, when the brain processes short term memories and converts them into long term ones. This process includes learning new skills.

Sleep helps us to retain what we have learned at work or in the classroom, for example. A lack of sleep – that is, less than 7 hours a

68 AUGUST 2018

night – does not allow enough time for this process to happen, resulting in brain fog and forgetfulness.

Given the influence of sleep on our memory, it is important to prioritize sleep on a daily basis. This includes making your bedtime routine and environment conducive to sleep. You can achieve this through simple steps such as avoiding sugar or caffeine in the evening, removing electronic devices and other stimuli when going to bed, and practicing relaxation techniques such as mindfulness.

Briefly, mindfulness is the art of being fully present in the moment. It can take a while to master, but can also be a very powerful tool when it comes to improving your memory.

Work can of course be stressful at times, particularly when you are in a result-driven or highly responsible role. Mindfulness can equip you with the tools needed to calm your mind and fall asleep, helping you feel refreshed in the morning.

help promote healthy blood vessels and, in doing so, a healthy brain.

It therefore pays to stay away from too much caffeine and sugar to make yourself more alert, and opt instead for healthier, slow energy-releasing alternatives (such as bananas and nuts, for instance).

In conjunction with a healthy diet, researchers at the University of British Colombia have revealed the positive effect of cardiovascular exercise on the Hippocampus. This is the area of the brain associated with memory and learning. Regular exercise promotes the development of healthy brain cells, whilst also helping new blood cells develop.

This all contributes to improved cognitive ability, including memory retention. The types of exercise shown to help memory include walking, swimming and cycling.

Give your brain a health kick through diet and exercise

Meanwhile, “getting some air” can be much more than just using an opportunity to clear your head. Research has shown the benefit of going for a brisk walk when studying, particularly when compared to sitting still.

Regular exercise and good nutrition don’t just improve your physical health; they have a significantly positive impact on your memory too. Recent studies have indicated the memory-boosting nature of the Mediterranean diet, which is rich in fruit, vegetables, fish and whole grains. These all

When it comes to sitting exams, for example, students who have been on a short, moderately-paced walk before a revision session have been shown to have a significantly higher successful recall rate than those who haven’t. This could also prove an effective technique for employees

LIFESTYLE

when on a training course.

Repeat what you have learned aloud or in writing Repetition can be very effective when it comes to retaining information. One popular technique that uses repetition is peer learning, which is used both in education and the workplace.

This method sees a student or employee learning off a classmate or colleague. It may sound like an act of laziness on the teacher’s or manager’s part, but is in fact a potentially very powerful teaching strategy that enables people to remember information and feel more confident about a topic. It also often makes it easier for people to understand something explained in terms explained by a peer.

Alternatively, consolidate your memory skills by reiterating to yourself what you’ve

learned out loud. You might feel selfconscious but, in the right context, there is no need to.

Find a place with no distractions (a meeting room at work, for instance) and go through what you have learned aloud. Hearing your words, perhaps even recorded, will make it make it easier for the information to ‘stick’, and you will also feel more confident about the topic at hand. This is a particularly useful exercise when preparing for an end-ofcourse exam, or a work presentation.

A popular and equally effective way of sharpening your memory is to write things down. When it comes to typing information on a computer, research has shown a correlation between font style and information retention.

People remember a lot more information that is written in an unfamiliar font than that which is written in a more familiar, easy-to-

read font. By making the brain work harder at reading, you are made to focus more, meaning that you will absorb more of the material you read.

Overall: commit to a memory-boosting routine Having and maintaining a good memory requires daily self-care. It is, however, perfectly achievable with some simple lifestyle choices. Focus on the things that help keep your brain and body healthy: a balanced diet, regular exercise and sharing things that you have learnt, whether it be verbally or in written form.

Perhaps most importantly of all, though, be sure to allow enough time for a decent sleep each night. This means going to bed at a sensible time and with as few distractions as possible, in order to help you fall asleep, re-energize and consolidate valuable new memories.

AUGUST 2018 69

RECOMMENDED

RECOMMENDATIONS

The following is a list of must-haves for your 2018 reading list: 1

3

2

5

4

6

1. e-HRM: Digital Approaches, Directions & Applications

2. Relationomics: Business Powered by Relationships

As with other parts of business, technology is having a profound effect on the world of work and management of human resources.

Technology is a key enabler for faster, cheaper and better delivery of HR services and in some cases can have a transformational as well as unintended negative effect. Designed for the digital era, e-HRM is one of the first textbooks on these developments.

Relationships are at the core of our lives. They shape and refine our character. They influence our worldview. They're not just important to us as human beings--they're crucial. So it should come as no surprise that healthy relationships are the heart of a successful business or organization. And yet, many organizational cultures do not promote healthy relationships. Those that do however, find that they enjoy greater effectiveness, reputation, and loyalty.

By Mohan Thite (editor)

By Dr. Randy Ross

3. The End of Performance Appraisal: A Practitioners' 4. Digital Learning in Organizations: Help your Guide to Alternatives in Agile Organisations Workforce Capitalize on Technology

By Armin Trost

By Steve Wheeler

This book demonstrates, in detail, why annual performance appraisals might still work in hierarchical environments, but largely fail in agile ones. The annual performance appraisal is one of the world's most widely used management tools. For many years, it was indeed seen as a pre-requisite for successful leadership and professional management. While most managers and employees have always been skeptical in this respect, those at a strategic level are now also realizing it causes more harm than good.

Technology holds vast potential for learning and development (L&D) practitioners. It can improve performance, productivity, engagement and knowledge retention. However, if employees aren't able to leverage the potential of these technologies, any investment in them is futile. Digital Learning in Organizations shows L&D professionals how to make sure that their workforce is 'digitally ready' and has the skills, capabilities and understanding needed to capitalize on the opportunities created by learning technologies.

5. The Ten Commandments of Corporate Leadership

6. Strategic Implementation of Continuous Improvement Approach: Improving the Performance of Small and Medium-Sized Enterprises

By Cami Haynes

Are employees constantly complaining? Have challenges retaining the best talent? Have challenges attracting the best new talent? Pull back the veil on any organization today and you will find that the number one employee complaint is bias in the workplace.

Real or imagined, bias erodes an organization’s most precious resource: its human capital. Hard working employees begin to believe they will not get the opportunities they deserve. They leave, resulting in additional hiring and training costs. Those who remain become unengaged and perform at minimal levels.

You can change this cycle.

70 AUGUST 2018

By Jagdeep Singh, Harwinder Singh

This book covers the strategic use of continuous improvement (CI) techniques for manufacturing performance improvement. It focuses primarily on strategies that can be adopted by small and middle-sized enterprises in manufacturing in order to meet the global challenges and competition.

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Performance Magazine, Printed Edition. Twelfth issue, August, 2018. Content: News. The KPI Institute and GCCIA: Partners for the Utilities Performance Program. Apple surpasses $1 trillion in stock market values. Blockchain, changing industries one at a time. Building your Alexa skills. Getting your business on the silver screen through reality TV. Indra Nooyi stepping down as PepsiCo’s CEO. Naming and Trademarking your Business. Snapchat business strategies that help you dominate the market. Tesla loses, but in fact wins. The reporting difference between CPM Heaven and Excel Hell. Cover Story. How can you improve Key Performance Indicator reporting?. Performance Analysis. Can a performance-based culture be nourished in organizations with a long history of instability?. Tools for Success: The Strategy and Performance Management Audit. Performance Management: Less Theory, More Practice. Portrait. Gail Stout Perry. Chief Strategy Officer & VP - Sales, USA. Achieving results – the essence of Performance Management. Health & Safety Management. The Essential Functions of Health and Safety Management Systems and Software. Techniques for Effective Environmental Health and Safety Management. Digital Performance. Web Design Trends for Success in 2018. Understanding Why Your Online Business Might Be Losing Customers. Balanced Scorecard. Balanced Scorecard & Six Sigma – the best ways to improve performance. Communication, Planning and the Balanced Scorecard. Managing bank performance with the Balanced Scorecard. The customer perspective within the Balanced Scorecard. Balanced Scorecard software selection: making the right investment. Employee Performance. Managing The Performance of Tomorrow’s Graduates. Continuous Professional Development, Learning, And Your Earnings. Boosting Performance Via World-Class Employee Engagement Events. 4 Types of Budget Rewards to Engage and Motivate Employees. 8 Ways to Write Effective Employee Performance Reviews. 13 Inspiring Ways to Motivate Your Employees Out of a Rut. Ask the Experts. Why do organizations struggle with strategy execution?. KPIs – Human Resources. # Management-to-staff ratio. % New hire failure. % Employee cost over sales revenue. Business Consulting. $ Cost of services delivered. $ Delivery overhead costs. % Consulting hours generating revenue. Accounting. # Days in accounts receivable. # Berry ratio. # Liquidity ratio. Lifestyle. Personal purpose, mission and vision and how to live by your values. Daily routines, productivity and personal performance. Helpful hacks to boost your memory. Recommended Books. e-HRM: Digital Approaches, Directions & Applications, by Mohan Thite. Relationomics: Business Powered by Relationships, by Dr. Randy Ross. The End of Performance Appraisal: A Practitioners’ Guide to Alternatives in Agile Organizations, by Armin Trost. Digital Learning in Organizations: Help your Workforce Capitalize on Technology, by Steve Wheeler. The Ten Commandments of Corporate Leadership, by Cami Haynes. Strategic Implementation of Continuous Improvement Approach: Improving the Performance of Small and Medium-Sized Enterprises, by Jagdeep Singh, Harwinder Singh. Keywords: Key Performance Indicators (KPIs). Balanced Scorecard. Performance Management. Performance Measurement. Strategy. Employee Performance Management. Personal Performance Management. Balanced Scorecard Management System Performance.

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