The Innovators: Winning the Productivity Game

Key Position Excellence

"When people in our most important positions outperform their competitor peers, we win." Let's be honest -- not all roles are equally important to the bottom line. At Kraft(TRI), brand managers are critical; at Coldwell Banker, it's the real estate office manager. Choose two or three roles with the biggest impact on customer and shareholder satisfaction and build a complete system that ensures year-over-year performance improvements. Here's how:

Clarify success measures for the role (i.e., lagging indicators of performance). This unambiguously answers the question, "How am I doing?"

Define the four to five most important activities for each role. Get rid of your over-engineered competency models. Determine the four or five things your top 5% do each week and find out how they do it. For sales managers these might include maintaining a full pipeline, improving executive positioning and upgrading sales capabilities. For real estate managers it includes agent recruiting and community relationships.

Assess incumbents and move low performers. Assess incumbents on each success measure and on each activity. Transfer or terminate individuals who will not be considered A or B players on the open market.

Design HR systems to improve performance on the key activities. Align all HR systems to the five activities (e.g., selection, training, appraisal, career paths, base pay). For example, use top 5% practices to create training content for the major activities. Eliminate all training that does not drive performance improvements on the major activities. Want a mini-MBA? Pay for it yourself.

Define your company's culture in business terms and behaviors. When IBM(IBM) reset its culture, it held a 72- hour "values jam" (like a jazz jam session where everyone gets to play). IBM employees set a very clear set of business focused values: Dedication to every client's success; innovation that matters for our company and for the world; and trust and personal responsibility in all relationships. Once the values are clear, assign a leader from the executive team to lead and report progress every quarter. IBM did this by assigning culture to the Senior Leadership Team, a working group of the "best" 300 leaders at the company.

Deming changed the world by building a system that drove step-function improvements in manufacturing productivity. Toyota(TM) adopted Deming's system; General Motors did too, but a decade too late. In today's service-rich economy a new productivity system is needed - one that focuses on human capital. Like Toyota and GM, the winners will get there first.

-- Written by Brad Hall

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