This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Making Your People Outperform Theirs

To measure executive quality, ask executive search firm partners to rank-order industry competitors by leadership capabilities. Or, better yet, have the firm conduct a deep assessment of your first- and second-tier executives. Ask them to compare each executive's leadership capabilities to an industry benchmark.

High Performance Organization

There are several ways to assess organization effectiveness. The first is to measure efficiency. This can be done by using available industry measures such as profit per employee or SG&A per employee. Both are reasonably good reporting measures, but they are at too high a level to improve efficiency. Improving efficiency requires that measures, and accountability, be pushed as low as possible -- ideally down to the first-level supervisor.

A second way to assess organization effectiveness is to measure engagement. Engagement evaluates whether a company is getting all it can out of its workforce.

One way to measure engagement is by examining turnover. But be careful, measuring overall turnover is meaningless. The McDonald's system employs over a million people and experiences about 160% turnover. In Japan, that number is much lower. In upscale U.S. locations that number is much higher. Also, the 160% number does not tell us if the turnover is healthy or unhealthy. For low performers, high turnover is better. For high performers, low turnover is better. Turnover data must be used thoughtfully to be a valid measure of engagement.

A second measure of engagement is an engagement survey. There are many engagement surveys. Questions across surveys may vary, but overall results are almost the same. Thus, the choice of survey is not very important. More important is that you choose one and stay with it. Managers like to see how their scores change over time.

Executive Team Performance

As the business world becomes more and more complex, heroic leaders like Henry Ford or Lee Iacocca are growing increasingly rare. Most successful companies today are led by effective executive teams. What is an effective executive team and how might one measure that?

Start by clarifying the expected performance outcomes. These may include: profit, revenue growth, customer satisfaction, share, etc. Then, let team members define the results the team must produce to deliver the performance outcomes.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.57 -3.30%
GOOG $690.01 -2.20%
MSFT $49.84 -2.10%
FB $116.54 7.00%
TSLA $248.18 -1.30%


Chart of I:DJI
DOW 17,816.20 -225.35 -1.25%
S&P 500 2,076.57 -18.58 -0.89%
NASDAQ 4,810.8720 -52.2690 -1.07%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs