INSEAD Library

Includes bibliographical references and index

Digitized

Performance Improvement Making it Happen Contents Preface................................................................................................................................ xiii Acknowledgments........................................................................................................... xvii About the Author........................................................................................................... xix Part I Performance Improvement: Getting It Started 1 Performance Improvement Efforts: They Are Everywhere............ 3 An Overview of Today's Realities ............................................................................... 3 Performance Definitions........................................................................................... 3 Powerful Need for Performance Improvement......................................................... 5 Limited Success in Performance Improvement ....................................................... 8 Organization: A Fortune 500 Communications Company with Worldwide Reach................................................................................... 9 Specific Reasons Why Leaders Start Performance Improvement......................... 10 Organization: Small Consumer Services Company.................................... 13 A Process Approach: The First Look...................................................................... 14 Summary............................................................................................................. 15 Suggested Action Steps for Organizational or Team Leaders.............................. 16 End Notes...............................................................................................................16 2 Performance Gaps and Deficiencies: An Overview for Facing Reality................................................................................17 Organization: Chiropractic Partnership.................................................... 18 Leadership Definitions of Their Organization's Performance: The Ideal Case.............................................................................................. 19 Organization: Webster University............................................................... 20 Performance at the Operational Level................................................................... 21 Organization: May Co. Inc., One of the Country's Largest Retailers (recently purchased by Federated)...................................................23 Goals, Standards, Key Performance Indicators, and Models of Effective Performance: Measures of Performance....................................... 24 Identifying Areas of Performance Improvement..................................................... 25 Conclusion.............................................................................................................26 Suggested Action Steps for Organizational or Team Leaders...............................26 End Notes............................................................................................................... 27 3 Deciding on Performance Improvement: Useful Concepts and Tools............................................................ 29 Introduction......................................................................................................... 29 Organization: Matheny Heating and Cooling Service, Inc. ........................ 29 A Process for Deciding About and Managing Performance Improvement: If/What/How?........................................................................................... 30 The General Model of Planned Change.................................................................. 32 Overview.......................................................................................................................... 32 The Four Stages.......................................................................................... 33 Stage I: Entering and Contracting................................................... 33 Stage II: Diagnosis..............................................................................34 Organizational Unit: A Large Information Technology Department........................................................................... 38 Stage III: Planning and Intervention................................................ 39 Organization: Motor Appliance Corporation.....................................39 Stage IV: Evaluation........................................................................... 41 A Model of Effective Performance: The Organizational Success Model.............................................................................................. 43 Organization: Ehrhardt Tool and Machine Company......................45 Suggested Action Steps..........................................................................................47 End Notes............................................................................................................... 47 4 Improving Performance for New Organizations............................ 49 Why This Chapter?................................................................................................ 49 Scenario 1: The New Start-Up Organization.......................................................... 50 Organization: A Healthcare Services and Products Firm...........................51 Scenario 2: Mergers and Acquisitions................................................................... 52 Scenario 3: Significant Change in the Leadership of an Existing Organization Due to the Addition or Loss of Significant Leaders ..............54 Organization: Landshire Sandwiches Inc. .......................................................... 54 Scenario 4: A New Department or Unit within a Larger Organization When That Unit Will Be Permanent (i.e., not a temporary project team)................................................................................................. 55 Suggested Action Steps.......................................................................................... 56 End Notes............................................................................................................... 56 5 Performance Improvement and Goal Setting: Making the Strategic Vision Happen............................................ 57 Introduction......................................................................................................... 57 Characteristics of Effective Goals.......................................................................... 58 Sources of Resistance to Goal Setting.................................................................. 59 Scottrade Company.....................................................................................60 Benefits from Organizational or Team Goal Setting............................................. 61 Cascading Goals.................................................................................................... 61 Organization: Tone's Brothers.................................................................... 61 Special Case: Large Teams in Big Organizations..................................................63 Organization: The Pro*Visions Pet Specialty Enterprises Sales Team for Ralston Purina, Co. (now a part of Nestle) ............. 63 Cascading Goals Down to the Individual..............................................................64 Measuring Performance: Goals and Key Performance Indicators........................65 A Brief Case Study: Another Model of Effective Performance.............................. 67 Organization: An Engineering Fabrication and Process Consulting Company...................................................................................................... 67 Organization: Scottsdale Securities, Inc.................................................... 68 The Role of Feedback...............................................................................................69 Organization: A Privately Owned Real Estate Company Managed by the Owner.................................................................... 71 Conclusion............................................................................................................72 Suggested Action Steps for Organizational Decision Makers.............................. 73 End Notes................................................................................................................................... 73 Part II Performance Improvement: Taking Action 6 Strategic Plan for the Organization: Where It All Starts..............77 Connecting Strategy to Prior Discussions............................................................77 Recommended Process for Creating Organizational or Team Strategy............... 78 Component 1: The Strategic Timeframe and Identification of the Driving Force............................................................................ 79 Organization: Tone's Brothers..........................................................82 Component 2: The Strategic Concept Statement.......................................84 Component 3: Evaluation of the Current Situation.................................. 85 Component 4: Strategic Objectives............................................................ 87 Cascading Goals Revisited and Extended............................................................89 Organization: Scottsdale Securities, Inc. (now Scottrade Inc.).................. 89 Organization: Medium-Sized Law Firm (Roberts, Perryman, Bomkamp and Meives, P.C.).................................................................. 90 Organization: Development Department of an Average-Sized Private University (Webster University)............................................ 91 Major Process Issues............................................................................................ 92 Conclusion............................................................................................................93 Suggested Action Steps for Organizational or Team Leaders.............................. 93 End Notes.............................................................................................................. 94 7 Building a Learning Organization: Importance and Methods...............................................................95 Review and Linkage................................................................................................. 95 The Learning Organization: A Starting Point for Performance Improvement.......................................................................... 97 Defining a Learning Organization........................................................................... 98 Organization: Mid-Sized Credit Union........................................................ 100 The Model for Growth: Learning and Skill Development..................................... 100 Building Learning Organizations: Three Case Studies....................................... 105 Case Study 1: Landshire Sandwiches, Inc............................................... 105 Case Study 2: Anheuser-Busch, Inc........................................................ 108 Case Study 3: Scottrade Inc. (see Chapters 3 and 6 for data on Scottrade)..........................................................................110 Summary and Conclusion ................................................................................. 111 Suggested Action Steps for Organizational or Team Leaders..............................111 End Notes.............................................................................................................. 112 8 Selection, Strategy, and Performance: Process, Tools, and Techniques................................................ 113 Introduction and Overview................................................................................... 113 Sources of Information for Hiring Decisions........................................................ 115 Step 1 ...................................................................................................... 116 Step 2....................................................................................................... 116 Step 3........................................................................................... 117 Step 4....................................................................................................... 118 Step 5....................................................................................................... 119 Organization: Site Oil Company...................................................... 120 Organization: Ralston Purina Training Function (now Nestle Purina) ................................................................. 123 Purina Selection Process (now Nestle Division), Pro*Visions Department................................................................... 124 Other Techniques for Effective Selection...............................................................124 Three Additional Selection Issues........................................................................ 126 Conclusion and Summary.................................................................................. 128 Suggested Action Steps for Organizational or Team Leaders..............................128 End Notes.............................................................................................................. 129 9 Leadership, Management, and Teamwork................................... 131 Introduction and Linkage..................................................................................... 131 Previous Chapters as a Linkage to Leadership, Management, and Teamwork........................................................................................... 131 The Importance of Leadership and Team Management....................................... 133 Sources of and Changes in an Individual's Leadership and Management Behavior................................................................................ 134 Importance of Leadership and Management in Organizational or Team Performance Revisited....................................................................... 137 Model of Effective Management and Leadership Performance............................. 139 Managing and Leading Area 1: Management Values (Beliefs about People and Workers)............................................................ 144 Managing and Leading Area 2: Participation, Access, and Involvement (Participative Management)................................................. 146 Managing and Leading Area 3: Interpersonal Competence and Communication Style................................................................................................................147 Managing and Leading Area 4: Motivation: The Managers and Those They Manage.....................................................................................151 Managing and Leading Area 5: Power and Empowerment................................152 Managing and Leading Area 6: Leadership Style...............................................153 Organization: Ranken Technical College................................................. 155 Suggested Action Steps for Leaders and Managers........................................... 156 End Notes............................................................................................................156 10 Teams: Their Uses and Impact on Performance........................ 157 Linkage and Overview........................................................................................... 157 Some Areas for Teamwork.................................................................................... 157 When to Use Teams and When Not to Use Them............................................... 159 A Model of Effective Teamwork............................................................................... 161 Organization: ACF (American Car Foundry)............................................. 165 Marketing, Sales, and Customer Service Teams............................................... 167 Organization: A 20-Person Advertising Company................................... 168 Production Teams.............................................................................................. 170 Company: Tone's Brothers....................................................................... 171 Conclusion......................................................................................................... 172 Suggested Action Steps for Organizational or Team Decision Makers ............. 173 End Notes............................................................................................................173 11 Performance Management: Goals, Feedback, and Performance............................................ 175 A Brief Review Related to This Topic.....................................................................175 The Role of Departments, Teams, and Individuals........................................... 176 Call Center at Scottrade Company.......................................................... 177 At the Individual Level.......................................................................................... 178 A Model Effective Performance Management Program....................................... 178 Organizations Doing PMPs Correctly.................................................................. 182 Summary and Conclusion................................................................................ 183 Suggested Action Steps for Organizational or Team Leaders............................183 End Notes............................................................................................................183 12 Recent Programs Emphasizing Effectiveness and Efficiency ........................................................................................................... 185 How This Chapter Fits In....................................................................................185 Project Management............................................................................................ 187 An Overview of the Connection between Project Management and Organizational Development/Performance Improvement....................... 190 Two Manufacturing Interventions Related to Performance Improvement: Lean Manufacturing and Six Sigma........................................................ 190 Ehrhardt Tool and Machinery Company (see Chapter 3)....................... 192 Conclusion and Summary................................................................................ 197 Suggested Steps for Organizational or Team Leaders....................................... 197 End Notes............................................................................................................197 13 Performance Improvement: Change, Learning, and Developing the Individual..............................................................................199 Introduction..................................................................................................... 199 What Is Known about Developing Individual Performance............................... 202 The Model for Growth and Developing Individual Performance........................ 204 Morale and Individual Performance...................................................................207 Performance Management and Developing the Individual................................208 Organization: Pro*Visions Pet Specialty Enterprises Sales Team for Ralston Purina Co................................................................... 209 Core Competencies and Developing Individual Performance............................ 211 Conclusion: Individual Learning and Performance Improvement.....................212 Suggested Action Steps...................................................................................... 212 End Notes........................................................................................................... 213 14 Learning in Performance and Performance Improvement....215 The Importance of Learning in Organizational Performance Improvement............................................................................................. 215 Learning and Previous Topics............................................................................218 A Practical Model of How People Learn............................................................... 221 Suggested Action Steps for Organizational or Team Leaders........................... 221 End Notes........................................................................................................... 222 15 Programs for Training, Development, and Education: Helping People Learn for Performance..................................... 223 Introduction..................................................................................................... 223 Distinguishing Training, Development, and Education................................... 223 The Three Learning Initiatives and Performance Improvement........................225 Characteristics of Effective Training and Development.....................................227 Organization: Veterinary Sales Team, Ralston Purina (now a part of Nestle)........................................................................ 229 Organization: Division of Family Services (DFS), Boot Heel of Missouri.......................................................................................... 232 Suggested Action Steps for Organizational or Team Leaders........................... 235 End Notes........................................................................................................... 235 Part III Performance Improvement: Forces Working For and Against Needed Change 16 Factors Affecting Performance Improvement Impact and Stability.......................................................................................................239 Introduction and Linkage.................................................................................................239 External Forces Requiring Change by Organizations........................................... 241 Forces Working against Change.................................................................................... 242 Techniques for Encouraging Change................................................................ 243 First Technique for Encouraging Performance Improvement Change: The Critical Role of Leadership......................................... 244 Organization: Division of Family Services, Boot Heel of Missouri................................................................................ 247 Organization: Ranken Technical College........................................ 248 Second Technique for Encouraging Performance Improvement Change: Changing the Organization and Culture......................... 250 Third Technique for Encouraging Performance Improvement Change: Changing the Characteristics of the People in the Organization....................................................253 Fourth Technique for Encouraging Performance Improvement Change: Conducting Effective Performance Improvement Interventions.................................................................................. 254 Summary and Conclusion ...............................................................................255 Suggested Action Steps for Organizational or Team Leaders........................... 255 End Notes............................................................................................................256 17 Comprehensive Performance Improvement: Actions for Leadership................................................................ 257 Introduction......................................................................................................257 Strategic Questions.................................................................................258 Operations Questions............................................................................ 258 Linking the Basic Elements of High-Level Performance.....................................259 Organization: A Consumer Products Company.......................................266 Conclusion and Summary................................................................................267 Suggested Action Steps for Organizational Leaders.......................................... 267 End Notes............................................................................................................268 18 Performance Improvement Efforts: Trade-Offs for Leaders...269 Introduction......................................................................................................269 Scottrade Inc...........................................................................................270 Landshire Inc. ........................................................................................ 271 Alliance Credit Union................................................................................ 271 Leadership's Biggest Problem............................................................................. 273 Part IV Index Index....................................................................................................................................277