Performance Consulting: Make Performance Your Business! (and Prove It) Jack Phillips Dick Handshaw

Manufacturing Plant Scenario Safety violations are increasing within a manufacturing plant Plant managers request safety training for operations and supervisors Records indicate individuals attended safety training last year

Could you create a learning solution for this scenario?

Will a learning solution, by itself, bring about a sustained decrease in safety violations?

The Story Continued Multiple Factors Impact Upon: Operators/Supervisors Plant operations

Performance Consulting is … “A strategic process that produces business results by maximizing performance of people and organizations.” - Dana and James Robinson, Patti and Jack Phillips, and Dick Handshaw

The Performance Consulting Process

The Performance Consulting Process

The Performance Consulting Process

The “True” Client The owner of the line of business who is experiencing the performance problem.

The “True” Client They know: Current business goals Internal and external barriers Strongest and weakest performers

The “True” Client They can: Answer questions as you conduct Reactive and Proactive Consulting Make the decisions that affect the final business results

1 Two Key Principles Partner with clients who accomplish results: Own the business and performance needs Have the most to gain or lose Have authority to make decisions Can obtain needed resources 1

Two Key Principles Use mental models to ask powerful questions and to accomplish results: The Needs Hierarchy SHOULD-IS-CAUSE Logic 2

Organizational & Individual Needs Hierarchy Business Needs Performance Needs Organizational & Individual Capability Needs

Business Needs Strategic Business Goals Hard Data Revenue Profitability Market share Customer satisfaction Quality

Performance Needs Performance Needs On-the-job performance Best practices Following procedures Supports Business Goal Performance Needs

Organizational and Individual Capability Needs Organizational Capability Coaching and reinforcement Incentives Work systems and processes Individual Capability Required skill and knowledge Internal motivation Educational credentials Organizational & Individual Capability Needs

Organizational & Individual Needs Hierarchy Business Needs Performance Needs Organizational & Individual Capability Needs

Proactive Performance Consulting is… “The process of establishing a consulting relationship that will lead to a strategic approach to achieving business results.”

Reactive Performance Consulting is… “Also referred to as ‘reframing’ is the process of assessing a client request through questioning to transition the discussion away from a focus on a solution and into a discussion about the business needs.”

Powerful Questions Are: Open-ended Focused to a specific need in the hierarchy Solution- and cause-neutral

SHOULD Questions Business SHOULDs Performance SHOULDs Seeking desired operational numbers “What is our goal for the percent of customers indicating service is very good or excellent?” Seeking desired on-the-job accomplishments / behaviors “What must our customer service representatives do more, better or differently to achieve this level of service rating?”

IS Questions Business IS Performance IS Seeking current operational numbers “What is our current customer satisfaction rating for service?” Seeking current on-the-job accomplishments / behaviors “What are customer service representatives typically doing now that yields this level of result?”

CAUSE Questions Organizational Capability CAUSEs Individual Capability CAUSEs Seeking root causes within the organization “What factors, if any, within our organization are contributing to the disappointing customer satisfaction results?” Seeking root causes within individuals “What is your assessment of the capability of customer service representatives to provide high levels of service to our customers?

Root Cause Categories for Gaps G:\PPTDATA\EP\ElecPres\Webinar2\Webinar_031809.pptG:\PPTDATA\EP\ElecPres\Webinar_111208.ppt Root Cause Categories for Gaps Successful On-the-Job Performance (Accomplishments and Behaviors) Factors EXTERNAL to Organization Factors INTERNAL to Organization (Organizational Capability) 1. Clarity of Roles and Expectations 3. Incentives 5. Access to Information, People, Tools, and Job Aids 2. Coaching and Reinforcement 4. Work Systems and Processes 6. Supportive Culture Factors INTERNAL to Individuals (Individual Capability) 1. Skill and Knowledge 2. Inherent Capability DANA Now I’d like to take us deeper into work environment and capability needs than we did in the prior webcast This is critical if we are to move the discussion to a strategic level Explain Gap Zapper and link back to the Zap the GAPS! Book On the job performance is representing the performance need box of the need hierarchy Performance is resting on a three-legged stool: 1)The first leg is capability needs with two categories of root cause - acknowledge skill and knowledge and discuss briefly inherent capability 2)For work env needs, acknowledge that there are five categories of root cause, commenting on coaching and reinforcement as well as work systems and processes with the Geary Rummler quote. 3) External factors When whole slide is up: acknowledge there is a total of 8 categories of root cause for why people don’t perform. Clients typically come to us with a single solution in mind such as training or reorganization.The probability that the single solution that is requested will, by itself, solve the problem is low. As Performance Consultants we must ask the powerful questions that will disclose root causes for the client’s current situation. 4.6. Supportive Culture

The ROI Methodology Evaluation Planning Data Collection Develop/Review Level 1: Reaction, and Planned Action Level 3: Application Develop/Review Objectives of Program Develop Evaluation Plans and Baseline Data Collect Data During Program Implementation Collect Data After Program Implementation Level 2: Learning Level 4: Business Impact

The ROI Methodology Data Analysis Reporting Capture Costs of Program Isolate the Effects of Program Convert Data to Monetary Value Calculate the Return on Investment Generate Impact Study Level 5: ROI Identify Intangibles Intangible Benefits

Matching Evaluation Levels with Objectives Exercise Reaction and Planned Action Learning Application Business Impact Return on Investment

Developing Level 3 and Level 4 Objectives Level 3 and Level 4 objectives provide: Direction to designers and developers Guidance to facilitators and coordinators Goals for participants Satisfaction for program sponsors A framework for evaluators

Alignment and Measurement Model Assessment (the IS/Current State) Objectives for Initiative (the SHOULD/Desired State) Measurement (the RESULTS)

Data Collection During Program Method Surveys   Questionnaires   Observation   Interviews   Focus Groups   Tests/Quizzes  Demonstrations  Simulations  Level 1 Level 2

Data Collection During Program Method Surveys  Questionnaires   Observations  Interviews  Focus Groups  Action planning/improvement plans   Performance contracting   Performance monitoring  Level 3 Level 4

Factors to Consider When Selecting Data Collection Methods Time – Participant/Supervisor Costs Accuracy – Validity/Reliability Utility Type of data Culture/Philosophy

Factors to Consider When Determining timing of Follow-Up Availability of data Ideal time for behavior change (Level 3) Ideal time for business impact (Level 4) Convenience of collection Constraints on collection

International Sales

Methods to Isolate Program Effects Use of a control group arrangement Trend line analysis of performance data Use of forecasting methods of performance data Participant’s estimate of program impact (percent) Supervisor’s estimate of program impact (percent) Manager’s estimate of program impact Use of experts/previous studies Calculate/estimate the impact of other factors Customer input

Isolating the Effects of the Program Benchmarking Data Method Control Groups Trend Line Analysis Forecasting Methods Participant Estimates Manager Estimates Sr. Management Estimates Expert Input Customer Input * Survey of Users, N = 235

Control Group Method Experimental Group M1 Program M2 Control Group M1 $35,000 $45,000 Control Group M1 M2 $40,000 $35,000

Data are Converted by: Converting output to contribution – standard value Converting the cost of quality – standard value Converting employees’ time – standard value Using historical costs Using internal and external experts Using data from external databases Linking with other measures Using participants’ estimates Using supervisors’ and managers’ estimates Using staff estimates

Design and Development Acquisition/Purchase (if applicable) Cost Items Prorated Expensed Needs Assessment  Design and Development Acquisition/Purchase (if applicable) Delivery/Implementation Salaries/Benefits-Facilitator Time Salaries/Benefits-Coordination Time Program Materials and Fees Travel/Lodging/Meals Facilities Salaries/Benefits-Participant Time Operating Expenses Ongoing Operations Cost (if applicable) Evaluation Overhead

Typical Intangible Benefits Adaptability Awards Brand awareness Career minded Caring Collaboration Communication Conflicts Cooperation Corporate social responsibility Creativity Culture Customer complaints Customer response time Customer satisfaction Decisiveness

Typical Intangible Benefits Cont. Employee complaints Engagement Execution Image Innovation Job satisfaction Leadership Networking Organizational climate Organizational commitment Partnering Reputation Resilience Stress Talent Teamwork

The ROI Calculation Benefit Cost Ratio (BCR) = Program Benefits Program Costs ROI = Benefits - Costs X 100 Program Costs

The ROI Calculation Exercise Costs per program (25 participants) – $80,000 Benefits per program (1st year) – $240,000 Benefit Cost Ratio (BCR) = ____________   ROI = X 100 =_____________%

Thank You Jack Phillips Dick Handshaw jack@roiinstitute.net dick.handshaw@handshaw.com

Performance Consulting

Training That Delivers Results