Published on March 9, 2014
ACHIEVING BUSINESS EXCELLENCE
Achieving Business Excellence Understanding the Pattern of Business Success P P P P The Formula for Business Success: (T+C+ECF) x DE = Success THE 4 I’S The Five Foundations of Strategy 1. How to Avoid the 4 I’s (1-10) Aggressive external market focus. 2. Ridiculously high level of customer focus. ______ Keep the "Main Things" the main things. 3. Bullish on knowledge sharing and learning. 4. Teamwork is mandatory – not optional. Passion and commitment at all levels. 5. Foster a healthy paranoia. Revel in change. www.johnspence.com Page 1
Achieving Business Excellence Understanding the Pattern of Business Success ORGANIZATIONAL EFFECTIVENESS AUDIT Answer the following questions as honestly as possible using this 1-10 point scale: 1 = Strongly Disagree 7 = Agree Somewhat 3 = Disagree Somewhat 5 = Not Sure 10 = Strongly Agree 1. We have a clear and detailed vision for the direction of our company that is very well communicated throughout the entire organization: 2. Every employee has clear/quantifiable/observable performance objectives: 3. There is a high level of very open and honest communication throughout the organization: 4. I have a high level of trust in the skills, abilities, and integrity of my co-workers: 5. There is a high sense of urgency within the organization to get things done: 6. We have only the best, highly competent people in all areas of the organization: 7. We focus very intently on the needs of our customers: 8. There are no politics, rumor-mongering or finger-pointing within our organization: 9. Our key leaders operate as a highly-effective team: 10. There is a high level of both personal and mutual accountability within the organization: 11. People display a positive, enthusiastic attitude throughout the organization: 12. We are superb at collecting and using feedback from our customers: 13. Our organization displays great discipline in pursuing our focused business objectives: 14. I am very pleased with where our organization is in the marketplace today: www.johnspence.com Page 2
Achieving Business Excellence Understanding the Pattern of Business Success CHARACTER COURAGE COMMUNICATION COLLABORATION COMPETENCY COMPASSION CONTRIBUTION WHAT THE BEST CEOs KNOW: KEY LESSONS FROM THE TOP 7 CEOs IN AMERICA (Grove, Dell, Gerstner, Welch, Kellerher, Walton, Gates) 1. We have an “Outside-In” perspective and place the customer at the center of the business ______ 2. The majority of our people are committed and passionate about working in our company 3. We have a strong corporate culture that supports our people and focuses on our customers 4. We are highly innovative at creating “next generation” products, processes, or solutions _______ 5. We study best practices and implement the best ideas, regardless of their origin Based on: “ What the Best CEOs Know” by Krames www.johnspence.com Page 3
Achieving Business Excellence Understanding the Pattern of Business Success THE TOYOTA WAY CHALLENGING VISION We form a long-term vision, meeting challenges with courage and creativity to realize our dreams KAIZEN We improve our business operations continuously, always driving for innovation and evolution (1% better every day) GENCHI GENBUTSU We go to the source to find the facts to make correct decisions, build consensus, and achieve our goals at our best speed. RESPECT, CHALLENGE AND HELP YOUR PEOPLE AND SUPPLIERS We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust. TEAMWORK We stimulate personal and professional growth, share the opportunities of development, and maximize individual and team performance. Orange Revolution: 4 + 1 Clear, specific and measurable goals High levels of trust across the organization Free flow of all pertinent information across the entire organization High levels of both personal and mutual accountability A focus on catching people doing things right and rewarding them Wow — No Surprises — Celebrate Based on: ”Results Rule!" by Pennington www.johnspence.com Page 4
Achieving Business Excellence Understanding the Pattern of Business Success ELEMENTS OF A HIGH PERFORMANCE TEAM D M C C M D 10 Key Team Competencies 1. Setting clear, specific and measurable goals. 2. Making assignments extremely clear and ensuring required competence. 3. Establishing 100% accountability for high performance across the entire team. 4. Running effective team meetings. 5. Building very strong levels of trust. 6. Establishing open, honest, frank and safe communications. 7. Managing conflict effectively. 8. Creating mutual respect and collaboration. 9. Encouraging prudent risk-taking, creativity and innovation. 10. Engaging in ongoing team building activities. www.johnspence.com Page 5
Achieving Business Excellence Understanding the Pattern of Business Success WHAT DO ENGAGED EMPLOYEES LOOK LIKE? They give more discretionary effort They consistently exceed expectations They take more responsibility and initiative They receive better customer service ratings They offer more ideas for improvement They promote and model teamwork They volunteer more for extra assignments They anticipate and adapt better to change They persist at difficult work over time They speak well of the organization TEN ELEMENTS OF A WINNING CULTURE 1. People enjoy the work they do and the people they work with 2. People take pride in the work they do and the company they work for 3. There are high levels of engagement, connection, camaraderie and a community of caring 4. There is a culture of fairness, respect, trust, inclusiveness and teamwork 5. The leaders walk the talk, live the values and communicate a clear vision and strategy for growth 6. Lots of open, honest, robust and transparent communication across the entire organization 7. The company invests back in employees; there is a commitment to learning, coaching and development 8. There is a bias for action, employees have an ownership mentality and always strive to give their personal best 9. There is high accountability and a strong focus on delivering the desired results 10. There is ample recognition and rewards and mediocrity is not tolerated www.johnspence.com Page 6
Achieving Business Excellence Understanding the Pattern of Business Success IS YOUR COMPANY UP TO SPEED? ADAPTED FROM FAST COMPANY MAGAZINE Score your company from 1 to 10: 1 = Strongly Disagree 3 = Disagree Somewhat 7 = Agree Somewhat 10 = Strongly Agree 5 = Not Sure WE HAVE A STRONG EMOTIONAL BOND WITH OUR CUSTOMERS: __ Competing strictly on price, quality, and features is the road that most companies travel—and it is the road to disaster. In a world of overcapacity, endless choice, and savvy buyers—there will always be some company that can do it a little faster, a little cheaper, or a little better than you can. Companies that prosper over the long haul don’t just offer good deals, they exude genuine affection and concern for their customers. They build strong, customer intimate relationships as trusted advisors and true business partners. WE HAVE A UNIQUE STRATEGY THAT CLEARLY STANDS OUT: __ You can’t do great things if you are satisfied doing things just "a little better" than your rivals. If you want to win big, you have to think differently. You must pursue strategic ideas that challenge the status quo in the industry. You must create a position that is unique, highly valuable in the marketplace, and defendable from your competition. OUR ORGANIZATION IS A FUN PLACE TO WORK— AND A FUN ORGANIZATION TO DO BUSINESS WITH: The most productive companies have an atmosphere of fun and excitement that permeates their entire culture. This does not mean people sit around and play video games and tell jokes all day long; it simply means that people smile and have fun while at work. They enjoy their work and the people they work with—and especially serving their customers. WE ARE BUILT TO CHANGE: The only certainty in business today is that some crucial elements of your strategy, the competitive landscape, your customer’s expectations, the underlying economics of your industry will be different tomorrow. That is why change itself has become a core capability in organizations that prosper over the long run. Companies that succeed—embrace, even revel in change. www.johnspence.com Page 7
Achieving Business Excellence Understanding the Pattern of Business Success WE STRONGLY EMBRACE THE VALUE OF VALUES: ________ Today, more than ever, customers don't just ask "What products do you make?" or "What services do you offer?" they also ask "What values does your company stand for?" The company with the clearest sense of purpose, bolstered by honesty and integrity wins. WE ARE AS DISCIPLINED AS WE ARE CREATIVE: ________ (AND AS CREATIVE AS WE ARE DISCIPLINED) Creating long-term value means delivering short-term results—every quarter, every week, every day. There is no contradiction between creativity and execution. The most innovative companies tend to be the most disciplined when it comes to making their numbers. Think outside the box, but build a strong box to stand on while doing it. WE USE TECHNOLOGY TO CHANGE EXPECTATIONS AND RESHAPE OUR BUSINESS: ________ Every business is a technology business. Regardless of your product, service or industry—every company that hopes to survive, let alone win, must embrace technology as a fundamental driver of their business strategy. Fundamental values and core business excellence is powered by relevant (to the customer) technology. WE ARE BUILT FOR SPEED: ________ Being fast does not mean reckless. But fast companies do understand the cost of hesitation and delay—whether responding to a customer’s complaint or launching a new product. Successful companies know that time is as valuable a resource as money or talent and treat it accordingly. WE HAVE BUILT A COMPANY OF LEADERS: ________ There is much more to leadership than the vision and charisma of the CEO. The most effective form of leadership is grassroots leadership; the companies with the most confident and committed leaders, in all levels of the organization, are companies that win. www.johnspence.com Page 8
Achieving Business Excellence Understanding the Pattern of Business Success K HEDGEHOG CONCEPT N L From a twice weekly survey for five years of 2,000+ senior managers and executives at: IBM GE Morgan Stanley Merck 3M AT&T Microsoft CIGNA Heineken MasterCard Fidelity Investments SAP Motorola Ikon American Express Progressive Insurance Bank of America Borders Books KEYS TO EFFECTIVE MANAGEMENT Communicate Clearly—internally and externally, honesty, transparency, candor Force the Hard Decisions — core values drive fast, effective decision making Focus Relentlessly on Key Results — outcomes not effort , clear metrics, binary Remain Flexible to Change — be agile, adaptable and nimble, embrace change Prove Your Value to the Customer — every day, in every interaction Force Collaboration — teamwork is mandatory, not optional , no Prima Donnas! Rigorous but Not Ruthless — set high standards and hold people 100% accountable Based on: “ Tough Management” by Martin www.johnspence.com Page 9
Achieving Business Excellence Understanding the Pattern of Business Success WEB OF VALUE = VOC + MOT + WOM WHAT ARE ALL THE WAYS YOU CURRENTLY LISTEN TO THE VOC? WHAT NEW WAYS COULD YOU ADD? MOT WORKSHOP: WHAT DO YOU BELIEVE ARE THE TOP 3 MOT FOR YOUR CUSTOMERS? DO YOU HAVE A ROBUST AND THOROUGH PROCESS FOR EACH TO MAKE SURE THEY ARE DELIVERED FLAWLESSLY EVERY TIME? www.johnspence.com Page 10
Achieving Business Excellence Understanding the Pattern of Business Success WOM… DO YOU HAVE A PROCESS TO GENERATE CONSISTENT QUALITY REFERRALS? IDEAL CUSTOMER PROFILE: HOW DO YOU GET THEM TO... FIND YOU: LIKE YOU: TRUST YOU: TRY YOUR PRODUCTS/SERVICES: REPEAT BUY: BECOME A CUSTOMER EVANGELIST AND REFER YOU TO OTHER IDEAL CUSTOMERS: www.johnspence.com Page 11
Achieving Business Excellence Understanding the Pattern of Business Success THE 4 + 2 FORMULA THE FOUR PRIMARY MANAGEMENT PRACTICES 1 = Not at all 3 = Poor 5 = Fair 7 = Good 10 = Superior /Excellent 1. Strategy: Devise and maintain a clearly stated, focused strategy: Whatever your strategy, it will only work if it is sharply defined, clearly communicated, and well understood by employees, customers, partners, and investors. 2. Execution: Develop and maintain flawless operational execution: You might not always delight every customer, but make sure that you never disappoint them. Winners consistently meet the expectations of their customers by delivering on their value proposition. Bad quality surely will hurt. 3. Culture: Develop and maintain a performance-oriented culture: One of the best indicators of being performance-oriented is the way you deal with your own poor performers. It is easy to reward good performers. What matters is whether you have the courage to get rid of poor performers. 4. Structure: Build and maintain a fast, flexible, flat organization: What really counts is whether structure reduces bureaucracy and simplifies work. Simpler and faster - such are the best goals for all organizations. THE FOUR SECONDARY MANAGEMENT PRACTICES 1. Talent: Hold on to talented employees and find more: Winning organizations pay great attention to finding, growing, developing, and rewarding very talented people. 2. Leadership: Key leaders are truly committed to the business: The research data clearly showed that the leadership effectiveness of the top executives, on average, influenced 15% of the variance in corporate performance, for better or for worse. 3. Innovation: Make innovations that are industry transforming: Agile companies that were highly innovative and able to anticipate rather than react to disruptive events in the marketplace, were always the winner. 4. Mergers and Partnerships: Make growth happen with mergers, alliances, and partnerships: Internally generated growth is essential, but companies that can also master mergers and partnerships are much more likely to be winners. Based on: "What (Really) Works” by Joyce www.johnspence.com Page 12
Achieving Business Excellence Understanding the Pattern of Business Success WHY IS IT SO IMPORTANT TO DELIVER SUPERIOR CUSTOMER SERVICE? It is a proven business fact: The combination of quality products and services, with very high levels of customer satisfaction — directly drives significantly higher profitability. In other words, it should be spelled Customer $ervice — with a big capital $. What this chart shows: According to this massive research study, by going from an average of "Somewhat Agree" to "Agree" on the Quality and Customer Relationship scores (in the eyes of the staff) the average company would more than double (104%) its financial performance! Financial Performance CR=104.12 Highest Quality Products/Services & Excellent Customer Relationships As another example: If you improve the average rating on Employee Satisfaction by 10 –15% (again going from "Somewhat Agree" to "Agree") it will cause a 42% improvement in financial performance, including both profitability and growth. CR=.249 L CR=.277 CR=.275 CR=.334 CR=.280 Empowerment Long-term Orientation N CR= .404 Employee Satisfactio n CR =.285 T CR=.371 Coaching CR=.365 Enthusiasm, Commitment, Respect High Standards CR=.191 Training & Development CR=.247 Fair Compensation CR = Causal Relationship Based on: "Practice What You Preach" by Maister www.johnspence.com Page 13
Achieving Business Excellence Understanding the Pattern of Business Success HERE IS THE LIST OF THE TOP FACTORS THAT DROVE THESE COMPANIES TO BRING IN FINANCIAL RETURNS THAT WERE OFTEN 20 TIMES LARGER THAN THEIR COMPETITORS... 1 = Strongly Disagree 7 = Agree Somewhat 3 = Disagree Somewhat 5 = Not Sure 10 = Strongly Agree We have an uncompromising determination to achieve excellence in everything we do: We have a real commitment to high-quality work, and tolerate nothing less: We have a real commitment to high levels of customer service, and tolerate nothing else: In this company we set and enforce very high standards for performance: Management gets the best work out of everybody in the company: The quality of the work performed by our group is consistently high: We keep customers informed on issues affecting their business: We make our customers feel as though they are very important to us: Customer satisfaction is a top priority in our company: We listen well to what the customer has to say: We are extremely good at building long-term customer relationships: The people in our company do "whatever it takes" to do a good job for the customer: _______ We do a good job of resolving customer problems when they occur: We always place the customers’ interests first, ahead of those of the company: ________ The level of quality service delivered by my group/team is consistently high: READ THAT LIST AGAIN… AND AGAIN!!!!! THIS IS CRITICAL TO YOUR SUCCESS www.johnspence.com Page 14
Achieving Business Excellence Understanding the Pattern of Business Success DISCIPLINED EXECUTION 1 = Strongly Disagree 7 = Agree Somewhat 3 = Disagree Somewhat 10 = Strongly Agree 5 = Not Sure We have a clear vision for exactly where we are trying to take our organization We have a detailed and specific plan to accomplish the key objectives we are trying to execute Our senior leaders are all 100% committed to executing the key objectives The key leaders/employees in our organization are all superb at execution All of the major objectives we are pursuing are fully aligned and mutually reinforcing We have excellent systems and processes in place to ensure consistently superb execution There is continuous and transparent communication throughout the entire organization about exactly where we stand on executing on our key objectives Every employee has all of the training, support, equipment and resources they need to deliver the results required of them We are superb at adjusting and adapting our strategy and objectives when truly necessary We do a great job of celebrating both small and big wins and praising great performance We refuse to tolerate mediocrity or lack of accountability and deal decisively with people who are not able to meet the clear standards of performance in our organization www.johnspence.com Page 15
Achieving Business Excellence Understanding the Pattern of Business Success IBM •Collaborative partnerships with customers. •Drive unique value and growth through innovation that matters. •Invest in people. •Leverage talent and knowledge through trust and communication. Charlie Trotter •Only the best people (passion) •Lots of communication •Highest standards •Innovation •Truly delight the customer Good to Great •Best people •Effective (Level 5) leaders •Deal with difficult issues •Focus on the main things •Patience + discipline Results Rule •Tell the truth •Pursue the best over the easiest •Leverage the power of partnerships •Focus on the main things •Accountability •Constant improvement Microsoft •Best people •Bet the company •Require failure •Managers are qualified •Performance is what counts •Money where it is important •Stop the insanity Spence: 6 Ways to Run or Ruin 1. Clear Vision 2. Robust Communication 3. Culture of Urgency 4. Disciplined Execution 5. Best People 6. Focus on the Customer 4+2 Formula •Clear, focused strategy •Flawless execution •Performance-oriented culture •Fast, flexible, flat organization -Best people -Committed leaders -Innovation -Growth through partnerships Top Concerns of 700 CEOs 1. Have not communicated my vision 2. Do not discuss the tough stuff 3. Do not have the best people in key positions 4. Lack of disciplined execution •Best people •Transparency •Customer focus •Sell value •Have FUN Skinner Nurseries •Own the word service •Best people •Lots of communication •Know your business •Have a plan •Sell value Small Giants •Independent vision •Strong Relationships -employees -customers -community •Caring workplace •Flexible structure •Passionate Think Big - Act Small •Stewardship •Transparency •Accessibility •Stand for something •Erase superficial distinctions In Search of Excellence •A bias for action •Close to customer •Intrepreneurship •Values driven •Focus on core competencies •Simple structure •Minimal bureaucracy Top 7 CEOs •Customer focus •Passion for the job •Culture counts •Constant innovation •Learn from the best Tough Management •Communicate clearly •Force the hard decisions •Focus on results •Remain flexible •Prove your value to the company •Force collaboration •Be a tough manager/not a tough guy Toyota Way •Clear and compelling vision •Constant improvement (Kiazen) •Go to the source (Genchi Genbutsu) •Respect and mutual accountability •Teamwork Kiss Theory Goodbye •Superior leadership •Sales effectiveness •Flawless operational execution •Superb financial management •Customer loyalty Ram Charan: Know How •Position/Reposition the business to make money •Pinpoint patterns and change - then take Action •Build a strong culture of excellence •Hire the best people - build them into leaders •Build a TEAM of leaders •Set the right goals - then FOCUS on key Priorities The Six Secrets of Change 1. Love your employees 2. Connect meaning to the work 3. Invest in your people 4. Learning/innovation IS the work 5. Transparency rules 6. Create learning systems Firms of Endearment Meaningful work Partnerships with all stakeholders Respect for individuals Transparency Teambuilding Empowerment Fun work environment Support for life balance Training and development are high priorities Recognition and celebration have a high Priority Mavericks at Work Value-based differentiation Transparency + knowledge sharing Bond with customers Talent + culture Mastering the Rockefeller Habits Right people doing the right things right Clear focused one-page strategic plan Strong core values. Organizational alignment and focus Relentless and consistent communication of the theme. Transparency and openness to employee feedback. Key executives highly aware of the business. Deliver the brand promise and truly delight customers. Philly Gear www.johnspence.com Page 16
Achieving Business Excellence Understanding the Pattern of Business Success WORKSHOP: IDEAS INTO ACTION Go back page-by-page and carefully look through the book. Compare and contrast your scores on the various audits and re-read any notes you wrote. What are the themes that emerge… the patterns? Look for any scores below a 7 as an area that needs improvement and anything in the 1-5 range as a serious problem that needs attention. The goal here is to really dig into these topics so you can take an honest look at the actual current state of your organization. This is a rare opportunity to take a critical look at how well your organization is truly operating and specifically what must be done to improve it. Take this exercise very seriously and push yourself to really understand what these scores and everything you learned today about world-class organizations could mean to your business. Here are three major questions to keep in mind: What does this mean to our business? How can I make these ideas work in our company? What can I do right away to improve our success? 1. Strengths What was the pattern of high scores? In what major areas did you seem to have as strengths, where you scored an 8 or higher across all of the workshops? 2. Weaknesses What was the pattern of low scores? In what major areas did you seem to have as weaknesses, where you scored a 6 or lower across all of the workshops? www.johnspence.com Page 17
Achieving Business Excellence Understanding the Pattern of Business Success 3. Key Strategies for Success Based on everything you have learned here today and your own personal business experience, what do you believe are the top strategies your organization must focus on to build and sustain success? What are the 4 - 6 most important ideas that will drive your organization’s future? (Please describe these in detail. You might lead off with a single word or short phrase, but then you’ll need to give a definition and description to exactly what you mean. It must be clear precisely what each ideas means and how you will pursue it.) 4. Organizational Action Steps Please list at least 4 specific, measurable, and observable action steps that your organization can take to implement the ideas you learned today. Based on the list you just created, as well as the strengths and weaknesses you identified, what can be done right away to take the lessons of this class and put them into positive action for your organization? 1. 2. 3. 4. www.johnspence.com Page 18
Achieving Business Excellence Understanding the Pattern of Business Success 5. Personal Action Steps Please list at least 4 specific, measurable, and observable action steps that YOU can take to implement the ideas you learned today. Based on the list you just created, as well as the strengths and weaknesses you identified, what can you do to make a more positive impact on your organization’s success? 1. 2. 3. 4. www.johnspence.com Page 19
Achieving Business Excellence Understanding the Pattern of Business Success NOTES: www.johnspence.com Page 20
Achieving Business Excellence Understanding the Pattern of Business Success SMALL GROUP WORKSHOP In your teams, share what you wrote on pages 19—22. Make sure that each person takes time to explain their findings and recommendations. Then, combine all of your answers in order to create a group answer to the following questions: 1. What does your team feel are the major weaknesses of your organization at this point in time? 2. What does you team think should be the key "strategies for success" that your organization needs to focus on? 3. Out of everything you have written, what are your teams top 4 recommended action steps that the organization should take immediately? EACH TEAM WILL HAVE 5 MINUTES TO PRESENT THEIR FINDINGS AND RECOMMENDATIONS. www.johnspence.com Page 21
Achieving Business Excellence Understanding the Pattern of Business Success NOTES: www.johnspence.com Page 22
Achieving Business Excellence Understanding the Pattern of Business Success NOTES: www.johnspence.com Page 23
Achieving Business Excellence Understanding the Pattern of Business Success It is my sincere hope that you have enjoyed this class and found it extremely valuable. The challenge now is to take everything you have learned and apply it in your business. Even the best ideas in the world are useless without massive action behind them. If you did find this class of value, I also hope that you will enthusiastically refer me to any colleagues or companies that you think would find value in the sort of programs I offer. 99.9% of all of my business comes from happy clients telling their friends and colleagues about my programs, and I thank you very much for taking a moment to let lots of people know about my work. If there is anything you need from me please do not hesitate to send a note or call, I’m here to assist you in any way I’m able. www.johnspence.com Page 24
Achieving Business Excellence Understanding the Pattern of Business Success THANK YOU If you have any questions at all please do not hesitate to send a note or call. My email address is: email@example.com PLEASE connect with me on LinkedIn and Twitter:@awesomelysimple Free videos are available on Vimeo at www.vimeo.connect/businesssuccess Also, you might find value in the ideas I share in my blog. You can sign up for it at: www.blog.johnspence.com Lastly, my workbooks and slides have already been uploaded to: www.slideshare.net/johnspence www.johnspence.com Page 25
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