“10 Powerful Ways to Inject Discipline” Into the “Revenue-Generation Process”| by: Dave Stannard| Chief-Executive

 

Many CEOs of middle market companies view sales and marketing functions as autonomous. When problems or inefficiencies arise in operations, finance, manufacturing or other areas of a company, CEOs zero in on well-established metrics and processes to pinpoint trouble spots and address them. However, that same kind of rigor and discipline is often absent in sales and marketing…!!

As a result, the CEO may be unsure of the underlying causes of disappointing revenue performance and often miss the real source of the problem. Is it the market, pricing, sales team, go-to-market strategy, or something else??

To improve performance, where should CEOs get involved ??… By analyzing multiple clients across several industries, we identified 10 common trouble spots that yield the greatest revenue improvement potential. By beginning with the three or four that resonate most strongly for their company, CEOs will see revenue expansion and establish a systematic approach for driving continued growth..

1. Segment the market and target High-priority customers – All customers are not created equal. Therefore, the time a company spends parsing new customers should not be evenly allocated among its prospects. Nor should it be left to individual reps to determine how to spend their time. They tend to gravitate to accounts that are most comfortable, the loyalists, and not necessarily those that will bring the most growth, such as customers where the company has a lower share of wallet. Nudge them to step out of their comfort zone..

2. Develop meaningful Account plans – Requiring clear action plans for each customer account with tasks, owners, and timing allows for a shared vision of what needs to happen. The account becomes a company asset, not just an individual salesperson’s asset. Many sales reps view account planning as unnecessary additional paperwork—a “homework assignment” more about checking boxes than creating something of value. But a good account plan is indispensable in proactively determining how to grow a customer..

Sales organizations lacking detailed and effective customer account plans will struggle to focus on the right actions to grow their business. They simply wind up reacting to requests. Good account plans allow for tracking of progress and building organizational learning on what works and doesn’t. Plans facilitate coaching conversations, giving sales managers a tool to measure progress and coach strategy. In short, meaningful account plans drive revenue growth..

3. Monitor progress via a simple set of metrics – There are two important elements in monitoring: metrics and simplicity. CEOs aiming to inject discipline into the revenue-generation process must establish and track a defined set of metrics that aligns with their growth initiatives. Metrics provide a fact base about a company’s revenue performance, reveal growth opportunities, help CEOs gauge progress and guide sound decision-making. They are fundamental and must measure activity as well as outcome. Without the right metrics, companies can only base decisions on assumptions, anecdotes and outdated information, perpetuating poor revenue performance..

Good metrics-tracking plans encompass only those data points most relevant to growth. To be effective, track only those metrics that relate directly to your growth aspirations and levers. Don’t track metrics simply because others track them or because it’s the way things have always been done..

4. Provide effective Coaching & Sales supervision – Putting effective sales management at the helm of sales teams has far greater impact on performance than upgrading the talent of individual reps. Great sales managers lift the performance of the entire team while a mediocre manager degrades team performance and often prompts top performers to leave..

“Great sales managers know the importance of good coaching and do it consistently”…In its 2014 Sales Management Optimization Study, CSO Insights found that of companies with a formal coaching process, 62.3% of reps meet or exceed quota and the organization hits 91.2% of revenue plan attainment—sharply higher than companies with informal coaching. Yet only 21% of companies have a formal coaching process identifying appropriate coaching activities (group meetings, individual meetings, ride-alongs, celebrating successes, etc.), appropriate activity cadence, and tracking across managers. About eight in 10 firms are missing out on a potent opportunity to drive revenue growth..

5. Document the “company way” of selling – Over time, every company builds knowledge about the most effective method of selling. A key to revenue growth is spreading this knowledge throughout the company so it becomes truly institutional, not just resident in the heads of a few senior people. The best way to codify and document the company way of selling is to create a manual of best practices that provides step-by-step instructions for accomplishing the key responsibilities of different sales roles..

6. Analyze pipeline data for a better understanding of flow rate and revenue forecasts – Tracking the pipeline of growth opportunities for both new and existing accounts is critical for the CEO and his team. It provides a leading indicator of sales performance, enables resource/ production planning and reveals the drivers of customer win rates. But many organizations lack a real-time window into the sales pipeline and a method of analyzing pipeline data that isn’t cumbersome and time-consuming. As a result, many mid-market companies are overly optimistic in estimating probabilities and forecasts.

7. Maximize selling time – How does a CEO know whether his company’s sales force is spending enough time on customer-facing activities? In almost every organization, sales teams complain of being overburdened with administrative activities, not having enough time to spend with customers. Most companies don’t have a factual basis for addressing this issue. By requiring a short study to identify how much time the sales force spends on different activities, the CEO can help the company better understand how sales people spend their days and discover opportunities to increase selling time..

8. Track sales activity with a Customer Relationship Management (CRM) system – CEOs and sales leaders of companies without CRM systems suffer from a lack of visibility into customers and sales activities needed to systematically drive growth. Many middle-market companies may see these systems as too costly and complex to use and may not understand the value they provide. For instance, CRM systems enables increased sales productivity through contact management, tasks, calendars, etc.; better customer profile information; greater visibility into buying behavior; and, a more complete understanding of market penetration. For marketing, an automated CRM system provides a more complete contact database for marketing activities as well as a source for measuring the relative value of content, channels, cost per lead, etc. And for sales managers, the systems provide visibility into sales time allocation and more accurate measurement of activity and performance in sales and marketing..

9. Optimize pricing effectiveness – Pricing is one of the most effective profit-generating levers available to the CEO. On average, a 1% increase in price yields a double-digit increase in operating profit. However, effective pricing isn’t about simply raising prices—it is a complex area that encompasses many elements including base pricing, discounts, recouping cost-to-serve elements, charging for ancillary services and more. For most middle-market companies, the initial goals for pricing effectiveness should be to reign in unwarranted discounts and to get paid for customer practices that increase the cost-to-serve. Such costs include inventory carrying costs, rush orders, freight costs, customer delivery rules, technical support services and other special efforts..

10. Align incentives with specific growth aspirations – As CEOs evolve their growth and go-to-market strategies, they need to ensure the compensation plans for the sales force remain aligned with those changes. If not reviewed and aligned, companies risk failing to incent new growth behaviors, or worse—incenting the wrong behaviors. This puts their revenue goals at risk…!!

The most effective incentive plans disproportionately reward the top performers; pay explicitly for growth year on year; balance the amount of base pay vs. variable pay based on the control, responsibilities and risk inherent in different roles; are simple enough for employees to directly connect their actions to their pay; and are made up of both financial and non-financial components. Like pricing, compensation is a complex area…However, by ensuring these basic elements are followed, mid-market organizations will drive the sales behaviors necessary for increasing revenues..

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“How Analytics & Big-Data” is “Changing” Soccer,Tennis,Basket-Ball,Golf & any-other “Sport’s performance” | by: Bernard Marr | API

” If there is One Area in which “Analytics & Big-Data” are literally Guaranteed to be Game-changers, it’s Sports…!!

Sports have for a long time been accompanied by a wealth of statistics – what’s different today is the amount of data and the multitude of ways that we have to analyze and interpret that data – and put it to work…

That could be to boost Performance on the Field, Decrease-Injuries and Recovery times, or simply make the game a more entertaining spectacle for the fans…!!

But the volume of data is going through the stratosphere too – every day companies, teams or individuals are coming up with ways to capture more data, and record more information about what’s happening on pitches and fields around the world…!!

This and similar projects mean that most major teams now employ data specialists, dedicated to interpreting the facts and figures and making sure their teams get the most benefit from them..

Athletes can be monitored with sensors tracking every element of their performance from their #HeartRate to their location and their routine saliva tests, and all this data analyzed to provide coaches with clues to help them spot the superstars of the future…!!

The athletes themselves can gain a better understanding of the way their own bodies act under the stress of competition, and use this to fine-tune their own preparations…

The insights will help teams better understand the factors for success and the hurdles that #EliteAthletes, will have to overcome to make it to the top of their game…Daily Workouts,Performance in Competition and Injury-rates (as well as subsequent #Rehabilitation times) can all be ” improved through the intelligence that #BigData provides”….!!

Oakland Athletic’s mission to redefine their game through Stats & #Analytics, is well known thanks to the book and film Moneyball, but that wasn’t the beginning by a long shot..

Decades earlier, in the late 1940s, a retired RAF wing commander began to make notes from his stadium seat as he watched his beloved Swindon Town play a frustratingly bad game of soccer…

What he discovered was that most goals were scored within three touches of the ball… This had not been noticed before. However when he approached the team with his findings, they were not particularly interested…

Convinced that his findings had the potential to improve the game, he approached rivals Bradford Town, who decided to refocus on their long-ball game. That season the team reversed their fortunes and avoided what many had considered an inevitable relegation to the lower leagues…

Today #Big-Data has also found a use in the boardroom politics that are part of every major televised sport in the 21 century…NBA commissioner Adam Silver told a conference that sports analytics had played a big part in ending the lockout which preceded the start of the 2012 season…

After the dispute caused by the ending of the 2005 collective bargaining agreement was settled, Silver told the 2012 MIT Sloan Sports Analytic Conference that “ The Analytical People are More Important than the Lawyers ” in resolving the situation…!!

It’s not all about the pros though – amateur sportsmen are starting to find they can save money on personal trainers by taking advantage of the many apps available for #smart-phones designed to #monitor-performance, so it “can be Datafied, Analyzed & Improved “…

The popular #SportsTracker, for example, allows you to monitor your workout and then share that data-online, where it can be compared against that of friends…

Nike’s Golf 360 app is one of the most impressive apps for monitoring personal performance. As well as acting as a trainer with real-time advice you can upload your scores to online leader-boards and compete for the top-positions…

And standalone devices such as the Nike Fuelband, which tracks your movement and converts it into a score, prompting you to set targets and continuously increase your activity levels, are flooding onto the market…

Perhaps the biggest winners, though, are the fans. Games can be scrutinised in greater depth than ever before, thanks to the reams of statistics published on the internet…

IBM’s Slam Tracker provides point-by-point real time analytics of tennis championships, integrated with social media “sentiment” metrics, designed to allow fans to compare how a player’s performance on court is affected by their support off court..

Commentators have reams of statistics with which to entertain the audiences during slow moment, and complementing their professional patter with crowd-sourced opinion from armchair experts on Twitter is becoming standard practice…

At this point, practically no sport remains untouched by the game-changing hand of analytics and big data, and teams or athletes who ignore the advantages it brings are in danger of dropping the ball…

As always, please let me know your views….Do you think Analytics & Big-data are good for Sports ?? OR do you think they take the heart and soul out of it … ?? Please share your thoughts….!! 

The “Secret Ingredient” in “GE’s Talent-Review System” | by: Raghu Krishnamoorthy | HBR

” GE is often highlighted as an organization that develops some of the most Effective Leaders. Most companies have a version of the talent-review system we use at GE “…

But judging from what I hear from managers of companies that visit us to benchmark our system, the difference between our approach and theirs does not lie in forms, rankings, tools, or technologies. It lies in the intensity of the discussion about performance and values. The debate, the dialogue, and the time taken to have an exhaustive view of an individual − evaluating them based on both what they accomplish and how they lead − are far more important than any of the mechanics.

The heart of our system has always been about the enormous time commitment the organization and the leadership devote to the conversation about people..

As the custodian of the talent-review process, I have been lucky to observe this at close quarters. Here is what I’ve learned :

a. It starts with the attention given to the individual appraisal – Managers are expected to dedicate time to prepare for a detailed discussion of a direct report’s performance and values, strengths, development needs, and development plans. Most employees spend over 1,800 hours a year working for the manager and the company. Is it unreasonable to expect the manager to spend at least a few hours thinking about and discussing the performance appraisal as part of a larger commitment to helping the employee be more successful ? (More about that in a moment). Individual appraisals are considered enormous opportunities for the candid, constructive conversations that employees deserve.

b. It is not uncommon for a manager’s assessment and feedback to be questioned by his or her own manager, if the commentary does not appear to reflect the individual accurately – I have seen our top leaders return an appraisal because it did not do justice to the feedback on the individual. Such a disconnect is the worst thing that can happen because it is a reflection of the manager, or the HR manager, as much as it is of the employee. This practice of multi-level engagement ensures that the quality of the appraisal is honest and comprehensive.

c. We continue to use a nine-block grid with quadrants that capture levels of performance and values not as a means of a forced ranking but as a way of facilitating differentiation – Here is how it is done. As our businesses and functions go through the process, the leaders justify the positioning of talent in different quadrants of the grid. The system allows us to link the grid straight to the appraisal. The chairman sets the overall tone and expectations, and leaders across the company make suggestions, comments, and additions to the feedback. While each leader may only have visibility into his or her particular business, the system ensures consistency and provides a consistent view and assessment of talent across the company.

d. Most of our leaders, including the chairman, spend at least 30% of their time on people-related issues – It’s part of our operating rhythm. These discussions are rich in making calls on leadership, succession, opportunities for development, organization and talent strategy, diversity, and global talent builds. The discussions also afford us the opportunity to assess performance more closely and holistically − including market factors, internal factors, organizational complexity, and risk elements. More importantly, it is the business leaders who take the lead on these discussions, not the HR person. This is consistent with our philosophy that talent development and assessment is a key business agenda, not just an HR activity.

e. Some skills are more important than others to be a great leader – As I have observed these discussions, some of the patterns are becoming increasingly obvious to me. For instance, the difference between a great leader and a good one is not just about intellectual capacity; it is often about judgment and decision-making. Likewise, a hunger to win, tenacity, customer advocacy, and resourcefulness can trump some of the skills we often look for − analytical skills, for instance. Such traits are best unearthed through discussions and become important considerations for future talent mapping.

Effective talent review is an intensely human process that calls for extensive demands on a leadership’s time…There are no formulas or equations..

The power lies in giving people the attention, candid feedback and mentoring they deserve through a company-wide commitment to human-capital development..!! 

TEN tips for “Leading companies out of Crisis”: a “Turn-around” road-map | McKinsey

” Even good-managers can miss the “early signs of Distress”, says McKinsey’s Doug Yakola. The first step is to acknowledge there’s a problem”…

“ I’ve seen my share of boiled frogs,” says Doug Yakola, comparing companies in crisis with the metaphorical frog that doesn’t notice the water it’s in is warming up until it’s too late. As the chief restructuring officer or CFO of more than a dozen turnaround situations over nearly two decades, Yakolahas witnessed firsthand how managers back right into a crisis without recognizing that their situation is worsening. “ They’re not bad managers, but they’re often working under a set of paradigms that no longer apply and letting the power of inertia carry them along.” And if they don’t realize they’re facing a crisis, they won’t know that they need to undertake a turn-around, either…!! 

He’s also heard the regrets !! sometimes managers underestimated how critical their situation was—or they were looking at the wrong data. Others took advantage of easy access to cheap capital to stay the course in spite of poor performance, believing they could push through it. Still others got so caught up in the pressure for short-term returns that they neglected to ensure their company’s long-term health—or even willfully sacrificed it.

Rare among them is the executive who stepped back to review his or her own plans objectively, asking “Is this what I thought would happen when I first started going down this road?” That’s a problem, because acknowledging that your plan isn’t working is a necessary first step.

1. Throw away your “Perceptions” of a Company in Distress :

It’s next to impossible to come up with one working definition of a company in distress—and dangerous to think that you have one for your own company. Depending on the situation, there are probably 25 different signs of potential distress (exhibit). The problem is seldom made up of just One OR Two of these things, however. Rather, it is the result of a greater number of them interacting together and with other external factors.

2. Force yourself to “criticize your own plan” :

The biggest thing you can do to avoid distress is periodically review your business plans. When you’re creating them, whether at the beginning of the year or the start of a three-year cycle, build in some trigger points. A simple explicit reminder can be enough: “If we don’t have this type of performance by this date or we haven’t gotten the following 12 things done by this date, we’ll step back and decide if we’re going down the right path, given what’s happened since our last review.”

Such trigger points should be oriented both to operational and market performance as well as to basic financial metrics and cash flow…Look at where you are as a company using basic financial and cash milestones, and then look at where you are with respect to your industry and competitors. If you’re not moving with the rest of the industry (or not outpacing it, if the industry is struggling), then your plan may be obsolete. And don’t forget to look back at your performance over past cycles to identify any trends. If you keep missing performance targets, ask why.

3. “Expect more” from your Board :

The beauty of a board is that it has enough distance from the company to see the forest for the trees. Managers often treat their board as a necessary evil to placate so they can get on with their business, but that undermines the board’s role as an early-warning system when a company is heading for distress.

It’s also the board’s responsibility to look the CEO, the CFO, and the chief operating officer (COO) in the eye and say, “OK, we like your plan. Now let’s talk about what it would take to cut costs not just by 3 percent but by 20. Let’s talk about all the things that can go wrong—the risks to the business.” Sometimes significant events happen that no one could have foreseen, of course. But in a typical distress situation, a company has usually just had 18 to 24 months of poor performance, and the board hasn’t been aware or hasn’t asked the right questions. Independent board members—truly independent ones—can have a big impact here.

4. Focus on “Cash” :

A successful turn-around really comes down to one thing, which is a focus on cash and cash returns…That means bringing a business back to its basic element of success. Is it generating cash or burning it? And, even more specifically, which investments in the business are Generating or Burning Cash ?? 

I like to think about this in the same way one would if running a local hardware store. By that, I mean asking fundamental questions, such as whether there is enough cash in the register to pay the utility bill, for example, or to pay for the pallet of house paint that will arrive next week, or how much more cash I can make by investing in a new delivery truck. When you bring a business back to those basic elements, the actions you need to take to get back on track become pretty clear. In many of the cases I have seen, the management team and board are focused on complex metrics related to earnings before interest and taxes (EBIT) and return on investment that exclude major uses of cash. For example, variations on EBIT commonly exclude depreciation and amortization but also exclude things like rents or fuel. These are all fine metrics, but nasty surprises await when no one is focused on cash.

Keeping track of cash isn’t just about watching your bank balance. To avoid surprises, companies also need a good forecast that keeps a midterm and longer view. For example, failing to pay attention to the cash component of capital investments routinely gets companies in trouble. Project net present values can look the same whether the return begins gradually at year two or jumps up dramatically at year five. But if you’re not focusing on the cash that goes out the door while you’re waiting for that year-five infusion, you can suddenly find yourself with very little cash left to run the business, sending you into a spiral you may not recover from.

5. Create a “great Change-Story” :

Companies in distress “don’t” focus enough on creating a change-story that everyone understands—and that creates some sense of urgency…Here’s an example: I recently did a turnaround as chief restructuring officer of a mining company. It was profitable, returned a decent margin, and was cash positive. But the commodity price was dropping, and the board was worried about generating enough free cash flow to drive the capital needs of the business. The change story we created said, “Yes, we are profitable. But the whole point of profitability is to generate enough cash to expand, grow, and maintain operations. If we can’t do that, then we’re headed for a long, slow decline where equipment breaks down and lower production becomes the new reality.”

If you can tell that story in a paragraph or less, in a way that means something to the average guy on the front line, then people will get on board. In this case, employees wanted to have their children and their grandchildren work for this company in the same remote mining location, and the change story spurred them to action. The key was a simple message, NOT fancy metrics.

6. Treat every turnaround like a crisis :

Without a crisis mind-set, you get a stable company’s response to change: risk is to be avoided, and incrementalism takes over. Your workers are asked to do a little more (or the same) with less. More aggressive ideas will be analyzed ad nauseam, and the implementation will be slow and methodical.

In contrast, a crisis demands significant action, now, which is what a distressed company needs. Managers need to use words like crisis and urgency from the first moment they recognize the need for a turnaround. A company that’s in true crisis will be willing to try some things that it normally wouldn’t consider, and it’s those bold actions that change the trajectory of the company. Crisis drives people to action and opens managers up to consider a full range of options.

7. Build traction for “change with quick wins” :

The tendency of most managers is to put all of their focus and resources into Three OR Four big bets to turn a company around. That can be a high-risk approach.. Even if big bets are sometimes necessary, they take a lot of time and effort—and they don’t always pay off. For example, say you decide to change suppliers of raw materials so you can source from a low-cost country, expecting 30 percent lower direct costs. If you realize six months later that the material specifications don’t meet your needs, you’ll have spent time you don’t have, perhaps interrupted your whole production schedule, and probably burned a bunch of cash on something that didn’t pay off.

In addition to going after big bets, managers should focus on getting a series of quick wins to gain traction within the organization. Such quick wins can be cost focused, cutting off demand for some external service they don’t need. Or it could be policy focused, such as introducing a more stringent policy on travel expense.

Not only do “such moves improve the Bottom-Line”, they also “generate support among employees”..In any given company, you’re likely to find that a fifth of employees across the organization are almost always supportive. They work hard. And they will change what they’re doing if you just ask them. These are the people you’ll want to spend most of your time with, and they’re the ones you’ll promote—but you’ll probably spend too much time with the bottom fifth of employees. These are the underachieving ones who actively resist change, look for ways to avoid it, or are simply high maintenance.

What often gets ignored is the remaining 60 percent of the organization. These are the fence-sitters, and they are tuned into action, not just talk. They see the changes going on, and if you proactively work with them, then 80 percent of the organization will be behind you. But if you don’t give them a reason to stand up and be positive about the company, they’ll go negative. That’s the importance of quick wins. When you quickly take real action, and when those actions affect the management team as well, you send a powerful message.

8. “Throw out” your “old incentive plans” :

Management incentives are often the most overlooked tool in a turn-around… In stable companies, short-term incentive plans can be a complex assortment of goals related to safety, financial and operational performance, and personal development. Many are so complex that when you ask managers what they need to do to earn their bonus, many just shrug their shoulders and say, “Someone will tell me at the end of the year.”

In a turn-around, take a lesson from the private-equity industry and throw out your old plans. Instead, offer managers incentives tied specifically to what you want them to do…Do you need $10 million of improvement from pricing ? Then make it a big part of your sales staff’s incentive plan. Need $150 million from procurement? Give your chief purchasing officer a meet-or-beat target. Be willing to forgo bonus payments for those that don’t achieve 100 percent of their target—and to pay out handsomely for those whose results are beyond expectations.

9. “Replace” a Top-team member OR two :

Experience tells me that most successful turnarounds involve changing out one or two top-team members. This isn’t about “bad” managers. In my 20 years of doing this, I’ve only seen a small handful of managers I thought were truly incompetent. But it’s a practical reality that there are managers who must own the decline. And more often than not, they are incapable of the shift in mind-set needed to make fundamental changes to the operating philosophy they’ve believed in for years…Whether they realize it or not, they block that change because they’re bent on defending what they believe to be true. Although it’s difficult, removing those people sends another signal to your stakeholders that there will be changes and you’re not afraid to make tough moves.

10. “Find & Retain” talented-people :

Beyond the leadership team, there are TWO types of people I look for immediately. First are those that have the institutional knowledge. They may not be your top performers, but they know all the ins and outs of the company—and are vital to understanding the impact of potential changes on the business… Many times they are the disgruntled ones, unhappy with the company’s performance. But you need people who are willing to point out the uncomfortable truths.

A turn-around is also a real opportunity to find the next level of talent in an organization…I’ve been through multiple crises where the people who added the most value and impact weren’t the ones sitting around the table at the beginning. I have often found great leaders two and three levels down who are just waiting for an opportunity—and the fact that they can be part of something bigger than themselves, saving a company, is often enough to attract and retain them.

For both groups, it’s important to realize that retention isn’t always about money and bonuses. It’s also about figuring out the individual’s needs.

Good Turn-around managers actively look for those people and find a way to get them involved..!! 

 

Why “Good Managers are so Rare ?”: in the “name of Culture-Fit”,hiring the “Wrong Managers”| HBR

For too long, Companies have wasted Time, Energy, and Resources ” Hiring the Wrong Managers” and “then attempting to train them to be who they’re not”. “Nothing fixes the wrong pick !! “..

Gallup has found that one of the most important decisions companies make is simply whom they name manager. Yet our analysis suggests that they usually get it wrong. In fact, Gallup finds that companies fail to choose the candidate with the right talent for the job 82% of the time.

Bad managers cost businesses billions of dollars each year, and having too many of them can bring down a company. The only defense against this massive problem is a good offense, because when companies get these decisions wrong, nothing fixes it. Businesses that get it right, however, and hire managers based on talent will thrive and gain a significant competitive advantage.

Managers account for at least 70% of variance in employee engagement scores across business units, Gallup estimates. This variation is in turn responsible for severely low worldwide employee engagement. Gallup reported in two large-scale studies in 2012 that only 30% of U.S. employees are engaged at work, and a staggeringly low 13% worldwide are engaged. Worse, over the past 12 years these low numbers have barely budged, meaning that the vast majority of employees worldwide are failing to develop and contribute at work.

Gallup has studied performance at hundreds of organizations and measured the engagement of 27 million employees and more than 2.5 million work units over the past two decades. No matter the industry, size, or location, we find executives struggling to unlock the mystery of why performance varies so immensely from one work-group to the next. Performance metrics fluctuate widely and unnecessarily within most companies, in no small part from the lack of consistency in how people are managed. This “noise” frustrates leaders because unpredictability causes great inefficiencies in execution.

Executives can cut through this noise by measuring what matters most. Gallup has discovered links between employee engagement at the business-unit level and vital performance indicators, including customer metrics; higher profitability, productivity, and quality (fewer defects); lower turnover; less absenteeism and shrinkage (i.e., theft); and fewer safety incidents. When a company raises employee engagement levels consistently across every business unit, everything gets better.

To make this happen, companies should systematically demand that every team within their workforce have a great manager. After all, the root of performance variability lies within human nature itself…Teams are composed of individuals with diverging needs related to morale, motivation, and clarity — all of which lead to varying degrees of performance. Nothing less than great managers can maximize them.

But First, companies have to find those Great Managers ?? If Great Managers seem scarce, it’s because the talent required to be one is “Rare”.. 

Gallup finds that “Great Managers” have the following Talents : 

  • They motivate every single employee to take action and engage them with a compelling mission and vision.
  • They have the assertiveness to drive outcomes and the ability to overcome adversity and resistance.
  • They create a culture of clear accountability.
  • They build relationships that create trust, open dialogue, and full transparency.
  • They make decisions that are based on productivity, not politics.

Gallup’s research reveals that about one in ten people possess all these necessary traits. While many people are endowed with some of them, few have the unique combination of talent needed to help a team achieve excellence in a way that significantly improves a company’s performance. These 10%, when put in manager roles, naturally engage team members and customers, retain top performers, and sustain a culture of high productivity. Combined, they contribute about 48% higher profit to their companies than average managers.

It’s important to note that another two in 10 exhibit some characteristics of basic managerial talent and can function at a high level if their company invests in coaching and developmental plans for them.

In studying managerial talent in supervisory roles compared with the general population, we find that organizations have learned ways to slightly improve the odds of finding talented managers. Nearly one in five (18%) of those currently in management roles demonstrate a high level of talent for managing others, while another two in 10 show a basic talent for it. Still, this means that companies miss the mark on high managerial talent in 82% of their hiring decisions, which is an alarming problem for employee engagement and the development of high-performing cultures in the U.S. and worldwide.

Sure, every manager can learn to engage a team somewhat. But without the raw, natural talent to individualize; focus on each person’s needs and strengths; boldly review their team members; rally people around a cause; and execute efficient processes, the day-to-day experience will burn out both the manager and his or her team…As noted earlier, this basic inefficiency in identifying talent costs companies hundreds of billions of dollars annually.

Conventional selection processes are a big contributor to inefficiency in management practices; little science or research is applied to find the right person for the managerial role.. When Gallup asked U.S. managers why they believed they were hired for their current role, they commonly cited they met the required Culture-fit, their success in a previous non-managerial role or their tenure in their company or field.

These reasons don’t take into account whether the candidate has the right talent to thrive in the role. Being a very successful programmer, salesperson, or engineer, for example, is no guarantee that someone will be even remotely adept at managing others.

Most companies promote workers into managerial positions because they seemingly deserve it, rather than because they have the talent for it. This practice doesn’t work. Experience and skills are important, but people’s talents — the naturally recurring patterns in the ways they think, feel, and behave — predict where they’ll perform at their best. Talents are innate and are the building blocks of great performance. Knowledge, experience, and skills develop our talents, but unless we possess the right innate talents for our job, no amount of training or experience will matter.

Very few people are able to pull off all FIVE of the requirements of Good Management.. Most managers end up with team members who are at best indifferent toward their work — or are at worst hell-bent on spreading their negativity to colleagues and customers. However, when companies can increase their number of talented managers and double the rate of engaged employees, they achieve, on average, 147% higher earnings per share than their competition.

It’s important to note — especially in the current economic climate — that finding great managers doesn’t depend on market conditions or the current labor force…Large companies have approximately one manager for every 10 employees, and Gallup finds that one in 10 people possess the inherent talent to manage..When you do the math, it’s likely that someone on each team has the talent to lead. But given our findings, chances are that it’s not the manager. More likely, it’s an employee with high managerial potential waiting to be discovered…??

The good news is that sufficient management talent exists in every company – it’s often hiding in plain sight.

Leaders should maximize this potential by choosing the right person for the next management role using predictive analytics to guide their identification of talent..

“Six Pillars of Leadership”: Why “Grounded Leaders Drive High-Performance”|by: Bob Rosen | Chief Executive

Our Leadership Model is broken. CEOs are poorly served by the prevailing paradigm–a long-standing focus to produce short-term results. But at what cost to ourselves and to our organizations? Recent research points to SIX Dimensions of health that support superior leadership…

Today’s CEOs find themselves ill-equipped to manage the challenges they now face in a world changing faster than their ability to reinvent themselves. As they look into their organizations, there remains a growing gap between present and future leader.

But a new model is emerging; a radically different approach to leadership that speaks to our better selves, while helping CEOs grapple with the relentless and complex demands of today’s marketplace and improving their company’s performance. Our extensive research with 500 CEOs in 50 countries over the last 20 years has led us to a startling finding: It’s who you are as a healthy leader that determines what you do—and, in turn, drives performance.

Specifically, we’ve found that the matter of who you are is determined by SIX Dimensions of Leadership Health, with the roots forming the foundation of great leadership.They include : 

1. Physical health –  which provides the energy and stamina needed to keep up with the relentless speed of change, as well as the ability to use mental and physical energy effectively and live a healthy life. PricewaterhouseCoopers Global Chairman Dennis Nally, for example, drives growth and change in his company by maintaining his physical energy with golf and yoga while balancing his work and personal lives.

2. Emotional health – enables leaders to understand their strengths and shortcomings, to tap into positive feelings and jettison the negative ones, to be comfortable living with uncertainty and bounce back from adversity. When she was diagnosed with breast cancer at the same time her company was stagnating, Linda Rabbitt, founder of Rand Construction in Washington, D.C., used her increasing self-awareness to let go and value her relationships more deeply and better delegate responsibility to her employees, helping the business to break out of its rut and experience explosive growth.

3. Intellectual health – involves a mental adroitness and deep curiosity, an ability to understand and accept contradictory or paradoxical thoughts and think clearly enough to innovate quickly and meet the demands of a complex marketplace and workplace. The CEO of military shipbuilder Huntington Ingalls Industries Mike Petters tapped his deep curiosity, adaptive mindset,and commitment to lifelong learning when his led the company, a spin-off of Northrop Grumman, in 2011 in a successful IPO.

4. Social health – provides the capacity to be authentic while forging intimate ties with others and to build mutually rewarding relationships and help to nourish teams and communities. Ken Samet, president and CEO of Medstar Health, the largest health-care system in the Washington, DC region, boosted employee trust and commitment to his 2020 strategy, in large part, by being real, honest and authentic.

5. Vocational health – is your ability to tap into a personal calling that reflects who you are and what you want to be, to fulfill your highest potential through personal mastery and to drive for achievement and success in a competitive world. Ted Mathis, CEO of New York Life, the largest mutual life insurance company in the United States, helped to change the firm’s slow, hierarchical decision-making structure—and to weather the 2008 economic downturn—through personal mastery by challenging himself, learning from others and being thoroughly prepared to address the issues.

6. Spiritual health – opens up the part of an individual that recognizes something more meaningful than personal needs; it helps leaders tackle the forces of globalization and avoid chasing small-minded aims. Klaus Kleinfeld, CEO of Alcoa, combines his German-bred passion for excellence with his commitment to social responsibility, applying those values to every facet of operations, from the work the company’s foundation does, to ensuring the business’s leaders are globally minded and socially committed.

Mastering the SIX Dimensions of Leadership Health, allows company chiefs to take the actions necessary to lead in today’s environment. The results have dramatic consequences for the bottom-line. These leaders significantly outperform their less-healthy peers, according to our research.

In fact, through face-to-face interviews with hundreds of CEOs and the results of our 360 Healthy Leaders Profile, which measures individuals’ leadership character and performance, our research revealed an eye-opening finding: The higher the leadership health score, the better the performance metric as rated by bosses, peers and staff. The formula is straight-forward – who you are drives what you do and that influences how you perform.

Ultimately, leaders who master the six dimensions see the world clearly, think with an open mind, feel with positive emotions and act constructively and responsibly. As a result, they are not only personally more fulfilled, but also able to run healthier and more competitive, profitable companies.

SIX Actions Healthy Leaders Should Take : 

CEOs grounded by the dimensions of health are able to take SIX Actions critical to company performance :

1. Tapping into a higher purpose. Ben Noteboom, CEO of Randstad Holdings, a global staffing company, boosted revenues from $5 billion in 2003 to $22.8 billion today partly by hiring people who are “fundamentally motivated to be able to build a better company and a better world around a higher purpose” he says.

2. Forging a shared direction. Alan Mulally, who became CEO of Ford Motor Co. at time when the company was hemorrhaging money and shedding thousands of jobs, focused the organization around the One Ford One Direction plan and turned the firm around.

3. Unleashing human potential. David Novak, CEO of Yum! Brands, relishes his role as teacher and mentor, instructing more than 4,000 people over 15 years in everything from problem-solving to step-change thinking.

4. Fostering productive relationships. Sally Jewel, former CEO of outdoor apparel and gear retailer REI and now Secretary of the Interior, formed deep personal connections with employees through town hall meetings in which she opened up the books, as well as regular “Let’s talk” sessions.

5. Seizing new opportunities. By creating a smart, growth-oriented culture, including making 26 acquisitions in 17 years, Kumar Birla, chairman of the Aditya Birla Group, (AGB) a global conglomerate producing everything from aluminum to cement, expanded the company from $2 billion in 1995 to $40 billion today—and is shooting for $60 billion by 2015.

6. Driving high performance. John Kealey, CEO of software company Decision Lens and former chief of satellite business iDirect Technologies, helped revenues at the latter firm soar 1,600 percent to over $120 million in five years by forging a culture encouraging teamwork and going the extra mile.