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BERSIN & ASSOCIATES RESEARCH REPORT | v.1.0
The Science o FitUsing Psychology to Replicate High Performance
Josh Bersin,
Principal Analyst
June 2011
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The Science o Fit 2
The Bersin & AssociatesMembership Program
This document is part o the Bersin & Associates Research Library. Our research
is provided exclusively to organizational members o the Bersin & Associates
Research Program. Member organizations have access to the largest libraryo learning and talent management related research available. In addition,
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supported by expert industry analysts who conduct our research;
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and industry leaders to discuss and learn about the latest industry trends and
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IMPACT Conerence: The Business Of Talent Attendance at special
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For more inormation about our membership program, please visit us
at www.bersin.com/membership.
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The Science o Fit 3
TABLE OF CONTENTS
Introduction 4
The Biggest Challenge in Management: Replicating
High Perormance 6
Implementing the Science and Strategy o Fit 8
Focus on Fit Drives Market Share Growthat Vodaone 11
Focus on Fit Drives Dramatic Improvement inSales at Bon-Ton Stores 13
Focus on Fit Drives Growth at Regeneron 15
How to Apply the Science and Strategy o Fit 17
Conclusion 18
Appendix I: Case in Point 19
Appendix II: Case in Point 22
Appendix III: Case in Point 24
Appendix IV: Case in Point 26Appendix V: Table o Figures 28
About Us 29
About This Research 29
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The Science o Fit 4
Introduction
The business world is undergoing rapid change. Globalization, shortened product cycles, new
technologies, and the recovering economy have created new business challenges.
What is the key to creating an enduring, globalized, high-perorming business?
The answer lies in people. While executives know that innovation, product leadership, and customer
service are keys to success, they also know that without the right people, none o these strategies can
succeed. Our research on leadership and talent management proves this. During the last three years,
organizations which rate among the 10 percent in talent management signicantly outperormed their
peers. These people-ocused businesses generated 26 percent more revenue per employee, had 40
percent lower turnover rates, and were 24 percent less likely to have had layos during the
last recession1.
We also know that these high-perorming companies are lled with people who are passionate,productive and highly engaged2. Kenexa, a global provider o business solutions or human resources,
ound that organizations that rank in the top 25 percent in employee engagement achieve earnings per
share almost 2.5 times higher than average3. There is a magic element to business success and it revolves
around how we manage people.
What are the keys to this people-driven success?
Traditionally managers have been taught that people perormance is driven by the perormance
management process: create a vision, develop goals, align people toward these goals, and hold them
accountable. Fortune 100 companies, like bellwethers GE, IBM and others, have promoted this processor years, and innumerable authors and consultants have written books and articles about the need or
strong perormance management, the need to dierentiate people, and the need to provide coaching
and development to employees.
Those activities are indeed important. But our research shows that peak-perorming companies go much
urther. They do not only practice great management; they have learned how to make great hiring
decisions or the business and or each individual role.
1 For more inormation, Talent Management Factbook 2010: Best Practices and Benchmarks in U.S. Talent Management,
Bersin & Associates / Karen OLeonard and Stacey Harris, September 2010. Available to research members at www.bersin.com/
library or or purchase at www.bersin.com/tmactbook.2 Employee engagement reers to an employees job satisaction, loyalty and inclination to expend discretionary eort
toward organizational goals. Companies typically measure engagement through an annual employee survey. Kenexa, a leading
provider o engagement research and services, has developed a global database o engagement actors and helps companies
to implement rigorous engagement measurement programs to identiy weaknesses in management, leadership, business
processes and culture. Many other consulting rms also oer various types o engagement surveys, and many companies do this
themselves.3 Kenexa WorkTrends Annual Report, 2008.
http://www.bersin.com/libraryhttp://www.bersin.com/libraryhttp://www.bersin.com/tmfactbookhttp://www.bersin.com/tmfactbookhttp://www.bersin.com/libraryhttp://www.bersin.com/library -
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The Science o Fit 5
These peak-perorming companies, such as Google, Apple, Zappos, and Amazon.com, outdistance their
competition by understanding how to select and promote the right people. They have identied the
personality types and traits that reinorce their business proposition and culture, largely by studying the
characteristics o high perormers. They ocus on who they hire, not just what people do and build
tools and systems to help managers and leaders assess and attract the right type o people into each
particular job.
The implement something we explore in this research: the science and strategy o ft.
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The Biggest Challenge in Management:Replicating High Perormance
Successul business leaders know that a small percentage o people typically drive a large percentage ocompany value. Bill Gates, ounder o Microsot, once stated that i he had lost the top ve perormers
in the company, Microsot would never have become the company it is today. In sales organizations it
is common or the top 10 percent o perormers to generate 30-50 percent or more o the revenue. In
sotware engineering, the top programmers oten write 10 times the code as average perormers. In
customer service there are individuals who are loved by clients, while others struggle with the job.
We all recognize these top perormers when we see them. The challenge is how we replicate this success.
How do we bring the rest o the team up to this level o peak perormance?
Our research shows that most managers are not trained or equipped to meet this critical challenge4.
They understand the principles o perormance management and are armed with tools to help them set
goals and evaluate people, but they do not understand how to build world-class teams.
4 TalentWatch Q1 2011, organizations rate rst line and mid-level management readiness as the weakest part o their
organizational readiness. Only 30% o organizations rated their rst-line or mid-level leadership as ully ready or excellent.
(insert link)
Peak PerformersTop 10% who Generate
80% of Value
How do we create
more of these top 10%?
Mid-Level PerformersKeeping the BusinessRunning
Low Performers
Those who must be developed,moved, or asked to leave
Number of People
Distribution of High-Performers
Figure 1: The Distribution o High Perormers in an Organization
Source: Bersin & Associates, 2011.
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The Science o Fit 7
The science and strategy o t can help. By applying the principles that we will explain in this report, any
organization can replicate high perormance, driving tremendous increases in customer loyalty, revenue,
market share and protability.
The Main Idea: Hundreds o books have been written on the importance o traditional
perormance management creating a top-level strategy, setting goals, measuring progress
against those goals, identiying high perormers and weeding out low perormers. Those activities
are important. But many top companies are discovering a lesser known and yet highly eective
means o creating a high-perorming organization: applying the science and strategy o t.e
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The Science o Fit 8
Implementing the Science and Strategy o Fit
Our research shows that implementing the science and strategy o t has our steps:
1. Clearly identiy the top perormers in a role or business unction.
In any major business area (e.g. sales, IT, customer service, operations), identiy the top 10 percent in
perormance. These are the employees who ar outperorm their peers. You can do this by looking
at business-outcome data measured at an individual level (e.g. sales perormance, quality metrics,
output volume and other measures available on an individual basis).
2. Figure out what makes the top perormers dierent.
Using science5 (this is really the magic part o the process), compare these top perormers to the rest
o the team. Identiy what makes this group dierent. Look at all elements, including experience,
personality, education, job history, skills and personal nature. Through this process you will identiyt characteristics, the traits, skills and behaviors that determine success.
During the process, you will nd that some o your pre-existing belies about high perormers
hold true: they work hard, they have experience in the role, they have deep skills, and they ocus
on quality. But you will also nd other characteristics (the secret sauce) which may not have been
obvious (the Bon-Ton Stores example in this research explains some o these non-
obvious characteristics).
3. Incorporate the ft characteristics into all management practices, making it easy or
managers to fnd and develop high perormers.
Next organizations build tools and systems to help managers select and hire people based on t.
These tools whill help managers assess candidates or t, train or t, coach or t, and promote
based on t. Tools should include pre-hire assessments, interview guides and coaching and sel-
development aids. Build a management culture based on how people succeed, not just what they are
supposed to do.
4. Clearly communicate your defnitions o ft throughout the organization:
Finally, publicize the winning traits and behaviors you have identied throughout the organization.
Discuss why and how people succeed. Celebrate not only results, but also how individuals
deliver results.
5 The science o t is part o Industrial and Organizational Psychology (called IO Psychology), which is a discipline o skills
and tools to assess individual capabilities.
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The Science o Fit 9
You will nd that many o the characteristics o high perormers are common across the company
they make up your culture and employment brand. Other t characteristics are very role and discipline
specic. Together these characteristics tie your company together and make up your
organizational culture.
This ocus on t creates a fywheel o high perormance. Managers now have the tools they need to helphire the right people into their open positions. Employees now have a model or success which they can
use or their own development plans. Executives understand how to heighten overall job satisaction
and engagement.
Employees also eel more comortable in their jobs because they succeed. And the organization
becomes more collaborative and productive, driving greater revenues and prot.
Kenexa, a company which ocuses heavily on recruitment and employee engagement, uses a ormula
to explain this process: i X e =s, where i represents individual, e represents environment, s
represents success, and X represents the t characteristics. When you multiply the right individual by
the right environment, success is inevitable. Using the science and strategy o t, an organization can
identiy the right i, create the right e and guarantee the s.
Case in Point: AMC Theaters Uses Fit to Drive Proftable Growth
In the 1990s, AMC Entertainments business perormance was suering because o lackluster
concession sales and high employee turnover. The companys market share was diminishing. Ater
studying high-perorming theaters, AMC realized that guest experience was one o the biggest
drivers o concessions sales (popcorn and candy), whch contribute greatly to the bottom line.
To address this challenge, AMC trained all managers and theater employees to understand how
to deliver great customer service. While this had some positive eect, the cost was high, and the
overall results were inconsistent. Even ater training, some theaters continued to
outperorm others.
Rethinking the problem, AMC embarked on a project to study t. The company looked at the
characteristics o employees in its top theaters, and ound that a certain type o individual was
much more likely to provide top-quality guest service and drive the resulting concessions sales.
Once t characteristics were clearly identied, AMC reduced its ormal training and reocusedits eorts on assessing and selecting the right job candidates. The result was an increase in
concessions sales and a signicant reduction in turnover. Overall prots rose to the highest in
the industry.
Theaters that implemented the t strategy increased their prot per customer by 1.2 percent,
which translated into millions o dollars in net income. Concessions sales and employee
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engagement scores rose. Turnover rates ell by 11 percent. These results, multiplied across more
than 320 theaters around the world, had a major impact on AMCs bottom line. Overall prots
rose to the highest in the industry. e
Case in Point: AMC Theaters Uses Fit to Drive Proftable Growth (contd)
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Focus on Fit Drives Market Share Growthat Vodaone
People who t are more engaged. They enjoy their work (because they are good at it), and they take onmore responsibility to help their organization change and grow. Kenexas research in 20096 showed that
companies with higher levels o employee engagement outperorm their peers in a variety o nancial
measures. This takes place because people in these companies take on more responsibility and react to
change more openly and assertively.
Case in Point: Vodaone Qatar Leverages Fit to Build Market Share
Qatar is a small, ast-growing country on the Persian Gul that is largely populated by immigrantworkers rom the Philippines, India, Egypt and other Middle Eastern countries. Workers in Qatar
come to the country as contractors, earn high wages and oten work six or seven days a week
to send money home to their amilies. As in other ast-growing countries in the region, mobile
telecommunications is a vital part o Qatars liestyle and economy.
Vodaone Qatars CEO, Graham Maher, knew that in order to rapidly penetrate this market, the
company needed a bold and clear mission. He and his management team studied the market and
realized that quality o lie was a signicant problem in this country. So they dened their mission
as one o improving the lives o all in Qatar through telecommunication services. They set an
internal goal o becoming the most admired employer in Qatar.
Many executives ail to see the value in such high-minded missions. But Maher, who had
previously turned around Vodaphones Australia operation leading it over the past ve years
to become one o Vodaphones most protable businesses knew what he was doing. He
understood that to succeed in Qatar, he had to attract and engage a workorce that could speak
more than ve languages, deliver excellent service, and remain loyal despite the ability to quit at
any time. He also needed employees who were willing and able to help Vodaphone out-innovate
companies that had been in the region longer. In short, he needed a workorce that believed in
the companys mission and could translate it into market share growth.
Working with his internal team, Maher crated a clear talent strategy identiying the precise
skills, qualities and behaviors that would lead to organizational success. The company then
developed a series o assessment and management tools that specied the personal values,
characteristics and behaviors o an ideal Vodaone Qatar employee.
6 Kenexa workorce trends report 2009
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The Science o Fit 12
Vodaphones t-ocused talent strategy worked amazingly well. In less than two years, Vodaone
Qatar became the most highly engaged workorce in Vodaone and the most protable new
business in the company. Today, Vodaone holds more than 30 percent market share in Qatar,
and the percentage is rising. The companys net-promoter score (the percentage o customers
who would actively recommend Vodaone to their riends) was more than 81 percent, among the
highest in Vodaone around the world.
This t model also helps the company to out-innovate its competition. By thinking about how
to improve the lives o people in Qatar, the company ound that many workers struggle each
week to nd time to go to Western Union and wire money home. To address this need, Vodaone
partnered with a local bank to launch a service that enables electronic und transers directly
rom the cell phone. This service greatly boosted Vodaone Qatars business and caught the
competition o guard.e
Case in Point: Vodaone Qatar Leverages Fit to Build Market Share (contd)
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Focus on Fit Drives Dramatic Improvement in Salesat Bon-Ton Stores
Think about the problem o sales management in most organizations. Sales leaders are taught to setclear goals or people, coach individuals or success, measure perormance against their goals, and weed
out those who cannot compete. I this process is handled well, the organization becomes execution-
ocused people are aligned and held accountable, high perormers are rewarded, and low perormers
are let go or moved to other positions.7
This sounds reasonable, except or the act that most organizations ace tremendous gaps in sales
management skills. According to our TalentWatch research, over 70 percent o all organizations believe
their rst- and second-line leaders lack the basic managerial skills needed to succeed, and 45 percent
believe the same o their director-level leaders8. Companies know that the supply o great leaders is thin,
so relying on each manager to gure out how to drive high perormance will oten bring uneven results.
When we ocus on t and apply science to the process, management becomes ar easier and employees
and managers succeed. Lets look at another example, Bon-Ton Stores.
Case in Point: The Science o Fit Helps Sell Cosmetics
Bon-Ton Stores makes much o its prot rom the sale o cosmetics a high-margin business that
dierentiates Bon-Ton rom competitors, such as JCPenney and Target (who have smaller cosmetic
businesses). When Bon-Ton looked at its cosmetics sales by store, the company ound year ater
year that some stores ar outperormed others yet management did not understand why. To try
to replicate high-perorming stores success, Bon-Tons leaders implemented a traditional sales-
management approach that included more goal-setting, competitive scorecards and a variety o
training tools to help cosmetics salespeople succeed. Despite these eorts, the vast dierences in
perormance remained.
7 The theory behind this traditional approach to perormance management, developed in the 1950s and promoted by such
companies as GE over the years, is what we call the competitive assessment model. It assumes that an organization, like
any ecosystem, has a ready supply o talented people, and that through the process o setting clear goals, competition and a
culture o accountability, high perormers will advance and low perormers will either improve or leave. It ocuses heavily on
accountability and training and assumes that any rugged individual can rise to the top. It oten leaves out the need to clearly
identiy the characteristics o success and build strong science to screen and assess who the right people are.8 Bersin & Associates TalentWatch Summer 2010. Among 350 senior HR and business leaders, 72 percent o organizations
rate the readiness o rst-line and mid-level managers to lead as weak or well behind what is needed. This trend has
remained consistent over the last three years.
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Bon-Ton worked with Kenexa to study the characteristics o the top 10 percent o cosmetics sales
representatives. Ater careully reviewing the data rom hundreds o stores, Bon-Ton realized that
it had the wrong people in many o these jobs. The traditional thinking had been that good looks
were the most important driver o success in a cosmetics salesperson. But the research indicated
that the typical high perormer rated only average in personal appearance. Other characteristics,
such as high intelligence and analytical abilities, correlated much more strongly with sales success.
Armed with a resh and clear view o what success required, Bon-Ton developed new tools to help
supervisors screen applicants and hire the right people. Managers received scientically designed
pre-hire assessment and interview guides, and training to look or specic experiences in each
candidates background.
The results have been astonishing. In the initial pilot group, sales grew by more than 35 percent
in one year, encouraging the company to implement the new approach nationwide. Now, ater
rolling out the tools and process across the entire company, Bon-Ton estimates an overall 12percent increase in cosmetics sales per employee.
This work has been so successul that cosmetics manuacturers who sell their products in Bon-Ton
stores are rethinking their entire model or identiying and assessing sales representatives in all
their retail outlets.e
Case in Point: The Science o Fit Helps Sell Cosmetics (contd)
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The Science o Fit 15
Focus on Fit Drives Growth at Regeneron
As the AMC and Bon-Ton examples show, hiring the right people and putting them into the right jobs
drives individual perormance, which in turn helps employees to eel valuable and ullled. Fullled
employees are engaged and passionate about the companys products and services, resulting in higherproductivity and lower turnover.
But the process also drives growth in recruiting and stang. Today many companies are trying to hire
critical sta to uel their global growth. Regeneron used the science o t to drive tremendous growth in
sta and resulting revenues.
Case in Point: Regeneron Fuels its Growth by Focusing on Fit
Regeneron, a mid-sized, ast-growing pharmaceuticals research rm, recently won a major
contract to build a new line o drug products. This required the company to quickly hire 350
scientists. Because great scientists can be hard to nd and hard to recruit, Regeneron needed a
bold approach.
Regeneron knew its existing recruitment process was ill-suited or the task at hand, so it
partnered with Kenexa. Kenexa conducted a study o overall employee t, and ound through
interviews that Regeneron had a unique and powerul culture. Unlike traditional pharmaceutical
companies that ocus on research, manuacturing, marketing and sales, Regeneron is a company
o scientists passionate about science. The study inormed the development o ve statementsabout Regeneron people that captured the essence o Regenerons employment brand:
1. Science drives our business, and passion drives our science.
2. We are a select team.
3. People here are challenged every day.
4. Thats the way weve always done it is the wrong answer.
5. We reuse to let bureaucracy drive away good ideas.
These ve statements, now called The Regeneron Five, became the companys mantra or
hiring, promotion and development. Regeneron re-engineered its recruiting programs to ocus on
these principles. The company helped its leaders and supervisors understand its culture and the
sort o people who would be a good t or it.
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With the new employment brand clearly dened, Regenerons candidate pipeline grew
dramatically. The percentage o candidates who accepted jobs with Regeneron more than
doubled. The companys culture got stronger every day, and as the company grew, the senior vice
president o human resources cited the ocus on t as one o the most important reasons
or success.
This program also helped the bottom line. The contract, worth approximately $1 billion, was
ullled ahead o schedule, enabling Regeneron to beat its revenue and protability targets. In
the highly competitive market or pharmaceuticals research contracts, Regeneron continues to
increase its market share.e
Case in Point: Regeneron Fuels its Growth by Focusing on Fit (contd)
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How to Apply the Science and Strategy o Fit
Any organization can apply the science and strategy o t. Whether you are the CEO, HR manager, or
business leader, ask yoursel these questions:
1. Do leaders understand the core o our companys (or my business areas) value proposition and what
drives success?
2. Can leaders identiy the roles that contribute most to revenue growth, customer satisaction,
innovation and savings?
3. Do we have an employment brand or outward-acing communications program to nd and attract
people with the background and nature we need?
4. Do my managers have the tools to easily select the right people even i these managers are not
seasoned in their jobs?5. Do we communicate and reinorce our core values through stories about employees who embody
what we want to encourage?
6. Do we have a strong culture? Can all managers describe it, talk about it and help reinorce it?
7. Do we apply the principles o t to all levels o management, rom supervisor to top executives? Do
we understand what makes leaders succeed in our organization?
8. Do we understand how engaged our employees are in each business area, and do we have programs
in place to regularly measure and monitor t and engagement?
9. Do our executive team members understand and believe in the power o having the right people in
the company, and do they themselves understand how to assess the t characteristics o
top perormers?
I you cannot answer yes to these questions, you have an opportunity to dramatically improve your
companys perormance through the science and strategy o t.
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Conclusion
Fit is a simple but proound concept that managers at all levels should understand. Unlike the traditional
perormance management process (which ocuses on goal-setting and appraisal), the science o t
orces the organization to understand success drivers at an individual level. Organizations can identiythese drivers by studying the characteristics o high-perormers and then use this inormation to help
managers better hire, develop, and coach to t.
When applied across an organization, the science o t helps leaders create a strong and enduring
company culture one which attracts the right people and encourages people to nd the best roles
where they can add the most value. Engagement levels go up, and the organization becomes more agile
and customer ocused.
The examples in this research-- AMC, Bon-Ton, Regeneron, and Vodaone each demonstrate how a
ocus on t can improve sales, customer service, business growth, and overall employee satisaction.
We hope this research helps you rethink your management approach and gives you new tools to drive
perormance in your own organization.
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Case in Point: Bon-Ton Stores Use Fit to Boost Cosmetics Sales
One o the most critical business unctions in any organization is sales. Whether the company
sells high-value, complex products, such as telecommunications services, or retail products, such as
cosmetics, the perormance o the sales team can make or break its success. Not only do salespeople
contribute directly to revenue and growth, they orm an important eedback loop regarding what
customers need and want.
Sales leaders know that in every selling environment, there are high perormers and others who
are only average. I companies had more superstars, revenue would go up year ater year. But theskills and attributes that make a salesperson highly successul are oten hard to discern.
Using the strategy and science o t, a company can identiy super-perormers and nd ways to
replicate their success. This is precisely what Bon-Ton Stores did, with Kenexas help, in its retail
cosmetics business.
Bon-Ton, a ull-line department store chain, generates nearly 17 percent o its revenue rom
cosmetics, one o the companys most protable product areas. So naturally, Bon-Ton searches or
ways to increase sales.
Several years ago, Bon-Ton sought to address a high turnover rate among cosmetics salespeople.Through an array o surveys, the company ound a variety o problems in that segment o its
workorce, mostly centered on a lack o experience and diering levels o success. Cosmetics
salespeople are oten young and may not even know whether sales is their ultimate career goal.
Bon-Ton initially ocused on improving accountability. The company ormalized a goal-setting
process, made use o perormance appraisals, and ranked sales perormance among peer
employees. Still, overall sales perormance remained very uneven, and turnover remained high.
The company ocused next on t. Working with Kenexa, Bon-Ton studied the characteristics
o the top-perorming salespeople. Commonly accepted wisdom held that the best cosmetics
salespeople were those who were most attractive. The cosmetics manuacturers that pay a portion
o sales salaries always ocused on appearance in lling cosmetics sales jobs. The theory was that
a good-looking salesperson would attract customers because the customers would assume that
salesperson could help to improve their appearance.
Bon-Ton and Kenexa tested this assumption. A pool o 600 cosmetics salespeople were selected at
random and divided into three groups: top perormers, middle perormers, and low perormers.
Appendix I: Case in Point
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This group drew rom each o Bon-Tons 270 sites, representing urban and rural locations, and
large and small stores.
The team then careully assessed this pool o 600 to identiy the range o characteristics that might
be causing good sales perormance. The team looked at demographics, physical attractiveness,cognitive skills, experience and a wide range o psychological attributes. It also looked at
perormance-appraisal ratings to gauge whether the existing management process was working.
This process is part o implementing what we call the science and strategy o t identiying
the characteristics, skills, attributes and personalities o top perormers.
Bon-Ton learned that the highest-perorming cosmetics salespeople were not the most attractive;
many were only average in looks. Rather, they were the strongest in terms o cognitive ability.
These people were quick thinkers, able to deal with lots o inormation, and excellent analytic
decision-makers.
The discovery deed conventional wisdom, but made perect sense. Selling cosmetics is a complex
business. Salespeople are expected to understand more than 700 products. They must deal with
customers who stand only a ew eet away and rapidly ask questions. They have to build rapport
and demonstrate value quickly. I a salesperson cannot think quickly, answer questions condently
and recommend appropriate products, the prospect simply walks away. Raw intelligence plays a
major role in success.
Bon-Ton now knows precisely what type o person is most likely to succeed in cosmetics sales. The
next step or Kenexa was to help Bon-Ton to build a set o tools, including new-hire assessments
and interview guides, that helped all managers quickly and easily identiy the right people.
Bon-Ton previously had a set o interview assessments, but it had ocused on traditional screening
criteria, such as age, educational background, GPA and sales experience. Armed with its newly
established, proven t characteristics, the company developed a new interview guide a
tool that helps line managers to ask specic questions careully designed to assess a candidates
cognitive ability, initiative, situational judgment and maturity. Rather than ask about grades and
prior experience, managers now ask about extracurricular activities and past leadership roles.
While intuition still comes into play, managers no longer make hiring decisions based primarily
on gut eelings or an applicants attractiveness. They have a dened process or assessing t. AndBon-Tons new tools and ocus resulted in an immediate increase in sales per employee by 12
percent and a dramatic reduction in turnover. Today, the cosmetics department outpaces the rest
o the company in employee engagement and retention.
The ocus on t in cosmetics was so successul that Bon-Ton is now replicating the process or ne
jewelry sales and other specialty products business areas where small increases in perormance
result in tremendous increases in protability.
Case in Point: Bon-Ton Stores Use Fit to Boost Cosmetics Sales (contd)
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The Science o Fit 21
Bottom line: In this case, as in almost all high-perorming sales organizations, Bon-Ton discovered
what we call a secret sauce o success. By using the science o ft, the company took the
guesswork out o hiring processes and helped managers to improve their own perormance and
build stronger, more engaged teams.e
Case in Point: Bon-Ton Stores Use Fit to Boost Cosmetics Sales (contd)
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The Science o Fit 22
Case in Point: Creating Movie Theaters That Pop How AMC UsedFit to Become Number One in Customer Satisaction
The movie-theater business presents many management challenges. AMC Entertainment, the
second-largest theater company in the U.S., relies on more than 385 general managers to operate
320 theaters with a total o more than 4,500 screens in the U.S., Hong Kong, Canada, France and
the U.K. Each general manager is responsible or a wide variety o business measures that include
total revenue, concessions revenue, protability, guest-satisaction ratings, employee engagement
and turnover. These managers must hire the right sta, work with corporate teams to negotiate
or the best lms, decide how to promote key movies in their region and manage daily theateroperations. Their roles are key to AMCs success.
In the theater industry, most prots come rom concessions. The core business o selling tickets,
running the theaters and paying royalties on the movies is typically break-even, leaving the theaters
in the business o selling popcorn. To make a chain protable and grow, each theater must drive
per-person concessions sales. Many actors contribute to this measure, including such things as
the price and quality o popcorn, promotional materials and layout, cleanliness o the theater, the
length o lines, the type and brand o concessions oered, and the entire guest experience.
AMC always knew that the quality o the guest experience had a direct impact on sales. I thetheater is clean, i employees are smiling and happy, i movies are new, i seats are comortable,
i concessions are resh and appetizing, and i the experience is un and enjoyable, people open
their wallets and indulge in lots o ood and candy. I the theater is dirty, employees are grumpy
or unavailable, and the ood is unappetizing or o low quality, the customers dont buy.
The challenge was to gure out how to continuously improve the guest experience. Could AMC
do this through training? Better management? Process improvements? Where were the levers
or success?
Ater reading research on the relationship between employee engagement and customer
satisaction, AMC embarked on a major study o employee engagement. The company believedthat i it could increase employee engagement, positive guest experiences would ollow. It ound,
as one might expect in a service operation, that employee engagement had a direct relationship to
prot. Theaters with the most highly engaged employees had higher per-capita concessions revenues
and in these theaters, revenues grew more rapidly. Thereore, the ormula worked: Positive guest
experiences translated into increased concessions sales, and the quality o the guest experience
correlated closely to the happiness, satisaction and engagement o the theater employees.
Appendix II: Case in Point
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The Science o Fit 23
AMC also ound a link between low engagement and high employee turnover. Many theater
chains have annual employee turnover rates as high as 150 percent (which is not nearly as high
as ast ood and some other retail industries). AMC ound that theaters with low engagement
levels had turnover rates o 84 percent or higher, while theaters with high engagement levels had
turnover rates o 77 percent or less. This dierence translated to millions o dollars in savings on
new-employee training.
But what drove high levels o engagement? Did managers o high-perorming theaters hire
better people? Were these managers better trained? I so, what skills, traits and activities did
they have? How could general managers improve turnover and engagement numbers, and what
specic characteristics were needed or someone to be a good general manager?
AMC decided to develop a major new training program to teach employees how to deliver great
customer service. The company spent millions on this program and ound that it seemed to have
some small, positive eect. But ater studying the ROI , AMCs leaders ound that some theaterscontinued to perorm well while others did not indicating that the training was not necessarily
a big key to success.
About 18 months into the training cycle, Keith Wiedenkeller, the senior vice president o human
resources, woke up one day and realized AMC had missed something. Just as Curly in the movie
City Slickers talked about the one big thing, Wiedenkeller realized that the single most
important key to ensuring a good guest experience was or the employees to simply be riendly.
And it is very dicult to train people to be riendly.
In act, riendliness is an innate personality trait. Friendly people are naturally outgoing, they
smile, and they enjoy being in a service role. Unriendly people do not.
In recognizing this, AMC began to shit its ocus to using t not perormance or management
to drive business success.
Ater AMC realized that having riendly salespeople was a key to success, the company partnered
with Kenexa to build assessments and revamp interview guides to help managers assess the
riendliness o job applicants. In the past, AMC had looked at educational background, grade
point average and a variety o achievement metrics to assess candidates. For example, AMC had
looked at applicants overall GPAs. By studying t, AMC discovered a better predictor o success
in its theaters: candidates GPA and achievement level in their avorite classes. This more ocusedmetric helps to identiy candidates who have the passion and condence to identiy what they
like. That ability tends to make people happy which makes them enjoyable to be around.
AMCs ocus on t has driven customer satisaction to the highest in the industry, and the
company recently acquired another chain to uel its growth.e
Case in Point: Creating Movie Theaters That Pop (contd)
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The Science o Fit 24
Case in Point: Biotech Company Regeneron Harnesses theScience o Fit
Regeneron is one o the most successul biotechnology companies in the world. With
approximately $450 million in revenues, the company is so successul in research and development
(R&D) that even competitors contract with Regeneron to help them develop products. Much
o Regenerons market value comes rom its ability to collaborate with other pharmaceutical
manuacturers a process the company calls collaborative R&D.
In 2007, Regeneron signed one o its largest-ever contracts, a $1.2 billion agreement with Sano-Aventis. To implement the contract, the company needed to nearly double its entire sta to add
more than 300 scientists to the payroll.
Hiring Ph.D.-level scientists in biology and pharmaceutical sciences is dicult. Not only are these
people hard to nd, they are oten happy with their current employers. While Regeneron had an
excellent reputation and had been able to recruit successully, the companys existing recruiting
process could not scale up to meet the demands o the Sano-Aventis contract.
In early 2008, the vice president o human resources met with the CEO and discussed the issue.
The company had been successul in hiring technical proessionals, but ound that many were not
staying with the company, and the hiring rate was too low. Leaders realized that in order to meet
growth plans and deliver on the contract, the company had to rethink the recruiting process.
Regeneron at that time did not ully understand the role o t. What type o scientist really t into
the Regeneron culture and business model? Where were these people, and how could the company
nd more o them? And most importantly, what could the organization do to attract them?
Regeneron partnered with Kenexa to harness the power o t. First, Kenexa interviewed executives,
lead managers and scientists to get a strong sense o the values, behaviors and passions o
Regeneron employees. Second, Kenexa took this inormation and developed a simple, compelling
set o messages that described Regeneron people. These messages, the essence o the Regeneronemployment brand, were developed to help the company transorm its recruiting process.
Kenexa ound that this was a company run by scientists with a passion or science. It characterized
Regenerons culture as that o a sage ull o people who want to push the envelope, discover
Appendix III: Case in Point
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The Science o Fit 25
new things and continuously innovate. This culture was distilled into ve statements about
people at Regeneron:
1. Science drives our business, and passion drives our science.
2. We are a select team.
3. You will be challenged every day.
4. Thats the way weve always done it is the wrong answer.
5. We wont let bureaucracy drive away good ideas.
These statements became known as the Regeneron Five. They were posted on walls throughout
the company. Stories were published about employees who embodied each o the principles,
which became the core o Regenerons new employment brand.
An employment brand is the image a company projects to job candidates. By careully creating
a new series o recruiting programs centered on the ideas set orth in the Regeneron Five, the
company could change its recruiting process rom a unnel to a tunnel careully nding just the
right candidates who t at Regeneron.
One o the campaigns Regeneron used, or example, was titled Five Reasons You Do Not Want
to Work or Us. Another was Five Things to Know Beore You Say Yes. These campaigns
challenged candidates to think about the Regeneron Five, and to decide or themselves whether
they were innovative, passionate and ocused enough to join the company. The campaign was a
huge success. The recruitment process accelerated so quickly that Regeneron made its recruitmenttargets almost a year earlier than expected.
The company set out to embrace the Regeneron Five internally. Regenerons onboarding
program, perormance management program, leadership development program and uture
succession program are now all built on these key identity statements.
The senior vice president o human resources and CEO have seen a transormation. Recruitment
has been easier, and the quality o new employees has risen dramatically. More job applicants
approach Regeneron, instead o always waiting or the company to approach them. And
Regeneron has attracted some o the most passionate scientists in the industry. This passion
enables Regeneron to pursue innovation, an area where many big pharmaceutical companies
today no longer excel, giving Regeneron a strong competitive advantage.
Without its keen ocus on t, however, Regeneron might have stalled, ailing to become the
thriving company it is today. e
Case in Point: Biotech Company Regeneron Harnesses the Science o Fit (contd
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Case in Point: Vodaone Qatar Leverages Fit to Build Market Share
Qatar is a small, ast-growing country on the Persian Gul that is largely populated by immigrant
workers rom the Philippines, India, Egypt and other Middle Eastern countries. Workers in Qatar
come to the country as contractors, earn high wages and oten work six or seven days a week
to send money home to their amilies. As in other ast-growing countries in the region, mobile
telecommunications is a vital part o Qatars liestyle and economy.
Vodaone Qatars CEO, Graham Maher, understood the importance o mission, culture and t to
drive growth. His management team started its business with a strong ocus on its mission in
this case, improving the lives o all in the country with a long-term strategy o becoming the
most admired employer in Qatar.
Many executives ail to see the value in such high-minded missions. But Maher, who had
previously turned around Vodaphones Australia operation leading it over the past ve years
to become one o Vodaphones most protable businesses knew what he was doing. He
understood that to succeed in Qatar, he had to attract and engage a workorce that could speak
more than ve languages, deliver excellent service, and remain loyal despite the ability to quit at
any time. He also needed employees who were willing and able to help Vodaphone out-innovate
companies that had been in the region longer. In short, he needed a workorce that believed in
the companys mission and could translate it into market share growth.
Working with Kenexa and his internal team, Maher crated a clear talent strategy identiying
the precise skills, qualities and behaviors that would lead to organizational success. The company
then developed a series o assessment and management tools that specied the personal values,
characteristics and behaviors o an ideal Vodaone Qatar employee.
In keeping with its mission, Vodaone Qatar hires only people who understand and demonstrate
emotional maturity and a passion to improve the lives o others. The company identies and
coaches leaders by evaluating their ability to communicate and live by the mission. Top leaders
visit sales oces and call centers weekly to reinorce and monitor the culture. And the companysrecruitment, coaching, compensation and evaluation processes continually remind employees o
the aim to improve lives in Qatar.
We are here beyond making money, said the vice president o human resources. We ask our
people to help us achieve our vision becoming the most admired company in Qatar.
Appendix IV: Case in Point
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The Science o Fit 27
Vodaphone Qatars t-ocused talent strategy worked amazingly well. In less than two years,
Vodaone Qatar became the most highly engaged workorce in Vodaone and the most protable
new business in the company. Today, Vodaone holds a market share o more than 30 percent,
and the percentage is rising. The companys net-promoter score (the percentage o customers
who would actively recommend Vodaone to their riends) was more than 81 percent, among the
highest in Vodaone around the world.
This t model also helps the company to out-innovate its competition. By thinking about how to
improve the lives o people in Qatar, the company ound that many workers struggle each week
to nd time to go to Western Union and wire money home. To address this need, Vodaphone
partnered with a local bank to launch a service that enables electronic und transers directly
rom the cell phone. This service greatly boosted Vodaphone Quatars business and caught the
competition o-guard.
Does Vodaone still use traditional practices o rating and ranking? Yes, o course. But eachemployee conversation is built around the concepts o mission, culture and t. As Graham Maher
puts it, By continuously reinorcing our mission in every single way, we can build an organization
o passionate, high-perorming people who uel our growth, deliver or our customers and drive
our team ever aster toward success.e
Case in Point: Vodaone Qatar Leverages Fit to Build Market Share (contd)
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The Science o Fit 28
Appendix V: Table of Figures
Figure 1: The Distribution o High Perormers in an Organization 6
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The Science o Fit 29
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About This Research
Copyright 2011 Bersin & Associates. All rights reserved. WhatWorks
and related names such as Rapid e-Learning: WhatWorks and The
High-Impact Learning Organization are registered trademarks oBersin & Associates. No materials rom this study can be duplicated,
copied, republished, or reused without written permission rom Bersin &
Associates. The inormation and orecasts contained in this report refect
the research and studied opinions o Bersin & Associates analysts.
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