Performance Consulting:Make Performance

Your Business! (and Prove It)

Jack PhillipsDick Handshaw

Manufacturing Plant Scenario

Safety violations are increasing within a manufacturing plant

Plant managers request safety training for operations and supervisors

Records indicate individuals attended safety training last year

Could you create a learning solution for this scenario?

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

The Story Continued

Multiple Factors Impact Upon:

• Operators/Supervisors• Plant operations

“A strategic process that produces business results by maximizing performance of people and organizations.”

Performance Consulting is …

- Dana and James Robinson, Patti and Jack Phillips, and Dick Handshaw

The Performance Consulting Process

The Performance Consulting Process

The Performance Consulting Process

The “True” Client

The owner of the line of business who is experiencing the performance problem.

The “True” Client

They know:

• Current business goals• Internal and external barriers• Strongest and weakest

performers

The “True” Client

They can:

• Answer questions as you conduct Reactive and Proactive Consulting

• Make the decisions that affect the final business results

Two Key Principles

Partner with clients who accomplish results:

• Own the business and performance needs

• Have the most to gain or lose• Have authority to make decisions• Can obtain needed resources

1

Use mental models to ask powerful questions and to accomplish results:

• The Needs Hierarchy• SHOULD-IS-CAUSE Logic

Two Key Principles

2

Business Needs

Performance Needs

Organizational& Individual

Capability Needs

Needs Hierarchy

Business Needs

• Strategic Business Goals

• Hard Data• Revenue• Profitability• Market share• Customer

satisfaction• Quality

Business Needs

• Performance Needs• On-the-job

performance• Best practices• Following

procedures• Supports Business

Goal

Performance Needs

Performance Needs

Organizational and Individual Capability Needs

• Organizational Capability

• Coaching and reinforcement

• Incentives• Work systems and

processes• Individual Capability

• Required skill and knowledge

• Internal motivation• Educational

credentials

Organizational& Individual

Capability Needs

Needs Hierarchy

Business Needs

Performance Needs

Organizational& Individual

Capability Needs

“The process of establishing a consulting relationship that will lead to a strategic approach to achieving business results.”

Proactive Performance Consulting is…

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

Reactive Performance Consulting is…

Powerful Questions Are:

• Open-ended• Focused to a specific need in

the hierarchy• Solution- and cause-neutral

SHOULD Questions

Business SHOULDs Performance SHOULDsSeeking desired operational numbers

“What is our goal for the percent of customers indicating service is very good or excellent?”

Seeking desired on-the-job accomplishments / behaviors

“What must our customer service representatives do more, better or differently to achieve this level of service rating?”

Seeking current operational numbers

“What is our current customer satisfaction rating for service?”

Seeking current on-the-job accomplishments / behaviors

“What are customer service representatives typically doing now that yields this level of result?”

IS Questions

Business IS Performance IS

Seeking root causes within the organization

“What factors, if any, within our organization are contributing to the disappointing customer satisfaction results?”

Seeking root causes within individuals

“What is your assessment of the capability of customer service representatives to provide high levels of service to our customers?

CAUSE Questions

Organizational Capability CAUSEs

Individual Capability CAUSEs

Successful On-the-Job Performance(Accomplishments and Behaviors)

Root Cause Categories for Gaps

Factors EXTERNAL to Organization

Factors INTERNALto Individuals

(Individual Capability)

1. Skill and Knowledge

2. Inherent Capability

4.6. Supportive Culture

Factors INTERNAL to Organization(Organizational Capability)

1. Clarity of Roles and Expectations

3. Incentives

5. Access to Information, People, Tools, and

Job Aids

2. Coaching and Reinforcement

4. Work Systems and Processes

6. Supportive Culture

Develop/Review Objectives of

Program

Develop EvaluationPlans and

Baseline Data

CollectData During

ProgramImplementation

CollectData AfterProgram

Implementation

Level 2: Learning

Level 4: Business Impact

Level 1: Reaction, and Planned Action

Level 3:Application

EvaluationPlanning

Data Collection

The ROI Methodology

Capture Costsof Program

IdentifyIntangibles

GenerateImpactStudy

Level 5:ROI

Intangible Benefits

Data Analysis Reporting

The ROI Methodology

Isolate the Effects of Program

Convert Datato Monetary

Value

Calculate theReturn on Investment

1. Reaction and Planned Action

2. Learning

3. Application

4. Business Impact

5. Return on Investment

Matching Evaluation Levelswith Objectives Exercise

Level 3 and Level 4 objectives provide:

• Direction to designers and developers

• Guidance to facilitators and coordinators

• Goals for participants

• Satisfaction for program sponsors

• A framework for evaluators

Developing Level 3 andLevel 4 Objectives

Alignment and Measurement Model

Payoff Needs

5

ROI Objective

5

ROI Results

Business Needs 4 Business Objectives

4 Business Results

Performance Needs

3 Performance Objectives

3 Performance Results

Individual and Organizational Capability Needs

2 Individual and Organizational Capability Objectives

2 Individual and Organizational Capability Results

Preference Needs 1 Reaction Objectives

1 Reaction Results

Solutions

Assessment (the IS/Current State)

Objectives for Initiative(the SHOULD/Desired State)

Measurement (the RESULTS)

Alignment and Measurement Model

Data Collection During Program

Surveys Questionnaires Observation Interviews Focus Groups Tests/Quizzes Demonstrations Simulations

Level 1 Level 2Method

Surveys

Questionnaires Observations

Interviews

Focus Groups

Action planning/improvement

plans Performance contracting Performance monitoring

Level 3 Level 4Method

Data Collection During Program

Factors to Consider When Selecting Data Collection Methods

34

• Time – Participant/Supervisor

• Costs

• Accuracy – Validity/Reliability

• Utility

• Type of data

• Culture/Philosophy

Factors to Consider When Determining timing of Follow-Up

35

• Availability of data

• Ideal time for behavior change (Level 3)

• Ideal time for business impact (Level 4)

• Convenience of collection

• Constraints on collection

International Sales

• Use of a control group arrangement

• Trend line analysis of performance data

• Use of forecasting methods of performance data

• Participant’s estimate of program impact (percent)

• Supervisor’s estimate of program impact (percent)

• Manager’s estimate of program impact

• Use of experts/previous studies

• Calculate/estimate the impact of other factors

• Customer input

Methods to Isolate Program Effects

Benchmarking Data

0%

10%

20%

30%

40%

50%

60%

1 2 3 4 5 6 7 8

32% 29%

5%

55%

37%

11% 13% 11%

Method

1. Control Groups2. Trend Line Analysis3. Forecasting Methods4. Participant Estimates5. Manager Estimates6. Sr. Management Estimates7. Expert Input8. Customer Input* Survey of Users, N = 235

Isolating the Effects of the Program

Control Group

ExperimentalGroup

M1

M1

Program M2

M2

$35,000 $45,000

$35,000 $40,000

Control Group Method

Data are Converted by:• Converting output to contribution – standard value

• Converting the cost of quality – standard value

• Converting employees’ time – standard value

• Using historical costs

• Using internal and external experts

• Using data from external databases

• Linking with other measures

• Using participants’ estimates

• Using supervisors’ and managers’ estimates

• Using staff estimates

Cost Items Prorated Expensed

Needs Assessment Design and Development Acquisition/Purchase (if applicable) Delivery/Implementation

• Salaries/Benefits-Facilitator Time • Salaries/Benefits-Coordination Time • Program Materials and Fees • Travel/Lodging/Meals • Facilities • Salaries/Benefits-Participant Time • Operating Expenses

Ongoing Operations Cost (if applicable) Evaluation Overhead

Typical Intangible Benefits Adaptability Awards Brand awareness Career minded Caring Collaboration Communication Conflicts

Cooperation Corporate social responsibility Creativity Culture Customer complaints Customer response time Customer satisfaction Decisiveness

Typical Intangible Benefits Cont.

Employee complaints Engagement Execution Image Innovation Job satisfaction Leadership Networking

Organizational climate Organizational commitment Partnering Reputation Resilience Stress Talent Teamwork

The ROI Calculation

44

Benefit Cost Ratio (BCR) =Program Benefits

Program Costs

ROI = Benefits - Costs X 100Program Costs

The ROI Calculation Exercise

45

Costs per program (25 participants) – $80,000Benefits per program (1st year) – $240,000

Benefit Cost Ratio (BCR) = ____________

ROI = X 100 =_____________%

Thank You

Dick Handshaw

Jack Phillips

jack@roiinstitute.net dick.handshaw@handshaw.com

Performance Consulting

Training That Delivers Results