Cut to the Core

Use Your Company’s Values as a Measuring Stick for Its Performance

When you review your company’s performance, do you benchmark it to your company’s values? That is, have you created evaluation “measuring sticks” from your mission statement and overall company philosophy that allow you and your leadership team to effectively evaluate “gaps” in your performance and to appropriately communicate your successes?

Most companies create benchmarks that facilitate the assessment of their performance in relation to their direct competitors. For example, if a company seeks to improve customer service, it may adopt the world-class standards of Southwest Airlines as a guideline to evaluate and to improve its own customer relations. A company may also set additional benchmarks if the company seeks a leadership position in a particular area of performance.

However, if you do not already use your company’s values, formally communicated in your mission statement, as an evaluation measuring stick for performance, I encourage you to explore the benefits. First of all, the development of a strategy of performance around your values is an effective way to focus on both the areas that need improvement and the areas that already represent success for your organization. As well, your efforts to focus on your company’s values will infuse all stakeholder communications with a consistency that further enhances the credibility of your brand.

A Strong Culture Assists You to Manage Effectively

The benefits and advantages of a strong company culture to managers, employees and customers is well documented in management literature. When an organizational culture is understood, enforced by management policies and exemplified by market action, employees and customers validate and “live” the culture. The strength of the culture leads to many competitive advantages including labor cost advantages, higher levels of employee satisfaction and increased levels of customer satisfaction.

I have noticed recently that my efforts to frame the communication of my decisions with the terminology of the Kore Access culture have lead to some of the following benefits:

* Priorities can be quickly determined using our vision statement.

* Discussions about sensitive topics are easier with our common vocabulary.

* Misunderstandings happen less often since actions are guided by our mission statement.

 

What are you doing to enforce your culture? For insights into building and nurturing a great company culture read The Ownership Quotient by Jim Heskett and Earl Sasser.

How do you keep engagement and commitment high in your organization?  For more details on the link between employee and customer satisfaction, read recommended industry practitioners’ best practices in the Kore Access white paper, Drive Business Success Through Improved Employee Engagement. To read this and other white papers - click here.

Are Your Customers Raving about Your Employees?

Surveys show that customer feedback on the quality of service they have received is linked to the workplace satisfaction of the employees who served them. In other words, engaged employees enhance customer service and drive customer satisfaction. With these facts in mind, can your business or organization afford to operate with employees who are not highly engaged and invested in your organizational mission, vision and goals?

 

Spend time finding out how other organizations have improved both customer satisfaction and business performance by increasing their employees’ satisfaction levels. Search out insights into best practices for your managers on leadership initiatives, explore the business benefits of various employee engagement programs and analyze the advantages of establishing good Human Resource practices. Through the use of such resources available in this knowledge-based economy, you will then become a manager who does not ignore the largest factor of an organization’s success – its people.

 

To learn more about the impact employee engagement has on the business success of your organization and about what measures your organization can take to improve employee satisfaction levels, read “Drive Business Success Through Improved Employee Engagement,” a Kore Access white paper. To access this and other white papers - click here.

Improving Customer Retention Rates in order to Improve Profitability

 

Companies are investing more in customer retention strategies in order to improve their bottom line. Using marketing dollars to increase sales from already existing customers makes sense in today’s challenging environment. Not only do existing customers generate significant revenue, but they also serve as a valuable referral base and are less sensitive to prices than potential new customers. Another significant boost to the bottom line is that marketing campaigns and programs focused on your current client base are, on average, five times more profitable than dollars spent on new customer acquisition initiatives.

Across industries, best-in-class organizations are using customer retention as a strategy to prosper and grow in this challenging economy. Historically, in any industry, the top five companies have a 93%-95% customer retention rate with 20% of the customer base generating 80% of the revenue. Trend analyses reveal that high customer retention rates positively correlate with high profits. The findings consistently show that keeping customers year after year leads to greater numbers of purchases per customer, higher rates of referrals (especially of customers less likely to defect) and lower customer acquisition costs.

Key Point – Understanding what your customer retention rates mean can help you improve organizational profitability. Do you consider customer retention rates in your plans to increase profitability for your organization?

 

Performance Management is Key to Business Success

In his keynote speech at SHRM’s 2009 Annual Conference held in New Orleans in June, Jack Welch, former CEO of General Electric, emphasized the importance performance management plays in the overall success of a business.

Welch pointed to the prominent role that human resources takes in any organization’s performance management system, and he stressed that HR is “responsible in many ways for ensuring that managers are candidly appraising people.”

It may be time, therefore, to reevaluate your current programs and determine if you reward the behaviors you desire.  Make sure that your managers give employees constant feedback and do not wait until their annual performance reviews to suggest changes or to praise excellence. 

 

 To learn more about Jack Welch and about GE’s performance management practices, read “Performance Management Is Key to Thriving in Tough Times,” a Kore Access case study - Click Here.

“But differentiation is all about being extreme, rewarding the best and weeding out the ineffective. Rigorous differentiation delivers real stars—and stars build great businesses.” 

Jack Welch

Learn From Jack Welch’s Reward Strategy

In his keynote speech at SHRM’s 2009 Annual Conference held in New Orleans in June, Jack Welch, former CEO of General Electric, encouraged human resource practitioners, to “get out of the small-term crisis box” by rewarding desired behaviors.

Welch suggested, “you get the behavior you measure and reward, so if you reward short-term … don’t be surprised if you don’t get long-term thinking.” As an example, he pointed to the practice of rewarding sales volume goals, even when consistently meeting sales targets does not necessary equate with increased profits over the long-term. He cautioned employers and managers to give careful consideration to the goals they share with employees in order to reward exactly what they want those employees to deliver: in this case, profit instead of mere sales.

To learn more about how Jack Welch, along with his top GE executives, dealt with and overcame the same employee management issues that confront all organizations, large and small, read “Performance Management Is Key to Thriving in Tough Times,” a Kore Access case study - Click here.

“Take care of your best. Reward them. Promote them. Pay them well.”

Jack Welch