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The Hidden Driversof
Corporate Performance
Tom FitzGerald & Caryl Barclay09/21/04
FitzGerald Associates
University of Chicago
GSB
Identifying, Quantifying, Transforming
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Traditional Measures of Performance
Financial
• Credits/Debits
• ROI
• ROA
• Discounted Cash Flow
• Stock Price
Parametrics
• Market Share• Quality (Returns)• Staff Turnover• Pilferage• Client Turnover• Growth Rate• Product Sales (New Vs Old)• Customer Capture Rate• Customer Turnover
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The Stages & Measures of Corporate Decline
See Next Slide
Stages and Measure of Corporate Decline
Stable
Aristocratic
Bureaucratic
Dissonant
Under-Performing
"Early" Decline
"Intermediate" Decline
Late Stage
Bankruptcy
Expressions of PerformancePerformance Drivers
Generators & Blockers
Parametric Measures
Financial Measures
HiddenPhase
Subtle
I
Overt
Phase
Phase
II
III
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Drivers of Performance
• The organizational and human factors that underlie and impel corporate expectations, behaviors and actions
• There are more than 100 ~10 Positive (Performance Generators)~90 Negative (Performance Blockers)
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Performance Blockers
Examples
– Internal Rivalries– Bureaucracy– Dictatorship– Lack of Trust
etc., etc., etc.,
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Performance Generators
• Corporate Decisiveness
• Acknowledgement of Work
• Vision Communicated
• Corporate Assertiveness
• Profit Orientation
• Personal Accountability
• Cooperation
• Tolerance for Risk
• Innovation
• Customer Orientation
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The Impact of Changing Just
• Corporate Decisiveness
• Acknowledgement of Work
• Vision Communicated
Begins to show in the financials within the month as systemic performance improvement.
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How to Change the Drivers
Take the corporate energy that is tied up in the negatives and move it into the positives.
Classic Intervention Process
Catharsis --> Cathexis --> Action
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Changed Performance Drivers
Noticed immediately during sessions
• Greater decisiveness
• Open discussion of work
• Feeling of confidence
• Improved Morale
• etc.
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Client 1
Core Performance Blockers
Fear of ConflictLack of TrustDissonance Within Management
Core Performance GeneratorsIncreased DecisivenessOpen Discussion of WorkActive Cooperation With Major Client
First Year ResultsIncreased Revenues by 25% - Profits by 31% - Systemically
Beat Profit Plan by $5,000,000 - ROI of 50:1
1200 Person Manufacturing Co.
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Client 2
Core Performance Blockers
Lack of TrustBureaucracyTolerance for Incompetence
Core Performance GeneratorsIncreased DecisivenessOpen Discussion of WorkIncreased Accountability
First Year ResultsReduced Costs by $6,000,000 - Systemically
Met budget for first time in seven years.
ROI of 35:1
2000 Person Utility
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Client 3
Core Performance Blockers
Dissonance Within ManagementTolerance of Incompetence
Core Performance GeneratorsIncreased DecisivenessOpen Discussion of WorkIncreased Accountability
First Year ResultsReduced Costs by $900,000 on Revenues of $6,000,000 - Systemically
ROI of 30:1
100 Person Trust Co.
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Client 4
Core Performance Blockers
Dissonance Within ManagementDisagreements With Holding CompanyLack of Trust
Core Performance GeneratorsIncreased DecisivenessOpen Discussion of WorkIncreased Tolerance for Risk
First Year ResultsIncreased Revenues by 50% - Staff by 11%ROI 100:1
150 Person Leasing Co.
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Q & A
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How-To Links
• Mirror, Mirror, on the Wall . . . http://managementconsultants.com/content.cfm?Contentalias=mirrormirror&rc=1
• Fire In The Corporate Belly http://managementconsultants.com/content.cfm?Contentalias=fireinthecorpbelly&rc=1
• List of Parametershttp://managementconsultants.com/content.cfm/caos??????????
• List Of Performance Drivershttp://www.managementconsultants.com/??????
• A Survey (Use “LOOK” as Password)http://www.corporate360.com/360/
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Wrap Up
• The Root Causes (Drivers) of Performance Are the Earliest Predictors of Corporate Success or Failure
• The Drivers of Performance Can Be Identified and Measured
• They Can Be Changed• Changing the Drivers Changes the Trajectory of
the Company• Changing the Drivers Costs Very Little
