We recall our overall goal. "We need to have the Right people, doing the Right things, the Right way, for the Right reasons with everyone in the business fully engaged and aware of their contribution."
So far we have broken down the income statement into the key drivers of value for your business. We have also a good idea on what areas require focus from our Contribution Curves. We now need to take a moment to bring it all together and assign accountability to the main lines of your Income Statement. We have already mentioned that you might have one IS for your entire business, but to have the right accountability you might have the overall IS broken down into Income Statements per Product or per Segment even. We've seen both. We'll work out what your business requires.
The table has been partially completed, and we will use our coaching session to review your best first pass.
|Old Functional Name||Accountability||Incumbent||Successor||KPI||Value Tree Driver|
|CEO or Managing Director||Voice of Shareholder||J.S.vdM||P.S.vdM||WACC||market value of Firm Equity|
|Reporting & Consolidation||Custodian of Value||P.T.S.D||none|
|Value Based management & Balance Sheet Optimisation||Custodian of Value||none||none||PBT|
|Risk Management||Custodian of Value|
|Sales & Distribution||Voice of Customer|
|Marketing||Voice of Customer|
|Product Development||Voice of Customer|
|Innovation||Voice of Reason|
|Operations||Voice of Reason|
|IT & Systems||Voice of Reason|
|Process Management||Voice of Reason|
|Human Resources||Voice of Employee|
|Talent & Success Planning||Voice of Employee|
|Learning & Dev||Voice of Employee|
For each Incumbent and Successor ask yourself the following:
What follows does not necessarily represent my views, but it is a summary of genuine output from such a session. The point here is not if this is right or wrong, but evidence of some original thinking, an urgency to address gaps in critical functions. It also shows some personal bravery and leadership by the managing Director, who delivered it in person to the business and fielded all the questions. He ended off by announcing the salary, bonus and performance rating of his own team.
The Managing Director made the following announcement at various off-site sessions held around the country.
|Business Decision||Under pressure from our Head of HR, I must finally concede to her wisdom. HR is too critical a function to be left to HR and my reluctance in heeding her advice has allowed line managers to neglect the custodial duties to their people, this has been to the detriment of the business and our employees. This neglect does not reflect the values of our business and is untenable.|
|Motivation for Decision||Those line managers unable or unwilling to fulfill these duties, are either a poor fit culturally or not competent to be managers in our business.From now on a more focused HR team will assess compliance of Line Managers to these crucial duties and assess the quality with which these duties are carried out.To stress the importance of the care needed in attending to all matters regarding our people, we have made it a pre-requisite for all promotions to positions "x" and above to have spent 6 months in this new over-sight and assurance role.|
|Recruitment||Line Manager||The Hiring process has been changed to assess:|
Diversity (age, gender, race, education, personality profile)
Personal Values & Behaviours
|Each new hire must attend breakfast with the CEOwho will extend the offer, if he agrees.
Each final interview before TBB The Big Breakfast will be held with a panel of 3 employees who meet the following criteria:
1) They are in a different functional area.
2) Employed for at least 24 months
3) They must have been assessed as a top performer in their last 3 quartely assessments.
|Learning & Dev||Line Manager||We aim to hire the most competent people we can, who also posses self-starter qualities, we will non longer pay for courses that motivated people manage to train themselves on. we encourage on the job training conducted by our in-house knowledge champions.||Training & Dev budget is still available, and the training plan will be signed off by the line manager as part of a career and succession plan, newly implemented.|
|Remuneration & Bonus Allocation||Line Manager||from now on, for every level of the business, we will publish salary, bonus and 3 performance ratings the line manager assessment, the self-assessment and the consistency check||none deemed necessary, but suggestions invited.|
|Payroll run||Operations||this is a monthly operations process and should be entirely automated with no manual inputs||Line Managers are to sign-off their cost centres monthly, we will not allow leave accruals to occur. Leave must be used.|
|Succession Planning||Line Manager and Leadership team||this forms part of the performance assessment, and includesdiscussion on next role, training requirements etc||review by leadership team|
One good place to start in aligning the business and providing
direction is to articulate what any reasonable audience of employees
would ask of their leadership given the opportunity. This is where we go next.