Business Success as Easy as PPM
Until recently, most business experts drew a distinction between efforts to generate loyalty among customers and strategies directed at motivating employees. But that was before the rise of "People Performance Management" (PPM), the notion that satisfied customers and satisfied employees are two sides of the same coin, and that companies can maximize both, along with financial success, by pursuing an integrated approach to the two.
In a recent executive white paper, Motivation Central’s Bruce Bolger argues that people performance management will become the predominant business strategy for the coming decade. He offers the following supporting statistics:
- 82 percent of customers will stop using your product if they lose trust in your company (source: Harris Interactive)
- Disengaged workers cost the economy $300 billion or more a year (source: Gallup)
- Companies with a strong link between enterprise strategy and rewards programs generate a shareholder return almost 40 percent higher than competitors without such strategies (source: Aberdeen Group)
Put more succinctly, as FedEx Chairman Fred Smith has observed, "How can we deliver world-class service without world-class people?"
Effective people performance management, Bolger says, involves redirecting corporate resources to where they do the most good – by motivating every employee, salesperson, and reseller to do as much as possible to attract and keep customers. He offers a seven-step guide to people performance management success.
- Leadership that moves people
Leadership is absolutely essential for getting the most from both customers and employees. So what does leadership consist of? A vision of where the organization is going; an open ear to customers, employees, and associates; ongoing feedback, recognition, and rewards for people who achieve; and performance measures that align customer needs with compensation and employee priorities. Good leaders also set an example, embodying the traits they try to promote among their team members while giving top performers the leeway to stretch their limits."People performance management requires leaders who understand the fundamental role played by people – customers, employees, resellers – and who recognize that, like any great leader in history, their primary job is to motivate and inspire everyone in the organization," Bolger says.
- People relationship management
One of the key tenets of PPM is that employee and customer relationships should exist on the same platform. As James Unruh, former CEO of Unisys says, "The best customer-centered strategy is only as good as the employees’ ability and desire to implement it." PPM operates on the theory that integrated customer relationship management and employee relationship management drives results. Employees dealing with satisfied customers are more likely to enjoy their work more, do a better job, and stay longer with the same company."Combining consumer and employee motivation requires integrated external and internal marketing that rarely exists in organizations," Bolger says. "It involves linking customer needs to the process of motivating all the employees in a position to help meet those needs."
- Alignment and communication
Bolger says that communication begins with fostering vertical alignment, which is a fancy way of saying that big picture strategy gets implemented throughout an organization. Effective communication is ongoing, however, and should involve plenty of face-to-face contact between managers and the front-line employees expected to execute strategy. Employees also need to hear just how their performance affects customer satisfaction and the organization’s bottom-line success."Companies dedicated to people performance management understand the need to market to their internal audience as well as to their customers," Bolger adds.
Bolger says PPM goes beyond the traditional training dicta about equipping employees with the knowledge necessary to provide excellent customer service and linking training to an organization’s key business objectives. "People performance management puts a new twist on training by recognizing the importance of training your organization’s customers as well," he says. "This takes the form of equipping them to be better customers by fostering an understanding of your product and how it can help them. That means introducing communications and marketing material that, in addition to selling, provides customers with useful, objective information."
PPM embraces the shifts that have taken place in the recognition industry in recent years. Rewarding non-sales employees has been seen either as an afterthought or something best left to the discretion of individual managers, but that idea has been replaced by a more holistic, or "total rewards" approach incorporating compensation, workplace environment, benefits, and other related factors.
Recognition itself can consist of traditional sales rewards like cash, merchandise, or travel, but also informal expressions of appreciation such as a pat on the back, a handwritten thank-you note, or a public commendation in front of peers. Ideally, rewards will not only provide the recognition that employees crave and which motivate further positive behaviors, but also provide opportunities for coaching, feedback, and managerial mentoring. The new wrinkle in PPM is the notion that recognizing and motivating employees, customers, and even vendors should all be equally emphasized.
While the rise of people performance management doesn’t do away entirely with the notion of managing by one’s gut instincts, PPM does demand that the results of executive actions – whether driven by gut or otherwise – be measured. One tool, the Kaplan and Norton’s Balanced Scorecard, reveals how the organization’s actions affect stakeholders and customers by measuring any number of metrics, including post-sale service quality, response time, new product introductions, employee satisfaction, and productivity. These indicators tend to apply to management, but PPM also allows for measuring individual and team activities.
"Measurement systems are an integral part of the business strategy, giving management feedback on how well its plans are working," says Daniel Stowell, author of Continuous Marketing & Continuous Improvement, cited by Bolger. "Measurements tell the organization how well it is doing relative to its performance and improvement goals, its competition, and customer requirements."
With the advent of database management and Internet-based tools fostering one-on-one communications, training, measurement, and motivation, implementing PPM practices has become much less complicated than just a few years ago. Even smaller organizations can identify prospects, customers, and employees on a micro level to offer targeted promotions or other information to build trust, confidence, and loyalty. Additionally, company intranets give employees and resellers access to just-in-time information while offering management a platform to reinforce organizational values and goals.
As Bolger notes, to make the people performance management model a reality requires commitment, and that commitment can only originate in one place. "People performance management is practiced all the time at organizations large and small," he says, "and many well-known organizations make it a fundamental way of doing business: Southwest Airlines, Marriott Hotels, Chick-Fil-A, and Fifth Third Bancorp, for example. At such companies, people performance starts at the top, because it takes high-level authority to mobilize the entire organization toward achieving new goals."
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