Bruno Aziza & Joey Fitts - Enabling a Culture of Intelligence Execution

Jim

Welcome back to People Performance Radio. You are here with Jim Matheson …

Steve

… and Steve Hunt.

Jim

Steve, I don't hear any crazy background noise today, so hopefully we got the audio problems cleared up from last week?

Steve

It is the never-ending adventure of figuring out the podcast technology, but Zak's doing an awesome job.

Jim

Yes, I was laughing listening to last week's episode, because I believe we were talking about how much better we were doing at the intros, and there was just a whole bunch of background noise and it sounded pretty bad, but luckily the main interview was good and hopefully today's show will come out fairly good.

Steve

I hope so, I know that certainly the topic was good, we spoke with Bruno Aziza and Joey Fitts, who are the authors of "Drive Business Performance: Enabling a Culture of Intelligent Execution", and that's from the Microsoft Executive Leadership Series. I understand, Jim, that Bruno and Joey are the most recent additions to the SF Thought Leader network—is that true?

Jim

That is true, they were actually just added to the research section of the website, and there's more information on them there. There should be links out of the show notes: successfactors.com/podcast.

Steve

Cool, well so what we talked with Bruno and Joey about is this book they wrote that was really a study of how organizations can align people more clearly around the objectives of the organization. It's kind of like pay for performance, but going beyond that, and they had a lot of great examples from different companies, the way they have done things to really get employees oriented around specific goals, so I think it's a great introduction to what sounds like a very good book around how to align people around the things that matter in your organization. So let's hear it from Bruno and Joey, shall we?

Jim

Let's do it.

Steve

Hi, this is Steve Hunt with People Performance Radio. Tooday we are talking to Bruno Aziza and Joey Fitts, who are the authors of the book "Drive Business Performance: Enabling a Culture of Intelligent Execution", which is from the Microsoft Executive Leadership Series. and we're going to be learning about what led them to write this book, what the book is about and other cool things and reasons why everyone should read this book. So with that being said, Bruno and Joey—can you introduce yourself, tell us a little bit about your background?

Joey

Yeah, hey, this is Joey Fitts, it's great to be here today. I have been in the industry for about 15 years working with all different types of organizations, from public sector to private sector, sart ups to Microsoft, and consulting many of the Fortune 500 along the way. Also I have worked a little bit with academia, having had the chance to guest lecture at Harvard Business School, and more recently with Bruno, presenting at the Stafford Executive briefin

Bruno

And hi, this is Bruno Aziza here, very happy to be here as well. Similar background, I've been in the performance management space most of my career. I'm originally French, so if you wondering about the accent, that's where it comes from. It also means that I've got education and a business background from various countries in Europe, I worked n Germany and in the UK and France obviously also. I have been working for the last ten years or so here in the US in different companies of different sizes, start ups in the Silicon Valley to medium size companies like Business Objects, to large enterprizes like Apple and Microsoft, and I've been in the corporate performance management my entire career, I'd say, particularly focusing on the cultural aspect, people performance and people management, and I think what you will find this book is vastly based on our collective experience working internationally with a lot of organizations in this field.

Steve

What sort of led you suddenly to realize, "Hey—we are on to something here, we need to write a book about this", I mean was writing a book, I've written a book, it's not really an easy thing to do.

Bruno

Yeah, you're definitely right, it's not a simple endeavor, and for us, Joey and I have been in the performance management space for a while now, and throughout our joint responsibilities working with hundreds of companies on the subject and interacting with analysts and experts, and a large number of business executives around this issue, we looked at what was available for helping those business executives with performance management, and we realized there are really two types of approaches. The first approach that's available to those business executives is what I'd call the tool type of approach, which focuses on what systems you need to implement when it comes to solving performance management. These books and resources are great, but often for a business executive they are very, how would I call that, very jargonish and typically they give up on them and sometimes they implement a system that they don't really get any value out of.

Then the second approach is also books that focus on the theoretical, almost two academic benefits, of good performance management and good people management, and we saw that there was a gap between these two books. Essentially what those executives are looking for is really something that was simple, tested, a pragmatic guidance around performance management, and we think that's what we have in the book, it's not just what works in performance management, but also, "Give me a model rational approach that I can follow"—in the book we have a test that allow executives to know where their organization is in the culture performance model, and we guide them along the way on how to get there.

So a little bit different from what's available out there and if you look at the pain in the market today when it comes to performance management and strategy execution, you can see that I think this is a valid survey, 85% of organizations do not achieve their goals and 70% of companies do not link a strategy with incentives with people incentives. So we what see is that, even though there is a great help on how to formulate your strategy, there is very little on how to actually execute on it and implement it from the very pragmatic fashion organization, so we tell the stories and we help the reader get on their way.

Steve

I have a question, one of the things that we talked about a lot at SuccessFactors is we say, the sort of technology-based methods for solving human resource challenges and there's consulting based methods, and I sort of joke that a great consultant salesperson, no matter how small the problem, can turn it into weeks and weeks of on site work, and a great technology salesperson, no matter how big the problem can reduce it down to "Use this technology and it will solve all ills". In reality, the truth is somewhere between those two, and it sounds like your book is trying talk about striking that balance, that it's not all process but it's not all theoretical conceptional consulting, it's a merging of those two—is that an accurate view of what you have written about?

Joey

Absolutely yeah, just as you described, and as you're well aware within this area it requires strong interplaying collaboration across the business and the IT function, and that's why you need not just the software but also the consultation on determining what are the measures that matter, what's the philosophical approach the organization is going to take, then how do you really operationalize that and make it something that is practical and actionable. As you said can't be fully addressed by software alone and can't be fully addressed by consulting alone, it requires both to really make it operational.

Bruno

And to add to that, one of the companies that we talk to, Skanska, just address exactly what you talked about when you said, typically any company, they'll rush to go out and get a dashboard or give me a set of KPIs, whatever, and they forget the reason why you want that in the first place, so don't rush to the tools solution, think about what problem you are trying to solve in the first place.

Steve

Is that what you mean by "intelligent execution", so you talk about the culture of intelligent execution that's in your title—what defines a "culture of intelligent execution?"

Joey

Well I think the best way to answer this might be with a couple of examples and it makes me think about kind of relating overall. We have got all these different acronyms and all these different phrases and categories for these different approaches, so we talk about business intelligence and performance management and human capital management and talent management, and there's all these different terms, but I think they're more related when you think about how an organization is trying to improve their performance, and if I may just provide a couple of examples, one of which is SuccessFactors, is actually both, now I think about it, are very familiar with SuccessFactors.

We wrote about a company, Expedia, who went through a very typical process in building on their capabilities, they followed the balance scorecard approach that Drs Kaplan and Norton had created, and they focused on the customer perspective first, so they realized they are a very customer-centric organization, they wanted to focus from that perspective first and they faced the typical challenges of trying to determine what are those measures that matter, they had to deal with the typical data quality issues of being able to trust the numbers that they had in terms of consolidate all that, so they had the technical and the kind of philosophical approach they had to deal with, but eventually they were able to set their metrics and fulfil this promise they wanted to make to all their employees, that employees would have visibility to know how they are performing and understand how their every day activities impact the organization, and they had accomplished this from a tools perspective and following the balance scorecard management methodology.

But what they realized was, that may be the business intelligence and performance management piece of it, but they had some employees who said, "You know, I do have some visibility as to how my everyday actions align to what we are strategically trying to accomplish, but this isn't tied to my human resources performance management review", and what I mean by that is, the performance management systems, the systems for aligning and executing strategy, they weren't connected to the systems for incenting, rewarding and developing talent. So, and this is very common, where organizations put together systems for communicating, aligning and executing strategy, that's not directly tied to how we pay people and motivate their behaviors.

So that's why Expedia said the one thing they would do different in the future, if they had this all to do over again, they would involve HR sooner in the process. They ended up with remarkable capabilities, world class for business intelligence and strategy execution with performance management, but they realized this tie in to human capital management and talent management was absolutely critical, to really be able to provide employees with visibility and alignment between, "Hey, how you're telling me to align my objectives", and then actually, "How that impacts my career, and how I'm going to be developing within this organization" Shall I continue with another example?

Steve

Yeah, just before you continue with another example, I have a quick question. So really what it's about is saying, making sure that how you're managing people aligns with what you're asking them to do from a business perspective, which is that classic article, the folly of wanting (a) and rewarding (b)?

Joey

Absolutely yeah, it's a common problem.

Steve

Okay, I have a really quick question because it sounds like you guys have thought a lot about this stuff. One of the things when I look at pay for performance, which I am a big advocate for, but often I think what's not factored in there is that employees work for a lot of things that aren't necessarily just money. So somebody might say, my job, I know in my own career personally I have taken jobs where I have actually taken a pay cut because I wanted to move my career in a certain direction to do a certain kind of work, as opposed to just making the most money for one company per se. So how does that factor in, I mean in that example with Expedia, did they have some way of saying, it's not just about what you are paid for, it's also what the employee wants?

Joey

Absolutely yeah, and you bring up a fantastically important point which is that there's many currencies of value, it's not just it is not just dollars or euros or yen, there's many different currencies of value and that value is perceived by the person who is receiving that reward, or that incentive, and you have to tie the incentives to what makes people get up to go to work in the morning. It may be recognition for work well done, it may be accessibility to things that inspire them, it may be different drivers for each of us on why we get up out of bed to go to the job that we go to each day.

Realizing how to incent for the behaviors that are aligned to what I am interested in as an employee is important, and I think a key point that you are making there is we've got to listen, and you've really got to know your organization, not only what you're trying to accomplish and command the control, dictate that down, but realize how to get the most out of your most important asset—your people. How do you really incent, that's aligned to things that I am going to respond to. How do you tie into my motivation as each employee, and you are right, Expedia did do that, they realized across different roles in the organization different incentives that they put together for a lot of people who worked at Expedia enjoyed travel. So when they put together, in fact for their budgeting forecasting processes, they created some rewards that, if you were within 5% of your budget, you could get two tickets to travel anywhere, and they had different programmes such as this that aligned to the motivations that people had in the organization, so "Hey, I really do enjoy travelling ,so I can that the linkage between what I want to accomplish and what they are incenting me on."

Another one is Hilton Hotels, who also we talk about extensively in the book, and they also use SuccessFactors and they had massive challenges of growing 600% in a single year, they had to figure out how to maintain a competitive advantage, and they compete on service, so they had still try to be hospitable on their terms, and they were able to align their objectives, so first figure out what are the metrics for our strategy, what are we trying to accomplish across all 80,000 people, but then they had to put it in motion with these different incentives and rewards and layer this on top to optimize the performance and achieve those results they are looking for across all roles. They had a million dollar "team pride" award, where they would pay out a million dollars to any property that could achieve green or 100% on all their metric, there were about 10 metrics or so. When they first implemented it, no property was green on all their metrics, and they aligned their incentives directly to these metrics for the bell hop, for the person who cleans the rooms, the people in the lobby, the people who do registration, all the way up to the property manager, so very much to your point, they had to figure out how we really incent results and they called it this "Go for the Green", they really communicated it quite a bit, and they were able to achieve fantastic results. They beat the competition, maintained, they were able to continue to win on services, they grew at 600% in a year, and it's an excellent story. There's a lot more detail in the book, but I don't want to go on for ever here.

Steve

Well, in the book you clearly give a lot of examples of how to really align the incentives and the rewards of the business with what you need people to accomplish from a business perspective in a way that inspires them. I'm curious, it's kind of an expanded view of pay for performance, if I'm understanding this correctly? I guess my question is, pay for performance, it doesn't always work, there are certain things you have to do to make sure it works correctly. Do you talk about basic principles or things that you go through, if you're going to implement this strategy, these are the things you have to have in place for it to work or steps that you do in a certain order?

Bruno

Yes, there is a couple of other examples, I think Whole Foods is a great example, Energizer is a great example, and so we look at the disconnect between strategy formulation and the execution of the strategy. Communication is important, but when you think about what are the behaviors that you need to see happening in your workforce, when you hire people, when you motivate them and you want to retain them, there's quite a few things that we talk in the book. I think the main principle is to understand that people drive performance, that's a core message for us, and the understanding on who these people are, their roles and what incents them, is almost more important than formulating a great strategy.

I think I ‘m paraphrasing Peter Drucker when he said, "The most valuable asset of the 21st century organization is its people and their productivity." When you think about that it, really allows you to think about the role of information and the role of those employees using information. The bottom line, is if you're a company today and you think about your competitive benefits and your competitive win factor here, it's not just your services, your products or your strategy, but it's the execution of that strategy and execution of that strategy goes through the people and the relationship these people have with information, and you've got to understand that, throughout the multiple generations of employees that you have, where newer generations have an expectation of information that might be higher than older ones. So when you think about the concept of culture performance, what in effect we mean here is, how does a company marry both of these assets?—the people and the information in a way that it allows it to perform at its best.

Steve

Just a quick question, I think it makes tons of sense, and I guess one of the things I know that a lot of people have talked about say, "We know people are really critical, we know we need to align our people issues." As people are about to do this, are there ways they need really to be concerned about, "Look, you have to make sure you do this right", or do you talk about sort of necessary requirements to really implement a high a culture of intelligent execution. Is there a right way to do it or is it really just, "Hey, figure out what you want people to do and give them rewards for it"?

Bruno

There are three capabilities that we talk about that I think will address what you're talking about here: when you think about driving execution, what are the key things you need to talk about, and we talk about monitor, analyze and plan, but specifically I will address the concepts behind that, because I think they are the most important ones.

Bruno

That's right, so monitor, analyze and plan, and I'll detail what they really are. Monitor is the ability to know what is going on, so it's important in the ability to empower people to make the right decisions, it also puts them in a situation where they are actors of their performance rather than just passive people that are watching the company grow. Now it might sound like a trivial thing to solve, just allowing people to know what's going on in the company, and you might have heard this as one version of the truth, and ‘garbage in and garbage out', and when we think about access to information, having the right data is important, it's necessary, but its not sufficient.

Companies today struggle with what we call this Tower of Babel, I don't know if you're familiar with the biblical image, but the Tower of Babel is when an organization is struggling by speaking different languages of performance. It is extremely frustrating for an organization, let's take for example the idea of expenses. Let's you and I discuss expenses for a second, and you're in finance, I'm in HR. Your definition might include, as a finance person, maybe its cost of sales, and me on my end, as an HR person, I think about the cost of training for that person, so the employee expense metric is going to be quite different for each of us. Getting agreement on what's being measured, how performance is being measured and specifically agreeing on that at the top of the organization, the tying that to the individual performance is extremely important.

We call that in the book the language of performance. The language of performance is not just a number like, "You sold 15 items this year and that's great"—what does that mean? What were the key things that we measured on that, and you've got to make that as clear as possible across your organization, so there is no ambiguity when rewards happen. So that's the first common mistake that we see, where you might end up with 400 definitions of customers, as one of a close friend Davenport talks about is this disease of having multiple definitions of the things that are measured. So removing that confusion is one of the most important things.

Now, I talked about monitor, analyze and plan—if you take as an example analyze, which is the ability to know why things are happening. What we see in companies that win, is they remove this issue that we called the analytical paradox, and to make it very easy to understand, what does the analytical paradox mean? It's the situation where those who make the fewest decisions have the most information, and those who make the most decisions have the least information. So think about, in your organization today, in fact IBC just came up with a report talking about the relationship of managers and access to information versus the employees, they say that 50% of executives have readily access to information, whereas 20% of knowledge workers or all other employees have access to this information. It is extremely frustrating when you are one of the many employees inside the organization, and you don't have access to the right information. What happens when this is the case?—do you stop acting? No, you don't stop acting, you continue acting and you conduct and make decisions that might actually not be the right ones for your career and for the bottom line of the company. So companies like Energizer or Klalite for instance, as an example, really think hard about the roles that each of their employees—how to motivate these employees, and we talked about obviously paying them based on the behaviors we want them to have, but also empowering them fully with the information that they can act on based on their roles.

So when you think about those two concepts that I just talked about, the language of performance—be clear on what's being measured across the organization. The analytical paradox empower people with information that's relevant to their roles, but it incents the right steps of behavior is important. And finally, the third point I'd make is that the third capability, which is called planning, and often we talk about planning as this ability to know how you are going to shape the future of the organization, and often we think about that as a finance function that's hidden and is conducted in the dark by the financial organization and everybody gets the number from that and you go away. One of the companies that we talked to joked about that, the analogy they use I thought was interesting, as if you were trying to paint a room and only one of the walls was perfectly flat and ready to be painted. So again organizations that think about planning activities, forecasting for their results and including other departments across the organization, don't just do that in isolation and finance. Make sure that you understand the connections between the financial results, the marketing, sales, operational results, and how you incent people right, so that they can interact across your organization. I think one of the biggest costs in any organization today is 70% of the costs in an organization is employees. So think about how the employees across those silent parts of the organization actually impact the bottom line of the organization.

Steve

So it's really, take the structure that people use to things like supply chain and manufacturing, and that really rigor of analysis, and apply it to the people, is what I'm really hearing. This take some time and some investment, to define these things—is that what you're saying?

Bruno

Absolutely, I mean the two examples that I can think of that really exemplify great examples is Energizer, Energizer talks about this culture of difference makers, and when think about training their employees, the new employees, they think about, "How do we empower each role specifically to perform at its best?", and they really, really think about each role differently. Kalite , a great example is the way they think about the relationship with doctors, you think a doctor is a very smart person, and you can throw a lot of numbers at them and you think because they've got such big brains that they should be able to have access to all this information, well in fact what Klalite does is it focuses on the action that these doctors need to take, so in fact the folks that we interviewed told us, "I want my doctors to be doctors, not to just be guru analysts." So it takes a while, and culturally it requires a little bit of new thinking, but I think it's necessary. Even today the companies that win out there is because they have innovative ways of bringing people and information together, and we see that even smaller companies sometimes can take on large companies because they can manage people and information much better.

Steve

So I think when we started talking about pay for performance, and as you have gone through you have talked about it and sort of said, "Well if you are going to do pay for performance it requires you to get really clear about defining what you actually want people to do", and maybe it's that definition of defining what exactly what you want people to do that makes you such a powerful business driver for a company. I am curious on your thoughts on this—do you think that really is one of the real benefits of pay for performance is, if you are going to implement it, it's going to force your company to implement it well? It's going to force your company to do all of this other stuff that's really critical for defining good talent strategy?

Joey

Yeah, it goes back to the original point that you had about, it's not just the systems and its not just the philosophy or the management methodology that will be followed, it requires the interplay of both, and I do think that one of the great benefits of going through this process is having to understand what you're trying to accomplish and what your objectives are. In order to get to that result of being able to incent people in their roles to be as effective as they can be in their roles, you're going to have know what you are trying to accomplish with those, and it is interesting, there's a couple of examples back to Hilton. They had not only done a good job of understanding what they wanted each role to do but they actually created metrics such as something they call "Perfection", where in understanding each role, not only what it means to be effective in that role, but having competitive contexts in them, it's, "Here's what you need to do to do your job well, but here's how we could really perfect, and here's Perfection for this role, and they have called the metrics that and that's where they had competitive context, that outside understanding of knowing not only what it means to be good at my job, but it's better than the other option, which is what the competition's doing, which is a really important point, I think, having that competitive context.

We saw that again with Skanska, who Bruno mentioned, earlier $17 billion top five construction firm globally, and they had set their metrics and understood what they wanted to accomplish with their people in the different roles across the organization down to the people working on the job sites, the foreman and the supervisors and the people doing the work. They set outperform objectives where again they had context not only to know, here's the objectives that we want for each of these jobs and here's the alignment of them, and here's what it means for me as someone who is working on the construction site to do well, but also they had baked in the competitive context. So they were able to see not only, here's our profit margin goal, but also understand, they'd forecast what they thought the competition was going to perform at, and then they would bake into each of the roles for the metrics—here's what it means to do well, and then they called their stretch metrics, if you will, outperform objectives and if you achieve your outperform objectives you not only better meet customer needs, also exceed what your manager was looking for from you, but also beat the competition and deliver more value to shareholders and you can only do that to your point, you can only do that if you first understand what those measures are, what does it mean to do well? What's the objective for this role, and you're right, I think a huge benefit for companies is to first to go through this learning of really understanding what are we trying to accomplish and what does it really mean to effective in each of these roles.

Steve

Well Bruno and Joey, as often happens we don't have enough time to continue. This has been a great conversation and I'm clearly taking away that this book provides, one, some methodology details on how to put in place some good talent management practices that really align the people of the businesses that have accomplished, and I think the other thing that's very clear from your examples, lots of really great stories about how organizations have done this in a sustainable manner and the clear benefits that come from really defining exactly what it is you want people to do, which companies I think often struggle with. Any last final thoughts or comments before we sign off?

Bruno

Well there might be one thing that I think we might we want to leave people with. As we talk about the balance of empowerment and accountability and as you are talking about paying performance, one of the things that we noticed companies that succeed do very well is this idea of branding the truth. When you want to develop this culture of performance, as you noticed, it's fairly complex to motivate people to do the right thing just based on the different types of currencies you have for performance. One of the important things is to tie what you're trying to get them to do, or trying to get them to trust to act on with a picture, and we see that Siemens and Expedia and other companies out there brand their information with a simple picture, so that when you go back to, "What it is that I'm supposed to do again?"—you can go back and look for that picture on top of that report or that memo, and understand that's what I'm supposed to follow, so as you think about motivating people and helping with driving culture performance in your company, think about creating a message that sticks and things that are easy to remember and associate performance with.

Steve

Cool, so really if they're branded. Joey, any last thoughts?

Joey

Yeah, I think just supporting what Bruno just mentioned, developing that brand for the truth so you can certify it, the language of performance, understanding that as you think about, actually Bruno's got a funny example for himself as a native French speaker when he was learning English, he tells a story of, there are 8,000 words, is that right Bruno, in the English language, you were told?

Steve

So again those were monitor, analyze and plan. I just want to so monitor, analyze and plan. OK, go ahead.

Bruno

Yeah, there's about 8,000 words I think that have been identified in order to speak the English language properly, but unfortunately the words by themselves, they don't do much for you, you've got to understand the context. So if you take the expression, "Break a leg", as you are learning the language, break a leg, that could many different things, but within the context of giving me that sentence, if you mean just good luck and perform well, that's different than actually breaking somebody's leg.

Joey

I think that goes back to this language of performance where the words, the 8,000 words is like the data, you have to have consistent data, but it's not just one version of the truth, it's not just data that's important, it's also consistent information, which is like the grammar, or the colloquialisms like this, and the combination of those is what's required to get this language of performance. I think that's one point, I'll leave with one another of sponsorship versus mandate.

We often seek sponsorship from, which means someone above me in the hierarchy saying, "Yes, I think that's a great, idea good luck with it", and you are getting sponsorship for some type of performance improvement program that you may be implementing, but actually what we found over and over again, it really was interesting to see, it was almost from every organization we spoke with, from Energizer, Expedia, Skanska, Whole Foods, Fortis—you name them, it was mandate that was required, it's often a leadership change where someone, to have this change within a culture happen within a company culture and changing culture, does require mandate. It doesn't have to be just the CEO, although that's great, it can also be leaders of different business groups who really say, "This is definitively what we're going to do and this is who we are going to be."

So with that, we also just want to thank you for your time. Thanks for having us today.

Steve

Oh well thank you, this has been a great conversation, and I do love that I totally agree that, what I am hearing is, basically you guys, so there's a book, there's great examples on that you need to tell people what to do you, really need to be clear about it, and you have to be very clear about exactly what it is you're telling them to do, which I think our field is just full of jargon that means nothing, so it sounds like you guys have written some great examples of how to get past those.

So thank you very much, and again everyone, I encourage you to go out and read the book, which I want to make sure I get the title right, the book is called "Drive Business Performance: Enabling a Culture of Intelligent Execution" and it's by Bruno Aziza and Joey Fitts. So thank you very much, talk to you later.

Joey

Thank you

Zoe

Hi, this is Zoe. Coming soon in the UK a new series of podcast interviews focused on talent in uncertainty. Tune in to find out more on how Cable and Wireless, Premier Farnell, LloydsTSB and the Lancaster Hotel Group are using SuccessFactors to address their business challenges.

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