Note: In this four part series, Kim Shepherd details how her agency, Decision Toolbox, uses a performance driven workforce model to achieve success. Last week she explained the essentials of the PDW model and how it is used at Decision Toolbox. Parts three and four will post on consecutive Thursdays.
Total Quality Management took the public and private sectors by storm in the late 1980s. Since then interest has shifted toward programs like ISO 9000 and Six Sigma.
All of these programs are valuable. In fact, at Decision Toolbox (DT) we utilize Six Sigma methods in our own quality efforts. Yet ultimately all three originated in manufacturing, and come from a manufacturing worldview. Each is at least 30 years old.
I think there is a better fit for service organizations in 2015: the Performance Driven Workforce (PDW). Last week, I gave the reasons we chose it at DT, and why it works well with our 100% virtual company. This week, I’d like to lay out the gist of PDW, at least as I see it, and why it is a better fit. At DT, PDW is based on five principles:
- Process
- People
- Performance
- Profit
- Purpose.
Design a Killer Process
At DT we’re not experts in recruiting for specific professional fields (although we have recruiters with expertise in IT, accounting, manufacturing and other areas). Rather, we are experts in recruitment process. We’ve been refining it for over 20 years. To define your process, you need to start by asking what are the optimal deliverables in your industry? It’s not necessarily what others do! This is an opportunity to differentiate your company.
Process must come first and it has to be well defined. For example, at DT we believe the optimal deliverable is quality candidates and excellent customer service delivered in a timely manner at a reasonable cost. We had to ask ourselves: what processes can we put in place to ensure we present quality candidates? One process is the “Discovery Call,” a brainstorming/consultation session that we hold with the hiring manager at the start of a project.
By probing for information between the lines of a traditional job description — and listening very carefully — we understand what that ideal candidate looks like from the beginning. The Discovery Call also gives us the opportunity to push back, to help the hiring manager understand the candidate market and challenges, and to set expectations. It sets the stage, moving forward, for our recruiters to act as true partners in this search, and in future ones.
Hire Great People
This is one aspect that makes PDW relevant to the 21st century: the Me, Inc. mentality has spread beyond Gen Y. People in service industries have adopted a strong entrepreneurial spirit, and tying compensation to performance not only makes sense to them, but it also motivates them. You need to make sure your people have a vested interest in the five Ps, and you need to provide clear expectations. By establishing a great process, you’ve provided the tools your people need, but keep in mind that it’s never static: all five Ps can and should change.
I can’t say enough about the importance of hiring strong, self-motivated talent. But just as important is the way you approach them. As Stephen Covey says, “Always treat your employees exactly as you want them to treat your best customers.” Here’s my version: If leadership treats employees as clients, then employees will treat the customer exceptionally well. Give your people the tools they need, recognize their accomplishments, help them develop professionally — and wrap the love around them!
Performance: Just Do it Well
Performance is what your team must do to delight customers, both external and internal. The key is to define performance clearly, determine how to measure it, and decide on rewards and consequences for particular levels of performance. Really important: Make sure everyone understands what’s expected. Now you need to monitor it, celebrate the successes and hold people accountable when they fall short.
This is where PDW differs from TQM and the others. TQM and Six Sigma methods emphasize a proactive approach to integrating the philosophy into the business culture. But by giving every employee a vested interest in delighting the customer, you integrate PDW into your culture organically. But don’t stop being proactive about maintaining a great culture.
You can get creative about the variable compensation, but you need to make sure the rewards and consequences have real value. At DT, for example, recruiters are assigned projects based in part on their performance index: higher index = more work = more revenue. Prizes are for contests, and those are fun, but for PDW to work, you should tie a significant portion of compensation to performance.
Profit Happens
Process, people and performance-driven profit. As I wrote last week, profit is an outcome — a by-product. It’s not just for executives though. The whole idea behind PDW is to give everyone a vested interest. Heck, we even reward channel partners outside the company. Don’t get me wrong, the variable compensation in our PDW program is based purely on performance, and not on profit. But consider this: it may seem counter-intuitive, but in a month when all employees perform well, your actual profit margin might be a little lower than in a month when employee performance is so-so.
But I see that as an investment in future business, with a stronger ROI than you’ll get from any marketing. Nothing generates more business than delighting the customer. I’d rather pay my people to delight than pay an agency to advertise. And it shows your people that your money is where your mouth is.
Purpose and Meaningfulness
Have you ever met a business owner who said her sole reason for running that company was to make money? There are lots of easier ways to make money than owning a business! Have a look at Simon Sinek’s TED video, “Start with the Why.” He makes a compelling argument that highly successful companies and people start with the why, not the what.
https://youtu.be/sioZd3AxmnE?t=6s
People want and need a purpose in addition to money in order to find meaning in their work. For several different perspectives on meaningfulness at work, see our blog series by members of DT’s leadership team. But to give you a couple of examples, Jay Barnett founded DT 20 years ago because he believed there was a better way to do recruitment – and we’re still looking for how we can be even better! A big why for me personally is that running a successful company allows me to make an impact in the philanthropic community.
Be sure to check in next Thursday when I’ll explain how PDW helps ensure that performance drives seamless processes, from qualifying a potential client to ensuring client satisfaction at the close of the engagement . . . and beyond.
Tom Brennan, senior writer, contributed to this article.