This post is part of the 33 Ways to Amplify Your Profit Quickly.
Management and leadership are the key factors that drive efficiency and accelerate profit growth simultaneously. Bad management will drag down profit sooner or later. Hence, you need to focus on improving your management by:
Strengthen Your Management Team.
Reinforce the Performance Management System, including the Incentives.
Upgrade Your Frontline Leadership.
1. Strengthen Your Top Management Team
Whether your business can successfully amplify your profit or not depends on the caliber of the people in the top management team. As a CEO, you need the best people to deliver the best result. For example, if you want a good marketing result, you need to get a good marketing director. Good people aren’t cheap, but they amplify profit greatly.
The objectives:
Define the critical management capabilities needed.
Reviewing current team capabilities.
Ensure that the right team is in place.
Steps to execute:
First, you define the leadership priorities, based on the requirements of the Profit Amplification Program (PAP), i.e., what management capabilities are needed to deliver PAP successfully.
Define critical PAP roles and management capabilities needed.
Define what to be assessed.
Review the current management recruitment process.
Then, you decide on how to assess the leaders.
Determine the scope of leaders to be assessed. Typically top 20-50 leaders, however, don’t forget to consider the promising junior people too.
Determine the assessment tools (can be in-house tools or outsourced externally). Usually, the tools involve 360-degree assessment:
Self-assessment.
Peer assessment (same level assessment).
Direct report assessment (downward assessment).
Supervisor assessment (upward assessment).
HR data and assessment (historical and future potential assessment).
Decide on how to communicate the assessment. You don't want to create panic in your top leadership rank.
After that, you can start assessing the leaders.
Launch self-assessment.
Interview the leaders.
Prepare feedback.
Conduct workshops to discuss results.
Once assessed, compare the assessment result with the management capabilities needed. Based on that, you can:
Assign candidates to key positions (matching the needs with the capabilities).
Define urgent leadership upskills activities (addressing the capability gaps).
Determine the need for external recruitment (if the required capabilities are not available internally).
Find solutions for the redundant leaders that aren't needed in the company.
Finally, you can prepare detailed action plans and execute them.
2. Reinforce the Performance Management System
Performance Management System (PMS) is a system that motivates and encourages your people to deliver. A robust PMS ensures results get delivered. Therefore, PMS is one of the most powerful things you can implement to drive profit growth.
The objectives:
Adapt the PMS toward PAP.
Incentivize desired behavior.
Retain the key people.
Reduce costs.
Steps to execute:
First, you analyze the existing performance management system.
Review targets for the company as well as employees.
Assess PMS process and incentives.
Identify low/high performing employees, and their benefits/costs.
Conduct interviews.
Then, you can identify opportunities, prioritize them, and agree on actions.
Offer incentives for savings identification (for employees) and realization (for managers).
Review potential savings due to the reduction of incentives and other costly efforts of low-performers or low-potentials (i.e., reduce their benefits, trainings, and travel as legally possible. Hopefully, they will resign by themselves).
Adjust targets to meet immediate business requirements. Make sure the incentives to be strongly linked with business performance and with savings realization.
Reduce the complexity of the PMS process and the effort needed from the HR side to free up HR personnel, time, and resources. For example, you can reduce the number of calibration rounds, and consolidate HR forums.
Finally, plan the initiatives and implement them.
3. Upgrade Your Frontline Leadership
Your middle management is the group of people who lead the employees at the frontline. They play a very important role in ensuring successful PAP. For the PAP to have a lasting impact, you need to convert and upgrade the frontline leaders.
The objectives:
Develop frontline capabilities
Develop frontline leadership
Drive better results
Steps to execute:
First, you start by reviewing the current frontline teams and leadership.
Conduct HR and management interviews to map possible issues.
Analyze the organizational structure and performance of the frontline management.
Then, you can assess the opportunities.
Identify low-performers with internal and external benchmarking on performance.
Promote the high performers and the high potential employees.
Reduce costs of the low performers and the low potentials.
Create an upskilling plan.
Review and detail opportunities in workshops with management.
After that, you can prioritize opportunities and set the target.
List priority actions based on potential and feasibility.
Update targets.
Prepare action plans (don't forget to prepare for the change management plan, too) and implement them.
Tips:
Consult the legal department as initiatives related to people can be sensitive and tricky.
Different regions have different rules and norms, so be very careful. In some countries, the consultation process can take very long.
Make sure the right people with the right capabilities and mindset are in critical roles. Don't give critical roles to the wrong people, just to satisfy them.
People changes should be done quickly to minimize the pain.
To see other ways to improve your profit, check the 33 Ways to Amplify Your Profit Quickly.
Alternatively, to continue exploring winning strategy, click here.
Kommentarer