The company was really doing quite well. They were profitable, with high employee satisfaction, and were even on both the Inc. 500 Fastest Growing Companies list and the list of Great Places to Work. They had good competent leaders as practice directors (we’ll get to that in a second).
But…they thought they could do better. They felt they were missing something.
By the numbers:
Revenue: $20M; Profits: $5.0M; Profit Margin: 25%.
3 Practice Director Performance Rating (Average): 3.11 “meets expectations” (on the typical scale of 1 to 5); Oscar’s weakest area was sales, while both Sara and Dan were weakest at operations.
$7,500 training and development budget.
Question: How to best improve performance (how to best invest their training budget)?
We were asked to come in and provide some advice or at least ideas. We looked at their situation – specifically their 3 practice director (key roles) – a little differently.
Instead of focusing on their average performance and weakest abilities, we focused on their strengths. While their weaknesses tended to overlap, in turned out their strengths did not. They were each good at a different one of the 3 main areas of their roles: sales, operations, and delivery.
Furthermore, when we did an informal time study, we found that each of them were spending the majority of their time (over 60%) working in their area of weakness. (When we time-adjusted their performance ratings, it dropped to 2.45, which then explained why there was a feeling of ‘missing something’.)
The recommendation, (now quite simple/obvious), was to restructure the roles for each of these three people and let them play to their strengths – and not do the other 2/3 of their job – for all 3 practices. So Sara did sales for all 3 groups, while Oscar did operations, and Dan did delivery.
And there was no need (at the time) to spend the $7,500 in training budget. In fact, there was no additional cost at all for to this plan.
How did it turn out? Well, performance (as well as employee satisfaction and retention, along with client satisfaction) went through the roof!
Revenue: Up $7.5M (38%)
Profit Margin: Up 27%
Profit: Up $3.75M (75%!)
And, now the time-adjusted performance rating of the 3 directors was, on a scale of 1 to 5, was the equivalent of 8.22! (These 3 people now performed better than 8 people ‘meeting expectations’.) They not only increased the capability (quality of work) but also their capacity (quantity of work).
Additional Note: This was one of the companies that was studied by the Gallup Organization to help them understand the value of ‘playing to your strengths’ and the whole ’employee engagement’ thing.