FitzGerald Associates www.ManagementConsultants.com Tom Horne

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FitzGerald Associateswww.ManagementConsultants.co
mTom Horne Tom FitzGerald

• Coaching To The Bottom Line
• Mobilizing
• In the
• Face of Recession
• Oct. 13, 2008

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FitzGerald Associateswww.ManagementConsultants.co
mSince 1976

• Introductions

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FitzGerald Associateswww.ManagementConsultants.co
m

• Investors, Managers, Coaches, Consultants
• Objectives
• How to increase profits NOW
• How to increase competitiveness NOW - and for the
  long term

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FitzGerald Associateswww.ManagementConsultants.co
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• Our Objectives
• Have Fun
• Answer Lots of Questions

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Study

• Longitudinal studies by
• The London School of Economics (LSE)
• and McKinsey Co.

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Results

• A 20 Improvement
• In 3 Critical Functions
• Generates a 42 Increase
• in Financial Returns
• (High performers as well as low)
• (Reverse also true )

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Results

• Equivalent to
• Increase of 5 in ROCE
• 25 increase in workforce
• Going from 10 plants to 17
• Increasing capital investment by 70

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FitzGerald Associateswww.ManagementConsultants.co
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• The Concepts
• Will to Compete
• The Operating Dynamic
• ManageMENT Vs Managers
• Intrinsic Trajectory
• The company as living entity

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Origins of Performance
Business Processes
Management Systems
Corporate Will
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Corporate Will

• Corporate Culture

Corporate Psychology
Corporate Energy
Business Motivation
Corporate Drive
Will to Combat
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Corporate Will

• Will to Compete
• (AKA The Operating Dynamic)
• Root Cause
• Of All Business Performance
• If strong, company succeeds
• If weak, the company falters

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Corporate Will

• That complex of organizational and human factors
  that underlie, cause and impel all corporate
  performance
• (100)
• (Entirely within the control of management)

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Origins of Performance
Cost of Change
Business Processes
Management Systems
Corporate Will
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FitzGerald Associateswww.ManagementConsultants.co
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• The ROI
• In changing Corporate Will
• Can be extraordinary
• (The McKinsey/LSE Studies)

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FitzGerald Associateswww.ManagementConsultants.co
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• Why Transform Corporate Will
• Ambition (the 40)
• Recession (the 40)
• On-boarding New sr. execs have an 18 month, 50
  retention rate
• 1M per failure
• MA (pre- or post-acquisition)
• 70 failure rate
• Only 30 of reengineering programs work placebo
  effect and luck
• Mobilizing the company
• Other

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FitzGerald Associateswww.ManagementConsultants.co
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• Where the Results Come From
• Systemic Efficiencies
• New Tactics
• New Strategies
• Reengineering

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FitzGerald Associateswww.ManagementConsultants.co
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• Corporate Will
• 6 Critical Functions
• 9 Generators

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FitzGerald Associateswww.ManagementConsultants.co
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• A small change In three
• Critical Functions
• Generates a large change in
• Financial Returns

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FitzGerald Associateswww.ManagementConsultants.co
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These Drivers Are entirely within The control
of Management!
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FitzGerald Associateswww.ManagementConsultants.co
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• Critical Functions
• are changed by changing the
• Generators

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The 6 Critical Functions

• 1 PERFORMANCE MANAGEMENT

2 TALENT MANAGEMENT
3 LEAN OPERATIONS
4 Profitable Growth Orientation
5 Customer Orientation
6 Innovation / Creativity
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The 9 Generators

1. CORPORATE DECISIVENESS
2. ACKNOWLEDGEMENT OF WORK
3. ACCOUNTABILITY
4. CORPORATE ASSERTIVENESS, ENERGY
5. COMMITMENT OF MANAGE-MENT
6. OPENESS OF MANAGE-MENT
7. ADAPTABILITY
8. EFFECTIVENESS
9. COOPERATION

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FitzGerald Associateswww.ManagementConsultants.co
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• The Transformation Process
• Measure the 15 drivers (Functions and Generators)
  of performance and their subsidiary functions a
  profile of the causes of performance
• Determine the desired profile item by item
• Cause the individual managers to commit to
  specific action steps, with dates, to fix or
  improve key drivers and subs
• Cause the individuals to execute the action steps

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FitzGerald Associateswww.ManagementConsultants.co
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• Measurement
• How we do it

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FitzGerald Associateswww.ManagementConsultants.co
mSince 1976

• Coding Convention
• All line items can have a or value
• A, B, C, D are positive descending
• E, F, G are negative

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• Consolidated Statements of Operating Dynamic
• Gamma, Inc.
• Balance Sheet
• 06/2008 Score Level
• of Max (Min) A -
  G
• PERFORMANCE MANAGEMENT
• Vision of Future 21.429 D
• Goal Definition 42.857 C
• Action Plans 7.143 D
• Plans Communicated (14.286) E
• Understanding Personal Contribution 64.286 B
• Decisions Implemented 7.143 D
• Decisions Followed Up 7.143 D
• Planning/Envisioning Capability 85.714 A
• Appropriate KPI's Measured 0.000 D
  Performance Management Balance
  19.841 D
• TALENT MANAGEMENT
• Attracting / Hiring 7.143 D
• Leadership Development 35.714 C
• Retention 71.429 B

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Consolidated Statements of Operating
Dynamic Gamma, Inc. Balance Sheet 06/2008
Score Level PERFORMANC
E MANAGEMENT of Max (Min) A
G Vision of Future 21.429 D Goal
Definition 42.857 C Action Plans
7.143 D Plans Communicated
(14.286) E Understanding Personal
Contribution 64.286 B Decisions
Implemented 7.143 D Decisions Followed
Up 7.143 D Planning/Envisioning
Capability 85.714 A Appropriate KPI's
Measured 0.000 D
Performance Management Balance 19.841
D
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• Consolidated Statements of Operating
  DynamicGamma, Inc.
  Profit (Loss)
• Score
  Level
• 
  of Max (Min) A G
• CORPORATE DECISIVENESS 
• Need for Consensus 21.429 D 
• Move to Decision 0.000 D 
• Move to Action 28.571 C 
• Manager Confidence 71.429 B
• Net Corporate Decisiveness 27.679
  C
• ACKNOWLEDGEMENT OF WORK
•   Communication Re Work 21.429 D 
• Quality of Evaluations 64.286 B 
• Appreciation 50.000 C
• Net Acknowledgement of Work 44.048 C
• ACCOUNTABILITY 
• Peer Accountability 35.714 C 
• Frequency of Reporting 64.286 B 
• Deadline Enforcement 21.429 D

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Consolidated Statements of Operating
Dynamic Gamma, Inc. Gain (Loss) 06/2008
Score Level CORPORATE
DECISIVENESS of Max (Min) A
G Need for Consensus 21.429 D Move to
Decision 0.000 D Move to
Action 28.571 C Manager Confidence 71.429
B Net Corporate Decisiveness
27.679 C
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• Consolidated Statements of Operating Dynamic
• Alpha Detector
• Balance Sheet
• 06/2008
  Score Level
• of Max (Min)
  A - G
• PERFORMANCE MANAGEMENT
• Vision of Future (33.336) F
• Goal Definition (41.669) F
• Action Plans (50.000) F
• Plans Communicated (54.169) G
• Understanding Personal Contribution 33.333 C
• Decisions Implemented (20.838) E
• Decisions Followed Up (62.500) G
• Planning/Envisioning Capability 20.825 D
• Appropriate KPI's Measured (62.500) G
  Performance Management Balance (35.928)
  F
• TALENT MANAGEMENT
• Attracting / Hiring (66.667) G
• Leadership Development (58.338) G
• Retention (41.667) F

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FitzGerald Associateswww.ManagementConsultants.co
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• The Discovery Process
• Feet to the Fire

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• Consolidated Statements of Operating
  DynamicBeta Food Company
  Gain (Loss)
• Score Level
• of Max
  (Min) A G
• CORPORATE DECISIVENESS 
• Need for Consensus 16.670 D  C Move to
  Decision 25.000 D  C
• Move to Action 33.335 C  B
• Manager Confidence 41.670 C B

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FitzGerald Associateswww.ManagementConsultants.co
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• The Discovery
• Process
• Action Plans

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FitzGerald Associateswww.ManagementConsultants.co
m

• PERFORMANCE MANAGEMENT
• The most important of the six Critical Functions.
  It is a complex function, comprised of more
• than twenty elements, ranging from strategic
  vision to action plan development to follow up.
• In this survey we address nine. This Function is
  driven primarily by the Corporate
• Decisiveness component (generator) of the Gain
  and Loss statement (GL). It has a possible
  range of 90.000 /-.
• The Overall score for this Critical Function is
  17.857 This indicates a weak positive pressure
• on the business.
• Level D 19.841
• CEO
• 6/25/08 . - Create with senior managers a
  business blueprint. Issue to all management
  ranks for discussion.
• 7/24/08 - Rank order all immediate reports (and
  theirs) and review with board in special session.
  Make hire and outplace decisions and implement.
• COO Incompetence is tolerated too long.
• 7/24/08 - Rank order all immediate reports.
• CMO
• 7/24/08 - Rank order all immediate reports.
• CFO
• 7/01/08 review report against financials and
  financial model and reconsider forecasts. Review
  with CEO and team.
• 7/24/08 - Rank order all immediate reports

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FitzGerald Associateswww.ManagementConsultants.co
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• Vision of Future As acknowledged and bought into
  by managers and supervisors. It has a possible
  range of 11.000 /-. The score for this element
  is 2.357.
• LEVEL D 21.429
• CEO
• 7/15/08 With team, create a business blueprint
  and action steps and discuss in detail with
  subordinates. Obtain their input and make
  changes as appropriate.

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• Questions?

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FitzGerald Associateswww.ManagementConsultants.co
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• Wrap Up

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Wrap Up I

• The 6 CFs constitute the Balance Sheet
• The 9 Generators constitute the GL
• Negatives are where you find the motivation to
  change

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Wrap Up II

• The Balance Sheet and PL Show
• The Trajectory of the Company
• The root causes of performance
• What needs to be changed
• Where to get the greatest return on effort

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Wrap Up III

• The Rewards
• An improvement of 25 in three Critical Functions
• results in a 40 increase in financial returns.
  
  (LSE/McKinsey)
• (High Performers as well as troubled)
• The cost is virtually ZERO
• The FIRST YEAR ROI extraordinary

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Question

• What would it mean to you
• If your company /client
• Increased profits by only 10?

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• FitzGerald Associates
• www.ManagementConsultants.com
• Since 1976

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