Strategies, tools, and methods for understanding customers’ wants and needs should be utilized.

Handing customer requirements over the wall from marketing to a development team guarantees a shallow understanding rather than a deep imaginative understanding of what customers want and need. Strategies, methods, and tools for getting everyone involved in meaningful face-to-face interactions with customers should be taught and utilized.

Any organization that develops goods or services for customer use should utilize quality function deployment (QFD) to understand the voice of the customer and translate it into the voice of the company.

CSMS data provide a rich listening post for gathering customer information.

CARS provides another rich listening post.

Get out and about. Go to peoples’ offices and workplaces. Initiate casual conversations. Ask questions. Listen intently. Be a friend, not a boss.

Participate as if you were a peer. Get involved. Solicit help with your issues. Involve others in making decisions that impact them.

Foster a passion for excellence in executing a process. Don’t obliterate the process by demanding results now. Good execution of good processes consistently yields good results. Shortcuts dramatically increase the risk of bad surprises. Foster quality of events in the process, not quick results. Process events are leading indicators. Results are lagging indicators of problems found too late.

Projects are the means to get things done. Lists of action items do not cause action. Projects do. Projects call for people to be assigned, resources committed, schedules made, objectives and goals established, and an ongoing assessment process to track progress and fix process problems. Projects have a beginning, a middle, and an end with commitments to do the work. If you want something done, don’t e-mail an action item. Instead, go to a potential team leader’s office and discuss what would be required to do a project to accomplish your objective. Then it will get done.

Responsibility always exceeds authority, and that is okay. It is not okay for people not to understand that they are expected to take responsibility to get things done even if the actions exceed their authority. However, all persons in the organization need to understand what they are responsible for, what their authority to act is, and what they are accountable for. Then they know the rules and when they are breaking them to get things done.

Involve those who know most about the topic at hand and those who will have to carry out your decision. When possible behave as a facilitator. Let the knowledgeable people make the decisions that they must carry out. If you have to make the decision, regard it as a failure in your facilitation skills. When the team makes the decision, the members understand what it means and how to carry it out. And they are committed to their decision.

Schedule time when anyone can drop in and chat unannounced. Schedule different times for scheduled drop-ins.

The key to successful change is practice. To get good at anything requires practice. Changing a corporation is no different—it requires practice.

The comments in reference to “practice makes perfect” in implementing change apply to deployment processes. In the GE 2000 Annual Report, Jack Welch stated that GE could deploy new practices created in headquarters to full implementation throughout the company within one month. Clearly, some new initiatives such as GE’s exceedingly successful deployment of Six Sigma and, more recently, Design for Six Sigma, take years, not months. Nevertheless, GE’s deployment capability contributes strongly to its industry-leading successes attributed to Six Sigma and Design for Six Sigma.

Benchmarking is a key methodology in every aspect of the business. It is the engine of change. Change without benchmarking is a fool’s mission. To do so is more expensive, takes longer, has higher risks, and produces less-effective outcomes than spending the upfront time and resources to find best practices for your continuous change process.

An innovation institute is a powerful change agent. The function of an innovation institute is to constantly search for best practices in the broad arena of innovation, select the best practices that are promising, internalize them into the innovation institute, adapt or tailor them for application within your company, develop training materials, train the trainers, and train and deploy the new best practices throughout the company, including key suppliers of the traditional sort and Talents as suppliers of the new sort. Successful innovation institutes, sometimes called “design institutes” in manufacturing corporations, are staffed with the best and the brightest full-time Talents and non-Talents. The typical duration within an institute is two or three years. Some choose to make service in an institute a lifetime career. Institutes are best structured with a full-time Talent reporting to very high levels, either the CEO or COO. The successful examples are organized like small corporations with boards of directors consisting of a who’s who list of members.

Benchmarking is one of the primary functions of the innovation institute. It is identified separately because of its key role in searching for the best practices on the planet.

Six Sigma and Design for Six Sigma are critical initiatives for every company in the new economy. The focus on innovation tends to detract from taking care of the details to achieve quality and reliability—the greatest weakness of Western manufacturing corporations. Japan continues to deliver products with much high quality and reliability at lower cost than Western manufacturers. And it continues to gain market share in nearly every sector. The trend is forty years old. How much worse does it have to get before we do something about it? Very few enterprises have succeeded in achieving quality and reliability anywhere comparable to those of the best Japanese companies, and they pay the horrendous price of more losses in market share, more lost customers.

The Talent Era tends to emphasize innovation. Innovation needs to be balanced between the pursuit of superior quality and reliability and the pursuit of innovative goods and services. Delivering innovative goods and services more rapidly than the toughest competitors is critical. But it is only part of the game. The other critical part is to deliver high quality and reliability at low cost. The latter is often assigned to the business of Six Sigma. However, breakthrough quality and reliability require intense application of Design for Six Sigma founded on Japanese quality guru Dr. Genichi Taguchi’s formulation of robust design. A knockoff design process using the words robust design does not provide competitive levels of quality and reliability. Six Sigma and Design for Six Sigma combine to raise the bar to new levels of quality and reliability and innovative products and services.

This is your process augmented with Design for Six Sigma.

Provide training in creativity and innovation and targeted training in all elements of the constant innovation system, including the function and utilization of the innovation institute.

The purpose of an idea seeding fund is to foster innovation within operations. Research centers are chartered to create ideas. The operations idea generation fund is a pot of money committed to support unplanned activities to develop new ideas to some level of feasibility. The idea cultivation fund is intended to carry promising ideas to demonstrable feasibility ready to transfer into engineering as a new design concept or new technology.

Champions are always pushing new ideas vertically up the corporate hierarchy where few, if any managers, have any interest or understanding about the topic that is being championed. Championing new initiatives is career threatening. It is corporate America’s version of prospecting for gold in lands protected by the federal government’s Environmental Protection Agency (EPA). Corporations have built-in protection agencies that resist exploration of new arenas. They are immune to the disease of new ideas such as the grunt work of improving quality and reliability. Observers of champions suggest that during the early steps of climbing the corporate ladder, ten adversaries are created for every advocate. The adversaries create high levels of noise that send mixed signals to management. In the face of many adversaries, a single champion supported by a small band of advocates, usually the creative misfits, stands little chance of convincing an uncertain manager that the proposed initiative could make big differences.

If a champion can find a high-level manager with the wisdom and courage to sponsor and help the champion with the treacherous climb up the organizational hierarchy, the champion has a better, albeit still small, chance of success.

Stand-alone management reviews are a clear manifestation of micromanagement dreaded by team members. They are often punitive in nature and demotivate everyone, including the managers who believe that they helped save the project by their insightful questions and probes. Punitive behaviors repel Talents; supportive behaviors attract them.

A better project review process is self-assessment, peer review, and management review. The output of the self-assessment is the input for the peer review. The output of the peer review is the input for the management review. The process takes no additional effort because the information generated by conducting the steps provides the information needed for a reasonable management review.

Be sure you have such a process and use it. Inform everyone about its existence and how to use it. Are lab books up to date? Are patents being filed? Are trade secrets being filed? Does everyone know what is proprietary and what is not? Are the people who create intellectual assets being properly recognized, rewarded, and compensated?

Staff the full-time core team on time. Avoid part-timers. Part-timers cannot develop a passion for the program. Which program are they committed to? The financial rationalization of efficiencies is false. Part-timers lose more time in shutdown and startup time than they gain by juggling multiple projects, no one of which can be a passion. If one becomes a passion, the others suffer neglect. Subject matter experts can serve as internal or external consultants on a part-time basis. Late staffing and part-timers cause more program schedule slips and end-of-process firefighting than any other factors. Staffing is the job of senior management with the authority to pull people off their current projects to staff new projects.

Have expert facilitators guide intense forming, storming, norming, and performing process.

Here the chief joins other members of the tribe as an equal. Camp meetings are intended to foster candid and open dialog among equals without fear of reprisal.

This is part of the Talent Management System, which is defined in chapter 5.

Standard performance appraisals, no matter what they are called, are all too often demotivating critiques by bosses. A performance assessment and enhancement process (PAEP) focuses on reinforcing areas of strong performance and capability, developing improvement actions in areas of weakness, and establishing career directions commensurate with an individual’s strengths. The objective is to help Talents and non-Talents build on their strengths and contain their weaknesses. Like the project review process, the first step is a self-assessment. The second step is a review of the CSMS data to establish the boss’s performance as a supplier to the Talent customer. This step levels the playing field for the game of evaluations. The third step is the boss’s assessment in the context of the Talent’s self-assessment. The fourth step is codeveloping a plan of actions and projects to enhance the Talent’s capability and performance. Over time, some people build their weaknesses into moderate to strong strengths while leveraging their strengths to the benefit of the company and to themselves.

This is intended as a collaborative dialog between the boss and the Talent to establish career options that mutually benefit the company and the Talent or non-Talent. It complements the PAEP process.

There is a saying in Japan that describes how people develop relationships: “First, face to face, then mind to mind, and finally, heart to heart.” The process is said to take about ten years between close friends. The four Cs process is an analogous progression of how people work together. The four Cs process might take ten weeks rather than ten years. Collaboration and commitment to team members and the project are the strongest of all performance enhancers. Collaboration spawns powerful passions: a passion for innovation, a passion for excellence, and a passion for winning.

States of collaboration and commitment between the human resource function and line management function are difficult to achieve. Human resource professionals want line managers to support their programs and guidelines. Line managers want the human resource professionals to support their desires and actions without being overly constrained. The balance of power between the two functions is always stressed. Cross-training in the roles, responsibilities, accountabilities, and authorities of the two functions provides a starting platform for moving from contention to collaboration for the good of the enterprise and the Talents and non-Talents.

Recruiting practices need to change drastically toward treating Talents as customers. During the recruiting Talent process, the enterprise is a supplier, not a customer. The enterprise is trying to sell what it has to offer to a Talent, who may be a reluctant customer faced with many attractive choices. Too often, enterprises focus on evaluating the potential of the Talent rather than on convincing the Talent that their offerings are the best on the planet. Talents are attracted to companies that exude a sincere and passionate need for their services. Do the homework to determine that you want Talents prior to inviting them for interviews. Talents have many choices, and they use them wisely. Treat Talents as high-value customers because they are. I know some companies that actually engage in testing even those they regard as potential Talent and wonder why the best of the best do not accept their offers. Real Talent even refuses to take the “silly” test, and the companies still don’t get it.

As personnel processes change to support the new economy and the Talent, new policies and processes need to be effectively and rapidly deployed within the human resource function and the entire management team through all levels and across all functions. Needed changes are not cosmetic; they are substantive, often requiring changes in behaviors as well as new administering policies, procedures, and guidelines.

Special procedures should be established to track the progression of Talent over time. If unexpected detours occur, it is important to respond by determining causes and solving problems if necessary. Unfortunately, as people progress from one manager to the next or as managers change above them, their reported performance can vary from super to poor and back to super with every change. These erratic swings are especially pronounced and distressing with Talent. Dr. Deming had it right. A subordinate’s evaluation score depends more on the performance of the boss than it does on the performance of the subordinate. The swings are understandable but wrong. When an egocentric Talent reports to another egocentric Talent, the relationship will be made either in heaven or hell. When one is a solid, contributing, modest, smooth, professional non-Talent, and the other is an egocentric, temperamental Talent with zero interpersonal skills, another class of conflicts can arise. The central human resource function needs to track progress of everyone, but especially the more volatile Talents, and recognize major variations in progress as cause for alarm and take action to resolve problems.

Human resource function needs to track various factors, such as the relationship of compensation to performance, the relationships between Talents, shifts between the Talent and non-Talent tracks, compensation spread between tracks, compensation progression over time, and large variations from one PAEP cycle to the next. The human resource function is also responsible for managing permanent personnel files and resolving issues and so on.

Every employee should have an individual career path. Career paths should be developed and periodically revised through meaningful face-to-face meetings between the boss and the employee. If the employee has a complaint, he or she should feel free to raise the issue to the HR function for resolution or arbitration without fear of reprisal.

HR, like all other functions, has the responsibility to benchmark its performance and utilization of best practices. It has the additional responsibility to benchmark, or interchange data with similar companies, to ensure that compensation and benefits are competitive. At the risk of repetition, benchmarking is the engine of change. Without benchmark data, all decisions are made in the dark. Don’t assume. Find out. Make fact-based decisions. The world is changing rapidly. Keep up to date through frequent benchmarking, say, every year.

Talent placement changes should be carefully orchestrated between the Talent and all managers involved. Chemistry, Talent aspirations, and management expectations must be aligned to keep Talent happy and productive. Non-Talent placement may be driven more by need and traditional factors. The style of placements should be the same for internal and external placements. Talent outside the enterprise can be very helpful or harmful. Strive to maintain good relations with Talents, no matter where they might be.

Response to employees with problems should always receive immediate and priority attention from HR and management. Unattended complaints spread through an organization like a dry timber wildfire.

Compensation for the Talent track needs to be very flexible with very few constraints on the range of pay and bonuses. Talents are often attracted to startups because of the joy of work and the opportunity to make millions. If they are making lots of money, perhaps not millions, they may be more content to remain with a large, stable company to achieve a reasonable balance between family and work. “Pay for contributions” may be a better mantra than “pay for performance.” The notions of return on Talent (ROT) and the Talent scorecard provide the means to manage pay for contributions. Means must be established to prevent general escalation of salaries. Conversely, substantially more money needs to be allocated to competitively compensate Talent. Perhaps the XYZ analysis of contributions of Talent versus non-Talent could be used to set a fixed fund for Talent compensation. The pot would be dramatically higher than the non-Talent pot if the XYZ ratios were utilized directly as guidelines. Don’t let traditional concerns of equity and disparity dampen efforts to make large differences between Talent and non-Talent pay scales. If 5 to 10 percent of the people—the Talent—contribute 60 to 70 percent of the value, pay them for their value, perhaps even three times what you pay non-Talent. Two-tier compensation systems have been around for years, and they have served many companies well. Many companies identify high-potential (hi-po) employees and put them on a hi-po track with higher pay scales. The difference in scales is normally rather small, and that is the central issue. Talents contribute orders of magnitude more than non-Talents and get paid 20 percent more. That is not equitable. If Talents contribute ten times as much, they should receive at least two or three times the pay of those who contribute ten times less.

Even though most organizations have the reward and recognition process in place, few practice the process effectively. The timely reward and recognition process inspires Talents.

Determine and allocate upfront funds needed to compensate Talents. Talents don’t understand freezes that impact their anticipated pay for contributions. Don’t get trapped by traditional thinking and practices.

The two idea funds are to support idea seeding and idea cultivation. Leading corporations allow their Talents to spend up to 10 percent of their time creating ideas and developing them to feasibility levels. The idea funds provide the monies for equipment, materials, lab space, technicians, and in some instances a portion of the Talents’ salary while they are prospecting for new ideas. This insightful leadership attracts and keeps Talents.

Financial projections are key to planning. What level of resources will be available to the organization? The smooth flow of monies to support Talent from year to year is necessary to avoid the familiar ups and downs in available resources depending on this quarter’s earning projections.

ABC accounting practices are consistent with the Talent scorecard. The cost of Talent occurs in the present. The return on Talent occurs in the future. It is important to keep resources spent and income derived at a future time associated with the same activity in order to unambiguously predict and calculate return on Talent.

The OMS characterized here is an upgraded version of what is typically regarded as a good management system. The elements of the system were chosen with a focus on attracting and keeping Talent. Although the number of elements may seem formidable, it contains no more elements than typical management systems. It is seldom that they are all written down in one place. As a sanity check, review the list and note any elements that you regard as unnecessary. After carefully reflecting on their purpose, if you still believe that they are unnecessary, delete them. Then add elements that you believe are not covered. Now you have your customized management system.

All that is left is to document the system, gain management approval, develop the training materials, develop a deployment process, and roll it out to the cheers of the workforce.

Alternatively, keep the system that is in place and devise a radically new system for Talent.