value proposition for wix
TRANSCRIPT
Leadership in Action Value Proposition
An outsourcing program for leadership development focused on driving organizational performance through engagement and discretionary effort.
The Leadership Development Challenge
Many organizations do not possess the specialized internal resources necessary to provide all three (assessment, blended learning, and coaching) of the required program areas for an effective leadership development program.
But, is there a compelling value proposition for these organizations to, in essence, “outsource” their leadership development program? Let’s see…
There is a Compelling Value Proposition for Leadership Development!
We are recommending an annual program of leadership development program for six to eight senior leaders that includes assessment, development, and coaching that can have a 6 times the cost impact on your bottom line.
Leadership development can be cost-effective, not just costly!
The Value Proposition for Leadership Development
Out of pocket costTime away from work
Greater discretionary effortHigher levels of engagementBetter customer serviceImproved teamworkMore creativity and innovationLess turnover
Our Value Proposition for Building Leadership
The leadership development program we recommend is focused on producing higher levels of engagement and greater discretionary effort across the organization resulting from improved leadership effectiveness.
Engagement and Discretionary Effort
Engaged staff members understand and embrace
organizational objectives as well as the strategies to achieve them,
with clear evidence of trust based on mutual respect and a
collaborative work environment all of which sum to produce high
levels of discretionary effort.
28% are Actively Engaged and “in the game” of achieving performance objectives.
54% are Not Engaged and “sitting on the sidelines” performing only to keep their jobs until retirement or a better job comes along.
18% are Actively Disengaged and disruptive from time to time.
What Proportion of Staff Members are Engaged?
There have been dozens of research studies on this topic. What you see below is an estimation of “typical” levels for U.S. worker engagement.
The “Want to Do” and “Have to Do” Curves
Leading by issuing orders and directives will produce only “compliance behaviors” with little discretionary effort. While this leadership style will produce compliance, it produces quite low levels of discretionary effort – and performance!
The primary objective of the
leadership program we
recommend is to improve the
discretionary effort of your
staff.
Discretionary Effort
Discretionary Effort extends beyond
what is minimally required to keep
your job up to maximum physical
and mental effort in pursuit of
performance objectives.
Actively Engaged workers (28% of staff) use high levels of discretionary effort to achieve personal performance objectives and to collaborate with others to achieve team objectives.
Not Engaged workers (54% of staff) are simply doing what is required to keep their jobs. They occasionally display some discretionary effort but they rarely help others, , take risks and always “stay under the radar.”
Actively Disengaged workers (18% of staff) are either acting “retired on the job” or disrupting the work of other staff members.
Research on the Current State of Discretionary Effort
Impact Achievement Group research states “The average American employee feels that the effort a person has to give in order to keep his or her paycheck is about 60% to 70% of what they feel they could be giving.”
Leadership IQ research indicates that 72% of employees polled admit they aren’t giving their best effort. And, in the same study, 77% of their managers agreed.
Dr. Aubrey Daniels frequently expressed his belief that the difference between workers doing what they must and working as they could with maximum effort, could nearly double their output and value to their employers.
The Impact of Discretionary Effort - Profits
Companies with high and sustainable engagement levels and discretionary effort had an average one year operating margin that was close to three times higher than those with lower engagement (Towers Watson 2012).
Marks and Spencer’s research shows that over a four year period stores with improving engagement had, on average, delivered £62 million more sales to the business every year than stores with declining engagement.
Research from organizations representing more than five million employees worldwide in the Aon Hewitt database showed that in 2010 organizations with discretionary levels of 65% or greater outperformed the total stock market index and posted total shareholder returns that were 22% higher than average; companies with discretionary levels of 45% or less had a total shareholder return that was 28% lower.
The Impact of Discretionary Effort - Productivity
85% of the world’s most admired companies believe that efforts to engage employees and improve discretionary effort have reduced employee performance problems (Hay 2010). A Gallup study (2006) looking at data from over 23,000 business units has demonstrated that those with the highest engagement scores (top 25%) averaged 18% higher productivity than those with the lowest engagement scores (bottom 25%).
A Fortune 100 manufacturing company reported that quality errors were significantly higher in poorly engaged/low discretionary effort teams (DDI 2005). The RSA insurance company found that their units with higher levels of employee engagement had 35% less downtime between calls – in effect the equivalent of one ‘free of charge’ employee being added to every eight engaged employees.
The Impact of Discretionary Effort – Customer Service
78% of the more engaged/higher discretionary effort employees in the public sector felt they could impact public service delivery positively; only 29% of the disengaged felt the same way (Towers Watson 2007). Work by Serco and Aon Hewitt looking at 274 Serco client contracts demonstrated a longitudinal relationship between employee engagement and effort versus the Net Promoter Score (NPS), a measure of customer loyalty. Those contracts serviced by employees whose engagement and effort had improved over the year had NPS scores 24% higher than those employees whose engagement had declined.
The Impact of Engagement – Retention
Replacing employees who leave can cost up to 150% of the departing employee’s salary. Towers Perrin reports that highly engaged organizations have the potential to reduce staff turnover by 87%; the disengaged are four times more likely to leave the organization than the average employee (Towers Perrin 2008). Gallup demonstrated that in those companies with high turnover (over 60%) those with the lowest engagement (bottom 25%) had a 31% higher turnover than those in the top quartile.
According to Hay, companies with high levels of engagement show turnover rates 40% lower than companies with low levels of engagement.
Leadership Effectiveness can Drive Engagement/Discretionary Effort
Focusing and accelerating the development of leaders’ emotional intelligence, social intelligence, thinking process, facilitation, and coaching skills can improve staff engagement and drive their discretionary effort.
Annual Program Deliverables and Cost
Mayer-Salovey-Caruso Emotional Intelligence Test360-degree test of leadership competencies360-degree test of leadership styles/strategies360-degree test of social intelligence
Personal leadership development plan24/7 assess to online learning materialsOne, two-day leadership development workshop
10 to 14 hours of one-on-one coachingTeam development and coaching can also be included
$9,500 to $12,000 per participant
Assessment
Development
Coaching
Cost
Do-It-Yourself?
Few organizations are satisfied with their leadership development efforts. To be fair to the HR staff in most organizations, effective leadership development requires the contributions of professionals with highly specialized backgrounds and certifications – not HR Generalists or Trainers.
As a result, leadership development often involves sending leaders to expensive off-site training programs and/or in-house workshops. These often extend leaders’ knowledge of leadership theories, but do not produce behavior change or drive leadership effectiveness.
Few organizations can justify employing full-time coaches to work with leaders and most external coaches are primarily interested in maximizing their coaching hours and revenues.
Do-It-Yourself leadership development is not cost/effective for most organizations, so outsource this critically important program!
The Value Proposition for Outsourcing Leadership Development Can Be 6 to 1 or Even Greater
A reasonable annual cost for our firm to provide comprehensive leadership development services for six of your leaders is about $65,000.
This should produce significant improvements in engagement and discretionary effort because these are the what our development program is designed to achieve. What if, as a result, we achieved just a 10% improvement in staff productivity, a 10% improvement in customer satisfaction, and 10% improvement in retention? These not unrealistic outcomes from our leadership development program.
Could this improvement result in at least a $400,000 improvement in your bottom line? We believe so and assuming it does, then we have a 6 to 1 value proposition.
