Improve Stock Options for Executives
Stock options typically vest in three or four years and allow executives to realize the full increase in the share price above the strike price of the options. The problem is that share movements alone are a poor indicator of a manager’s performance, says Richard Dobbs, a consultant with McKinsey. A McKinsey analysis of the stocks of some 400 companies determined that since 1962, more … [ Read more ]

Authors: Andrew Osterland, Robert Thomas | Source: "Down Market Big Upside" | Original Publication: CFO | Subjects: Corporate Governance, Finance, Human Resources | Company: BASF AG

Get Rid of Stupid Stuff

Dr. Melinda Ashton led an effort at Hawaii Pacific Health system entitled the “Get Rid of Stupid Stuff” campaign. Dr. Ashton asked people to submit ideas about “stupid stuff.” She got rid of a bunch of stupid stuff that reduced the burden on nurses and doctors as they dealt with the electronic health record system.

Authors: Melinda Ashton, Robert Sutton | Source: "Author Talks: Got friction? Stanford’s Robert I. Sutton shares what you can do about it" | Original Publication: The McKinsey Quarterly | Subject: Management | Company: Hawaii Pacific Health

Redefining the Middle Manager Role

A bank redefined the [middle manager] role. They knew the role had become unwieldy, and as they looked into it they found that just by having a direct report, every people manager had 105 tasks to do. Some of these tasks made sense for a manager: performance reviews and coaching. But there were other things, like simple approvals of credit cards or expense reports, that … [ Read more ]

Authors: Bill Schaninger, Bryan Hancock, Emily Field | Source: "The future of middle management" | Original Publication: The McKinsey Quarterly | Subjects: Management, Organizational Behavior

The Pay-to-Quit Program

Managers need to create incentives that will encourage employees to reveal their true levels of motivation. One such strategy is to offer employees money to resign voluntarily — the so-called Pay-to-Quit strategy. Zappos, the online shoe and clothing retailer, was the first to employ the strategy, making what has become known as “the offer”: a bonus for new hires to quit following a four-week training … [ Read more ]

Author: Uri Gneezy | Source: "How a 'Pay-to-Quit' Strategy Can Reveal Your Most Motivated Employees" | Original Publication: Harvard Business Review | Subject: Human Resources

Ask New Employees for Critical Observations

Ask new employees to keep a diary of observations from each meeting and each day during their early employment period. Then set up a time for them to make a presentation to you, or perhaps you and your leadership team, about what they’ve learned, what didn’t make sense, what they have seen done differently in previous jobs, and so on. This gives the new person … [ Read more ]

Author: Ron Ashkenas | Source: "Is Bad Onboarding Stifling Your New Senior Leaders?" | Original Publication: Harvard Business Review | Subjects: Human Resources, Management, Organizational Behavior

The Premortem Technique
The premortem technique is a sneaky way to get people to do contrarian, devil’s advocate thinking without encountering resistance. If a project goes poorly, there will be a lessons-learned session that looks at what went wrong and why the project failed—like a medical postmortem. Why don’t we do that up front? Before a project starts, we should say, “We’re looking in a crystal ball, and … [ Read more ]

Profit Mapping
A profit map, the core analytical tool of profitability management, displays the profitability and cost structure of every product in every customer in the company. Profit maps show exactly where profit is flowing and where it is lost.

A profit map is not especially difficult to develop, but it is completely different from the information developed for financial reporting. Many finance managers make the … [ Read more ]

Review Profitability Before Expanding Capacity
When faced with the need to expand manufacturing capacity and the inherent investment required, first perform a thorough profitability analysis (a profit map) of each product produced from the capacity-constrained factories (this includes profitable products being sold unprofitably to selected customers). Since many companies have a significant amount of unprofitable business, it is quite possible that stopping the unprofitable sales can free up enough capacity … [ Read more ]

Deploy a Redeployment Pool
Intel monitors changing skill requirements and institutes a redeployment program when it becomes necessary to downsize a business. Under this program, managers effectively lay off people, and the head count of the business unit is moved off the payroll. These excised people enter a redeployment pool under the auspices of human resources. Once in the pool, employees generally have four to six months, and can … [ Read more ]

Role Charters Are a Key Tool in Organization Design
Organization design can and should provide an effective and practical resolution to many stubborn strategy and business-execution issues. If a redesign is to work, senior executives need to recognize that all three elements of design—structure, individual capabilities, and roles and collaboration—are essential in making a change.

If an organization's structure is its skeleton, then individual capabilities are its muscular system, providing energy and vitality, … [ Read more ]