2GC Consultancy Services

Corporate Performance Management

Purpose

Achieving demanding strategic goals almost always requires changes in the way an organisation operates, driven ultimately by changes in the behaviour of individuals, from board level to the shop floor.

Description

2GC brings fresh thinking to the review of strategic goals and to existing organisational structures and processes. To be clear: 2GC is not in the business of writing reports. Instead, we work closely and efficiently with management teams to help them refocus the organisation on the achievement of the strategic vision using highly choreographed workshop processes.

2GC works with senior managers to articulate implicit strategies, and to translate these into unambiguous actions plans, with clear accountabilities and targets. In doing this, 2GC builds into client organisation the capabilities needed to review, monitor and deliver strategic goals as these are developed to keep pace with the evolving competitive landscape. 2GC clients typically observe that, following the consulting assignment, their organisation is more focused on what must be achieved and how to deliver this.

Individual Performance Management and Incentives

Purpose

Firms routinely seek to align pay with performance. Such incentive pay is particularly common at senior management levels. When incentive systems are well designed managers are successfully motivated to perform at higher levels, delivering better results for the organisation than would otherwise be the case. But good incentive systems are difficult to build and sustain; testament to this is the pervasive villain of our times - the failed executive with the fat bonus check.

Description

2GC works with senior management teams to efficiently develop practical, results-oriented incentive systems that strongly support organisational strategy, and logically link employee incentive with employee performance. These systems clearly link incentives to business results, and the results go beyond the short-term financial outcomes common in less advanced incentive systems. We can help build systems in which senior managers are evaluated and rewarded on performance against external results related to customers and markets, as well as internal results related to production/service delivery, social responsibility or intellectual capital, for example.

2GC’s performance incentive methodology uses simple frameworks/models, and a logical design process to help clients identify the optimal structure for their organisation’s incentive system. This includes definition of the relative contribution of the two key inputs – individual performance and team/organisational (shared) performance. It also defines the extent to which (and process by which) senior decision-makers are able to apply subjective interpretation to the hard performance data in finalising incentive pay-out numbers.

Our work to design and launch such an incentive system would typically involve the following activities:

• Analysis of current (or historic) incentive system(s), including the performance data underpinning these;
• Based upon current best-practice, education of the firm’s incentive system designers and decision makers on the current situation and potential models for the future;
• Assistance to decision-makers in designing the ‘incentive logic’ for the future incentive system;
• Workshops with senior managers to be covered by the system (or representatives of this population, if large), to help them understand and refine the incentive logic communicated from higher levels of the organisation;
• Definition and documentation of the process that will underpin the new/redesigned incentive system;
• Work with managers and teams to define objectives and set targets that are consistent with the agreed incentive logic and process;
• Assisting ‘one year later’ in the application of the agreed incentive logic to actual in-year performance information in order to calculate specific incentive payments.

Typical project deliverables

• Agreed and documented incentive system ‘logic’ (to include textual descriptions and conceptual models where appropriate);
• Agreed and launched incentive system (to include: a defined process, calendar of events, participant roles and responsibilities, template documents for information capture on incentivised objectives, measures and targets, guidance notes);
• Agreed and documented incentive-linked objectives for each employee covered by the system.

Why 2GC

2GC brings a logical, ‘balanced’ approach to performance incentive thinking, grounded in ten years of performance management work with more than 100 leadership teams around the world. We apply our expertise in the areas of strategy articulation, objective definition, target setting, business modelling, and executive accountability coaching. We also help firms define manager and team objectives that strongly and sustainably support organisational strategy, and that are agreed and ‘bought into’ by the key stakeholders to the incentive system. This makes it much more likely that the incentive system will work as intended (and not otherwise).

Performance Measurement

Purpose

Strategic decisions, more than any other type, are most effectively taken by informed decision-makers. It is imperative therefore that information is provided to decision-makers on the progress against their strategies, a management team charged with realising a strategy will inevitable exhibit superior performance if properly informed of the progress being made in achieving the strategic objectives underpinning this strategy.  Regular and frequent review of metrics ensures that decision-makers are well informed.

Description

2GC works with management teams to facilitate the selection of practical and meaningful measures that effectively inform them of the organisation's progress towards achieving its goals, enabling more appropriate and more timely intervention and support to be delivered, as and when this is required. From amongst all the potential metrics present in an organisation, and using a proven methodology, 2GC helps managers select the optimal set of measures: those that are appropriate (to the objectives being sought), easily obtained (to minimise the bureaucratic burden) and frequently available (to allow timely remedial actions to be taken).

Performance Reporting

Purpose

A set of practical, relevant measures of strategic success is vital but, by itself, insufficient. Because measures must also be used, so as to effectively drive behavioural changes, it is essential that they are made readily available - reported - to decision-makers.

Description

2GC works with organisations to build the systems needed to report strategic performance measures, by helping to design and document the reporting responsibilities and processes required. From simple spreadsheet based tools, to complex specialist software packages, 2GC can provide the insight and experience needed to build pragmatic reporting performance reporting systems, helping to avoid the bureaucratic burden that these systems can become if poorly designed. And because 2GC is not affiliated with any performance reporting software suppliers, clients are assured of our unbiased advice.

Strategic Studies

Purpose

Despite the presence of vision statements, strategic plans and budgets, experience shows that many management teams still lack a clear, shared, communicable description of the desired future state of the organisation and the road map to get there. To address this lack of clarity and consensus, many 2GC projects have an initial objective to generate explicit agreement on the organisation’s actual strategic goals.

Description

2GC helps management teams articulate and reach consensus on a set of strategic goals and to agree on the strategic ’destination‘ for their particular organisation or unit. To achieve these goals 2GC calls on a whole range of proven tools and processes, carefully modified where necessary to suit an individual group of managers.

Use of Evaluation Frameworks

Purpose

The majority of 2GC’s consulting work is in the field of performance management. However, in the not-for-profit sector, 2GC is frequently involved in support of evaluation activity. The language of performance management and evaluation are, on the face of it, similar. Indeed, the detail of measurement tools and techniques that underpin the approaches are almost identical,however, some of the philosophical underpinnings are different. for example, evaluation is often by an outside body.

Description

The following paragraphs explain briefly some of the key approaches to not-for-profit evaluation and in so doing introduce some of the philosophical departures from performance management in the commercial world. None of the approaches here discussed are in conflict with the 3rd Generation Balanced Scorecard approach. In fact, 2GC has found it encouraging that the design principles underlying the “Logical Framework” and “Results-based management” show striking similarities to the core principles of the 3rd Generation Balanced Scorecard.

2GC has delivered projects in all four of the areas discussed below. Most required the use methods for design and implementation of evaluation and performance management systems drawn from several of these frameworks. As a result, 2GC is has demonstrated its ability to carry out both not-for-profit evaluation, to develop hybrid approaches to suit particular needs. The latter is significant: many organisations live with legacy systems while also wanting to upgrade their evaluation and management approach. 2GC's view, born of experience is that it is far better to respect, accommodate and update legacy systems rather than abandon them totally.

Triple Bottom Line

“Triple bottom line (TBL)” (aka: People, Planet, Profit and 3BL) has become the ascendant approach to full cost accounting in the public sector. TBL represents a broadening of the principles and criteria for measuring organisational success. In addition to economic impact TBL aims to measure environmental and social impact of any activity. Underpinning TBL is the idea that a company’s constituents of relevance are “stake-holders” rather than the more limited group; shareholders. The set of “stake-holders” consists of groups or individuals who are influenced, directly or indirectly, by the activity of the company. Any firm professing a commitment to corporate social responsibility (CSR) will likely have to commit to some form of TBL reporting.

Social Return on Investment

Social Return on Investment (SROI) aims to measure, in addition to financial value, the social value created by an organisation. As with TBL, underpinning SROI is the concept of the ”stake-holder“. Stake-holders views are used to identify and attribute financial value to social outcomes that would not ordinarily have market value. In so doing it is assumed that power and influence transfers to these sometimes powerless and disenfranchised constituents. A key aspect of the approach is the development of measures and measurement frameworks to manage outcomes absent from the traditional profit and loss account. In some respects SROI is a more general form of cost-benefit analysis designed to assess, the social and environmental returns, as well as financial outcomes, resulting from investment decisions.

The Logical Framework Approach

The Logical Framework Approach (LFA) is a management tool mainly used in the design, monitoring and evaluation of development projects. It is also known as Goal Oriented Project Planning (GOPP) or Objectives Oriented Project Planning (OOPP). The approach was developed in the late 1960’s for the United States Agency for International Development (USAID). In the LFA a development project is seen as a set of causally linked entities / events: inputs, outputs, purpose and goals. These are developed in the LFA to create a testable hypothesis of the development project and its impact. The component entities in the LFA are also used to derive measures for monitoring and evaluation of the development programme.

Results-based Management

The Results-Based Management (RBM) Approach was designed to encourage managers of development programmes to pay attention to the final impact of their development activities. RBM achieved this aim by linking allocation of resource to achievements as measured by outcomes. In some respects therefore, RBM is an incentive scheme. The “Results” are the longer term and intermediate outcomes that benefit a community. Results also encompass the “enabling” outputs that make those outcomes possible [such as trained engineers or teachers, clean water supplies ... and so on].  “Results” are also the outputs of various elements of the internal service network that is typical in the development context.  An important distinction is that that results are not ”activities“ or ”functions“. This distinction represented a marked philosophical shift in the evaluation of development programmes where previously, programme effectiveness was primarily assessed by measuring input effort alone.

Facilitation

Purpose

Excellent Facilitation makes the difference….

• Do your meetings fail to achieve concrete ends?
• Are attendees left feeling frustrated at the lack of specific actions?
• Do you feel sometimes that you might as well have not met?

If your leadership team meetings have some of these characteristics, then you might need some help. Expert facilitation can make the difference between a reasonable meeting and an excellent meeting.

Description

Facilitation is a core competence of 2GC. – our facilitation expertise and experience is unparalleled. Over the last 10 years we have successfully guided hundreds of challenging meetings and workshops. In these we facilitated senior decision-makers, to obtain consensus around documented deliverables, always including a plan of action for post-meeting delivery.

We facilitate meetings and workshops using customised, structured agendas that logically, efficiently and apolitically help specific questions be answered. We apply a range of meeting methods as most appropriate, including brainstorming, Q&A, individual, syndicate/team and plenary working sessions to produce a set of documented ‘answers’ (e.g. definitions of priorities, plans to deliver).

We have successfully facilitated client meetings on subjects as demanding and diverse as:

• corporate strategy
• growth targeting
• stakeholder alignment
• M&A strategy, and
• incentive system design.

Our clients say:

• “In the last 24 hours we have made more progress than we had managed in the last 6 months of discussions”
• “xxx was an excellent facilitator”
• “I like your style, that was an excellent workshop”
• “xxx and xxx were both first-class facilitators”
• “xxx was a great success as facilitator and showed passion, commitment and looked deep into his heart to serve his client”
• “2GC’s process is a good one. All of the team enjoyed the process . . . and xxx’s facilitation”
• “The 2GC facilitator did an excellent job”

Why we are among the world’s best facilitators

• We plan every minute of the meeting rigourously and share that plan with our client;
• We start our plan with the end in mind – what outcome do participants/the client want from the meeting/workshop?
• We never forget that people need to feel confident and that FUN can be a key part of this;
• We drive meetings toward concrete specific plans or actions (we do NOT leave loose ends).

Benefits of using an outsider

• Using an outside facilitator brings the following benefits:
• People are more likely to raise sensitive issues
• Efficient use of time
• Introduces new ideas and viewpoints
• Strong action-orientation
• Easier to drive participants to an agreement
  

Here are some examples of our work with Clients

We work with a wide range of organisations from the commercial world to government departments and the not-for-profit sector. We have worked with three UN Agencies recently in New York, Croatia and West Africa – some challenging facilitation there! Also our work in Malaysia and the Middle East is always interesting for the cross-cultural issues we manage in different ways to arrive at “concrete” outcomes in a discursive and consensual environment.

Crown Estate – Board Objectives and Senior Management Away Days

2GC has worked with the Management Board of the Crown Estate and with the whole Senior Management team a number of times over the last three years. Firstly we helped the Management Board reach agreement on their priority objectives by taking them through a four-workshop process over a period of three months. We have also recently helped them to update these priorities in a half-day meeting.

We also now facilitate the half-yearly meeting of 25-30 senior managers – this entails meeting with the sponsoring Director and their team to discuss the core content of the Away Day – venue, timings, aims – and agreeing the timetable. At the event 2GC choreograph the event and ensure that agreed items are fully recorded for subsequent dissemination and that timings are followed as closely as possible.

United Nations Agency

Managers within a large United Nations Agency (UNA) engaged 2GC to facilitate a re-set and re-invigoration of its Balanced Scorecard. In order to gain buy-in from its constituents, the UNA managers decided that the Balanced Scorecard design process would be highly inclusive. In practice, this meant that the design workshop participants would include representation from the Regional and Country Offices as well as the HQ leadership team.

2GC designed and delivered a two-day workshop for 48 delegates and 15 observers who would later be involved in a cascade of the Scorecard. The workshop delivered significant benefits in terms of acceptance of a new shared approach to Balanced Scorecard.

Read a case study report on this work in the Case Studies section of this web site.

Industry Association

For an information and communication technology association, 2GC ran four half-day workshops over two days. Each half-day was dedicated to one of four themes (e.g. infrastructure) and was attended by 20-50 parties from industry, government, academia and civil society. 2GC facilitated these groups to develop a strategy map for each theme – defining what nation-wide actions were required and what national outcomes/results were sought, with targets, over the next 24 months.

Retail Company

For a large and successful European restaurant chain, 2GC designed and ran a 1-day meeting to create a new employee performance management system. In attendance were 12 representatives from the regional, area and store management levels, selected because they were good leaders and thinkers. Over 6 hours (interrupted by a delicious meal) we facilitated the managers to build the future employee evaluation system, defining the process to be used and the components required (financial, KPIs, competencies, behaviours – templates and descriptors)

Regional Development and Regeneration

This client – the Essex Development and Regeneration Agency – was keen to get agreement amongst a very diverse group of stakeholders in the economic and social development of Essex. We planned a series of one-day workshops to include organisations as diverse as Learning For Skills, Essex County Council, Thurrock District Council, Solicitors, Regional Development Agency and the Office of the Deputy Prime Minister. We designed activities to drive out a consensus on the following issues:

• A shared vision of future success;
• Priority objectives to be pursued by some of the attendee organisations to better develop the Essex economy.

Middle East Bank

For a mid-size bank we designed 1.5-day workshop to answer some difficult questions and make some hard decisions in the context of a bank with survival at risk. We started with the bank’s board, the principle shareholders, to decide a M&A strategy (invest/exit) across a strong-willed, fractious and encamped board of twelve. After this, twelve of the bank’s top managers joined for more facilitated sessions, informed by several specialists, to discuss and agree both the ’strategic’ and ‘operational’ strategies that would be pursued by the bank going forward.

Our way of working

This is somewhat dependent on you, our client. – your sector, where you are located and what you need from a good facilitator – however, the diagram below summarises our usual way of running a facilitation project.