When Linda Galipeau took over Randstad US nearly two years ago, the recruitment company lacked key performance indicators, or KPIs for short.
“Before I came in, there were two big ones but oddly enough, they didn’t correlate with success,” the president says. “I know that’s very strange. One was very ‘amount of activity,’ and one was sort of ‘units sold,’ if you will.”
Both assumed that all activity was good activity and that everything else was done well.
“Since they had narrowed it down so much and said, ‘We’re going to assume that all of those have taken place, and we’re just going to push these two,’ you saw falling away of other KPIs, and since there were too few, you couldn’t measure the fallout of the chosen focus,” she says.
She suspects the thought process was to not give people too much information because then they’ll get lost in the details, so by focusing on just two areas, they’ll gain more traction in those areas.
“But what actually happened was kind of quite the opposite,” she says. “First of all, there wasn’t a lot of buy-in — people are pretty smart, and there wasn’t a lot of solid buy-in and adoption of the value of these KPIs. And there was constant change — if this didn’t work, then we’ll try this, so there was a constant changing of KPIs, and there wasn’t a fundamental buy-in. People weren’t engaged.”
To get things back on course and move the 1,600-person business forward, Galipeau decided that she had to set new KPIs and then get employees engaged in the business.
Set performance indicators
Galipeau had to first find the behaviors and actions that would move the business forward.
“In all businesses, at the end of the day, there’s how the market does,” she says. “You see that after the fact, but even that is very descriptive, but it’s not terribly prescriptive — if you want to be prescriptive about your performance, you have to say, ‘All right, this and this and this gives me that and that and that, and therefore, I’m going to measure how we’re doing on those three areas.’”
She says they should be easy to measure, easy to drive, transparent, visible and timely. One way to identify those is to look at differences in your performers.
“You look at the difference between the highly successful and highly unsuccessful,” she says. “… You can’t just look at the operational input of the very successful and say, ‘They’re successful because of these.’ You have to actually look at what operational inputs differentiate the highly successful from those that are less successful.”
Galipeau divided employees into quartiles based on performance.
“It’s really capturing what were the differentiators between the top group and the bottom group, because that’s where you see the differentiators,” she says.
In doing this, they identified three success indicators and three outputs that separated the top 25 percent from the bottom 25 percent.
“You have to take a fairly long look at the data and make sure you’re really contracting the extreme in performance before you come to that conclusion,” Galipeau says. “If you’re looking at the top group, the middle group, the submiddle group and the bottom group, you’re just not going to come to that conclusion. … You can’t dissect the struggles and hope to find the recipe for success. I think you can only compare and contrast and find the things that differentiate.”
At the same time, you have to be careful not to lump all successes as leading indicators.
“Just make sure you’re in facts, and make sure you’re always comparing and not only describing a group that succeeds,” she says. “Very often we get caught up in, ‘Gee, this person is doing very well, and they’re doing this, therefore, they’re doing well because they’re doing this.’ That leads to anecdotal leadership, which I think is very dangerous and probably is not doing justice, and sometimes you end up with a series of behaviors that happened to work for an individual but aren’t necessarily organizational success factors.”
For example, you can’t just say that a salesperson does a good job because he or she has X appointments in a week. Instead, you have to look at a ratio of how many appointments did it take to close a certain amount of deals. If one successful person had five appointments and another successful person had three, but then an unsuccessful person had one, that tells you something.
“It took a certain number, there was no question about that, so the people who did more didn’t necessarily do well, but you didn’t do well if you didn’t do at least this number,” she says.
Therefore, you may conclude that three is the magic number to set as a performance indicator.
“If the goal is to achieve sustainable results, you have to measure outputs and inputs and making sure that the ‘more is better’ is not the message, and enough is enough, and now we’re going to look at the content of those activities,” she says.
If you drive the more-is-better mentality, you’ll be hurting your organization.
“If you only look at that, the message that you’re driving has nothing to do with effectiveness,” Galipeau says. “You’re encouraging just activity and not results. Many organizations have done that because it’s easy to measure.”
Once you have clear performance indicators, you can also measure employees.
“You have to have metrics,” she says. “I want to take your blood pressure before you have your first heart attack, so I think we have to make sure that we’re engaging in wellness and not fixing the sick. I think you have to pick metrics you can measure in a timely way.”
Galipeau measures employees weekly, and then stack-ranks them against each other and the overall standard on a monthly basis. Once she found these KPIs and started measuring people, she noticed a difference in the organization.
“The top half did much, much better, and the bottom half didn’t move, which is not surprising,” she says. “The people in that third quartile, you did see some movement up into the second quartile. The people at the very bottom either quickly got themselves out of the situation or realized, ‘I’m not a bad person, but this isn’t the role for me.’”
With performance indicators and top employees established, Galipeau then had to attack the other part of her initial problem — engaging employees in the business.
“Once you have clearly stated to everyone where they stand, then you quickly become paranoid about that top group because they then understand that they’re the top group,” she says. “If you don’t do a very good job of driving, understanding and engaging them, you’ve done yourself a great disservice. They then realize, ‘Gee, I am very good, and I am very valuable, and I’m one of the top people. Do I feel that way? Am I rewarded that way? Am I treated that way? Do I want to be that way here?’
>“The second piece that came to us very quickly was, ‘How do we continue to develop them? How could we keep them? How could we make sure they were engaged? Beware advice from fools, but you certainly want the advice from the top group.”
Galipeau’s primary tool for finding out whether employees are engaged or not is through a staff survey. But even that requires some level of buy-in before it can be an effective tool.
“It’s not just good if the very top leadership accepts it or even, heaven forbid, the human resources department accepts it,” she says. “It has to be owned by everybody who needs to receive the feedback and act on it. A very credible, outside firm that specializes in that will be most well-received, and an employee-satisfaction survey produced and executed internally may not have the same impact.”
Doing it externally helps employees feel more comfortable being honest.
“Employees are worried about anonymity, and you want to make sure that’s protected, and the use of an external party will help you achieve that so you’re going to get credible, objective results that are measuring the right things and people will listen to,” she says.
If it’s your first one or you’ve done them in the past but never changed anything afterward, you also have to convince employees that you will take action based on their feedback.
“You have to explain to them why you’re doing it and what you’re hoping to learn,” she says. “You have to ask them to participate. Typically companies with low engagement scores have low participation — they have to see what’s in it for them to do it. If they’re disengaged, they may be so far gone that they don’t perceive there to be any possible benefit to them, and that’s not going to help you too much, so you tell them why you’re doing it, you tell them what you’re looking to learn, you ask for their participation, and you promise to share the results. I think that if you do that and they see the purpose and they know that there’s no risk to them and they see what’s in it for them, people will participate.”
Once you do the survey and get the results back, you have to then communicate with them what they said needs to be changed, which may be a blow to your ego.
“It can be quite reassuring to them to hear that you now see [the problems] and that you’re going to take steps,” Galipeau says. “Very often, leadership development is an outcome of that. That’s why people are a little hesitant to do it because it’s not so much that your dental plan gets criticized — everybody would always like better benefits, I agree with that — but there’s a lot of feedback on the leadership, so leadership development is often a key priority.”
But just doing the survey isn’t enough.
“Once you get that feedback, you have a mistaken impression that you’ve already began to improve,” she says. “Once you recognize you do something wrong, you think that that great epiphany will take care of some of the problems. That, of course, is not the case.”
Instead, have a process to go through the feedback and create a plan.
“One of the first things that we did was we sat down and said, ‘All right, which of these are consequences, and which of these things are things we initiate — which of these are outcomes and inputs, kind of the way we look at our business, and what are the key elements?’” Galipeau says. “You have to look at the key strengths — these we’re particularly good at because those are easy to get better at, and you don’t want to turn away from that, and organizations typically do that. Then there are the things that are the laggers — the things that are pulling you down. Again it’s the top and bottom approach. You have those things in the middle, but if you look at the top and bottom, there aren’t many things that you can’t impact.”
Start by choosing three major priorities and developing new strategies and programs on a 12-month time frame. This allows ample time to actually work on what you need to, but it will also give enough time for employees to become more engaged.
“Even at that time frame, you have to start to understand that once you start shining lights on this, people will expect more of you, and you have to make sure that you’re going with that,” she says. “Once you say you’re going to work on something, there’s certainly the tendency to say, ‘Well, let’s see.’ So engagement leads should only be undertaken by companies that really plan on changing anything. The status quo will only result in increasingly negative outcomes and lower participation. It will have precisely the opposite effect.
“A very tectonic shift in short time frames is unlikely, but a culture of engagement has to be done by biting these things off, having a plan of attack, and then measure, measure, measure. You have to measure because working on things gives you such a placebo effect of, ‘I’m moving these things forward.’”
After doing all of these things, Galipeau is already seeing a difference in Randstad.
“The organization is clearly performing better,” she says. “There’s no question we have very clear metrics on the results, and the results have improved fairly drastically, so I’d say we’ve seen certainly an improvement in performance and the distribution of performance. The success is much more evenly distributed than it has been in the past — that’s very healthy.”
How to reach: Randstad US, (770) 937-7000 or www.us.randstad.com