Chapter 14.

Building a High ACE Organization

“You can’t connect the dots looking forward, only back”

Steve Jobs, Apple Founder

Recently, I visited WD-40 Company, a high ACE organization. I came away exhilarated. There was a buzz about the place; the people were engaging, and everyone I met had a smile for me. Employees could talk readily about the company’s important values and desired behaviors and work as a team despite global distances; they also found time to be creative. Even in a short period, a visitor could feel the palpable difference, compared to other companies, such as the global services organization I visited a few weeks earlier. I left that visit feeling drained and commented to myself in the parking lot, “I sure am glad I don’t work here!” I did not realize I had said this aloud, until another visitor leaving said, “You can say that again.” This organization was a low ACE organization in which the overall direction was incomprehensible; top-level goals were overwhelming and debilitating; functional groups were separate and uncooperative; and employees probably could not wait to hit the parking lot at the official closing time.

I hope by now you have become excited about the possibilities of what a high ACE organization could do for both your organization and you personally. The task is to move from possibilities to reality.

In this closing chapter I pull together the most critical suggestions from throughout the book into a working framework for you to use in your quest to create a high ACE organization. Each chapter contains many Great Practices and Action Tips. Here, I capture the major steps along the journey.

Putting It All Together — Tools for the Change Agent

Context

Percept 1. If people in your organization do not understand the enormity of the change occurring in today’s marketplace, they will not see any reason to change their behavior. Executives will continue using old models until reality dictates otherwise. Managers will rely on skills that elevated them to their current level of success, but that may not carry them to success in their next role. HR professionals will continue legacy practices that will no longer be effective.

Action. Create constructive dissonance. Challenge people with facts and experiences in the new marketplace. Point to industry leaders known for their adept management in this new environment. Add in a healthy dose of current business trends and their impact on human capital. Compare the “as is” to the “should be.” Presenting such data is a way to foster dissatisfaction with the status quo and to prompt a search for new ways of doing business. My prior book, Reinventing Talent Management, and its website, www.reinventingtalentmanage-ment.com, also provide a variety of statistics and discussion tools.

Talent Optimization

Precept 2. Talent must be optimized. To compete effectively in today’s marketplace, you must have talent in the right place, at the right time, with the right skills, and a clear understanding of what should be done. In other words, you need to optimize your talent in order to maximize your talent investment and compete effectively.

Action. Help key stakeholders in your company understand and see how optimized talent connects to organizational and personal outcomes by reducing turnover, satisfying customers, and improving financial performance. Help them understand what talent optimization might look like. Have discussions with groups to discuss where and how talent is being sub-optimized within the organization.

Talent Optimization and People Equity

Precept 3. People Equity is an exceptional indicator of talent optimization. People Equity represents the reservoir of talent that has been developed in an organization that is Aligned, Capable, and Engaged. A large number of research studies have shown that when People Equity is high, organizations have lower turnover, higher levels of quality and productivity, improved customer loyalty, fewer customer complaints, a stronger supply chain, and superior financial performance.

Action. Develop an in-depth understanding of People Equity, and use the research and other information in the ACE chapters to prepare for educating a variety of stakeholders. Conduct an ACE survey to determine your baseline level of People Equity. These data will likely be a powerful eye-opener for many stakeholders. Tap into your professional network to learn more about People Equity and what other high ACE organizations are doing. Consider using an upcoming executive meeting to discuss these concepts, or get a group together to visit a nearby high ACE organization.

Seven Steps to Becoming a High ACE Organization

Start the seven-step journey to becoming a high ACE organization:

1. Educate and build awareness.
   • Precept. Three key catalysts of change — top leaders, managers of people, and HR professionals — must understand how ACE can help them better achieve their objectives. Help these groups understand the implications of ACE in terms of improving your organization’s operational, customer, and financial success.
   • Actions. Put into place a variety of awareness and educational tools to increase the ACE awareness of your organization. Here are some of the most successful tools we at the Metrus Institute have seen used, starting with the most frequent:
     1. Speeches, webinars, or workshops. Exposing executives to leading thinkers in talent optimization helps debunk legacy thinking and provides interactive opportunities to test understanding and gain mindshare.
     2. Books, articles, and papers. These might range from research evidence of the power of ACE to cases and examples. You can find many of these tools at www. the-ace-advantage.com or www.metrus.com. Share a copy of this book with your executive team or other leaders throughout the organization.
     3. Internal ACE discussions. Within the context of planning your business strategy or unit goals, discuss the implications of high and low ACE and the need for a long-term talent strategy.
     4. Case studies and visits. There is nothing like seeing another high ACE organization in action to drive the message home. Create ACE envy!
     5. Measurement and comparative data. Organizational leaders and managers like to compare themselves to others. Benchmark norms can be helpful to get a rough comparison of how your firm stacks up. Join a consortium of organizations, such as Metrus’ ACE Benchmarking Group. If you cannot find one, contact Metrus or go to www.the-ace-advantage. com for more information.
2. Get the top team on board.
   • Precept. Without top leadership support, itis nearly impossible to become a high ACE organization. It is possible, however, to increase ACE in pockets of the organization or in single functions if the leadership of these smaller groups is on board.
   • Actions. For top management to buy in, it must see how improved People Equity can help leaders achieve both the organization’s and their personal objectives. Once they make the link, top leaders need to do the following:
     1. Model behaviors consistent with high ACE. Create a list of behaviors that are both consistent and inconsistent with high ACE performers for leaders to discuss.
     2. Rethink policies and practices that damage Alignment, Capabilities, or Engagement. Seek alternative approaches that accomplish the desired goal while having a more positive impact on People Equity.
     3. Hold managers accountable for optimizing their talent. This means holding them accountable for improving ACE scores in their unit. It also means questioning managers about the impact on ACE of any new actions or investments they propose.
     4. Communicate the importance of People Equity. Position ACE centrally in all planning discussions of business and talent strategies.
3. Build a talent scorecard.
   • Precept. A strategy map with an associated talent scorecard helps guide thinking about the most important talent factors, including ACE, its drivers and enablers, and how they relate to business outcomes.
   • Actions. HR and top management need to agree on the chief elements for optimizing talent within the organization’s unique business strategy. These elements should include the following:
     1. A talent strategy, a clear set of priorities regarding the acquisition, development, and retention of talent. Such a strategy is most effective when it is closely connected to the business strategy. Every business strategy should include a clear people element.
     2. A talent strategy map, provides a powerful visual tool to help all stakeholders see end goals of optimized talent, as well as the drivers and enablers needed to achieve those results. The map should be balanced and have both leading and lagging indicators.
     3. A talent scorecard, including key measures, with targets, for each element in the strategy map. The measures should be reviewed regularly and used to guide talent investments and activities. Building the scorecard with the involvement of major stakeholders helps guarantee its successful implementation.
     4. Regular reviews should be held at least quarterly and used as the basis for making investments and planning initiatives to close gaps.
4. Measure ACE (and the elements of your talent scorecard).
   • Precept. You cannot optimize talent if you do not measure it. Measuring ACE is one of the best ways to see how well talent is being optimized in an organization.
   • Actions. ACE can be measured most cost-effectively through well-designed surveys. While not a perfect measure, such surveys can capture most of the information you will need to make wise talent decisions and well-prioritized talent investments.
     1. If you do not have an ACE survey, design and conduct one. It may be more effective as a stand-alone measurement instrument than trying to force-fit it into an existing employee survey. Of course, you can adapt a current survey to reflect components of ACE, but you need to take into account a number of cautions previously described in this book.
     2. A “best places to work” survey is not an ACE survey. It is designed to be a marketing tool to attract and compete for talent in your labor market. It represents a one-way platform — how good is this company to work for — rather than a tool to assess fit (Alignment), Capabilities, and Engagement. An organization can score high on “best places” for a variety of reasons — best alternative in a location, rich benefits, attractive work hours — but not necessarily have the most productive workforce, the most loyal customers, or even the most engaged people.
     3. The ACE survey should provide specific information abouteach elementof People Equity: Alignment, Capabilities, and Engagement. Remember that Capabilities includes not only having talent with the right competencies, but also how effectively the organization brings information and resources together with that talent at the “moment of truth” with customers.
     4. The results of the survey should be analyzed and displayed in a way that makes interpretation easy and actions obvious. Leaders need to know if they are declining in certain areas or making progress in others; if units are actively disengaged or misaligned; and if an ACE score is typical or not. Are they in the top quartile on ACE or its drivers?
     5. It is usually best to employ some advanced statistical techniques, such as relative weights analysis, to identify the most influential drivers and enablers of A, C, or E. Such analyses can help determine the relative benefits of alternative actions such as whether improving recognition would be more beneficial than improving communications for increasing Alignment.
     6. It is often quite valuable to conduct interviews or focus groups in combination with the survey to understand more about the reasons for low A, C, or E scores in certain job groups or locations.
     7. The payoff of effective measurement is selecting the most effective actions to improve ACE. The appropriate measure of such actions is how much — and how quickly — they increase ACE.
5. Help managers see how ACE can help them achieve their goals and grow personally.
   • Precept. Managers who are responsible for talent and its performance in their organization are key enablers of high People Equity because their daily behaviors contribute to — or detract from — high ACE.
   • Actions.
     1. Discuss with managers the impact of high and low ACE on their unit’s performance. Encourage managers to consider the dysfunctional outcomes of low ACE.
     2. Provide all managers with ACE diagnostics tools, such as surveys, 360-feedback, and discussion guides.
     3. Help managers eliminate their personal ACE blind spots, which are often different for each individual. This process will typically entail coaching and training to help managers become more skilled in helping their organization move into the “green” zone of high scores on A, C, and E. Make sure that managers have access to training in Alignment, Capabilities, or Engagement.
     4. Be an internal catalyst for improving People Equity in your organization by educating, promoting, training, and helping managers make ACE a daily priority in their unit.
6. Adjust management and HR processes to drive high People Equity and superior organizational performance.
   • Precept. Management and people processes and policies, when viewed through ACE and talent lifecycle lenses, often need to be adjusted or redesigned to optimize talent and organizational performance.
   • Action. Management and HR professionals often need to take a number of actions to increase the effectiveness of policies and processes:
     1. Review the entire talent lifecycle and its supporting processes through an ACE lens, and make adjustments to these processes to better optimize talent.
     2. Ensure that your human resource processes are coordinated and connected across the entire talent lifecycle.
     3. Have a complete talent strategy that is connected to the business strategy, and make sure the human resource processes support the strategic intent.
     4. Review the Fast Facts and gaps through an ACE lens for each of the eight talent process areas discussed in Section IV of this book, and prioritize essential processes for redesign or better implementation:
        1. Are you attracting and acquiring talent with high ACE potential? Enhance your employer brand with a strong talent value proposition. Review recruiting and selection tools to ensure consistency with the brand and evaluate to determine if those processes are helping you find people with high potential to be Aligned and Engaged and who possess the right competencies.
        2. Do you have strong processes that help new and existing employees achieve peak ACE and performance levels? Do the onboarding, acculturation, and training processes continue to reinforce the brand and accelerate Alignment, Capabilities, and Engagement? Do the performance management processes effectively drive higher Alignment and Capabilities without sacrificing Engagement?
        3. Do you have strong talent processes for ensuring the future? Are you identifying the right highpotential leaders — ones with an ability to optimize the talent in their areas of responsibility? Do you have effective processes for developing, coaching, and evaluating leaders on their ability to achieve high ACE? Are you retaining high ACE performers? And when you have regrettable losses, do you have processes for potentially recovering this talent?
7. Embed ACE in your organization’s culture.
   • Precept. If ACE is to have a meaningful impact on your organization over the long run, it needs to become part of the ongoing way everyone in the organization understands and manages talent. It cannot be a passing fad or a one-time tool, but rather it needs to be an effort directed toward continuously optimizing talent.
   • Actions. One of the best ways to embed ACE in your organization is to make it part of both the strategy and the ongoing strategic measurement and review processes.
     1. Consider reporting ACE scores to your board of directors. These scores are relatively stable and provide a high-level view of talent for the board. Reporting the scores will also allow the company’s officers to frame discussions of talent rather than have them framed for them.
     2. Make ACE part of the CEO’s or owner’s scorecard. Many organizations now make ACE a centerpiece in the People component of their leaders’ scorecards.
     3. Review ACE at least quarterly, and use it as the basis for investment decisions. Some of the most effective leaders include ACE on the same review schedule as their company’s financials, customer ratings, and other operational measures.
     4. Develop a regular process for evaluating the impact of investments made as a result of People Equity information. Did targeted leaders improve ACE in their unit? Do more employees understand the business strategy and how their job supports it? Do customers register greater satisfaction — or fewer complaints — as a result of improving ACE scores in targeted units or locations?
     5. Have an ACE Day. Review ACE survey information with employees, hold discussion groups on ways to grow ACE, and allow groups to share creative ways they have improved ACE in other departments or locations.
     6. Give ACE awards. Recognition is a powerful motivator. Make sure that high ACE managers are recognized and rewarded for their outstanding performance in optimizing one of the most valuable organizational resources — people.

In addition to the above framework and suggestions, you can also visit this book’s website, www.the-ace-advantage.com, for more resources, tools, and readings to support you in your journey. Additionally, the Metrus Group and the Metrus Institute have a wealth of information and resources to help in your quest.

In this incredibly fast-paced, modern world, the worst thing is to be left behind. Talent must be optimized or lost — there is no room for taking a middle road. Sadly, we visit far too many organizations where people are beginning to lose hope. For some, this is the result of skill obsolescence. Others appear to have become misaligned with where their organization is headed, while still others no longer have fun or are engaged in their work environment.

The good news is that there are an increasing number of high People Equity environments in which people are challenged, learning, growing, innovating, and finding themselves highly engaged in their organization’s mission, vision, and values. Why not join these high People Equity environments? You have read this book and understand People Equity in fair detail. You have seen ACE’s power to optimize talent and to create enduring value for organizations. It is now time to move from understanding to action. Start right away by taking the first of seven steps to becoming a high ACE organization. I wish you a fruitful and successful journey.

Above all, be creative, have fun, prosper, and grow!