The Vault: Winning Culture

I decided to reach into the vault for this one.  I wrote this a few years ago and it still holds true.

Let’s face it; working in a shared services organization can be very difficult, especially for front line employees.  Everyone has heard statements such as:

  • “You screwed up our payroll again.”
  • “We didn’t make half of the mistakes you make.”
  • “It was much cheaper when we did it ourselves.”
  • “Why do we need shared services?”
  • “Our vendors are not getting paid timely.”

Criticism is simply a part of doing business and as leaders we should expect it and learn from it.  However, front line employees are often discouraged, angered, frustrated and de-motivated by the comments they frequently hear and front line employees determine the perception of our shared services center.  That’s why it is absolutely imperative to spend a great deal of time and energy creating a winning culture and surrounding ourselves with outstanding talent.  It takes a special person to spend years and years working in an organization that sits in the middle between sometimes frustrated vendors, customers and employees and the business units whose success depends on those vendors, customers and employees.  Surrounding ourselves with great people means not only finding great talent, but retaining that talent.  The best way to retain talent and ensure that we are surrounded by great people is to create a winning culture.

Granted, managing the people aspect of “People/Process/Technology” is generally more difficult than the other elements, but the results will permeate every inch of our organizations.  One of the reasons managing people is so difficult is that we often ask people whose expertise is Process, Technology, Finance or Accounting to miraculously know how to motivate, communicate with, evaluate, mentor and coach people.   Success as an individual does not necessarily lead to success as a manager.  We see this frequently in the sports world where Hall of Fame players rarely become Hall of Fame coaches.  This does not however mean that we cannot make very successful managers out of successful individuals.

First and foremost, in order to create a winning culture, we must define winning.  In the case of shared services, winning is often times cost savings or perhaps increased customer satisfaction or maybe an ability to absorb strategic acquisitions while remaining volume insensitive.  Winning means different things to different organizations and that’s why it is so important to explicitly define it.  This is best done with a mission statement.  The shared services mission statement should be linked to the overall company mission statement and should be developed by the employees.   While it is difficult to include everyone, unless we are just starting a center, we can include representatives from all of the teams. Participating in the process of defining the mission will certainly create buy-in.

Once the mission has been defined, we need to be able to determine if we are winning or losing, which means keeping score.  Everything that is processed in our centers should be measured.  Examples of the types of measures include:  volumes processed, overtime hours, transaction errors, timeliness and quality of inputs from the business units, processing errors, percentage of automated transactions, customer satisfaction, call answer rates…the list goes on and on.

Once we have created the metrics that will allow us to know the score, they must be explained, communicated, updated and displayed for everyone to see.  The metrics displayed should only show team results and not the individual productivity of employees.  While metrics are great for determining the success of a team they can be very misleading when it comes to individual productivity.  As we all know, certain transactions or processes can vary greatly depending on the difficulty or uniqueness of the item.  Displaying individual results could discourage someone from taking the time to perform the difficult or time consuming task.

Now that we have a scorecard that determines if we are winning or losing and now that everyone understands the scorecard, we should create an incentive plan that all employees are eligible to participate in that rewards winning.  The salespeople of our organizations are rewarded for creating revenue and the collectors are rewarded for collecting receivables and the executives are rewarded for creating profit.  In the same way, shared services employees should be rewarded for creating value, reducing expenses, increasing customer and vendor satisfaction or being able to absorb the transactions of the newly acquired business.  Not only is the financial incentive itself a motivator, the mere existence of the plan sends the message to the shared services employees that their work is a vital part of the overall business strategy.  In other words, they make a difference.

In order for an incentive plan to properly motivate employees, it must be understood by everyone.  Complex and confusing bonuses do not motivate employees because they will not understand the effect the results will have on the eventual payout.  A good rule of thumb is to have 4 or 5 Key Performance Indicators that determine the bonus payout for each team.  For example, the Accounts Payable team might receive a bonus based on, average processing time turn around, percentage of electronic transactions, percentage reduction in overtime, percentage reduction in processing errors and customer satisfaction rating.  These components would determine the percentage of the overall potential bonus received (see inset for example calculation).  Each team would have similar components.  Supervisor’s and manager’s incentive can be based on the combined incentives of the teams they are responsible for managing.

The last component of creating a winning culture is to frequently communicate with everyone in our organizations.  Despite our best efforts, every organization suffers turnover and the new employees need to understand the mission, scorecards and incentives just as well as long-term employees.  It is a good idea for the shared services leader to go over scorecards and incentives in Town Hall type meetings or smaller meetings with the individual teams if Town Halls are not feasible.   Seek feedback from the teams regarding the effectiveness of the plan, possibly changing components or any other idea that might increase buy-in, productivity and creativity.  Another good method to motivate employees and help them understand the mission is to have a leader from one of the business units discuss how the mission of shared services ties into their overall business strategy.  Also, publicly celebrate winning.  When a team does something extraordinary or dazzles a customer, celebrate with that team, communicate it to other teams as a positive example and perhaps most important, have fun.

To summarize, working in a shared services environment can be very difficult especially for front-line employees.  Also the perception of a shared services center is often determined by stakeholder’s interactions with those employees so it is important to be surrounded by good people and to create a winning culture that entices those good employees to stay.  Managing people can be very difficult but implementing a few basic ideas can make the manager’s job much easier.  In short, establish a mission that defines winning, keep score, celebrate, payout wins and never stop communicating.  Our employees will be more motivated, creative and happier.  And happy employees are good employees.

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