Specific Performance Expectations
One of the most important components of the needs analysis and certainly one of the most difficult; is establishing specific performance expectations for the incoming executive. This exercise is tricky because most of us are not accustomed to thinking through this process to this degree. What is helpful here is to "fast forward the tape" three months, six months, one year and two years past the date of the placement. How will you know that the new executive has been successful? How will the numbers look different? Will the organization look different? Will the capital structure be different? Performance metrics should be specific, measurable and have a time table. They may or may not be tied directly to financial statements. This component is incredibly valuable on many levels. It gives the search a much sharper focus and moves far beyond the traditional job description that only focuses on background, experience and credentials. Make sure that when performance expectations are established, they are mindful of the company's financial condition, resource allocation model, competitive environment, labor relations situation and any other variable that could be a factor in impeding success in the position.
The needs analysis should clearly address the client's corporate or high level strategic issues. We are careful not to assume that the latest annual report, or the plaque hanging in the office, paints an accurate picture. The consultant must be clear about what drives the client's business, what differentiates it from its competitors, where it wants to take the business, as well as what strengths, weaknesses, opportunities and threats exist.
EXAMPLE (CEO)
- Conceptualize new go-to-market strategy for board review by first quarter 2010
- Reverse sales trends by 5 percentage points years 1 through 3 with +5% of baseline as objective for FY 2012
- Improve EBITDA by 500 basis points years 1 through 3
- Conceptualize market diversification strategy for board approval by second quarter 2010
- Design a new prototype format for rollout by the end of the fourth quarter
- Grow same store sales by 5% (running rate) by the end of the fourth quarter
- Reduce store level turnover by 2% per quarter by the end of the second quarter
EXAMPLE 2 (SVP)
- Develop an objective scoring system to quantify store standards by the end of first quarter with the objective of raising the overall company standard by 20 points by year's end
- Develop and implement an inventory loss program by the end of the first quarter with the objective of reducing non-perishable shrink from its current level of 1.8% to 1.0% by year's end
- Develop and implement a plan by the end of the first quarter to raise trade discounts and allowances from the current 3.5% of sales to 4.25% of sales by the fourth quarter
- Reduce cash and check loss from $1,785 PSPM to $1,000 PSPM (running rate) by the fourth quarter
- Engineer a total shopping experience blueprint, choreographing each stage of the customer's experience - have ready to present to board of directors by the end of the third quarter
- Design a new prototype store capable of housing our current 45,000 SKU's with the objective of reducing building and operating costs by 10% without sacrificing ambiance by the end of the fourth quarter
- Assemble and manage a task force to survey and tour top retailers world-wide in an exercise of determining the best mix of store merchandising fixtures for the new prototype store
- Grow same store sales by 5% (running rate) by the end of the fourth quarter
- Develop and implement a program to reduce store level turnover by 2% per quarter by the end of the second quarter
- Design and implement a customer satisfaction/complaint tracking system with the objective of reducing customer complaints by 25% by the end of the fourth quarter