Aligning Organizational Strategies with Leadership Development Programs

Transcription

1 Aligning Organizational Strategies with Leadership Development Programs Christopher A. Poinsatte DFW International Airport EVP and CFO 0

2 Objectives of Presentation The proper execution of strategy leads to superior business results Overview of the DFW Leadership System and Strategic Plan Organizational Alignment Employee Engagement Strategic Objectives and Initiatives Measurement and Programs Leadership Competencies, Training and Communication Implementation Timeframes 1

3 DFW Leadership System and Business Model

4 DFW s Leadership System for Strategic Alignment* Phases of DFW's Leadership System Policy and Controlling Documents Measurement Strategic Planning and Management System Employee Employee and Alignment Workplan and Budget Employee Goal Setting and Engagement 3 * Based on an article written by Christopher A. Poinsatte, and published by Journal of Airport Management, Henry Stewart Publications, Vol. 6, No. 1

5 Phases and Elements of DFW s Leadership System There are multiple Elements within each Phase. Each Element is critical to the overall success of DFW s Leadership System. Phases and Key Elements of DFW's Leadership System Policy and Controlling Documents Strategic Planning and Management System Workplan and Budget Employee Goal Setting & Engagement Measurement Employee and & Alignment Contract and Agreement Airline Use Agreements Bond Ordinances Strategic Plan Financial Plan Airport Master Plan Enterprise Risk Management 3-5 Yr Business Unit Plans Capital Plan Operating and Capital Budget Workplan of Goals and Initiatives Level 1 Goals and Initiatives for Senior Management Level 2 & 3 Goals/Initiatives Cascaded to Managers and Employees Level 1 Scorecards and Reporting Levels 2 & 3 Scorecards and Reporting Pay for Performance Incentive Leadership Competencies Beliefs 4

6 OUR VISION DFW Airport Connecting the World Aligning Organizational Strategies with Leadership Development Programs OUR MISSION DFW International Airport will provide our customers outstanding facilities and services, expanding global access and economic benefits to those we serve. OUR PRIMARY BUSINESS GOAL Grow the core business of domestic and international passenger and cargo airline service.. KEY RESULTS BELIEFS 5 STRATEGIC OBJECTIVES AND INITIATIVES

7 Strategic Planning and Management Systems There are six Elements in this phase. All are interrelated and help ensure that DFW s long range planning efforts are coordinated. Strategic Planning and Management System Strategic Plan Financial Plan Airport Master Plan Enterprise Risk Management 3-5 Yr Business Unit Plans Capital Plan CEO commitment critical Involve multiple levels of management Use a facilitator Development of plan can take 6-12 months Include performance metrics, timelines, and quantifiable goals Should drive Financial Plan, Business Plans, and Capital Plans Write the plan to employees Train all employees (Learning Map ) Reinforce communication regularly 6

8 Strategic Plan Training with a Learning Map Game 7

9 History Map - Effective Way to Communicate Where We Have Been 8

10 Workplan of Goals and Initiatives Management cascades strategic priorities into its Budget and Workplan. Workplan and Budget Operating and Capital Budget Workplan of Goals and Initiatives Definitions: Goal = numeric target Initiative = task or project to be completed Prioritization - Levels 1, 2, and 3 Level 1 Executive Mgmt (CEO and EVPs) Level 2 Senior Management (VPs and AVPs) Level 3 Departmental (Managers, Employees) 9

11 Workplan Thoughts and Helpful Hints Workplan and Budget Operating and Capital Budget Workplan of Goals and Initiatives Discuss Level 1 goals/initiatives for next FY during strategic planning meetings Finalize goals and initiatives early in the fiscal year, not based on the budget. Clearly document expected outcomes Publish and communicate all Level 1 goals/ initiatives. Report on Level 1 progress regularly. 10

12 Employee Goal Setting - Helpful Hints/Lessons Learned Employee Goal Setting & Engagement Level 1 Goals and Initiatives for Senior Management Level 2 & 3 Goals/Initiatives Cascaded to Managers and Employees Link Level 1 goals/initiatives from Workplan to Management s annual performance plans Incentive Program Cascade the Level 1, 2, and 3 goals/initiatives to all levels of organization to line employees 11

13 Measurement Helpful Hints/Lessons Learned FY10 Measurement Level 1 Scorecards and Reporting Levels 2 & 3 Scorecards and Reporting Key Performance Indicators Actuals FY11 Budget FY11 Actuals Core Business L1 Total Passengers (Ms) ** L1 International Passenger Destinations Announced ** L1 International Cargo Service Departures (non-integrators) ** L2 O&D Passengers (Ms) L2 Total Landed Weights (Bs) Develop a Level 1 and 2 KPI scorecard. L2 Cargo Landed Weights (Bs) FY11A vs FY10A Even if the organization does not control the metric Cost Competitive L1 Net Revenues from DFW Cost Center ** n/a $50.3 $72.1 n/a L1 Passenger Airline Cost per Enplanement (CPE) Report regularly, especially (3) ** $6.67 $6.73 $6.30 if tied to incentive L2 CPE Ranking vs. Competitive Set of 13 large hubs (1) 1st place 1st quartile 2nd place L2 Total 102 Fund Expenditure Budget (Ms) $585.5 $572.3 $565.9 compensation program. L2 Total Airline Cost (Ms) $200.9 $202.4 $190.5 L2 Revenue Mgmt. Revenues per Enplanement $7.20 $7.07 $7.80 L2 Parking Use Revenue charts, per Originating or Passenger red, yellow, $8.17 and green $7.98 scorecard $8.48 L2 Concession Revenue per Enplanement $1.79 $1.59 $1.80 Customer Be Satisfaction careful ** which metric you choose to reward L1 DFW's ACI Passenger Survey Score L1 ACI Survey Relative Ranking (competitive set of 13) (1) 1st place 1st quartile 1st place Operational Excellence ** L1 % Level 1 Goals & Initiatives Achieved (1) 95% 90% 90% L1 FAA Part 139 Uncorrectable Deficiencies L1 Regulatory Enforcement Violation Notices L1 Aspirational M/WBE Goals (GS/Prof/Const (2) ) (1) 35/32/30% 25/27/30% 30/41/36% n/a (2) Employee Engagement ** L1 Engagement Index (1) 73% 70% 74% L1 Engagement Survey Participation (1) 86% 82% 85% Results Status Bar Improved/Constant Exceeded by >5% ** Excellence Reward Program Worse by >5% Worse by 0-5% FY11A vs FY11B 12

14 Employee Engagement Strategies and Initiatives

15 Employee Engagement Strategic Objectives and Initiatives Ensure that the workforce is productive, engaged, healthy, inclusive and diverse. Continually update LiveWell health and wellness initiative. Continually update Total Rewards program to align the benefits employee value with the cost of compensation and benefits. Fully integrate inclusion practices to ensure workforce diversity. Continually update DFW s performance management process to ensure that individual employee objectives are aligned with desired organizational goals and strategic objectives. Long Range Target for Employee Engagement 80% 14

16 Employee Engagement Strategic Objectives Enhance a continuous learning environment by providing education, training, and career development opportunities. Develop sustainable leadership capabilities by implementing talent review and succession planning initiatives. Create an organizational culture consistent with DFW beliefs by effectively aligning policies, processes, and systems to reinforce the beliefs. Execute comprehensive internal communication programs to educate employees on significant goals and strategic initiatives. 15

17 Employee Pay for Performance and Incentive Employee and Alignment Incentive Leadership Competencies Beliefs Employee Reviews Pay for performance Raises effective January 1 for all employees Incentive compensation Actual Result Percent of Target Pool Led to significant performance improvements Fourth year = provided different scale for performance on each target Fifth year = increasing bonus levels, adding individual performance as portion Percent of Target Paid-Out Reduce Cost per Enplanement below budget of $ % Achieve CPE of $6.80 -$6.72 (approx $2M in cost savings to airlines) 50% Achieve CPE of $6.71 to $6.47 (approx $2M-$10M All in done cost savings in November to airline) 100% Achieve CPE of $6.46 or lower (approximately >$10M in cost reductions) $ % Grow DFW Cost Center Net Revenues above budget of $54M 30% Achieve Pay $54M for to $55.9M 50% Achive Performance Net Revenues of $56M to $59.9M Introduced over last five years 100% Achieve Net Revenues of $60.0M or over $ % Customer Satisfaction (DFW Score) 15% Achieve score of 4.15 to 4.17 First year = one goal 50% Achieve score of to 4.19 (FY10 actual) 100% Exceed (Exceeds FY10 Actual despite TDP Second construction) year = linked to strategic plan 150% Operational Excellence - CEO Initiatives 15% Complete 75% of CEO goals and initiatives as scheduled 50% Complete 90% or more of CEO goals and initiatives as scheduled 90% 100% DFW Employee Engagement Goals 10% Achieve engagement survey target of 70% 50% Achieve engagement survey target of 73% (equal to FY 2010 actual) 74% 100% 100% 138% 16

18 Employee Leadership Competencies Aligning Organizational Strategies with Leadership Development Programs Employee and Alignment Pay for Performance Incentive Competencies reinforce the beliefs and culture you want to have at your organization Measures HOW employees achieve results rather than WHAT they achieved Competencies are evaluated as part of annual review process. Leadership Competencies Beliefs 17

19 Succession Planning and Focused Training Develop sustainable leadership capabilities by implementing talent review and succession planning initiatives. Senior management reviews Department reviews to manager level Updated annually Identify gaps and training opportunities Enhance a continuous learning environment by providing education, training, and career development opportunities. review process 18

20 DFW s Beliefs Create an organizational culture consistent with DFW beliefs by effectively aligning policies, processes, and systems to reinforce the beliefs. Employee and Alignment Pay for Performance Incentive Leadership Competencies Beliefs 19

21 DFW Believes The Action Oriented/Skinny Version You re Important! Stepping Up! Innovating Wins! Owning It! Reaching Out! 20

22 Results Employee Engagement 80% 75% Employee Engagement Scores 73% 74% 70% 65% 60% 60% 62% 62% 65% 67% 55% 50% FY05 FY06 FY07 FY08 FY09 FY10 FY11 21

23 Implementation Timeframe

24 Implementation of DFW s Leadership System: FY Numerous elements were missing when DFW developed first strategic plan. Policy and Controlling Documents Strategic Planning and Management System Workplan and Budget Employee Goal Setting & Engagement Measurement Employee & Alignment Contract and Agreement Airline Use Agreements Bond Ordinances Strategic Plan Financial Plan Airport Master Plan Enterprise Risk Management 3-5 Yr Business Unit Plans Capital Plan Operating and Capital Budget Workplan of Goals and Initiatives Level 1 Goals and Initiatives for Senior Management Level 2 & 3 Goals Cascaded to Managers and Employees Level 1 Scorecards and Reporting Levels 2 & 3 Scorecards and Reporting Pay for Performance Incentive Leadership Competencies Beliefs Element fully/systematically implemented Elements partially implemented Elements not implemented 23

25 Implementation of DFW s Leadership System: FY Biggest changes were linking annual work plans and measurement and implementaion of incentive compensation. Policy and Controlling Documents Strategic Planning and Management System Workplan and Budget Employee Goal Setting & Engagement Measurement Employee and Alignment Contract and Agreement Airline Use Agreements Bond Ordinances Strategic Plan Financial Plan Airport Master Plan Enterprise Risk Management 3-5 Yr Business Unit Plans Capital Plan Operating and Capital Budget Workplan of Goals and Initiatives Level 1 Goals and Initiatives for Senior Mgmt Level 2 & 3 Goals Cascaded to Managers and Employees Level 1 Scorecards and Reporting Levels 2 & 3 Scorecards and Reporting Pay for Performance Incentive Leadership Competencies Beliefs Element fully/systematically implemented Elements partially implemented Elements not implemented 24

26 Implementation of DFW s Leadership System: FY In next phase, DFW improved its long range financial and capital planning and ERM, plus pushing measurement and accountability down into the organization. Policy and Controlling Documents Strategic Planning and Management System Workplan and Budget Employee Goal Setting & Engagement Measurement Employee and Alignment Contract and Agreement Airline Use Agreements Bond Ordinances Strategic Plan Financial Plan Airport Master Plan Enterprise Risk Management 3-5 Yr Business Unit Plans Capital Plan Operating and Capital Budget Workplan of Goals and Initiatives Level 1 Goals and Initiatives for Senior Management Level 2 & 3 Goals Cascaded to Managers and Employees Level 1 Scorecards and Reporting Levels 2 & 3 Scorecards and Reporting Pay for Performance Incentive Leadership Competencies Beliefs Element fully/systematically implemented Element partially implemented Element not implemented 25

27 Summary It s a Journey! DFW has successfully aligned its strategic planning with employee goals, performance evaluation, training, and compensation This has resulted in Superior business results Satisfied customers Engaged employees The process takes years So get started today and enjoy the implementation! 26

28 Achieving Superior Business Results at DFW Linking Strategy to Execution Christopher A. Poinsatte DFW International Airport EVP and CFO 27