O.D. Institute Newsletter

June 2009

Using a Peer Review Process to Evaluate OD Performance

(By Robert Hessler, Sandra Sperry, Gerald Swanson, Denise Tegel, Deborah Pagel, and Edward Tiesse)

Introduction

In most companies, especially in a very challenging economic environment, functions must be able to demonstrate their value. Organization Development (OD) is no exception.  For our project, we present a peer review process used in a leading aerospace manufacturer’s Organization Effectiveness (OE) group which focused on ROI from project and client-consultant interventions and was a significant part of our overall performance management process. Additionally, our OE strategy, structure and processes are the foundation for our peer review process and in turn, the peer review process is a reflection of the OE organization and our values, specifically giving direct communication and honest feedback.

Setting the Context

Our organization strategy has been evolving over the last three years and focuses on acquiring game changing, high level, strategic OE consulting projects, such as those that result in:

·        Saving or avoiding the corporation and/or business units 100s of millions of dollars

·        Helping  the corporation and/or business units create 100s of millions of dollars

Our client relation management process is vital to our strategy. This process consists of senior OE leadership’s ability to procure appropriate strategic projects, develop the business case that demonstrates the project‘s importance, and gain clients’ agreement on the potential OE value contribution prior to project staffing. This was accomplished by building relationships at the C Suite level, defining the scope of work before the contract is agreed to, and finally, matching the right consultant with the right competencies and skills to each specific project.

The Peer Review Process

The essence of our project review process is a peer committee consisting of ~5 consultants. They evaluate the performance of each consultant and how his/her work aligns to OE’s goals.

The committee’s review and feedback help a consultant understand the meaning and importance of strategic work and re-enforces the integration of individual goals with the organization’s goals. Re-enforcement occurs because peers review the consultant’s work and give feedback.  The results of this are an increased awareness of how individual work aligns with the organization’s goals and personal commitment to these goals. The committee reviews each consultant’s electronic portfolio which is located on the OE knowledge management system. A consultant’s portfolio includes each client-consultant contract per OE project, a summary of each project, project alignment to the OE goals, business results achieved by the client, a consultant self-assessment of their goals, and the OE contribution. OE contribution result totals compare to the overarching OE goal on our strategy scorecard (see separate PowerPoint presentation for details).  Although the consultants get feedback from the committee, their managers are responsible for their final performance evaluation.  When differences occurred between the committee’s evaluation and the managers’, the managers used this as an opportunity for deeper dialogue with the committee about measuring and evaluating the goals and with consultants about their performance.  This has led to a more meaningful understanding of the organization’s goals and strategy.

The benefits include:

·        Identifying OE’s contribution (i.e., OE’s value to the corporation)

·        Helping clients understand and acknowledge OE’s contribution

·        Aligning each consultant to OE’s strategy and goals

·        Reinforcing that our entire organization is aligning to the OE goals

·        Working to achieve business impact and results

2008 Goals and Results include the following:

Strategy: Get high impact / high value projects in service to our customers’ growth, productivity and execution goals

Goal: Influence client ROI for OE Projects to > 10X budget

Results:

Award Fees: OE works with clients who have had part of their award fee withheld due to low ‘management’ scores.  After working with the clients, we have demonstrated measurable improvements to the management score and higher award fees have been given to Boeing Programs.  These additional awards can add up to hundreds of thousands or millions of dollars in a given year.

OE Cost (Salary+Benefits/Time) $40K

Additional Award Fee  $400K

OE “Credit” (X 20%) $80K

ROI 2 / 1

Employee Retention: Employees from the Millennial generation often leave Boeing after only two or three years.  “Generations in the Workplace” sessions help educate managers about working with younger employees and can reduce turnover within workgroups.  Standard HR Metrics estimate the cost of a lost employee at a minimum of nine months salary and benefits.

OE Cost (Salary+Benefits/Time) $100K

Lost Employee Cost $75K

# of Employees not Lost (X 20) $1,500K

ROI 15 / 1

Strategy: Provide the Best Total Solution to Our Clients 

Goal: Meet and/or exceed client expectations on a scale of 1 to 5 (with 5 being high), through the client evaluation process

Results: Major Ways in Which the Project is Responsive to the Statement of Values as Written in the OD Code of Ethics:

As OD consultants, living to the Statement of Values as Written in the OD Code of Ethics is paramount to how we do our work and the stance we take with our clients. The values and ethics are engrained in our identity. They are a living statement and are embedded in our charter. Please review the attached deck.

Our peer review process incorporates these OD Values in the following ways:

·        Quality of Life, Human Potential, Growth & Excellence – Knowing how performance is rated by peers adds to one’s life experience because it celebrates areas of success and motivates one to address needed improvements. 

·        All-Win Attitudes & Cooperation – The Committee, through their “working together” approach, demonstrates to all OE that they care about individuals and the organization.  By candidly sharing their results and the honest, direct (and sometimes difficult) conversations with the entire organization, everyone becomes aware of how much they care and how much they want everyone to be successful.

·        Authenticity & Openness in Relationship – The Committee is a living example of this.  Their feedback is direct, honest and caring. The consultants report that the feedback received from Committee members is authentic and valuable.

·        Effectiveness, Efficiency & Alignment – The Peer Review process enables OE to raise awareness about achievements and consequently raises expectations about higher levels of performance.  It also reinforces OE’s strategy and goals by helping consultants understand how their performance aligns to them and contributes to OE’s overall success.

Copyright © 2009 The Boeing Company.  All rights reserved.

Organization Development Editor, Joel Finlay, odjed@yahoo.com,