What Es Brand Stand For

Risk management and risk premium

In the waning hours of 2009, the risk was still bad news: the Pope jostled by a faithful during the Mass of Christmas, The foiled attack on the flight Amsterdam / Detroit yesterday and the water leak on an American Airlines flight New-York/Paris that led the plane to an emergency landing.

reappear Behold what Nassim Nicholas Taleb, a philosopher of science of chance, a former trader and expert in mathematics, called the Black Swan, these improbable events that mark our lives. The unpredictability is not only the chance and perhaps we should add, in our societies, the mission of "risk-manager" that of "Managing the Unexpected."

Given these recent developments, steps are being taken to control future risk: the papal entourage said goodbye protection procedures, Barack Obama promises enhanced security measures and indignant at the special case failure to take into account the intelligence alert known but untapped could almost say a "leading indicator" unsupervised.

I can not help but make a comparison between the decisions taken following these events and the strike dabistes this month December demanding a reassessment of their risk premium. One side tries to limit the risk and the other accepts it, the more it mints.

Demand for these workers arrested me somewhat, I realized that they require the establishment of procedures to enhance their safety even higher wages to compensate them for increased vigilance in the exercise of their profession. This is not the case since the risk is clearly accepted by those employees.

I could even read, following the revaluation of the risk premium, a committed journalist described the decision as "advancing social ! The risk premium has become a "social progress"! Moreover, one might wonder about the reaction of these same employees if tomorrow, by the establishment of ad hoc procedures, they are guaranteed the "zero risk" in exchange for eliminating the risk premium ... Undoubtedly this would cause conflict with a new claim as a return to an environment of risk!

My intention is nothing but provocative reading a stop July 27, 2009 the State Council for the least surprised me. The Upper House has considered a technician of the environment commissioned under water and forests, assigned to the Directorate of Research and Studies of the National Game and Wildlife, is entitled to payment the risk premium although it is not exposed in his professional practice at any risk!
A risk premium paid to an employee who is no risk!

we trivialize the meaning of risk?

what about the article " negotiate her starting salary in times of crisis " published in the Journal Du Net in September 2009 and issuing the following advice: "Your profile is sought? Know request a risk premium to quit your current job. " In this council, it was perhaps better to express a notion of hiring bonus or why not "golden hello"!

I recently had the opportunity to discuss the topic of risk management with the manager of a large group of industrial equipment. He told me that his organization in the very notion of risk premium was unthinkable because it was not about to risk it was an employee in exchange for a premium. He illustrated his point by telling me that once a warden located abroad had requested permission to pay a risk premium for moving a part in a sensitive country said. His first impulse was then to say that if the proposed assignment posed a risk, it had to cancel it.

*****

I take this end of the year to send my best wishes for success and performance for 2010 but also to thank all those and all those who follow me on this blog that DAF recorded since it went online on 1 October 2009, 4620 visits. Thank you again and hope to see many more in 2010.

What Is The Sharpest Chefs Knife

two cases illustrative of the approach of good operating practices

Following numerous requests, Patrick and Philip Jaulent Mularski propose to illustrate the approach developed in the article good practice performance management by two examples.

One taken in the field of Health Safety at Work, the other taken in the field of Quality.

example in the field of Health Safety

The "Health and Safety at Work" is the obligation of the employer to protect the physical and mental health of its ; employees at work. It is therefore to address the relationship between the state of health of a person and his work.

To set the scene for the demo: a simple definition that encompasses three aspects of health:

- Monitoring the health, well-being, employability,

- Evaluation and prevention of occupational risks, improved working conditions,

- Emergency Organization.

Without being exhaustive, it is important not to ignore the influences of situations and events arising outside the workplace. There are, without doubt, a relationship between job stress factors encountered in the workplace and outside the workplace.

The process of implementation of the approach is consistent with that developed in the article good practice performance management including:

- Identify risks and opportunities prevention,

- Identification of actions to develop improved prevention,

- Defining expected results these actions,

- Monitoring the results of actions,

- Getting no place measures to improve the Health and Safety performance.

Indicators Level 1: Compliance

This level focuses on compliance with legislative and regulatory framework by requiring, for example, minimum compliance with hygiene and security.

Leading indicators of this level could be:

- # Of meetings with the HSC,

- # of shares of health and prevention of risks (collective protection, IPR, ...) developed to meet regulatory requirements,

- # of shares corrective to avoid accidents,

- # of health documents (R) distributed

-% of employees whose jobs require regular medical assessment and specific

-% of employees working for example on platforms at sea, valued for their ability to work through periodic medical examinations,

- # discount brought to the single mandatory risk prevention,

- # controls / protection installed (computer screen equipment, noise detector, HACCP controls for food),

- # of employees trained in health policy.

Level Indicators 2: Improving

This level introduces the "culture of improvement. It is not enough that the Health and Safety Policy is written is published, it must also be understood, applied and produce results.

- Percentage of employees with knowledge of the health policy or to link with a level indicator "# of health documents distributed with outlets on an appropriate initiative,

- Rate of targets set by the Health and Safety Policy,

- Effectiveness of training courses on health policy, for example utilization of personal protective equipment (PPE),

- Number of employees trained at the OHS (Labour Lifeguard First Aid trained in first aid ).

Indicators Level 3: Lifelong Learning

With this level of maturity, the indicators are defined locally where employees work. Employees are empowered to determine where and how improvements can be implemented .. The employees are both perpetrators and beneficiaries of the policy of Health Safety performance indicators can be developed eg

- Percentage of employees with responsibilities related to health,

- Number of health training conducted,

-% of jobs for which assessments of health risks are realized,

-% reduction in the duration of exposure to hazardous activities (eg reducing exposure to noise, vibration, or chemicals),

- # of people arrested for smoking after anti-tobacco campaign (ditto on alcohol),

- Rate of employees involved in assessments of non-compulsory health.

Philippe Mularski

Example in the field of Quality

- The quality assurance manager (QAM) of the company WWW decides to place suggestion boxes points to "strategic" business (Near the coffee machine at the entrance of the canteen ..). The objective is to strengthen the participation of as many quality employees.

The QAR fixed a target of 10 ideas per month. Naturally, these 10 ideas will fall months do not all alone without a plan of action. The IAS uses the internal newsletter, the intranet to give momentum to his initiative.

indicator showing the maturity level 1 could be:

# of new ideas per month.

After several months of running, the target of 10 new ideas per month is reached.

The QAR determines that the organization is mature enough to move to level 2

The QAR decides to change the initial indicator. It considers that it is indeed nice to have new ideas but it is better to implement some. It changes the basic indicator (without too much change) in:

# of new ideas implemented.

As before the QAR fixed performance targets and identify action plans to achieve them.

It sets and 10 new ideas per month with 3 ideas implemented. After several months of running and using proper action plan (the name ideas are implemented in the newsletter) system developed by the QAR to motivate employees on quality is satisfactory (but begins to s' of breath).

The QAR determines that the company is mature WWW to move to Level 3

The QAR decides to change the previous indicator. He finds that to implement ideas is good, but it's better if they achieve tangible results for the company.

He decided to change the indicator in # of new ideas implemented that allowed (for example) to reduce the processing time of a customer complaint (Class A) 2, or specialists SMED , # of new ideas implemented that allowed a change of tools within X minutes.

Naturally, all this will not happen without a plan of action. The QAR decides (in consultation with DG) to grant a bonus whose value depends on the gain.

Finally, all this is not very complicated. Again, common sense might say farmer.

What should we learn?

- Use indicators that reflect the maturity level of the organization.

- Do not try to copy what is always in the books, the Internet, or what the organization does well over there.

Patrick Jaulent
President of Balanced Scorecard Europe

Why Is My Oovoo And Skype Not Working

Good Practices performance management by Patrick JAULENT

Patrick Jaulent us the honor of the premiere we deliver text of his next paper on good practices in performance management.

The purpose is interesting and could be summarized as "show me your dashboard and tell you the maturity level of your business."

Finding

bodies are different, then why try to format their control system using the same model dashboard with the same indicators. The tools, techniques, indicators can be effective for the organization X and not suitable for the organization Y.

For example, the indicator "# Of meetings held between the finance and business management / # scheduled meetings" may be acceptable to Company A when these two functions have a hard time understanding, so that it will not fit the organization B preferred that the indicator "Rate of meetings held between the finance and sales management having uncorked a joint initiative."

Similarly, the organization C, the latter indicator may deem as not sufficiently evolved. This organization prefers the indicator "# of meetings held between the finance and sales management having uncorked on joint initiatives with the aim to reduce DSO (turnaround time customer)."

For the organization D, the choice will be the indicator "# of meetings between management and financial management leading to business improvement of VAS (Value-added indicator)" acting on such terms and conditions (revised allocation policy discounts, etc.)..

Thus we see that there is a link to the choice of indicators with the level of maturity of the organization. Why then try to build the same dashboard as its neighbor, apart from a willingness to look (at maturity level equivalent). For the general direction of the organization A, the initiative for these meetings, it is not to generate "réunionnite acute" but to put a table around the finance function and marketing function to that 'they work collaboratively on common goals.

Although various models offer 5 levels to assess the maturity level of organizations (Prosci's Change Management Maturity Model, NASCIO Enterprise Architecture Maturity Model, CMMI, Risk Maturity Model, ...) the solution that we recommend, following my return to experience, based on 3 levels:

Level 1 - Compliance: performance indicators that make up this advanced level will be associated with compliance, in other words, the Does organization has implemented a management system to ensure compliance requirements as stipulated by a plethora of external guidelines (IFRS, SOX, LSF, ..) and internal (quality plan ,..). This level introduces the "culture of compliance". It is equivalent to levels 1 to 2 of maturity models cited. Level 1 shows the tactical level of the organization.

Level 2 - Improved: performance indicators that make up the advanced level are related to the effectiveness of management systems of the organization. This level is intended to inform management on areas of weakness in the organization and determine where efforts should be conducted. This level introduces the "culture of improvement." It is equivalent to 2 to 3 levels of maturity models cited. Level 2 shows the functional level of the organization.

Level 3 - Lifelong learning: At this level, learning and continuous improvement are the goals for all parts of the organization. With this level of maturity, the teams set their own performance indicators developed to facilitate the learning process and continuous improvement. This level therefore requires "accountability" of actors to determine where and how improvements can be made. This level also introduces the "culture of lifelong learning." It is equivalent to levels 4-5 maturity models cited. Level 3 shows the strategic level of the organization.

But whatever the level (1, 2 or 3) the performance indicators developed will be chosen and will evolve based on the greatest potential threats to the organization .

Why use performance indicators developed on 3 levels of maturity?

We have repeatedly stated, outcome indicators (lagging indicator) are needed to communicate on past performance: that of the past month, quarter past, half past the previous year. But they can not control, anticipate performance as can be leading indicators (leading indicator).

Indeed, leading indicators:
- Allow you to identify what is important to improve performance.
- Provide rapid feedback on what is true: they improve the visibility of efforts to improve performance.
- Allow a connection with incentive programs by identifying efforts (and not just the result).
- are early warnings of the vitality of a process, thus promoting preventive action corrective action (see proactive control).
- Provide a framework for analysis under certain conditions: equivalent level of maturity, the same performance indicators advanced.

Characteristics of a good performance indicator.

To be effective, it is important that a performance indicator is:
- Linked to the objectives of the organization on which actors are involved and are eventually evaluated
- Easy to use (collection ,..), therefore understood and adopted by the actors who influence
- Reliable on the level of performance
- A controlled costs (Costs of equipment, technology, personnel, collection time, ..)

In addition to these general characteristics, other characteristics must be demonstrated, such as:
- The understanding of the indicator hierarchy
- The ability to provide information that can guide future action or a warning about the potential drift of certain processes.

Characteristics of a good performance indicator advanced

In addition to the above features, an advanced performance indicator should:
- relate to activities considered important for future performance
- may be subject to an intervention or influence by the group work whose performance is measured,
- refer to something that can be improved,
- provide a clear indication on how to improve the performance of the indicator.

When using performance indicators developed, it is important to analyze Periodically relations or indicator (s) Advanced (s) and delayed the outcome indicator. Statistical analysis can be a way to verify the correlation between these indicators.

To help you select the best performance indicators developed in view of the characteristics presented, we invite you to ask the following questions on all performance indicators developed:
- Covers- t they the biggest threats to the organization's performance?
- Do they cover the elements (Systems / processes / activities ..) of the organization offering opportunities for improvement (availability of resources to achieve improvement)?
- Do they provide information to guide action to improve performance?
- Are they under the control of a working group that influences the performance?
- Are these goals?

How many performance indicators developed to have a reasonable coverage of the 3 levels of maturity?

My experience shows a selection of approximately 10 performance indicators developed (to be linked to outcome indicators, about 20 indicators in total) should provide coverage of the 3 levels of maturity but still manageable. The segmentation of the 10 leading indicators is of course depending on the level of maturity of the organization.

example:
- With a low level of maturity, the organization may decide to place the 10 indicators only on level 1 to ensure the minimum "culture of compliance"
- With a level of maturity higher, the organization may decide to position 5 indicators on the level 1 and 5 indicators on level 2.,
- At maturity level even higher, the organization may select two indicators for level 1, 3 indicators for level 2, and 5 indicators for Level 3.

The process of selecting performance indicators developed is not one-off exercise. Even if progress is achieved through selective and appropriate use of indicators, it is necessary to review periodically to maintain their effectiveness and adapt to the changing environment.

This principle is the same for a reasonable coverage of corporate risk: assessing the level of maturity in risk management through, for example, the Risk Maturity Model model, then selection of the 10 leading indicators risk position on all 3 levels, depending on the level of the organization on this subject.

The incentive and recognition

Many public and private incentives to use the principles (Bonuses, gifts, changes ..) to encourage better performance.

To improve motivation towards these incentives are advised to encourage the performance indicators developed and not only indicators. The use of these early may also help to improve the perceived fairness of the incentive mechanism and increase the transparency of relations between different actors (relationships between those who set the incentive and those who perceive it).

Patrick Jaulent
President Club Europe Balanced Scorecard