“In my current position, I have met my profit target for 8 quarters in a row. I

Question

“In my current position, I have met my profit target for 8 quarters in a row. I am 110% confident that I can meet similar stretch goals for you, if given the opportunity.” This was Mr. I. M. Grete’s boast when he interviewed to be a profit center manager at a large corporation. Mr. Grete had a history of turning in very good results for two to three years before switching jobs. As evidence of his exemplary managerial talent, Mr. Grete points out that his prior units’ performance unfailingly went down after he left.

1-1. What could be alternative reasons for the lower performance of Mr. Grete’s prior profit centers after he left?

1-2. What kind of performance measures would you add to profit goals to ensure that Mr. Grete also pays attention to long-term goals?

Explanation / Answer

1-1..

The buyers of MR. I.M. Grete's ex company must be fully dependent on the words of Mr. Grete. He made strong business relationships with the people he worked with during his stint. After he left, the buyers of his ex-company must not have taken over or followed by the new employee who would have joined after Mr. Grete. There can be several other reasons for this situation. First of all, let us assume that Mr. Grete had a team. He might have failed to groom a leader who could fill his position. Mr. Grete might be a great manager but he failed to be a leader. He left the vaccum in the company after he left. Second reason can be that Mr. Grete may not have given appropriate Knowledge Transfer session to the new employee and might not have introduced this new employee to the stakeholders/buyers with whom Mr. Grete ex company used to work with. Thirdly, Mr. Grete failed to retain the customers. It might be just business from new customers only but less business from old customers.

1-2 The following performance measures can be added -

a. Performance of his sub-ordinates working under him(Employee Turnover Rate)

b. Preparation of Individual Development Plan for sub-ordinates of Mr. Grete (Employee Satisfaction)

c. Customer metrics such as Customer Life time Value , Customer Satisfaction & Retention, Net Promoter Score etc.

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