Increasing Individual and Team Productivity at New York Life
Members of New York Life’s management development group were concerned that the company was not fully exploiting the 360 data they had been collecting. “We had been using 360-degree feedback for years to guide personal development of individual field managers, but the data lay dormant after executives identified areas for personal development.” says Vince Baglio, New York Life’s corporate vice president of management development. “I was concerned that we were not getting the most out of the data we were collecting or the investment we were making in collecting it.” His opportunity came in the form of a question asked by a senior executive: “Management competencies are useful on a personal basis, but how do I know which ones make a difference to our organizational performance and our bottom line?”
“This question became the catalyst for an initiative to identify the competencies that correlated with the individual financial production of field managers,” says Vince. The initiative involved the company’s 120 field managers and focused on the two most important measures of this group’s success; the productivity of the sales people they hired (measured by sales commission) and the retention rate of these salespeople. “The goal,” says Vince, “was to see if the management competency data collected on the field managers during their 360-degree feedback process could be linked to the productivity and retention of their salespeople.”
To accomplish this goal Vince asked Larry Clark (who is now the director of the Korn/Ferry Institute) and his study team to look at the data from three perspectives:
• The importance of each competency and the management competencies each manager used the most, and how well he or she performed each competency (based on his or her boss, colleagues, direct reports, and customer ratings)
• The correlation of the field manager’s competency ratings with the individual performance in generating first-year commissions and retaining high-performing salespeople
• The similarities and differences among below-average, average, and above-average performing field managers
“By comparing these three data sets, we were able to identify the six competencies that were the “tickets to the game,” says Vince. “These were the competencies that were necessary to get hired and operate within the corporate culture, but they were not sufficient to sustain high performance. We also identified the thirteen competencies that enabled executives to elevate the organization’s financial performance or the competencies that differentiated the above-average performers from those that were average and below average.”
“We then used this information to target training and development programs and plans,” says Vince. “We were able to demonstrate that by improving the performance of average and low-performing executives in the thirteen key competencies by one standard deviation the company could generate an additional $467,000 per executive in first-year commissions while reducing turnover costs by $580,000 per executive, for a combined economic value of $1.05 million. This is a great example of how 360-degree feedback can be used to improve leader performance and deliver real and significant economic value.”
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