A framework for a creating a Performance Driven Company

Two weeks ago I had the good fortune of attending a Service Industry Association Roundtable. These roundtables are held every couple of months and they are typically hosted by a member firm. This particular roundtable was held in Grand Rapids, MI and hosted by Service Express, Inc. (SEI). One of the highlights of the event was a presentation delivered by Ron Alvesteffer, SEI’s CEO.

SEI provides Data Center Hardware Maintenance and has been growing by leaps and bounds over the past ten (10) years. The company has recently been acquired by the Pamlico Capital, a Private Equity firm focused on the Lower Middle Market. Ron’s presentation offered insight into the tremendous growth the company has experienced and will continue to experience under his leadership.

It is not just their financial performance that makes them a great company. It’s the culture and values of the company that make it a great place to work. Indeed, SEI is a proud winner of the “101 Best and Brightest Companies to Work For” in West Michigan, Chicago, and Metropolitan Detroit each year since 2005. The company was also named on of the  “101 Best and Brightest companies to Work For in the Nation” in 2011 and 2012. Inc. magazine  named them to their “Inc. 5,000 List of America’s Fastest-Growing Privately Held Companies”, an honor they have held since 2007

A great deal of the company’s success is due to Ron and his management team’s ability to build a performance driven organization. This strategy has enabled the company to grow through a combination of geographic expansion and new product/service development. The management team diligently follows a process centered business model that Ron developed. The model involves managing each business function, department, and line of business like a franchise. More specifically, the model is comprised of these four (4) building blocks:

  1. Vision: Ron refers to this as his “why”. Indeed, having a strong “why” is the basis for all successful endeavors. In essence, you need to have a compelling reason why you want to achieve any goal if you are ever going to achieve it. The reason why SEI exists is to “work with employees to help them achieve their personnel, professional, and financial goals”.
  2. Core Objectives: SEI has four core objectives these are 1) employee engagement, 2) excellent customer service, 3) margin retention and growth, and 4) revenue growth. These core objectives answer the question “how”, how does SEI achieve its vision.
  3. SR5 Performance Measurement: This is a performance measurement system that SEI utilizes to track results. Although, “SR5” sounds a little complicated, it’s really quite simple. It stands for Scorecards, ROIs, and 5/15s. In case you are wondering, scorecards are used to track goal achievement at a company, department and regional level. ROI stands for responsibilities, objectives and indicators. The 5/15 is a personal development plan created by each employee. (It originally got its name from the fact that it takes five minutes to read and 15 to prepare.) The SR5 system helps SEI personnel see trends and avoid emotional reactions to movements in company performance. As a result, management and employees view their performance objectively rather than emotionally.
  4. Business Focus: As mentioned above, SEI’s business focus is on Data Center Hardware Maintenance for mission critical servers. Ron’s perspective is the business focus answers the question “what”, what is it that we do here at SEI? Ron also believes that while this question is important, it is less important than the other three building blocks mentioned above. This makes a lot of sense, don’t you think? It often doesn’t matter what a company does as long as they have clear vision, core objectives, and an effective measurement system in place.

These building blocks serve as a great framework for how to build a thriving, performance driven company with high levels of employee engagement and morale. In addition to the awards and accolades that SEI has received for being a great place to work, the company has experienced an average revenue growth rate of 20% over for the last 10 years.   Ron refers to this framework as the “SEI Way”. You can download a copy of the free e-book that explains the concepts in more detail by visiting Ron’s blog site. http://ronalvesteffer.com/theseiway/

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