Active Leadership at Gap Inc. Canada

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Active Leadership at Gap Inc. Canada
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• Overview Of Gap Inc.
• One of the worlds leading international
  specialty retailers offering clothing,
  accessories and personal care products for men,
  women, children and babies.
• Opened by Don Doris Fisher in 1969 with a
  single store and a handful of employees. Today,
  Gap Inc. employs over 165,000 people.
• Operates 4,241 stores worldwide including stores
  in United States, Canada, France, Germany, Japan
  and the United Kingdom with three distinct
  brands.

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• Gap Inc. in Canada
• Maintains a strong leadership position within
  the retail industry in Canada.
• All three brands represented in Canada with close
  to 200 store locations by end of 2004.
• Approx.10,000 employees in total.
• Almost 1 billion dollars in revenue across all
  brands in Canada for 2003.
• Aggressive Old Navy store growth plans in 2004
  and beyond.

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• Business Case
• Manager Level
• Managers viewed managing performance only as a
  Human Resources process.
• Focus was on discipline and corrective action
  vs. building better performance.
• Managers did not know how to flex their
  leadership style to get the most out of their
  people.
• Managers are not providing timely feedback to
  their employees. Evidenced by the fact the 1
  issue on the Organizational Health Survey.

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• Business Case
• Manager Level
• Managers do not possess the skills to diagnose
  the root-causes of performance gaps in the
  field and how to develop action plans to address
  them.
• Managers did not know how to effectively manage
  employees through change.
• Managers view providing feedback as
  confrontational and have avoided doing so
  because they feel it is not allowed/not their
  job.

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• Business Case
• Organizational Level
• Opportunity to improve controllable KPIs
• Sales Conversion
• Loss Prevention (shrinkage)
• Management Turnover
• Opportunity to improve upon some key 2002
  business initiatives.
• No coaching training being designed or
  implemented for Store Managers by corporate in
  2003.
• Leadership training being offered focused on the
  attributes of an effective leader.

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• Business Case
• Need for Change
• Two (2) point increase in conversion.
•  Ten (10) decrease in shrink by 2004 over 2003
  translating.
•  Ten (10) decrease in turnover in 2003.
• An increase from an overall OHI score of 4.5 to
  4.8 in each Region across Canada.

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• Business Case
• Need for Change
• Therefore Gap Canada Inc. would save almost 2
  million and generate 14 million by going forward
  with the Active Leadership program in 2003.
• The ROI (cost/benefit) on the cost savings alone
  would be 8,000.00 per participant.
• If the increased revenues were included in the
  ROI calculation, the ROI (cost/benefit) per
  participant would be 64,000.00 per participant.

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• Why CDI and Active Leadership
• Active Leadership Model and program are better
  than other programs on the market.
• Active Leadership Inventories.
• Program customization
• Gap Inc. case studies
• Gap Inc. core competencies
• Quality of Facilitators.
• Continuous Learning Portal.
• Canadian company/big Canadian clients.

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• Sustaining The Learning
• Before During The Training
• Manager/Participant Contract.
• Senior Management in all Markets open and close
  each day during the sessions.
• Linked AL program to ROI initiatives at the
  beginning of Day 1.
• Told participants up front on Day 1 that they
  will be held accountable and evaluated on how
  much they use the content of the program.
• Linked all Action Planning Frameworks to ROI
  initiatives.

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• Sustaining The Learning
• After The Training (strategy paper)
• CLP (see graphic slide).
• Coaching Agreement due to Manager 14 days after
  the program.
• Action Planning Frameworks linked to ROI
  initiatives due to Manager 30 days after the
  program.
• Level 2 assessment (knowledge retention)
  completed (closed book) in presence of Manager 30
  Days after the program.
• Level 3 assessment (behaviour change) completed
  by Manager on behalf of participant 90 days after
  the program.

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• Sustaining The Learning
• After The Training (strategy paper)
• AL quarterly newsletter.
• AL linked to management recognition programs.
• Specific AL goals in Q3/Q4 performance reviews.
• Focus on store visits (developed AL store visit
  guide template/suggested questions).
• Build into regular field communication (i.e.
  conferences, voicemails, written updates).
• HR audit/follow-up on AL commitments.
• AL model posted in all meeting rooms.

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Sustaining The Learning
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• Level I Results
• Satisfaction/Importance Scale
• Four point scale measured both the satisfaction
  and importance of various aspects of the
  classroom session.
• Program met their high expectations.
• Participants thought the program content was
  relevant and valuable as well as being quite
  positive about the facilitation of the program.

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• Level II Results
• 85 of all Active Leadership participants
  completed the Level II evaluation.
• Statistically significant sample size and can
  guarantee a 95 confidence level.
• 25 questions on the Level II exam.
• Closed book in presence of participants
  immediate Manager.
• Target completion date was 30 days after
  participant completed three (3) day classroom
  training.
• Average overall score was 82.

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• Level II Results
• Cross referenced results with KPI information to
  determine impact/correlation by end of October
  2003.
• Eliminated middle 65 of scores.
• Analyzed top/bottom 35 participant scores to
  their individual store KPIs in areas of
• organizational health scores
• turnover rates
• sales conversion

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• Level II Results
• Organizational Health Results
• 1/2 of the bottom scoring Store Managers had
  results that were in the danger zone.
• 1/2 of the top scoring Store Managers had results
  that were deemed best in class.
• Management Turnover
• Overall Management turnover (all levels)
  decreased from 23.92 in 2002 to 14.82 in 2003.
• Overall Store Manager turnover decreased from
  14.40 in 2002 to 3.70 in 2003.

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• Level II Results
• Management Turnover (continued)
• The bottom scoring Store Managers had higher
  management turnover in their stores than the top
  scoring Store Managers.
• Sales Conversion
• Of the bottom scoring Store Managers, 55 were
  up YTD and 45 were down YTD.
• Of the top scoring Store Managers, 90 were up
  YTD and 10 were down YTD.

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• Level III Results
• 76 of all Active Leadership participants
  completed the Level III evaluation.
• Statistically significant sample size and can
  guarantee a 95 confidence level.
• 52 questions on the Level III evaluation.
• Participants manager rated on both application
  of skills taught in the programs as well as the
  impact those skills have had back in the store
  environment.
• Target completion date was 90 days after
  participant completed three(3) day classroom
  training.

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• Level III Results
• Average overall score for application was 3.7
  out of 5 (75).
• Average overall score for impact was 3.7 out of 5
  (75).
• Therefore can conclude that
• 1. There was a good level of content application
  back in the store.
• 2. The application of those skills has had an
  impact on Store Manager performance.
• Cross-referenced the Level III results to the
  same sample Store Manager group used in the Level
  II assessment to determine if the previous
  findings held true at the end of the year.

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• Level III Results
• The low scoring Managers had a full 25 higher
  management turnover rate in their stores than the
  top scoring Store Managers at year end.
• The top-scoring Store Managers continued to have
  higher sales conversion than the low scoring
  Managers at year end.
• If annualized, this conversion increase would
  represent would represent an additional 8.4
  million in annual revenue.
• The Level III results were congruent with the
  Level II findings and solidified the impact the
  Active Leadership program had on Gap Inc. Canada
  employee satisfaction and business results.

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• Kirkpatrick Model
• Level 1- Reaction
• Level 2- Learning
• Level 3- Behaviour
• Level 4- Results
• Level 4 defined as the final business results
  that occurred because participants attended the
  program.
• Could include increased production, improved
  quality, decreased costs, increased revenue.
• Usually remains unanswered for two reasons
• Trainers dont know how to measure
• Even if they do, is evidence at best

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• Kirkpatrick Model
• Guidelines for Evaluating Results
• Use a control group if practical.
• Allow time for results to be achieved.
• Measure both before and after the program.
• Repeat the measurement at appropriate time if
  practical.
• Consider cost versus benefits.
• Be satisfied with evidence if proof is not
  possible.
• be satisfied with evidence because proof is
  usually impossible to get

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• Phillips Model
• Level 1- Reaction
• Level 2- Learning
• Level 3- Application/Implementation
• ltisolationgt
• Level 4- Business Impact
• convert data
• tabulate cost
• identify intangibles
• compare costs to intangibles
• Level 5- ROI Intangibles

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• Phillips Model
• Level 1- Reaction
• Level 2- Learning
• Level 3- Application/Implementation
• ltisolationgt
• Level 4- Business Impact
• convert data
• tabulate cost
• identify intangibles
• compare costs to intangibles
• Level 5- ROI Intangibles

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• Phillips Model
• Methods For Isolating The Impact of a Program
• Use a control group
• Trend line analysis of performance data
• Use of forecasting methods of performance data
• Participants estimate of programs impact
  (percent)
• Supervisors estimate of programs impact
  (percent)
• Managements estimate of programs impact
  (percent)
• Use of previous studies
• Use of experts
• Calculating/estimating the impact of other
  factors
• Use of customer input

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• Phillips Model
• Level 1- Reaction
• Level 2- Learning
• Level 3- Application/Implementation
• ltisolationgt
• Level 4- Business Impact
• convert data
• tabulate cost
• identify intangibles
• compare costs to intangibles
• Level 5- ROI Intangibles

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Phillips Model Example Sales Revenue Increase of
100,000 Contributing Factors Impact on
Results () Average Confidence Level
() Training Program 40 85 Marketing 25
90 Better Scheduling 20 70 Management
Emphasis 10 95 Incentive Program
5 80 100 100,000 x 40 x 85 34,000
increase as a result of the training
program
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• Phillips Model
• Calculating The Cost of a Program
• Needs assessment
• Design development/acquisition costs
• Program materials
• Instructor/facilitator costs
• Facilities Costs
• Travel/lodging/meals
• Participant salaries benefits
• Evaluation costs
• Administrative/overhead costs
• costs can be prorated

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• Phillips Model
• Identify Intangibles
• Additional evidence of program success.
• Presented as supportive qualitative data.
• Deemed intangible when
• Data can not be converted into monetary value
  easily
• Expense of conversion is too great
• Data can not be isolated effectively from other
  factors
• Phillips is very clear that this is still a very
  important part of the overall evaluation.

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• Phillips Model
• Level 1- Reaction
• Level 2- Learning
• Level 3- Application/Implementation
• ltisolationgt
• Level 4- Business Impact
• convert data
• tabulate cost
• identify intangibles
• compare costs to intangibles
• Level 5- ROI Intangibles

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• Phillips Model
• ROI Calculation
• BCR total benefits X 1
• total costs
• ROI net total benefits x x100 X
• total costs
• (total benefits-total costs)

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• Phillips Model
• Group Discussion
• What are the pros and cons of the Kirkpatrick
  model?
• What are the pros and cons of the Phillips model?
• What should Gap Canada Inc. do with the results
  of the Active Leadership program at this point?

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• Phillips Model
• Level 1- Reaction (100)
• Level 2- Learning (60)
• Level 3- Application (30)
• Level 4- Business Impact (10-20)
• Level 5- ROI Intangibles (5-10)

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• Insights from Gap Inc. Canada
• Support from most senior levels of leadership
  essential i.e. do not have HR pay for the
  training.
• Most challenging task is to gain support from
  middle management group.
• Needs to become part of organizational
  currency in doing business with each other and
  tied to performance management systems.
• Needs to be constantly reinforced through all
  formal and informal recognition programs for
  people to adapt their behaviours.
• Levels 2-4 post-training evaluations are
  critical in sending a message that the program is
  important and is not going away (i.e.
  continuous learning portal).
• Focus needs to be on what actions the immediate
  Manager is taking with the participant both
  before and after the training event.