2nd Wind Exercise Equipment is a fast growing fitness dealer with more than 100 retail outlets across the Midwest. To manage the company's growth, the executive team introduced a Business Alignment Model, a key component of which was automated talent management. With Halogen eAppraisal, 2nd Wind has been able to:
- Empower managers and employees by providing them with a clear set of goals and an understanding of how those goals link to overall corporate objectives;
- Reduce involuntary employee turnover by 75% through employee performance management best-practices and ongoing coaching; and
- Drive return on the Halogen investment for HR, IT and the executive team.
Background
2nd Wind Exercise Equipment is one of the most successful and respected fitness dealers in the United States, with more than 100 retail outlets in 9 states across the Midwest, as well as a thriving commercial business. As a rapidly growing organization, 2nd Wind runs its business based on a Business Alignment Model (BAM), which sets an effective management framework for all of its operations, managers and employees. In recent years, 2nd Wind implemented a key IT initiative to adopt a software-as-a-service (SaaS) driven approach for enterprise applications, to assist them in quickly adapting to changes in the business, and to best support their retail locations with web-based tools.
Challenge
Under the company's BAM, 2nd Wind is focused on ensuring everyone in the organization has a clear picture of the organization's goals, where each individual fits in and how, as a team, they are going to achieve them. The BAM strategy at 2nd Wind combines long-term objectives with short-term improvement projects and tasks. To formalize the program company-wide, and report frequently on goal progress, 2nd Wind's management team wanted to be able to execute 90-day development sessions with its employees to review their goals, which tie back to the BAM. They quickly realized the need to implement an employee performance management tool that could provide for frequent processes and goal alignment reporting delivered in a SaaS model.
“Throughout our school years we receive report cards to tell us how we are doing, and as adults, we become conditioned to expect that feedback, explained Tom Kelly, CFO and CIO, 2nd Wind Exercise Equipment. Yet often in the business world, individuals don't receive any feedback. People quickly become paralyzed when there's no clear direction and we wanted our team to be inspired. We recognized that to be able to effectively meet our organizational goals, we needed to provide feedback to all our employees on a quarterly basis. We also had to ensure that everyone could see all the steps required to be successful, broken down into manageable and realistic goals throughout the year.”
Solution
As a senior leader within the organization responsible for finance, human resources and information technology, Kelly began looking at employee performance and talent management solutions that would meet this need, and fit with the organization's SaaS strategy. Going into the process, he recognized that there would be a big transition from having no talent management system in place to providing employees feedback four times per year, and wanted to ensure that any solution he selected would not overwhelm managers or employees. Additionally, he wanted to ensure that any solution could be easily supported by HR within the company, with minimal IT involvement.
Following a review of several competing solutions, Kelly selected Halogen eAppraisal. “I looked at a number of solutions on the market, and what made Halogen stand out was its simple user interface and workflow, and very specifically the solution's on-target goal management feature, which was a perfect fit with our business alignment model. There was no shortage of SaaS solutions on the market, but a real plus for Halogen was that we could buy only the modules we needed to roll out to our team today, but have confidence in knowing we could grow over time. The Halogen solution was very flexible and a good fit with our culture as well,” said Kelly.
Benefits
Since rolling out the Halogen system, 2nd Wind has realized a number of tangible benefits. The key driver behind implementing the Halogen system was to support the company's BAM by ensuring everyone, organization-wide, had a clear set of goals and the appropriate steps by which to achieve them. Over the past year, despite the downward market trends and unstable economic climate, 2nd Wind's sales numbers have remained steady. Kelly attributes this stability to employees being more invested in the organization's success.
“Now everyone understands what is expected of them and is focused on ensuring we are successful, said Kelly. As a result, employees are being more creative, coming up with ways we can maintain healthy sales, and increase traffic into our retail locations.”
2nd Wind has been able to significantly reduce involuntary employee turnover, with a 75 per cent drop in 2007 over the previous year, much of which is attributed to the company-wide emphasis on goals, performance and feedback. “Managers and employees have the tools they need to identify problems and improve upon them. The true cost of turnover is apparent and managers now understand that a little coaching can go a long way. We actually see more coaching and feedback on a day-to-day basis now, as well as better individual performance,” explained Kelly.
As an IT professional and financial executive at 2nd Wind, Kelly's focus is on cost-effectively implementing enterprise-class technology that improves the performance of the organization, and ensuring it produces a solid ROI. By deploying Halogen eAppraisal using an On-Demand hosted model, the company has streamlined the total cost of ownership and minimized administration since it is all handled by Halogen. Kelly also notes that the administrative burden of reporting on goals and performance to support the business alignment model would not have been feasible on paper. The ability to effectively and efficiently do so with a web-based system has been very powerful.
“If you look at the cost of the software, compared with the benefits it has brought our organization, the ROI is incredible, said Kelly. I've been an IT professional for years and it is rare to see this level of ROI within two years of deployment. This technology is a real a no-brainer for any CIO.”
