Effective Performance Management Means People Working Smarter

Performance Management

Effective performance management is more than just measuring the KPI outputs of the team. It also focuses on the behaviour of individuals and whether or not they reflect the values of the whole organisation. Here John Raftery discusses performance within a core competencies framework while Tricia Cunningham  outlines key elements in the performance management process that all managers need to be aware of.

Performance Management Systems

There are a number of issues with performance management. A lot of the larger companies have performance management systems and some of the complaints that are made about them is that they become tick box exercises and people don’t particularly enjoy doing them. They are often reluctant to use them to their full potential, but really good performance management systems cover two things.

One is the hard metrics i.e. your outputs, your KPIs and other deliverables that can be measured. The other side of it is the side that I think people find more difficult and challenging and relates to behaviours and attitudes. Effective performance management systems will examine those through a competency framework. At the very top level of the organisation the senior management team will work with us to identify what are the core values or competencies that the organisation requires.

The organisation may require three or four core competencies that can be turned into behaviours.

We then identify what those behaviours are so we can begin to rate people in terms of what level they are at in relation to the core behaviours. To use time keeping as a simple example; if people turn up for work two minutes to nine and they leave at two minutes to five, this causes a lot of frustration for managers because they feel they can’t challenge the employee as they are arriving on time and leaving on time. But there are three levels of time keeping.

1. You arrive on time and you leave on time. That’s the basic entry level time keeping requirement.

2. At the next level the employee is ready to start work at 9am with all of their documents ready for a team meeting for example. And if meetings or tasks go past 5pm people are willing to stay on. They will show the same flexibility regarding lunch breaks.

3. The third level concerns flexibility, particularly when there is an emergency or if issues arise at the weekend. Are you available?

You can then develop a template or framework for behaviours that you measure employees against in terms of their time keeping.

But performance management means getting people to work smarter as opposed to working longer hours.

You are trying to help people focus on achieving what you want them to achieve and make sure they are moving in the right direction. People at every level of the organisation should have some way to measure performance in terms of the hard metrics but also for attitudes and behaviours and to get constructive feedback from a supervisor at least once a year.

Performance Management Process

A challenge for many managers with the performance management process is managing the conversation. Many worry about how the conversation will go and how they will raise “difficult” points with an employee.

All examples of an employee’s performance should be discussed with the employee close to the time it occurred so that the details are fresh and can therefore be explored properly. The performance management conversation is reinforcing the comments made previously in addition to discussing important issues like future objectives or goals.

Managers should regularly discuss an employee’s performance so that there are no “surprises” in the meeting regarding behaviours the employee demonstrated.

Managers and Communication Skills

Performance ManagementCommunication involves words, tone and body language. A manager needs to make sure all three elements are aligned.

For example, if the message is positive then the tone needs to be upbeat and the body language engaging. If on the other hand the message is reminding the employee of the need to change behaviours then the tone and body language needs to reflect this requirement. Managers can’t confuse employees because they are uncomfortable with conveying a particular message. Practice makes perfect so managers need to practice how they will convey a difficult message.

Managers Need to Anticipate Difficulties

Anticipate possible difficulties the conversation might raise and consider your responses ahead of time. By anticipating your response you will be more relaxed and confident and you know how you will respond. Remain calm and focused.

Isolate the issue and address that issue before moving to the next point.

Employee Assessment

An employee values this conversation. This is an opportunity for an employee to really understand how the organisation is assessing their contribution. The majority of employees, and especially your top performers, are eager to discuss what they need to do to continue being valuable to the organisation.

John Raftery
       John Raftery
Tricia Cunningham
Tricia Cunningham

 

 

 

 

 

 

Interview by Des Kirby

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How to make team meetings more effective

How to make team meetings more effective_John Raftery blogIn this part of John Raftery’s series on visual management he addresses the problem of team meetings that lack purpose, and have little effect on performance. Due to a lack of delegation and accountability meetings will often drift off the agenda, with team members no better off after the meeting than they were before it. What can managers do to correct this? Here John explains how to make team meetings more effective, and how a simple visual aid like a Gantt Chart can transform meetings.

Team leaders must track performance

‘What companies need are not meetings for meetings sake. Meetings do have a bad name and the reason they have a bad name is because they go on too long and tend to go off track. People often come in ill-prepared for the meeting, then minutes are taken and issued out. People don’t look at those minutes until just before the next meeting takes place, so nobody really takes any action. The meetings just go on and on indefinitely, without really achieving anything. There is no tracking mechanism to see how effective the meetings are.

Visual Management

The simplest and most effective way to make meetings useful and efficient is, once again, to introduce the concept of visual management. If you were to do a Google search on work plans you will probably see lots of different examples of plans which are basically Gantt Charts. Instead of issuing minutes to the team after a meeting, all you need to do is take your weekly or monthly meeting and divide it up into 4 or 5 core areas.

Creating accountability

Under each of those core areas you will have different lines of action in the left hand column. The next column will show who the owners of the lines of action are, in other words who’s responsible for implementing those actions. Then divide up the right hand side of the page with a timeline of 12 months or 52 weeks. There you track the activities by colour coding them using green, orange and red. Green indicating actions completed successfully within the timeline, orange indicating actions delayed or postponed and red indicating actions incomplete within the timeline.

How to make team meetings more effective_visual managementYou can then print this Gantt chart out on an A3 sheet of paper, and this can act as a very effective tool in managing team meetings. Not only does it show what people should be working on and what’s coming up next, it also helps you to track the things you have achieved over the year. As more and more items are shaded green, you get a good overall picture of the progress that’s being made. It’s a very simple but effective tool that gets away from the standard process of meetings that can often drift off course, and where no real progress reporting gets done.’

John Raftery is a business advisor and executive coach at LEAP.

Interview by Des Kirby
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How To Measure Customer Satisfaction More Effectively

How to measure customer satisfaction more effectively

Bill Gates once said, ‘your most unhappy customers are your greatest source of learning.’ However LEAP’s John Raftery, who works closely with SMEs, explains why measuring customer complaints can be problematic and unreliable. Although he acknowledges the value of customer feedback, he suggests another way to measure customer satisfaction that is both cost effective and powerful in its impact on the business.

John, what is an effective way to measure customer satisfaction?
One of the issues that come up regularly when working with clients in the SME sector is that managers don’t have a handle on how satisfied their customers are. And if they are trying to measure customer satisfaction they usually go about it the wrong way. Sometimes they measure complaints, which is absolutely the worst way to measure customer satisfaction. Measuring complaints does not give you any real sense of customer satisfaction. Another thing they do is carry out surveys, and they can be complex and expensive and often difficult to interpret.

Net Promoter Score
What I always recommend to customers to use is a very simple, very effective and inexpensive methodology known as the Net Promoter Score (NPS). It’s being used more and more in business. The beauty of it is the simplicity; you are only asking the customer one question. ‘How likely is it that you would recommend this product, service or company to a friend or colleague?’ And you get them to rate it on a scale of 1 to 10. The people who score anywhere from 1 to 6 we regard as detractors, that is people who have had a bad experience and are likely to relay that bad experience to others.

What the higher scores mean
The people who score between 6 and 8 are passive or neutral customers, they are happy to buy your product or service, but if a better deal comes along they will go with it; they are not loyal customers. Then we have the people at the top end who score a 9 or 10, these are the promoters and they are vital to your business. Obviously businesses need to increase the number of promoters of their business.

How to calculate your Net Promoter Score
The net promoters score is calculated very simply; you take the percentage of detractors away from the percentage of promoters and you get your net promoters score. So you are actually measuring your customer’s satisfaction by using just one number. That number is easily calculated at very little expense. You can carry out NPS surveys continuously or periodically and watch the number increase as you carry out customer satisfaction improvements in the business.

How to measure customer satisfaction more effectively

Other advantages of the NPS
Another advantage of the NPS is that it is fast becoming an industry standard score so you can measure yourself against other companies in your industry. Apple computers, for example, have a high score at 67{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4}. Compare that to Sony who have an NPS of around 30{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} in computer hardware. So you can begin to benchmark yourself against other similar companies. So the NPS is very simple, inexpensive and easy to analyse but very effective in giving you one single score regarding the level of customer satisfaction.

Why is it unhelpful to analyse customer complaints?
For two reasons; one is because it’s too late in the process. You’re dealing with an event after it has occurred. Secondly the people who are gathering the information on customer complaints will sometimes supress information, and what is regarded as a customer complaint can become subject to a lot of debate, that is whether it’s a genuine complaint or not. You can end up with a lot of messy data that you can’t trust. And besides, most customers don’t complain anyway, they simply go away, they vote with their feet.

Take for example a restaurant. You get a customer complaint. That customer is seen as the problem in some peoples’ eyes. You could be serving bad food all night and no one will say anything, but they won’t come back to your restaurant again. If someone complains they are seen as awkward or disruptive, and if the boss doesn’t welcome complaints and he comes down hard on the staff, then they won’t tell him about complaints.

How to measure customer satisfaction more effectively

Customer complaints – an opportunity for improvement
People look at a reduction of customer complaints as progress, but I always get suspicious of that. I think an increase in customer complaints is progress, because it means staff are engaging more with customers. People often feel uncomfortable about customer complaints when they should welcome it, because it gives the business an opportunity to find out where they’re going wrong. Customer complaints can be an opportunity for improvement.

However, in some sectors like the hotel industry for example, companies can often become overwhelmed by the volume of survey data. There can be information overload from customer feedback. And if the senior managers, or the owner, sits on that information and doesn’t share it with the rest of the staff then they don’t know what’s going on. They can’t figure out what actions to take.

Set Clear Objectives and Measure Performance
The NPS cuts through all that and identifies where the business is now and where you want to be; it’s a clear starting point. Once that score is established you can then decide what you are going to do to improve it. With a clear set of objectives and a new set of KPIs centred on actions and accountability, you can measure performance and see if you’re objectives are helping to increase your NPS.

In interview with Des Kirby

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How to improve your business with a Core Score

How to improve your business with a core score

There are many types of metrics companies use to measure success, but how do you know what the most effective Key Performance Indicator (KPI) is for your particular business? John Raftery, executive coach at LEAP, explains how keeping a Core Score  can dramatically improve your business performance and drive behavioural change.

The Core Score and Performance Management

One of the key issues that people have when they’re trying to run a business and trying to come up with Key Performance Indicators, is that most of the KPIs are financial. But in order to have a balanced score card you need to have KPIs across 4 elements of the business. One is obviously the financials, the second is people, the third is customers and the fourth is processes.

Sometimes though you can find a unifying score or KPI which is a core score for the business; the Core Score for the business is something you can map in graphic format, as in a bar graph. It captures the essence of the business and it becomes like a flywheel within the business that will drive all the other elements of the business.

The New York Metro Example

I’ll give you an example from Malcom Gladwell’s bestseller The Tipping Point, about how behavioural trends take hold in society. A candidate was assigned to take over the running of the New York City metro, a system which looked and behaved like a sewer in terms of its business performance and its visual impact on the customers. He was tasked with the job of turning the metro around. He disappeared into his office for a number of weeks and thought about the strategy for bringing the subway system back to success. He emerged after a long consultation and thinking process with an answer.

All the staff eagerly waited to hear what the answer was. They thought it was going to be a very complex strategy involving lots of financial data. But his answer was this: we are going to cut down on subway fare dodgers. We are going to adopt a zero tolerance policy towards people who get on the subway without paying. Everybody thought this was ridiculous; if you were going to solve the major problems of the NY metro that’s not where you should start.

But he persisted and added additional security to catch fare dodgers. The security company started catching so many dodgers that the NY police had to become involved and set up their own porto-cabins in the underground platforms to cope with the problem. They were arresting people in large numbers, sometimes with fare dodgers handcuffed and lined up like a daisy chain on the platform. The police also found that when arresting the fare dodgers some were carrying weapons or drugs or they were wanted for some other crime. The message went out very quickly across NY that if you want to travel on the subway, you don’t carry weapons or drugs, you pay your fare and generally behave yourself.

It then became evident that the safest way to travel in NY was by subway which resulted in an increase in footfall. With that increase came an increase in revenue which allowed authorities to clean up the trains, get rid of the graffiti and so on. The clean-up had a further effect of increasing footfall and revenues even more. Essentially what he had identified was a flywheel within the business that was easy to manage and would trigger other positive things throughout the business.

The Core Score Effect on an SME

The question is how would you apply that flywheel effect to the SMEs that we deal with? I’ll give you an example of a service repair business, where a service team was going out to repair domestic equipment in the home and it was €70 for a call out. A lot of the repair engineers were not completing the task the first time.

They had to go away again and return with a different part for the appliance or different tools that they didn’t have in their vans. So we looked at that and decided we had to start measuring first time completion rates on the job. It turned out that first time completion rates were just over 50{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4}. Almost half the engineers had to return to complete jobs on another day. That led to customer dissatisfaction as well as loss of revenue because you could only charge the customer for one call out. So there was huge inefficiency within the business.

We began to measure each engineer for their first time fix rate, and we figured out that if they could increase their first time fix rate by a certain percentage it would bring a serious amount of cash into the business, without having to make extra investment in resources. The second effect was that increasing first time fix rate also increased customer satisfaction rates. The third effect was it allowed the business to see which engineers were performing well and which ones were performing poorly. This helped to identify where the deficiencies were in terms of where training was required. Often just by measuring something there is a natural improvement in performance and we began to see improvement straight away. Cash began to flow into the business and there was no requirement for additional resources or investment. The business was transformed as a result.

So the key really is to try and find what the Core Score is, the flywheel in the business that will drive the rest of the activity within the business. Finding the right KPI that not only tells you how the business is performing, but will actually drive performance and drive behavioural change, and will drive other things within your business if its measured in the right way. So what I would recommend is that visual management tools such as a bar graph represents something that can drive behaviour and drive other activities within the business. If you can identify that it can have a very powerful effect on the business.

Interview by Des Kirby

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Performance Management – 3 Activities of High Performing Teams

Performance Management – 3 Activities of High Performing Teams

performance managementBuilding a high performing team is no easy task, but having a good understanding of the basic elements of performance management is an excellent start.

Whether it’s defining roles or determining how teams make decisions, creating a sense of interdependency is crucial for effective team performance. As Tricia Cunningham points out, it’s not essential that every individual has to be a star performer, but it is essential that the team as a unit is high performing.  To build that high performing team Tricia recommends you focus on 3 core activities.

 Most people don’t listen with the intent to understand; they listen with the intent to reply _ Stephen Covey

1. Effective Communication

‘There’s a challenge in any organisation to get a team performing at a high level as quickly as possible. This doesn’t mean that each individual has to be a high performer; it’s more about how they function collectively as a team. No organisation has its people working individually; there is always crossover between functions or teams.

So managers need to focus on effective communication within a performance management system.  They need to develop communication systems that facilitate team members to share knowledge, insights and opportunities.  Facilitating meetings is one such mechanism and, when managed effectively, is a powerful tool for engaging employees.  The team as a unit can hear the same message at the same time; people can discuss issues or opportunities and explore courses of action.’

2. Taking Responsibility for Actions

‘Team members need to take responsibility for their actions.  When everyone takes this on board actions are delivered on and progress is achieved.  It’s the manager’s job to hold the team members accountable for those actions.  This means praising when warranted and addressing poor or non-performance swiftly and effectively.  When managers consistently hold people to account they create a culture of responsibility.  Holding people accountable happens on a one-to-one basis and in team meetings.  Team members see that all need to deliver on what was agreed within the defined time frames.  It becomes the norm.’

 3. Motivation

‘The third characteristic of a high performing team is strong motivation.  When people are motivated productivity is increased.  This means that managers need to clearly understand (a) what motivates each individual person within the team and (b) try to find ways to tap into that. Many managers feel that kind of influence is beyond their ability because they believe it’s all about money, job security or rungs on a ladder. They believe a manager is limited in what they can do, limited in their ability to influence those three areas.  

But in actual fact for most team members it’s the smaller things that are more important on a day-to-day basis.  Very often it can be the praise and thanks they receive; it can be the sense that they are valued by the organisation. It can be that the organisation respects what the person does, and values their work and their contributions.  When those elements are tapped into, they act as more enduring motivational factors for individuals.

 

So a manager needs to understand what motivates each individual and then look at the wider picture; what motivates the overall team.  By identifying what motivates the overall team it provides opportunities for finding projects or opportunities within the business on which they can work.  These are opportunities for the managers to get the team rallied behind something.  

When you have a team that is highly motivated, that communicates well and each person is taking responsibility for their actions, you have a strong high performing team.  

The challenge for the manager then becomes maintaining these good behaviours: continuing to monitor performances, continuing to provide feedback and keeping the team motivated.  The reward for all is in the results achieved.’

 

Interviewed by Des Kirby. Feel free to leave your thoughts about this blog in the comments box.

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Motivation and the Challenge for New Managers

Motivation and the Challenge for New ManagersTricia Cunningham has designed many management training courses over the past 12 years, including programmes for new managers. Working across a variety of business sectors, she has gained many insights into the challenges that emerging managers face when trying to build high performance work teams. Here Tricia discusses motivation and how to motivate teams, a common problem for new managers.

Q. Tricia, what is the most common problem that new managers face?
The most common problem is motivating team members. Often managers complain that ‘I can’t motivate a person.’ They feel that everything is out of their hands in terms of the factors that motivate people. For example they think I can’t increase their pay, I can’t promote them up the career ladder, there are no promotions going. So managers feel like they have no leverage to motivate an individual.

In LEAP’s programmes we look at the real factors that motivate individuals. We try to get managers to look at each individual team member and determine what the manager can do to motivate that person. The factors that motivate an individual are usually within the control of the manager, but the manager doesn’t always see that. Factors such as having interesting work to do and playing to strengths are very powerful and need to be used to better effect by managers.

Managers need to find ways for employees to play to their strengths within the defined role. Another factor that’s within the manager’s control is employees feeling they are involved in things and understanding what’s going on in the organisation. When the employee understands that this is the direction we’re going in, this is what’s happening, this is why my role is important, they are more concerned about the business and its success. When managers start looking at it this way they start to see that actually there is something they can do about motivation. It isn’t always down to money or steps on a hierarchical ladder that needs to be climbed.

Q. How effective is this approach with new managers?
It’s very effective because you’re getting managers to see things differently, and that’s what a manager’s job is; to constantly look at a situation or problem from a different perspective and come up with a workable solution. They are at least beginning to think more constructively and positively.

Q. There are some tasks that people don’t want to do. Is it difficult to get an entire team motivated by playing to each of their strengths, and at the same time making sure that all tasks get done?
Of course. People are realistic. If 80{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} of my job is made up of tasks I really love doing and 20{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} are tasks I don’t like doing, then I’m probably very happy in my job. We try as much as possible to get employees to play to their strengths so they will enjoy what they’re doing, so the other tasks that they have to do, they don’t mind doing them as much. It’s when the balance is incorrect, where nobody gets to play to their strengths, where 80{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} of the job are things they don’t like, and only 20{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} are tasks they like, well then they start to hate their job.

It’s not about changing everyone’s role in the team. You don’t have the scope for that. It’s about the manager stepping back and figuring out what the person likes and what their strengths are, is there scope within the role, and within the organisation, to get them playing more to their strengths?

When the employee says ‘yeah this suits me better, I like this.’ Then they are motivated.

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Interview with Des Kirby
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Leaders Need Vision, Managers Need Objectives and KPIs

Leaders Need Vision, Managers Need Objectives and KPIsWhat is management? Managers need to do many things, but clarifying business objectives, and deciding key performance indicators (KPI) to measure against those objectives, is crucial to effective performance management. It may, or may not, come as a surprise to you that many businesses in Ireland don’t document either of these. A company’s vision has to be supported by a clear set of objectives. Managers need to know how and why they reached some objectives, but failed to reach others. Maureen Grealish, director at LEAP, spent eight years in a business advisory role dealing with these very issues. Here she shares some of her insights into why business objectives and KPI’s are inextricably linked to your bottom line.

Maureen, in your experience how many businesses have their objectives clearly defined?
Most businesses don’t have any objectives, because they don’t realise the importance of it. There is a phrase ‘what gets measured gets managed.’ Sometimes people are taken up with the enormity of their tasks and they don’t realise that by focusing on 5 or 6 key things they can have a lot more impact on their business. Objectives are the 5 or 6 key things that they need to address in a given time period. That time period could be 6 months or a year, whatever the right time frame is for that particular business. But without that reference point you find that people are fire-fighting a lot, or business becomes very reactive. When they have an objective in place they have a target, and it helps them act in a more disciplined way. It also helps them measure how they’re doing as they go along so they know if they are on the right course or not.

So there are businesses operating without any set of objectives in place?
Yes because they don’t have a strategy. We ask people ‘what’s your vision for the business?’ If that’s your vision what’s your strategy for getting there? The objectives need to be linked to the strategy. So your strategy might be for a 5 year period. So let’s take the first year as a time frame. In order to achieve the vision, and thereby the strategy, what do you need to have achieved in that first time frame. And then the next time frame, and then the next. So the objectives should be seen as a set of milestones towards achieving the vision. But many businesses don’t have a vision, don’t have a strategy and don’t have objectives.

If they don’t have a set of objectives, what are they actually doing on a daily basis?
It depends. This is one of the big issues in business. They are essentially managing what’s in front of them. Some are managing their current customers, others are managing their current work rate, or they’re managing current staff but they don’t have an eye on the future. They might have an idea of where they want to get to but they’re not actively managing towards it. They’re almost hoping it will happen without actually steering themselves towards it.

How are objectives measured in terms of Key Performance Indicators?
If you have five or six key objectives you will have a measure for each one that makes sense to that particular objective. You generally have two financial based objectives, so you’ll have two financial KPIs. So for turnover you’re measurement will be a sales report. For a profit objective the measure would be your monthly managed accounts, the actual profit or loss figure.

For non-financial objectives you need to come up with a measure that makes more sense to that objective. Once you have developed the objectives the next thing you do is develop the measures for each one. For a customer service type of objective you may look at doing customer surveys, or mystery shoppers or you might do some kind of audit, where you score for a particular performance, and monitor that over a period of time to see that the action you are taking is making an improvement. It’s about picking a method that will measure the effect of an objective.

Give an example of a poorly thought out objective.
A poorly thought out objective would be ‘I’d like to increase sales.’ It doesn’t have any reference to how much you want to increase sales by, where you’re starting from or the time period where you want it to increase. So a better objective, when you’re looking at sales, would be to increase sales by 10{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} by Dec 2014. What you’re trying to do is establish a measure that will hit every element of the SMART acronym – specific, measurable, achievable, realistic and time bound. Until the objective can tick each one of those then you don’t have a good objective.

How can LEAP help managers and businesses with this critical issue?
We do it as part of an overall process. We need to see the wider context of what they’re trying to achieve in business. So we work with senior management initially to work out what the vision is for that business. Then they need to break that down into manageable chunks. So they may have a three year vision, but they need to focus on the first year. So in the first year what are the five or six key things they need to focus on in order to help them get closer to their vision?

What LEAP can do is help them with their vision. Agree on what the specific objectives are, and identify the measurements they will use. Help them agree on the timeline and implement the strategic plan. Help them monitor their performance, adjust their behaviour and achieve their vision. 

In interview with Des Kirby
How do measure performance in your business? Leave a comment in the box below. Thanks.

Maureen Grealish is a partner and director at LEAP.
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sonja@leapleadership.ie

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