The sheer number of businesses with no performance management strategy or tactics simply amazes me. Coming from a background where EVERYTHING is built from the ground up on frameworks that allow for tweaking and refining of performance, and with a solid schooling in management science, it makes me die a little inside.
“How many people have walked away from that business because their troubles weren’t spotted by their manager? How many resources have been wasted by that agency? No wonder they’re always slipping deadlines and their profit margin is razor-thin. And for how long?! Hey, they did have the bandwidth, they could’ve taken on that new client!” Oh! Despair…
I want to put it out there; I value great leadership over great management, any day of the week. Great leadership papers over the cracks, inspires people to join organisations, forges great characters, nurtures talent, provides vision, gets you through the hard times and will (sometimes literally) make people happily bleed for the cause. That’s all great. Exactly what you need when you’re up against it in a Champions League final. Sir Alf would be proud. However, great management isn’t much further down on the skill list; in fact, it’s what gives you a cutting edge in long term success.
Running a business isn’t about playing in a final every day of the year. It’s about playing an entire season, the ups and downs, players arriving, players leaving, players refusing to train, big opponents, crap opponents, the goal droughts, the scoring streaks, that time you snuck in that lucky goal as the underdog while the opposition couldn’t hit a cow’s arse with the side of a barn. You need to switch up your tactics, rotate players, and eventually average out enough points per game to come out on top at the end of the season.
In all likelihood, this is why they don’t give you points for losing beautifully. It’s also why the coach doesn’t only get paid to give inspiring half-time talks and be a general top lad/lass to everyone in the team. His/her job is about getting the best out of every play, every player, the entire team, and the best results by the end of the season. This is done by training, repeating, feedback, analysing, trying something new.
So I’m baffled when I go into a business that just does not have any performance management at all, bar a quarterly review with objectives. “That’s it, here’s what you have to achieve over the next three months, good luck matey. By the way, if you don’t achieve that, it’s either OK because we like you, or you’re getting the sack.”
I’m even more baffled when I hear “We’re a creative house, so managing their performance would be counter-productive, and it might affect morale. Plus we don’t want to become corporate.” What?!
Artist's impression of me whenever I'm told performance management doesn't work in creative.
It makes me wonder what sort of awful experience of management those individuals have been exposed to, and what sort of people they’ve hired if they would be put off by working under a system that would help them become better professionals. Two conclusions immediately spring to mind:
1 – Performance management is confused with Micro-management (or the Gulag)
2 – A lot of people simply don’t know how to performance manage. People tend to be frightened by what they don’t know.
Let’s set those two things straight. First, what performance management isn’t.
• Performance management isn’t micro-management.
• It isn’t designed to treat people like minions or machines, make people feel bad, and it isn’t a benchmarking tactic to decide who to cut.
• It certainly doesn’t stifle creativity.
• Those are ridiculous ideas.
So what IS it?
• Performance management aims to take away micro-management by setting outcomes/KPIs that are achievable, and drive behaviours where people are both empowered and accountable for their own deliverables and methods of achieving them.
• It’s designed to give a clear picture of who needs help/training if they do not hit the KPI’s or struggle with their processes.
• It should be built around a system that makes it incrementally easier for teams to hit deliverables and understand where they are compared to business goals.
• It should make people feel great for over-achieving.
• It should drive positive behaviour and more effective time management.
• Which in turn (and this should be an obvious given), leads to better creativity (every single study carried out on this has shown that individuals make less errors, are more fulfilled and far more creative when they feel in control of their work, supported in their development, and not in an utter organisational mess)
• It must ALL tie into the profitability of a business, in some way, shape or form.
How do you do it, I hear you clamour? Well, it’s a process that requires a fair bit of elaboration, based on whatever setup you’re working on and the niche you play in, but here are the absolute basics you should think about if you decide that giving your team and your business the best chance of success is the right way forward. And, I can’t believe I’m saying this, but here it is in “10 easy steps”.
1. Start with understanding your problems and outcomes. What would you like to see more of? What’s a recurring problem? What output are your competitors getting that you just can’t seem to crack?
2. Set layered KPIs. The obvious ones are based on input, output, customer satisfaction, quality of work, and bottom-line.
a. Overall business KPIs
b. Team KPIs that lead into the business indicators
c. Individual indicators. These require a little more thought. You need to find metrics that pertain to each role, something that is critical to their role that no other role can accomplish, while turning into a level playing field where everyone can be measured comparatively in a fair way. (Don’t task your lead developer with a sales target. That would be stupid.) 100% needs to be a realistically achievable target for everyone. Your aim is to also make over-performance (which actually also translates into a tangible extra return for the business) a reachable goal, and something individuals strive towards.
3. Make sure those metrics have a universal translation model, i.e. percentage vs. target or total number of points vs. a maximum, apart from the bottom-line target for the business. This is always profitability, ergo, squid, or bucks, or whatever is the lingo for money wherever you’re from.
4. Gamify it, so you can get buy-in. Buy-in makes it work. It also makes it fun. Work and fun should not be two diametrically opposed ideas. (More on this soon)
5. Performance manage and record results, EVERY DAY if possible. Weekly, at a very minimum.
6. Display and share your results for everyone to see. This is also crucial for buy-in. It’s rewarding for some, painful for others. Leaders and managers need to take responsibility for making sure the painful results are followed by positive reactions, and in almost every case, support to fix the underlying issues.
7. Think like a sports coach; analyse and tweak. Create a grid matrix with your A-players and B-players, short terms goals, long-term goals, and next coaching action. Never slip compiling your results, and always look for room for improvement. The matrix will never be static, and it’s the leader’s or manager’s job to make sure that as many people as possible make it into the A-list.
Here you go Steve, a well-deserved breadstick. Applause, everybody!
8. Reward outstanding performers. It goes without saying, one of the biggest buy-ins is the carrot. Great performance management yields incredible gains for the business, so praise those who have smashed the targets consistently. CONSISTENTLY.
9. Also reward big improvers. Just because someone has gone from 50% of their target to only 80%, doesn’t mean you should still ignore them, or even worse, whip them, because they’re under target. Performance management is all about improvement. An improvement of 30% on the scoreboard needs to be celebrated with the same zeal as an over-performer.
10. Raise the bar. If you’re constantly hitting all your targets, demand more of yourself and your team. Performance management isn’t only about getting up to a certain level, it’s about constantly finding out what you’re capable of, then exceeding it. Don’t go crazy and double your targets, it’s all about steady, incremental improvement.
Them’s are the basics. It really pays off for both the teams and the business to have a solid performance management structure; everyone wins. Do e-mail me if you’d like to find out more, I love talking about this stuff. There’s more to come, because there’s simply a lot more to it, and one size never fits all. Just don’t e-mail me or message me to tell me this doesn’t work in XYZ business, unless that’s accompanied by a will to be proven wrong.
Live long, and prosper!
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