Written by: SmartGrowth 7/27/2010 5:00 PM
High performance occurs when people are focused on and execute against the organization’s strategy. Many companies have a well-designed strategy but do not achieve the level of performance they desire. A winning strategy poorly executed rarely produces desired results. We have identified five common impediments to superior organizational performance. Impediment 1 : They Don’t Set Clear Expectations The first impediment is not setting clear expectations about performance, that is, failing to be explicitly clear about what results people are expected to produce. When employees are not exactly sure about what they should accomplish, they do what they think they should do. These actions are mostly well intentioned, but often misaligned. People working hard at the wrong things do not deliver business value. It is critical that all business activity, particularly in the fast-growth business, be directed at the successful execution of the company’s strategy. In their book The Balanced Scorecard: Translating Strategy into Action (Harvard Business Press, 1992) the authors Kaplan and Norton estimate that up to 95% of employees don’t know their company’s strategy. If that’s true, it’s highly unlikely that their tasks and objectives are aligned to the strategy. Recommendation The Gallup Organization’s landmark research, compiled in First Break All the Rules (Simon and Schuster, 1999) found that the most effective managers were able to help employees answer the question, “What is expected of me?” Great managers help their employees deliver results on the tasks and initiatives that mean the most to the success of the firm – the ones aligned to the company’s strategy. Make sure that everyone understands the organization's mission and strategy and that everyone has clear goals and objectives aligned to that strategy. Ensure that managers know how to translate these goals into expectations and make sure there is constant dialogue between managers and staff about the clarity of the expectations. Impediment 2: They Don't Hire the Right People Hiring the right people is difficult. That’s because making good hires requires significant work long before a candidate walks in the door. It’s very hard to find the right people if you don’t do the up-front work of defining the role, the accountabilities, and the knowledge, skill, and experience that candidates will need to get the job done. Furthermore, it gets harder and harder to identify those specific competencies as you move from front-line employees to middle and executive management. Speaking of leadership roles, Larry Bossidy and Ram Charan state in their book Execution (Crown Business, 2002), “They (leaders) and their organizations don’t have precise ideas about what the jobs require – not only today, but tomorrow – as a result, their companies don’t hire, promote, and develop the best candidates for their leadership needs.” Bringing the wrong people into an organization has three immediate outcomes: 1. They perform at sub-optimal levels 2. They drain the time and energy of managers 3. They have a negative impact on other employees and customers Recommendation Here are three simple suggestions for improving your hiring: 1. Develop a competency model and interview guidelines. These tools help you to define the knowledge, skills and attitudes that employees must have to be successful in a job. The interview guide should focus on specific behaviors that are critical for success in the role. 2. Train interviewers and managers in how to use the interview guide to ask tough and probing questions that really explore what a candidate has done, how the candidate makes decisions, and how he or she handles difficult situations. 3. Benchmark your compensation model. If you’re not competitive, you will have fewer opportunities to capture top talent. You don’t need to have the most lucrative compensation package but it must be in the ball park. Impediment 3: Companies Don't Help Their People Improve Their Performance. Underperformance has high costs. Individual performance improvement is a result of efforts in three areas: number one is motivation, number two is skill development, and number three is feedback. As we discussed earlier, most firms don't get the improved performance they seek because they don't invest the time and energy to clarify expectations for their staff. If they did, their employees would be clear about what results are expected. Knowing what is expected is necessary but not sufficient for breakthrough performance. Employees must have the desire (motivation) to perform and the skills to execute the tasks and achieve the stated goals. Recommendation Get managers focused on these three areas: motivation, skill development, and feedback. Motivation—This is a big topic. For this discussion, let’s focus on the connection between goals and motivation. Without challenging goals we amble. When employees don't have clear, challenging goals, they often do not have the strength of motivation to perform at the optimal level. Research conducted by John W. Atkinson and David McClelland (Psychological Review, 1957) on the relationship between motivation and expectancy of goal achievement demonstrates that the level of motivation increases with the expectancy of success until the level of expectancy reaches 50% and then begins to fall off as the expectancy of success decreases. Essentially, what they found was that no motivation was aroused when the goal is perceived as being virtually certain or virtually impossible. This work was also confirmed by Mihaly Csikszentmihalyi in his research on how we achieve the highest levels of enjoyment and performance in our work. (Flow: The Psychology of Optimal Experience, Harper Perennial, 2008) It is the manager’s job to identify the appropriate level of challenge required to facilitate employees’ best performance. Skill Development—Are employees gaining expertise through learning? As markets, customers and technologies change, employees and managers need to upgrade their skills and capabilities. These skills can be technical, such as utilizing new software applications, or they can be professional skills such as negotiating or delivering excellent customer service. Learning can be formal or informal, but if it is not happening in your organization, employees are at risk for underperformance. Feedback—Even the most highly trained professional athletes seek feedback on a regular basis to improve performance. It is the manager’s job to provide coaching and feedback that employees need to master new skills on the job. Feedback is best provided in a trusting manager-employee relationship in which the manager is committed to helping employees grow and develop to be their very best. Impediment 4: Companies Keep Underperformers Too Long Without a systematic way to understand how employees are performing on the job, many organizations carry underperformers too long. In sales it is easy to identify an underperformer. For the sales professional it is very clear: you either make your number or you do not keep your job. But for non-sales roles it is not as easy to determine an individual's cumulative level of performance in real time. Most fast-growth companies wait until the annual performance review – if they even have one – to calibrate individual performance. By this time, months, perhaps quarters, have gone by before underperformance has been addressed. Recommendation Gain real-time insight into individual performance by implementing tools and methods that track performance against goals and objectives on a more frequent basis, such as weekly or monthly. Help managers recognize the importance of regular, performance-related discussions and help managers recognize the signs of employee disengagement and poor performance and then hold them accountable for dealing with non-performers. Impediment Five: Companies Don't Keep the Top Performers in the Organization The loss of a top-performing employee is a significant drain on financial resources. In addition to the productivity and intellectual capital that leaves with a top performer, the costs associated with finding and training a new employee in a key position can be significant. It’s tough to keep top performers if they are not challenged, engaged, and properly compensated (see Impediment #3.) Most organizations that face employee retention issues focus on compensation, but our own research and the work of other experts such as Frederick Hertzberg and Jon Katzenbach suggest that employees seek to fulfill much deeper, intrinsic needs, in their work, such as achievement, recognition, and career development. Recommendation In addition to ensuring that you have a competitive compensation structure, determine the level of engagement of your workforce and identify retention risks. You may need to build a rewards and recognition program that helps employees feel valued. Develop and communicate a career path for employees so they know that they can grow with the company. If they don’t understand the criteria for promotion, they are less likely to strive to meet those criteria. Give employees the opportunity to work collaboratively with their managers to create challenging but attainable goals that, when reached, will provide a strong sense of achievement for the individual and will move the company forward. Uncover and take action on these hidden impediments in your organization and you’ll begin to develop a high performance workplace. For more ideas on how to build, manage and grow an extraordinary organization, call us at 919-324-6770.
Copyright ©2010 Smart Growth Admin