Dynamic performance management
Modern businesses invest in performance management processes to deliver more effectively on objectives. It’s a robust process, 1. identify the strategy, 2. break it into objectives, 3. roll down performance goals to meet those objectives and 4. track key performance indicators to judge the level to which those objectives are met. There are several ways in which this process can be dramatically improved in a dynamic environment.
Simplify the process to allow performance management to move as swiftly as your dynamic strategy does.
Gone are the days in which a business can set annual goals and expect to keep up with environmental changes. Now we need strategies that are moulded and updated with new information, that we are dynamically collecting from the environment. As much as possible we should look for short-term ‘best guess’ objectives, accepting an 80% fit to the known environment and acting on them more quickly. Therefore performance goals need to fit this same timeline. Move the goals to an online tracking system (there are an enormous number of these Smartsheets is my current favourite), shorten the timeline of goals to weeks rather than months and get progress updates weekly.
Set goals that are a mixture of BAU and stretch, align these to the firm and fluffy objectives in your strategy.
A business as usual (BAU) goal is a clear goal that fits the SMART methodology and is simple to write when the objectives in your strategy are firm. Firm objectives are measurable with clear paths for delivery written into the objective themselves. A dynamic strategy will also include ‘fluffy’ objectives, it needs to, you’re responding quickly to the environment and creating the objectives you know you need for the business even if you do not yet have a picture of how they will be delivered. Delegating responsibility for the fluffy objectives requires a different approach and creates the type of goal I like to call ‘stretch’ so as to align it to previous performance management terminology, even though it’s actually probably more accurately defined as ‘fuzzy’. I call these ‘stretch’ to give credit that their delivery is less certain and will require a greater level of personal risk and creativity from the team. This is best described through examples:
Firm: The business has an objective to get the new customer system up and running in six weeks?
BAU: Your team members goals should be matched to the project milestones.
Fluffy: The business has an objective of becoming more customer focussed?
Stretch: Team member goals will be hard to write and there is a lower possibility that they will deliver directly on objectives, but it is vital that they are still actually linked to the strategy. For instance, the team doesn’t actually know what the customers want, so the first step will be to ask them. Planning a customer focus session would be a nice clear BAU goal, something that fits the SMART methodology very well, but it may deliver very little towards the objective of the customer feeling that you are actually listening. So instead, write a stretch goal that is still clear but may have lower probability of being achieved because there is a higher level of uncertainty within it, ‘deliver on three quick wins out of the customer focus session’. This is stretch, because no one yet knows whether they’ll be three quick wins coming out of the session. The greater the resources at the disposal of your team member the more uncertain that goal can become and still deliver on objectives.
Prioritise and incentivise stretch goals more that BAU goals.
Good engaged employees should need no specific incentive to deliver on BAU. It’s wise to include it in performance plans as it will still focus on the outcome of their day to day job that is most critical to delivering a strategy quickly. These keep everyone on the same page in a tangible way. But stretch goals, the fluffy and fuzzy is where all the creativity is. This is where your team members will need to dig the deepest. Incentivising this creates a human contract where you are accepting and grateful for the emotional effort it takes to do something that may fail. Measuring performance on these goals with compassion will go a long way to building psychological safety, allowing team members to judge their own performance against these stretch goals can go a long way to building true accountability.
Psychological safety is the name of the game.
The most important thing you can do is to build an environment where asking team members to ‘do the impossible’ is a way of life, one that builds on your Employee Value Proposition (EVP) by bringing variety, learning and really gratifying wins. You will create a resilient organisation that can pivot with change faster and with less mistakes.
Value failure: When asking for ‘stretch’ or even ‘impossible’ out of your team members it is absolutely critical that yours is an environment where failure is accepted. Create quick and dirty reviews on failures, capture the lessons, integrate them in the next planning stage and be grateful for everyone who had a roll in failing quickly and openly. The new stretch goals relating to this objective should be written before the end of the review session.
Don’t kill the ‘gratifying win’: It is a common management philosophy to hold an optimistic view of the future for your team. I don’t disagree with this generally. Certainly holding a pessimistic view of the future is a quick way to lose your best employees to the competition. If you think you’ll remain in a changing environment for a time (and if you don’t, I’d love to know what your business is) then you’ll need to ensure that when the impossible is achieved that your team members are feeling that win, really feeling it. This feedback loop keeps their energy levels high. The solution: be honest and open about how hard it may be to deliver on the objective, and accept that we may fail. No one wants to fail. If your employees believe in the future, have a high level of engagement with the business’ outcome, then you will not increase the likelihood of failure by being honest that there is uncertainty and complexity in the solution. The resulting high from the team members finding that solution will pay enormous dividends to EVP, employees who feel they solved a wicked problem for their business are an enormous cultural asset. They spread hope and increase performance standards.
Self assessment and accountability building
Am I crazy? Self assessment? Won’t everyone say they’ve done brilliantly? Well, no. One way to avoid any confusion in self assessment is to create so blasé goals that there is no debate. However, when it comes to dynamic, complex, stretch goals the measurement of acceptability of performance is drawn away from ‘did you do X’ to ‘how effective were you in applying your own (and the team’s) resources to solving the problem’. To be fair, the only true assessment here is self-assessment. When assessment only comes from above there is a shift in focus from being accountable for your own delivery to the protection of the perception of that delivery. This can be a magnificent waste of time, and feed the monster of both competition and insincerity. Insincerity being the seed of fraud. You will know quite quickly which employees are incapable of self-assessment, and this will give you tremendous information to use to build your effective team.
Remove the blockers of self-actualisation
This is where the magic of leadership happens. You’ve established a dynamic process of aligning team members focus to your strategy. That is wonderful. Team members are accountable for their own outcomes. And yet, this process has identified team members who:
Consistently talk down their own performance
Meet them where they are. Please remember that each of your team members is a human with a history, a set of expectations for themselves and a complex life outside of the office. Commence every single discussion with your team members by a ‘temperature check’ of their emotional well being, regardless of whether they’re in this category or not, but especially for these people. Consider ways in which work can improve upon their view of their unique awesomeness. A couple of suggestions include a. Open the performance results of the whole team to each other and ask them to reevaluate their self-assessment in light of this data. b. Ensure there are deliverable BAU goals in their plan, being able to categorically achieve improves self-perception c. increase the frequency of planning (to enable more practice in a shorter timeframe) and d. increase your positive feedback and expressions of gratitude.
Fail to deliver on BAU
Please first start with checking on their well being as above. A manager who is compassionate in hard times creates a bond between an employee and the organisation which can handle many ‘knocks’. The best response to outside pressure is to find resources to share their goals. Delaying the goals would delay your strategy. Ignoring their pressure will delay the appearance of the failure. Be a leader, find the capacity and relieve the pressure.
Nope, no external temporary reason here. In this case - Increase the frequency of the planning cycle. Ask for more regular check ins on progress. Start every progress discussion with ‘what do you need to achieve your goals’. Use your performance planning spreadsheet to record these requests, which of course, you’ve made visible to the whole team. Make sure you deliver quickly on requests for resources. Check that the goals are considered important by them, and draw a better mental picture of its importance through links to strategy and the business’ future. Check engagement levels. Is there a reason they are not attached to the positive business outcome? Do they believe there is a better way? It is possible that the goal is incorrect and this ‘poor performing’ employee holds the key to a better way.
Nothing works? There is no reason to include separate specific performance improvement plans. Continued failure to deliver on expected performance should commence redeployment/exit procedures.
The worst thing you can do for your transparent and dynamic performance processes is to leave poor performance unchecked.
Cannot take on tasks that are complex, new, uncertain.
Meet them where they are, build rapport. In my experience investing in these categories of employees pay much greater dividends than railing in your consistent BAU under performers. This could sound non-sensical to invest more of your time building the capability of acceptable performers to try the ‘impossible’ whilst others in the team are not even delivering their BAU goals. I suggest that you clear out the dead wood quickly so that you can coach this group. The potential of this group is untapped, who knows what gold lies within them.
Now that you’ve been ruthless enough to free up time for them. How do you build their capacity for the uncertain. For me, this is a risk tolerance problem and so your actions will focus on reducing the apparent risk and increasing it’s apparent reward.
Be vulnerable. Take them under your wing as you encounter your own wicked problems. Share the frustrations, your uncertainty, your nerves. Allow them to support you in this. (reduces perception of personal risk)
Start massive. Well, not massive, but definitely don’t start small. Start with something that you transparently believe is impossible. Share this. Again this seems counter intuitive but relaxing expectations of an outcome allows them only the positive feelings of having a chance to delight you. (increases perception of potential reward)
Coach don’t teach. Keep an open door to this group, but be careful with your input. It is important that you are available for emotional coaching for this group as they battle their own nerves. It is more important that you do not solve issues they encounter. Solving issues will transfer ownership of the win from them to you. As the win is not very certain to start with, please don’t ‘spoil the pop’. (both reduces perception of personal risk and increases potential reward)
Do not ever allow anyone to take the glory. Did they create a new tracking system for you? Every time you use it publicly, use their name. Did it fail? Be grateful. Acknowledge their efforts. Publicly. Notice someone else failing to give them credit? A bit of public shaming can’t hurt. :) (increases perception of potential reward)