What is Performance Management?

There have been volumes written about Performance Management yet at its core it's really quite simple. It means that a company has embraced a culture of setting agreed goals, holding people accountable to those goals, and rewarding those who achieve them. This can happen on the macro-level at which strategic planning is more than an academic exercise; a plan is meant to be executed and people actually commit to do so. This can happen at the micro-level in which individuals are expected to set and achieve results, are measured and coached to those results, and are rewarded (or not!) for what they actually contribute to the company. This can happen at all points in between.

Here are three components to Performance Management that apply at all levels. They are a simple guide and a useful test.

1. Clear and agreed EXPECTATIONS. Does everyone know and understand what the desired outcome looks like? Does an employee truly know in specifics what is actually required of the job? Is a clear set of business objectives created and articulated? Are clear metrics in place to determine progress to plan? Success? Failure?
2. Regular and honest FEEDBACK. Accountability means "the ability to tell the story." Is every employee, team, business unit head asked on a regular basis how they are doing and what they are doing? Are the metrics applied to them? Is management giving true and timely appraisals of work done (or not done)?
3. Appropriate REWARD AND CONSEQUENCES. It has to matter. Paying those who achieve goals and who do well more than those who don't is the purest form of capitalism and is NOT favoritism. Not everyone gets a trophy. There are winners and losers. Performers and non-performers. The simple truth is that some contribute more than others and therefore should receive the greater reward. Let the under-performing, closet socialists complain. Life is not meant to be fair!

I Coulda Had a V8!

As I finished a kaizen event this afternoon and the team did the obligatory management report-out, I couldn't help but laugh when the executive sponsor said over the speakerphone that he had experienced a few "I coulda had a V8" moments. In other words, DUH! It was the obvious, little things that made the difference--and the difference was in the millions of dollars.

On the two hour ride from Knoxville to my home in North Carolina, I kept thinking about this and here's the burning question I kept kicking around: HOW MANY OF THE THINGS WE STRUGGLE WITH ARE THE RESULT OF OH-SO-PAINFULLY-OBVIOUS CAUSES. We have been conditioned to look for the exotic, brilliant, breakthrough answer and the mindbending AHA! As a result we miss the clear, in-your-face simple things that, if seen and addressed, could make a lot of difference. Some of you get this. For those of you who don't, well...you've just proved my point.

It's All About Focus

A client of mine recently inaugurated a set of 2008 initiatives wrapped around 3 high impact areas. Knowing the leadership of that company very well I find myself worried that somehow this will get turned into working harder and longer hours--they already work exceedingly hard and incredibly long hours because of how much they (and I, for that matter) care about the company. In this case, importance becomes urgency becomes working harder.

This got me to thinking about the fact that it's not about working harder--in very few cased do I see reasonably successful people who don't already work very hard. And I'm not going to say it's about working smarter (which generally means cramming more into a day through false efficiencies--essentially another form of working harder); this makes me want to hurl!

The real issue at hand is focus--doing a few, highly impactful things really well rather than doing a bunch of things tolerably. Most of us are deathly afraid of saying "No" or of taking something off our list. We don't unsubscribe to email newsletters. We don't tell people we can't be there. We don't eliminate--we expand our commitments on a regular basis. The result is diffusion, confusion, and overall frustration.

Strategy is not coming up with a list of initiatives (the more the better) and then trying to do them all. Strategy is considering all the things that you could do and then reducing that list to the fewest possible things that you must do. It's all about focus. At a company level and at a personal level, stop and ask yourself about your sense of focus.