Walt Disney and the 4 Performance Management Tools

Walt DisneyThe Performance Management King

I recently picked up the very brilliant The Illusion of Life by Frank Thomas and Ollie Johnson. For those of you who don’t know, it’s a colourful investigation into the origins of our favourite Disney characters. Written by two of the nine animators who made Walt Disney into a household name, it very aptly demonstrates what a visionary Disney was – and not just in the field of animation.

Way back in 1923, when performance appraisals, 360 feedback, and employee evaluations weren’t established (and certainly weren’t Googleable), this guy was blazing a performance management trail that leaves many modern businesses in the dust. It’s an approach that took his fledgling studio from two employees to over 1000 in only sixteen years¹. Let’s take a look at exactly how he did it.

1. Alignment

“Of all the things I’ve done, the most vital is coordinating those who work with me and aiming their efforts at a certain goal.” – Walt Disney

Over the last 20 years, we’ve seen a huge amount of research published on the topic of employee alignment. We now know that employees who are aligned with organisational goals and objectives have higher engagement and job satisfaction, while their employers enjoy significant advantages over competitors². Disney was way ahead of us, using three key practices to actively aligning his workers:

Leading by Example

Disney had a firm creative vision, and he made sure his animators shared it. In story meetings he would act out the scenes, demonstrating the gestures and attitudes he wanted to see in the final cartoon. It’s a philosophy the Disney Company maintain today, and leaders are expected to behave according to their values and vision, which must align with organisational values³.

Team Effort and Ownership

‘Everyone has to contribute, or they become laborers.” – Walt Disney

Disney believed that each person connected to a film had to feel that they were vital to its success. As such, he involved everyone in the collaboration and evaluation process throughout production.

Engagement

To get his team excited about an upcoming production, Disney would bring in a well-known artist to create unique drawings or paintings long before any actual story work began.

2. Transparency and Collaboration

When animation was in its infancy, skills gaps were commonplace. Studios did not share techniques, and it was difficult for beginners to learn the skills and tricks other animators had already discovered, even within their own studios.

Disney turned this model on its head. He insisted on an open atmosphere and encouraged each artist to share their views and discoveries. The studio effectively created a mentoring program which, by pooling insight from newbies and experienced professionals, allowed Disney animators to remain at the cutting-edge of their field.

Believing that good ideas came from everyone⁴, Disney did away with the concept of seniority. All the animators worked together in one large room to encourage discussions and problem solving. It wasn’t until 2012 that knowledge management (the process of transforming individual knowledge into organisational knowledge) was proven to contribute positively to organisational performance. At the same time, we also discovered that a collaborative culture enhances the benefits of knowledge management⁵, something Walt Disney had recognised nearly nine decades before.

Regular feedback infographic

3. Recognition

With the power to increase engagement, encourage development, enhance alignment and reduce turnover, recognition is critical to talent management (check out my article on recognition programs for a re-cap). Disney knew this only too well and made sure to praise great work – calling everyone together to discuss a drawing he particularly liked.

Recognition still plays a pivotal role at The Disney Company – Florida’s Walt Disney World alone boasts 180 different employee recognition programs. One of the most coveted at the park is the Spirit of Fred Award. Named for a long-term employee who made his way up the ranks by exemplifying Disney values, Fred makes the awards himself, which include The Lifetime Fred Award and the annual Spirit of Fred Awards⁶.

4. Frequent Feedback and Training

Quality was everything to Disney, but so was skill. If an animation was clumsy or poorly staged, he wouldn’t delegate the work to an animator with more proficiency. Instead, he would pair the original artist with a more experienced teammate to provide guidance.

Despite this focus on mentoring and on-the-job training, by the 1960s, Disney’s studio was suffering from a skills gap. His original nine animators – trained in 1929 at the Chouinard Institute – were starting to retire, and those coming up lacked the technical expertise to take their place. He needed a new approach to training, and his long-term association with Chouinard provided it.

Disney’s vision for a specialist college led to the incorporation of CalArts (a merger between Chouinard and the Los Angeles Conservatory of Music) in 1961. There, students studied animation under the tutelage of his nine retired animators, and the company cherry-picked the best graduates⁷. It’s an approach we see more and more of in China and India, where companies sponsor existing colleges or create their own to guarantee the graduates and skill sets they need⁸.

To Sum Up…

One word crops up over and over again when investigating The Disney Company’s people management processes; genuine. Disney genuinely cared about his business, his worker, and his product. His understanding of alignment and company values ensure his attitudes to training, recognition, and collaboration are still at the heart of the company today.

References:

¹Disney Institute. Undated. Leadership excellence.Disney Institute

²Gottschlag and Zollo, 2007. Interest alignment and competitive advantage. Academy of Management Review. 32 (2). pp. 418-437.

³James, 2014. Leadership lessons from Walt Disney: how to inspire your workforce.Disney Institute.

⁴Jones, 2013. Leadership lessons from Walt Disney: building relationships.Disney Institute.

⁵Rasula, et al., 2012. The impact of knowledge management on organisational performance. Economic and Business Review. 14 (2). pp. 147-168.

⁶BH Engagement, undated. Exploring employee incentives. Black Hawk Engagement.

⁷Wikipedia, undated. California Institute of the Arts. Wikipedia

⁸Capelli, 2014. How Disney solved its skills-gap problem. Human Resource Executive Online.

An International Approach to 360-Degree Feedback

360-degree feedback has well and truly conquered the world. There’s no doubting that it offers advantages at both an individual and organisational level, but the system — dependent on self, subordinate, peer and management appraisals — is far from objective. With extensive research detailing the biases introduced by cultural perception, I think it’s time we took a frank look at the international implications for 360-degree feedback.

Power Distance and Leniency Bias

Two cultural factors have the greatest impact on the objectivity of appraisers; power distance and leniency bias.

A measure of the degree to which society accepts the uneven distribution of influence and authority, power distance (PDI) is very highly correlated with cultural attitudes. Societies with high PDI are hierarchical and expect a clear division between high status and low status individuals. By contrast, individuals from countries with a low PDI see few distinctions between position and function and value being included in the decision making process, regardless of their status.

Leniency bias describes the inflation of performance scores by individual appraisers. This reaction can stem from respect for the appraisee, self-preservation or a desire not to give offence.

Australia - Power distance infographic

Source: PDI Index

Cultural Differences

Individualism and collectivism can also impact rating accuracy. In collective cultures, the image of group harmony is essential. Communication is indirect and non-confrontational, and individuals actively avoid embarrassing others. In individual cultures, communication is typically more direct, and it is the responsibility of each person to protect their dignity and keep face.

Countries characterised by a high assertiveness (i.e., negative and positive communications are commonplace) experience very little leniency bias, and both peer and subordinate ratings closely match an individual’s assessment of their performance. Similarly, self and subordinate ratings are positively correlated in countries with a low PDI, which means 360-degree reviews are well suited to individualistic, assertive societies with low PDI.

North America

Highly assertive with a low PDI, individualistic Canada and the USA provide the optimum environment for this system. It is quite literally made for them.

In this environment, agreement between self and third party appraisals is indicative of high performance. Interestingly, comparisons with other Western cultures found that even though they had the same attributes (individualism, low PDI and assertiveness), the correlation between self and third party assessments was not as accurate for identifying high performers outside North America.

Southeast Asia

High PDI countries are known to suffer from leniency bias, with subordinates regularly overrating their managers. PDI also presents another problem, since requesting feedback from subordinates can be interpreted as a lack of knowledge on the part of a manager. Similarly, superiors are less likely to consider feedback from junior staff valid or useful.

Collectivism hinders the delivery of assessments, with confrontation and criticism actively avoided. Additionally, ambiguous communicative styles and a tendency to deliver subtle feedback has also been shown to reduce the efficiency of performance appraisals in these countries.

Japan

Displaying many aspects of a collective society, but highly competitive, Japan is caught somewhere between individualism and collectivism. Borderline hierarchical, it was an early adopter of the 360-degree review strategy.

Industry-based studies do suggest a leniency bias here, with individuals receiving the lowest scores from superiors. This phenomenon appears to be unique to Japan and is likely the result of a meritocratic system that promotes high performance.

Europe

In mainland Europe, performance reviews are often linked to pay and promotions, and self-evaluation is less common than in the US. Of course, the use of performance appraisals is highly varied. In France, for example, it is unusual for fixed-term workers to receive reviews, while in Germany men are often appraised more frequently than women.

Individualistic and assertive, most European cultures closely mirror that of North America and 360-degree reviews work well here. The UK was an early adopter of the approach, which has been widely used since the 1990s. UK-based studies have credited the system with improved management competencies and increased self-awareness. A 2006 international study cited leniency bias as a problem, with own performance usually underrated by appraisees. Interestingly, the authors also noted a general reluctance to complete surveys and submit feedback.

Germany performance appraisal infographic

Source: FedEE Global

In Practice

If managers fully understand the bias and cultural values influencing feedback, then 360-degree reviews are workable in any country. By avoiding comparisons of results across cultures, ensuring the rating scale has enough points for respondents to differentiate, and recognising which cultures are susceptible to leniency bias, leaders can accurately identify high performers and areas for development.

How to make feedback less stressful

Regular feedback is one of the most erowerful tools in improving the performance of employees. Recent numbers say 65% of employees want more feedback than they’re getting, with 98% of employees disengaging when managers give little or no feedback.

With numbers like these, there’s no question that regular, meaningful feedback is crucial to business success and employee satisfaction. What is less certain is how to help ensure managers actually give the feedback that delivers better performance and more engaged people.

The answer relates directly to stress. People actively avoid giving feedback because it’s so stressful. If we could remove or lessen that stress reaction, we’d all be much happier to give and receive feedback more often.

A recent webinar from Harvard Business Review: “Making Feedback Less Stressful” aims to do just that.


The best webinar on feedback I’ve ever seen

Whether you need to encourage your leaders to deliver feedback more often – or you’d like to improve your own skills, this SlideShare is a great resource (If you’re working specifically in this space, I suggest bookmarking this 146-slide pack). It’s the brainchild of Ed Batista – executive coach, change management consultant and course facilitator at Stanford University. Batista facilitates ‘Interpersonal Dynamics’ (or ‘Touchy Feely’ as it’s more commonly known), which is one of the most popular electives at the university.

If you’re short on time, let me help. In this article, I’m going to talk about the two most important things that I took away from Batista’s webinar on making feedback less stressful.

Takeaway one: Why is feedback typically so stressful?

Before looking at how to reduce the stress around feedback, we need to understand why it’s so uncomfortable. Batista doesn’t beat around the bush here: “Feedback is a social threat”, he says. Just like all threats, it causes physiological, emotional and cognitive responses. These include:

  • Increased heart rate
  • Heightened blood pressure
  • Anger, aggression, fear and anxiety
  • A negativity bias

Of course, it’s the person receiving the feedback that experiences these stress-inducing reactions. However, being the person giving the feedback and being responsible for such uncomfortable reactions is no picnic either.

Takeaway two: How you can personally make feedback less stressful

If you knew your feedback was going to be accepted gratefully and acted on every time, how would that affect your management behaviour? My guess is that you’d deliver feedback much more often.

In his presentation, Batista suggests two frameworks for delivering effective  feedback. Both of the frameworks focus on feelings – but from different perspectives:

Framework 1: A simple equation (that’s quick to remember)

This framework is an easy-to-remember equation that requires you to draw on your own feelings (as the feedback giver). If you link the feedback to an emotion you are feeling, it tends resonate more and have a longer-term impact

“When you [X], I feel [Y]”

[X] specifies a behaviour and clarifies what you’re talking about.

[Y] specifies an emotion, creating interest and influencing future behaviour.

For example: “David, when you keep making avoidable mistakes in these mark ups, I feel really frustrated.”

Framework 2: The SCARF model (for when you have more time to plan)

When you give feedback, you risk threatening five components of social situations: status, certainty, autonomy, relatedness and fairness.

Before you give feedback, consider the recipient’s thoughts and feelings – and reframe your feedback accordingly:

Status

Status is a person’s relative importance to others. If their status is threatened they will feel like they are being spoken down to, undermined or patronised.

How to reduce the status threat

Encourage people to give themselves feedback on their own performance:

“How do you think that went? How might you do it better next time?”

You may also want to give praise in public.

Certainty

Certainty concerns the future – and how predictable or secure it is. At its worst, threatened certainty may manifest as a fear of being demoted or even fired.

How to reduce the certainty threat

Establishing clear expectations is the best way to increase certainty. While expectations would generally be set prior to a task beginning, you can give feedback during the task to help reduce certainty threat:

“Remember, the ideal outcome here is…”

Autonomy 

If someone has autonomy, they have a sense of control over events and they have choices available to them. If feedback is seen as micro-managing, it will feel like choices are being taken away.

How to reduce the autonomy threat

As a threat to autonomy could feel like losing choices, the best way to avoid a negative reaction is to give choices as part of your feedback:

“Here are two options that might work, which do you prefer?”

Relatedness

Relatedness involves deciding whether someone is a friend or a foe. A healthy manager-employee relationship can be damaged if feedback threatens relatedness.

How to reduce the relatedness threat

Encouraging friendships is a good way to reduce this threat, especially if people work remotely. At the point of giving feedback however, you may want to try personally relating to the task at hand:

“I had to do this last week/last year and I struggled, try this next time it might help.”

Fairness

To evaluate whether feedback is fair or not, the recipient will look at the actions of other employees and the feedback given to them. It is important that your feedback is based on fact too – not an assumption or a generalisation.

How to reduce the fairness threat:

Make it clear that you are not treating one person differently to another:

“Like I just said to Sid…”

For more detail, check out ‘SCARF: a brain-based model for collaborating with and influencing others’ by David Rock – the creator of the SCARF model.

In conclusion…

Increasing the frequency of feedback is a sure-fire way to improve performance and engagement – both at the individual and team level.

However, telling your leaders to give feedback more often is only part of the story. Address the reason/s why people don’t naturally give feedback: complacency can be a problem, but the more probable reason is the uncomfortable stress reaction people often experience when both giving and receiving feedback.

Training everyone (including leaders) in the art of feedback is a great opportunity for companies wanting to step-up performance and deliver stronger results. I recommend using this webinar as a starting point. The great news is, everyone can learn to give better feedback more easily, with less stress for both the giver and the receiver.

Have you seen any other great resources on feedback? Let me know via Twitter: @cognology.

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.

Yes, you. Even the board needs performance feedback.

The topic of performance management for boards came up in my recent Talent Management Talk with Tania Hannath. As we talk about in the short clip below, the performance management of boards is a positive, major trend that we’re seeing across both listed Australian corporates and the Not-For-Profit (NFP) sector.

In this article, I explore the growth of performance management at the board level in more detail. We start with a quick look at where this recent trend has come from, look at some hard data around the impacts, and briefly explore the similarities/differences in board-level performance management.

Why have businesses started evaluating boards?

In my opinion, there are three reasons why board-level performance management has seen such recent focus:

1. A change in requirements for ASX boards post-GFC

In July 2014, the ASX set out additional governance principles for ASX-listed companies. The first is the requirement for companies to report on how they are evaluating the performance of their boards.


2. A shift in the responsibilities of boards

An international review of corporate governance published in 2005 states:

“As boards are held increasingly accountable for corporate performance, they become more proactive in the leadership of the companies they govern.”

True to the report, in the decade since 2005, we have seen a profound shift in responsibility of boards from management support to organisational leadership. This change in organisational thinking means boards are now being held accountable for strategic direction, change management and formulating corporate objectives. This has two impacts on performance management:

1) It makes performance management for boards critically important, and
2) It gives us tangible, measurable performance indicators for board directors.


3.  The undeniable benefits of regular performance management at board level

Now we’re getting to the real heart of the matter – the ‘business case’ for board performance management:

  • The opportunity to track and improve the performance of every board function
  • The ability to prove performance to all stakeholders, which in turn:
    • Increases the trust of shareholders
    • Allows transparency for the government, employees and customers
  • Individual development and growth of directors

The verified impact of board-level performance management

An increasing number of studies are being conducted into the impact of board-level performance management. As you’ll see, the data makes a powerful case for why performance management at the board level is so important:

  • 72% of those who expected board members to participate in formal skills and knowledge development expected revenue to increase. (Perpetual Philanthropic Services, 2015)
  • High-performing boards spent seven days a year on performance management compared to four by low-performing boards. (McKinsey Quarterly Review, 2014)
  • The board activities most strongly correlated with organisational effectiveness include strategic planning and board development. (‘Board performance and organizational effectiveness in nonprofit social services organizations’, Green, JC and Griesinger, DW, 2006)
  • More than 80% of European and US institutional investors say they will pay more for companies with good governance. (Economist Intelligence Unit, 2001)

How does board-level performance management work?

Practically, performance management for boards is very similar to the process for everyone else in the organisation. Great performance management at every level is built on:

As I’ve said before on the topic of best-practice performance management:

“Top athletes, entrepreneurs and leading businesses all have one thing in common. They have goals and they succeed by regularly seeking feedback on their progress to achieving their goals. They use the feedback to adjust the things that aren’t working for them and to know what is working well. Winners are constantly looking for ways to improve.”

Notice how there’s no mention of ‘managers’ or ‘employees’ above. Best practice performance management is not necessarily ‘top down’, and it’s not just for tracking performance. At its core, performance management is about ongoing improvement. That’s a goal (and a process) that all high performers should actively buy into – regardless of if they’re in the graduate program or the boardroom.

In summary

It’s fantastic to see that performance management is achieving real traction at board level. As the data shows, performance management for the board as a whole and for individual directors brings great results for the organisation at all levels, and for shareholders and other stakeholders too.

If your organisation has implemented board-level performance management I’d love to hear about your experience. Reach out on Twitter via @cognology.

Australian managers, this is your 360 performance review

How is Australian management really performing?

There’s a lot of good reasons to do a 360 performance review. One of the most critical is to make sure you’re getting an accurate picture of the real situation (and not just one person’s view).

It’s common sense that any performance review that’s only based on one viewpoint has the potential to go badly wrong. (if you’re interested, we touch on the other reasons you should be using 360 reviews in our detailed guide to 360 performance reviews).

As we saw in our recent look at the state of middle management, it’s very possible for two groups of people to have a very different take on performance. To recap:

  • When you ask middle managers how they are performing, only 27% think middle management is underperforming.
  • However, when you ask senior managers, 64% rate the skills of middle management as “below average”.

This finding got us interested about whether there was such disagreement about the broader performance of Australian management.

A broader look at the performance of Australian management.

To get a 360 view of Australian management, we went looking for data from the top, the middle and the front line. One of the best resources we found comes from the Australian Institute of Management (AIM). AIM have been publishing an annual management capability index since 2012. To compile this capability index, AIM asks managers from 420 different companies to rate their organisation’s management performance (“how well is the organisation performing vs. the capability of management”).

To get a comprehensive review, we’ve integrated this data with Glassdoor for front-line employees. There’s more detail on the methodology and logic below.

Without further ado, here’s our 360 review on Australian management:

360 performance review chart

 

The view from the top: The CEO perspective on Australian management.

AIM’s Management Capability Index (AMCI for short) shows that the average CEO thinks their organisation is operating at 72% of management potential. This is a concerning figure from the leader of the organisation (who is ultimately responsible for the performance of management). On average, CEOs are saying that their management team is leaving nearly 30% of potential performance on the table! It’s a major performance gap!

If you have some time (and you’re a HR nerd like me), the underlying data makes for fascinating reading. It reveals that CEOs think that Australian management are worst at “Results and Comparative Performance” (68%) with “Visionary and Strategic Leadership” also performing poorly at just under 70%.

The view from the middle: What do senior managers and middle managers think about Australian management?

Ratings of management performance continue to fall as we move down the hierarchy. The AMCI shows that Level 2 and 3 managers feel their organisations are only operating at 65% and 58% of management potential respectively.

These ratings are a strong criticism of overall management performance. In plain English, level three managers are saying that they think their company’s management team are capable of performing at almost twice current output!

Again, this isn’t a uniform picture across the board. Every level of management picks different management weaknesses:

  • Level 2 managers are particularly critical of management performance on “Organisational Capability” (57%) and “Innovation” (just under 60%).
  • Level 3 managers are significantly more critical of management performance on “People Leadership” (just 50%) and “Application of Technology” (again 50%).

The view from the frontline: Employees’ thoughts on Australian management via Glassdoor.

The thoughts of employees are not far removed from the management capability index. We’re using Glassdoor as a proxy for how front-line employees think management is performing.

On Glassdoor, employees are asked to give the company and management a rating out of five. For the ASX 100, the average rating is 3.09 out of 5. On a percentage basis, that converts to just under 62%. For comparison, 62% sits comfortably between level 2 and level 3 managers.

(Obviously we’re making a few assumptions here around Glassdoor. Primarily, that reviews are most likely to come from frontline employees. And although Glassdoor isn’t specifically reviewing management capability, the numbers are closely in line with the AMCI. On this point, we think it’s not hard to believe that on both the AMCI and Glassdoor ratings are reflecting the broader gap all employees experience (to some degree) between expectation and reality in organisational performance.)

What does it all mean? The key takeaways

For me, this data points to four interesting takeaways to think further about:

  1. Everyone agrees that there’s a massive gap between Australian management’s potential and what’s actually being achieved right now. This is a major national problem and productivity issue.
  2. CEOs think that management is doing better than anyone else in the organisation. It appears that there’s a real communications failure from Australian CEOs in making sure the rest of the organisation shares their (relative) optimism around the current performance of the organisation and management team.
  3. Middle managers are a major problem area for Australian organisations (whichever way we look at it, as we showed in this previous article). The data here shows that middle management is increasingly jaded about the broader performance of management and leadership.
  4. And finally, an interesting takeaway with much broader implications: Glassdoor looks to be a surprisingly good proxy for management capability.

How do these results stack up with your management experience? Any key takeaways that you think I’ve missed from the data? Jump on the comments or reach me at @cognology on Twitter.