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Valuable Lessons I’ve Learnt About Goals As A CEO

You don’t need to have an MBA to be familiar with the concept of “competitive advantage.” From just-in-time inventorying to disruptive innovation, we’re always looking for the newest technique to get a leg up on the competition.

But newer doesn’t always mean better, especially when leaders fail to take the time to learn about what they’re implementing. When the process overshadows the results, people lose sight of what they set out to accomplish. Lately, it seems that’s what’s happening to many organisations signing on to agile performance management (APM).

Allow me to caveat here. I am an advocate of APM. Emphasis on frequent feedback, the growth process, and collaborative leadership are all moves in the right direction. In all of these areas, APM is clearly preferable to traditional performance management (TPM).

The issue is not what APM seeks to do. It’s what it fails to do. In their recent adoption of APM, many organisations have tended to completely overlook goal-setting, both short- and long-term. To my mind, there’s no reason to make that trade-off, because agility and goal-setting are by no means incompatible.

Throughout my own career in people management, I’ve experienced a lack of goals first hand and how it can impact the bottom line. But don’t just take my word for it. There’s new evidence that APM fails to recognize the importance of goals – and the effects are majorly damaging.

A survey of 9,500 employees and 300 HR leaders by the tech company CEB shows that failure to set clear performance targets is detrimental to both managers and employees. The shift hits top-performers the hardest – CEB’s survey showed their productivity fell 28 percent after adopting APM.

Five decades ago, the godfathers of goal-setting theory, psychologists Gary Latham and Edwin Locke, found that clear goals elevated performance and productivity by 11 to 25 percent. We’re forgetting what we’ve long known: goals are a key motivator.


Speaking from experience

Like any process introduced to an organisation, Agile Performance Management needs to be implemented properly to be successful. As part of the implementation process, the use of goals should be a key consideration. To explore this concept, I’d like to share three lessons I’ve learned as a CEO about goals and performance management.

Lesson 1: Without a destination, you’re always left wandering

Frequent feedback is a good thing, but too much can yield diminishing returns. Organisations switching to APM risk engaging in overly-frequent feedback which then begins to obscure clear goals.

Let’s travel to Surrey county, just south of London, to look at an example of how agile can go awry. It was here that the Surrey Police Department embarked on an ambitious new project, SIREN (Surrey Integrated Reporting Enterprise Network), while management tried to implement agile principles.

SIREN was supposed to be an improved digital database to track crimes, store intelligence, and identify relevant patterns. Between 2009 and 2013, the Surrey Police Department poured nearly £15 million (A$24 million) into developing SIREN. Then, much to the chagrin of Surrey’s taxpayers, the project was scrapped.

A post-mortem determined that agile pitfalls played a large role in the debacle. The most critical failure was identified as management not clearly defining the scope of the project. Teams were constantly given feedback that amounted to changing and conflicting information. With 140 people involved, there was certainly a need for strong guidance. In retrospect, we can clearly see how incorrectly adapting APM can be problematic: overemphasizing the process causes an organisation to lose sight of the desired end result.

Lesson 2: Goals are critical to autonomy

I’ve long been a supporter of autonomy. It’s been proven to boost both employee productivity and job satisfaction. According to a study from the Harvard Business Review, “workers whose companies allow them to help decide when, where, and how they work were more likely to be satisfied with their jobs, performed better, and viewed their company as more innovative than competitors that didn’t.”

Giving reliable high-performers more freedom consistently improves their work. Of course, autonomy is impossible without clear and strategically oriented goal setting. A management team that doesn’t set clear targets for autonomous teams or individuals will constantly be forced to reassess and realign. This in turn creates frequent interaction – i.e., micro-management – which makes autonomy impossible. When agile is done wrong, it can actually be pretty rigid.

That’s why I believe that the flexible goals advocated by APM work best when integrated with a long term vision. Google, for example, uses the so-called OKR system. In it, “Objectives” are ambitious and big picture, while “Key Results” are smaller quantifiable steps that will help achieve these goals. Real life is messy, and it’s true, no plan survives once the bullets start flying. That’s why we need to be able to adjust processes on the fly without losing sight of the long view.

Lesson 3: One size does not fit all

Now that we’ve looked at where goals work best (i.e., result-oriented management) I think we should turn to where competencies, behaviors, and values fit in the process. For some roles, goals can do more harm than good (check out my article on balanced goals for more on that). Nonetheless, we need to keep people on track and measure their performance. That’s where a few tricky intangibles come into play.

In terms of performance management, this means looking beyond top-down, quantifiable feedback. Whether using APM or TPM, developing employees’ competencies – and how well they align with organisational values and principles – is of paramount importance. Let me briefly explain some of the techniques I believe to be most effective:

  • The 70:20:10 rule, which states that 70 percent of learning should occur on the job, 20 percent should occur from interactions with colleagues, and 10 percent should occur through formal training.
  • 360-degree feedback, offered online through Cognology, is a great way for managers and employees to gain perspective on what other colleagues, teams, and departments think of their performance.
  • A competency framework puts everyone on the same page when you talk about concepts like leadership, innovation, or collaboration. It’s important to get more than HR onboard while developing a framework, so seek input throughout the organisation.

To Sum Up…

Agile performance management is going to become the new standard. The power of flexibility is real. The problems we see are largely due to the fact that organisations that ditch TPM tend to throw the baby out with the bathwater. Visionary goals – clearly-defined and concrete – are a hallmark of any successful management system. They don’t need to be sacrificed in order to adopt APM. The processes may change, but leaders should never take their eyes off the prize. Let us help.

Turning Poor Performers into Productive Team Members

A whopping 65% of Australian HR managers admit to hiring an employee who failed to meet their expectations¹. These poor performers are an expensive commodity. They reduce productivity², monopolise their managers’ time³, and drag down the morale of those around them¹.

With so much at stake, addressing under performance is crucial to long-term organisational success. However, poor performance is a complex issue, and there are many reasons why someone might not be giving work their all. More often than not, that reason lies with their manager. So, how do we separate the true poor performers from those who are struggling to meet expectations?

The Reasons Behind Poor Performance

There are two main reasons why someone under performs; lack of ability, and lack of motivation⁴.

Ability is governed by more than just skill. While competency gaps are an obvious reason for poor performance, a lack of resources, expectations, and understanding will also affect an individual’s ability to perform well.

Motivation is influenced by both external and internal factors. Mental health issues such as depression can impact productivity and motivation⁵, as can tensions within a team, concerns over job security⁶, burnout, and a lack of incentive or accountability⁴.

Is Your Poor Performer Really A Poor Performer?

Source: Eagle Hill Consulting

Managing Poor Performers

When addressing performance issues, do not view the individual as a poor performer. Assume that the problem is your responsibility since, as a manager, you are ultimately responsible for setting expectations, ensuring they are understood, and providing resources that enable staff to deliver on their objectives. Managers also have a huge impact on motivation and job satisfaction.

A one-to-one conversation is the quickest way to identify the problem. Avoid comments that sound critical or personal, and instead keep the conversation forward focused,

“I noticed that you’ve been struggling to meet deadlines recently, and I wanted to check in and see if there was anything I could do to help.”

By the end of the meeting, you need to have a thorough understanding of how that individual does their job and what obstacles and everyday problems they encounter.

Don’t be surprised if you hear the phrase, “I’m working as hard as I can”, or “There is nothing more I can do.” In my experience, this is true, and the individual really is working to the best of their ability. As managers, it’s down to us to identify any obstacles and address inefficiencies.

Training and Coaching

If your performance conversation highlights a skills gap, then it is your responsibility to address it. Providing employees with the opportunity to gain job-related skills introduces new ideas and encourages innovation, increasing productivity in the process⁷. Don’t be afraid to allow individuals the freedom to implement those ideas, either. Giving employees the autonomy to adjust ineffective workplace processes can improve performance at both a team and individual level⁷.

Ongoing feedback and coaching are vital to the success of any performance management strategy, especially when managing under performers. Coaching places the responsibility for finding a solution on the employee but provides them with the support they need to identify that solution. It’s a great way to increase confidence and help individuals prioritise their workloads, and can boost productivity by as much as 21%⁸.

If a lack of skills is the problem, then a combination of on-the-job training and coaching is often an effective solution. Don’t expect miracles to happen overnight, recognise that the process may take months and give the employee the time they need to address skills gaps.

Setting SMART Goals

If the individual doesn’t understand what is required of them, then it is up to you to establish clear expectations. Regular readers will know I’m an advocate of SMART goals, which are specific, measurable, attainable, relevant, and time-bound. By providing employees with a measurable objective and clear deadline, you increase responsibility for the outcome and individual accountability for performance.

Addressing the Impact on Team Members

In a US study, 68% of professionals cited a negative impact on employee morale as the biggest problem with poor performers. Most (54%) believe that they also play a pivotal role in cultivating an environment where a mediocre performance is acceptable⁹.

Leaders spend nearly 20% of their time managing under performers³, so it is crucial that you don’t overlook the rest of the team. Schedule performance conversations with those working alongside your poor performer. Focus on identifying any long-standing issues or obstacles facing the team as a whole and make sure that employees who are meeting or exceeding expectations feel valued and appreciated.

Knowing When to Quit

If intrinsic motivation is the problem, then you have on your hands a real poor performer. You can determine this by attitude, and a performance conversation or coaching session will generally be met with repeated negativity and disengagement. If this is the case, then the only solution is to remove the individual from their role.

To Sum Up…

Poor performance is a complex problem influenced by many factors. Addressing the issue requires a personalised approach, with a focus on improving workflow efficiency and providing individuals with the resources they need to meet expectations.

Do you have experience managing poor performers? Feel free to share your ideas, insights, and successes in the comments section below.

References

¹Robert Half, 2016. The cost of a bad hire: 10% of employee turnover is attributed to a poor hiring decision. Robert Half.
²Ekpang. 2015. Counselling for effective work performance: a way for service improvement. IOSR Journal of Humanities and Social Science. 20 (3). pp. 39-43.
³Robert Half, 2012. One bad apple. Robert Half.
⁴Marr. 2015. 7 causes of poor employee performance and how to address them. LinkedIn Pulse.
⁵Wang, et al., 2004. Effects of major depression on moment-in-time work performance. (Abstract) The American Journal of Psychiatry. 161 (10). pp. 1885-1891.
⁶Staufenbeil and Konig, 2010. A model for the effects of job insecurity on performance, turnover intention and absenteeism. Journal of Occupational and Organizational Psychology.
⁷Fernandez and Moldogaziev, 2010. Empowering public sector employees to improve performance: does it work? The American Review of Public Administration 2011.
⁸Cognology, 2015. A leader’s guide to coaching. Cognology.
⁹Eagle Hill Consulting, 2015. Are low performers destroying your culture and driving away your best employees? Eagle Hill Consulting.

Free stuff – how to write objectives guide

If you’re a manager, one of the skills you need to master is how to write objectives.  If they aren’t written properly you simply won’t get the results.  And you’ll open yourself up to difficult one-on-ones and plenty of disagreement with team members.  On the other hand, a well written objective is a thing of beauty that will make you and your team members more successful.

We’ve added a new free guide to our web site that explains how to write good quality objectives.  Head on over and check it out.

How to write SMART goals

Ummm – increase distance from ground by 1 metres – before I get called in for dinner.