What most companies do to achieve a ‘high-performance culture’ often does the exact opposite: their performance management (PM) frustrates, confuses, and disengages – which leads performance to suffer instead of surge.
The question is why? Why do smart people and organizations keep building PM that doesn’t deliver performance – especially when research and some of the world’s leading companies have identified better alternatives a long time ago?
In our work with some of the world’s leading companies, we have found three underlying causes that keep PM stuck and prevent well-intentioned efforts to improve it from succeeding.
These are the deadly sins that undermine high performance:
- EXECUTIVE MISALIGNMENT AND ABDICATION
Performance dies in silos and fails because leaders either impose their will – or abdicate entirely.
There is blissful ignorance at the top that leads to flailing cynicism below.
- THE PROCESS TRAP
Organizations obsess over technicalities and compliance that does little to enable performance.
This leads PM to become a costly, value-eroding bureaucracy that is loathed by everyone.
- OBSOLETE MINDSETS
Companies cling to outdated beliefs about what it takes to motivate people to perform.
This fosters demotivation, burn-out, loss of talent and low productivity.
WHY IT MATTERS
Most companies build pillars of PM with the intention to improve performance – but they fail to realize that how they go about it creates cracks in the very foundation of high performance.
The good news is that when companies get PM right, they achieve outsized returns:
- 22% higher performance driven by positive employee reactions.
- According to McKinsey, companies with effective PM are 2x more likely to outperform peers.
Research has found that a healthy and high performing culture accounts for 40% of the difference in performance. What it takes?
In highly aligned companies, employees trust leadership, clearly understand the desired corporate culture, frequently observe the majority of leaders modeling the desired culture, and regularly feel the culture helps to accelerate, not hinder, the business strategy.
This whitepaper explores the sins that prevent companies from getting. It explores why they happen – and what happens because of them.
SIN #1: 30,000-FOOT CONVERSATIONS
Everyone knows this: it is impossible to achieve a shared objective if people aren’t clear and aligned on what the objective is or how they should contribute.
That also goes for PM and achieving ‘high performance:’ if you don’t clarify what it means in practical terms, you can hardly expect people to deliver it.
The sin:
Many organizations fail to clearly define what performance they need to execute their strategy – what ‘high performance’ means concretely.
There is either no clear definition, or worse, each Executive Committee (ExCo) member has his/her own version.
What is interesting is that when you ask individual ExCo members, they often believe the ExCo is fully aligned.
The reason for that is simple: most conversations take place at 30,000 feet where it is easy to agree.
The alignment is an illusion, however: when we work with ExCos and ask what ‘high performance’ means in practical terms, the teams are far from aligned on what it means – and far from aligned on who is supposed to do what to deliver it.
What it leads to:
- We fail to achieve ‘high performance’ because no one knows what it means.
- People’s focus and effort is scattered in different directions.
- Conflicts – warring tribes – emerge across the organization because accountability and hand-over haven’t been sufficiently clearly defined.
- The consequence for our people is that they end up feeling disconnected from the strategy and don’t know how to do their part to execute it.
The sin is not that conversations don’t happen. It is that they are ineffective and drive the wrong outcomes.