Why is measuring performance so important?
When you are too close to something or someone it is all too easy to overlook or take for granted what you have. Like most of us, I started the year with enthusiasm and a desire to stick to my resolutions. One goal I had, was a refresh of our website and branding and this led me to review feedback and testimonials we had received over the years. What rapidly became apparent was the number of positive comments we have received about our ability to measure and track organisation, team and individual performance over time. Other than comments on the experience and impact of the Performance First team, this was seen by customers as the most useful and biggest differentiator to other providers. What better time to revisit how you might measure, and track performance in your organisation or team than at the start of the year and thus an appropriate topic for our first edition of 2016
The Challenge
Since we started the company we were looking for powerful and meaningful tools that could help organisations, teams and individuals track performance over time. What we soon discovered was there were none we liked. Worse still, most means of internal measurement, especially staff satisfaction surveys, and cultural audits (I have in a previous life been involved in these from both sides) are expensive and often worthless! Sometimes, even dangerous as they can create the thing they aim to avoid, namely suspicion and toxic behavior. How many of you have experienced this for yourselves?
Survey results not published after you have taken the time to fill it in
No follow up or feedback or when you get it, it is so generic to be meaningless
Questions changed year on year so no benchmarking possible
Comparison to 500 other organisations in 20 different markets in 10 different industries? Yes and this is helpful because….!
A report the size of a small rainforest and rich in jargon poor in interpretation or conclusions!
Speaking personally, as the young consultant given the task of feeding back the rainforest content; previously as a line manager and later as a business leader, I knew there had to be something better.
Like marketing, 50% of training is meaningful and 50% is not. The challenge is which 50%! We set out to prove what we were doing worked and help L&D and HR leaders justify their training budgets and ensure a ROI. We looked at what we needed to do for this:
Proof of a return on training spend.
Track performance over time in line with the business cycle (Not once a year as a tick box exercise)
Identification of good and poor management behavior – to help find champions and to target poor performance – In line with our aim to create professional leaders.
Assess peoples motivation, happiness, engagement and wellbeing – Happy staff make happy customers.
Compare functions, locations and teams in a meaningful and easy to understand way.
What our customers really wanted was to know:
How are we performing as an organisation now, compared with last quarter or last year?
How is every region, function, site, or team performing?
How do we compare groups or teams with different measures of success or performance outputs? e.g Can I compare my HR function to my Sales function? Or my Flagship Store to my small rural branch?
How can I compare team leaders / managers/HODs to identify talent, training needs and highlight performance issues early?
The two requirements were aligned so in 2001 we embarked on a journey that as taken fifteen years and developed into a Performance dashboard for HR that is a game changer. It utilizes a powerful easy to use product called the Performance Climate Survey© (PCS) and is something that we can use with you, or you can be trained and licensed to run yourself or through your own preferred training partner.
The Concept
We based PCS primarily on the research of McClelland, Boyatsis and Spencer who carried out seminal work into organisation performance and climate at Harvard. They were asked by Mobil Oil for some help. The company had a series of refineries all built to the same specification, same organization structure, same processes yet they were experiencing vastly different performance outputs (+/-30% of mean) Given everything was the same, it was a complete mystery as to why there was such a discrepancy. McClelland et al identified that the biggest impact on each refinery’s performance was the culture or climate of the organization or “the way it is around here”. We have all experienced this. Does it feel different when you compare one office location to another; or walk to a different floor in your own office or sit with a different team. Even when you go home at night and you walk through the front door. They concluded that the biggest single factor impacting climate was the behavior of the leader. Consider this for a moment and ask yourself if it makes sense to you? Did it feel different and did we behave differently in the UK after a change of Prime Minister? (Thatcher, Major, Blair, Brown, Cameron) is the U.S different with Obama as President when compared to Bush? What happened at Apple after Steve Jobs left and then when he rejoined? Yes it did. So what can we conclude?
Performance is the result of the climate created by the leader
If you could measure the climate, you can get a common measure of performance, irrespective of function or output whether it is sales made, petroleum refined, accounts paid, etc.
By measuring climate you have a surrogate measure of effective management or leadership behavior.
If you have a measure for effective team management / leadership behaviour you can rank every team leader irrespective of level or experience.
Other researchers (Bandura et al) have proven the impact of leadership culture on individual motivation. They suggest that approximately 70% of our overall motivation is intrinsic and 30% extrinsic or influenced by the environment in which we operate. This is our discretionary effort. We can choose to give our all for a great boss and work late or if the climate they create is so demotivational we will act to protect our self. If you want to identify problem areas in your business, look at your sickness and absence data. Where there is a poor or worse still, a toxic leader in place you will find high levels of stress, sickness or absenteeism. Think back to your time at school. How much was your performance in your best subject and in your worst subject directly impacted by your relationship with the teacher and how much your own innate intelligence or intrinsic motivation? QED?
A reality check
As a young Royal Marines Officer, I learned very early to be critical of theoretical approaches. In the same way that plans fail first contact with the enemy, theories often fail first contact with real business. As a result, we referenced only those we have proven and experienced in developing high performing cultures and teams over our careers. (Schein, Buckingham & Coffman, Bechart and Harris, Tuckman, Kilman, Lencioni) We also added to the recipe our own touch of magic, taking what we knew from working with high performance teams, and in high risk environments, at all levels from the Exec Team down to the shop floor and across 30 different national cultures in private, government and third sector organisations. We also made the tool meaningful and valuable for teams outside of work and used it to help deliver championship winning performances in World Rally, Formula 1 and a range of other sports and social enterprises big and small.
The Reality
Since 2001 the tool has been proven in over 30 countries. Thomson Reuters have used PCS globally in their Customer Service and Operations functions using it to track the performance by region, country and in over 300 teams.
They proved a direct correlation between their PCS scores and client satisfaction, as measured independently, and used the outputs in quarterly business planning reviews and, to inform PM and talent decisions.
Johnson and Johnson asked us to rank their sales teams in order of performance, based only on the PCS data, We did so without a single team out of place proving to their satisfaction a direct correlation with sales performance.
Latest Developments
Most recently we have been working with a large Oil company in the Gulf. We helped them with a major business transformation. We provided their CEO with the ability not only to track his leadership teams’ performance during the change but also to see how every team, function and offshore oil platform was functioning. He was able to rank every team and leader and identify and address organizational issues highlighted by the teams in the confidential feedback. This helped all leaders to monitor and measure progress and identified a range of ideas and solutions to help in the transformation project.
We developed an easy to use Organisation Performance Dashboard to allow selected individuals access to all team reports, to map different parts of the organization on a single diagram and to see the overall climate of the organization by combining the different teams to create a picture of the whole. The tracking facility allows you rank any team or manager at a single point in time. So like a P&L you have a snapshot of the health of your organization in terms of its performance and motivation.
How it works
The PCS is simple to set up. We do this for you or, if you are a trained user you have a licence to run your own surveys you simply enter the team name, start and finish dates and the email addresses of the team leader and team members through your own unique Company PCS portal.
The software automatically invites participants, who then complete the survey. This takes about 15 minutes to complete and all team member results are confidential. Once the survey is closed or times out a report can be printed or sent via pdf.
The PCS Team report
On the dashboard you can print various reports and compare any number of teams across the organisation. The main report of interest to the team and its leader is the Team PCS Report. It is structured as follows:
User guide and interpretive notes.
Section 1 - Quantitative data – A radar chart and data table providing
Overall climate score out of 100%
A breakdown of climate by focus area
A breakdown by mean, mode, lowest and highest scores
Separate team leader scores - The team leaders view of the team is shown separately as it ensures their result does not skew the team scoring and their view of team performance is highly indicative. A good manager typically demonstrates a close match to the teams view of the climate. Significant differences open the door for a valuable and open coaching conversation.Breakdown by question ranked highest to lowest score overall and including mean and range
Section 2 - Team focus, Stage of development (forming, storming, norming, performing) and Conflict mode
Section 3 – Qualitative Feedback
Section 4 - Key Strengths Development areas and Recommendations
Action Planning and Notes
One team leader, an engineer with 25 years offshore experience said after reading his second PCS report
“I thought that leadership was a black art and always something I left until I had done my proper job until now. At last I see it is a process. I cannot tell you the difference this has made to my team and to me in terms of how I now manage”
Of course, one look at his report and we could tell and so could you. He had improved his climate score 25% in just 6 months! Whether leadership is a process or not, is a debate for another time. However, the key for this manager and many others was they could see a direct impact on team behavior and performance of actions they and the team took to address issues or ideas coming out of the survey. Designed in a way to make it easy to turn theory into practice, the PCS is currently the only proven tool to help organisations , teams and individual leaders measure performance and leadership effect in a meaningful way. I hope this has given you some food for thought at the start of a new and exciting year. Should you wish to find out more or wish to prove it for yourself, do contact us. www.performancefirst.com
Gordon Mackenzie
Managing Director
Performance First limited
