Friday, September 28, 2018

Alternative to Performance Appraisals

In many of the conversations I’ve had lately, in which I share that I believe performance appraisals are not only fraught with biases but a double-sin, I’m asked what’s the alternative. The alternative is simple: frequent feedback on performance and the person’s approach or process of achieving that performance. If you want to have a written, defined feedback process, avoid cluttering it up with multiple purposes, like tying it to merit increases and becoming a personal/professional development plan. Simply, give a report on the person’s performance.

In one company, we reduced the performance appraisal to five questions,  only one of which was related to performance: “How did you contribute to the organization’s success?” The question is answered by a report on the person’s goals for the year. That’s it. The only question based on performance.

Another question dealt with future performance, next year’s goals: “How will you contribute to the organization’s success?” Two questions asked about the person’s approach to the job—aspects which rarely changed, especially for people who’ve been in the job for several years. In those cases, the popular 360 reviews become meaningless because the feedback is the same—and has its own bias problems.

The last question was my favorite: “How can I, as your supervisor/manager, help you more or hinder you less?” If I hadn’t been getting my own ‘performance appraisals’ from my staff—again, frequent feedback—this provided a chance for them to suggest some changes.

Some say that a lot of people in their organization don’t have goals. However, many people have ‘efficiency standards’ of some sort—whether it’s parts/hr, calls/hr, order entry errors/wk, etc. Goals can be set according to that. However, if the nature of the work changes frequently—the complexity of the orders changes from order-to-order or over the course of the year—I caution against using efficiency. Most times, the person is not part of setting the standards. It’s set based on group performance or same-but-different work comparison. Those standards are often set at the median. Each person then has a 50/50 chance of being better than the standard.

The frequent—daily, weekly—feedback needs to be specific to the work being done. What did you like about how things were done? How much did the project completion move us along the strategic plan? How much revenue was gained or how much reduction in costs occurred? What disaster was averted?

One expert has said we spend 95% of the time teaching how to give feedback and almost nothing on how to receive it. I believe we’d all get better at giving it, when each of us ask for that specific, frequent feedback: “Hey, boss, how much did this project help the company?” If we’re asking, we’re also going to be listening. We’re ready for the feedback, instead of the ‘drive-by’ feedback that might happen while we’re working on a task.

Monday, September 17, 2018

No End Game in Business

Sports analogies for business are wrong. This was the intriguing point Simon Sinek recently made in a leadership summit. In his talk, he used some war analogies, which might be closer...but not quite.

In business, we're involved in an "Infinite Game". However, we think we're in a 'finite' game, one with:

  • clear rules, 
  • defined ways of keeping score and knowing if you're ahead, 
  • clear playing field, and 
  • known opponents who're following the same rules.
When we apply sports analogies, we think business is conducted this way. In modern war--especially guerrilla warfare--many of these sports analogies don't apply. Instead, like the North Vietnamese in the 1960's and 1970's, they were playing for the long-term. Even though they were 'losing' by many scorecards--e.g. casualty rates 40x greater than the US--they outlasted the US because they were in an Infinite Game:
  • rules change all the time
  • there's no ahead or behind; there's only getting better at your efforts
  • as strategy changes, the playing field boundaries change
  • unknown opponents and allies
In an Infinite Game, an ideological rival is of more value to you than a tactical rival. An ideological rival is one that challenges why you're still in business. A tactical rival only challenges how you do your business and what business you decide to grow. The corporate culture that will help your team succeed at the Infinite Game:
  • Just Cause: the purpose, vision of your business stated in the affirmative, is inclusive, resilient to changing conditions, is customer-focused and is defined such that all members of your organization know how they can meaningfully and significantly contribute;
  • Trusting Teams: a high level of organizational trust is needed to progress (and is especially important for engagement on the mission of the organization) and is evident when people are open about mistakes, doubts, and needing help;
  • Worthy Rival: one who pushes you to get better than you were yesterday, because they too are focused on getting better against their own performance and not focused on you (Sinek says he knew Microsoft was in trouble when they were focused on beating Apple and Apple was focused on providing better customer experiences for people using digital devices);
  • Existential Flexibility: the Why won't change, but the How and What may e.g. Wells Fargo is still in the connecting people, money and goods and the How changed from stagecoaches to banking
  •  Courage to Lead: to go into new territory of behavior, marketing, development, autonomous teams ("trust your people enough to believe they know when to break the rules"--Sinek)