Category: management systems

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How performance management will improve your revenue, profitability, and give you your life back

I started my career with a degree in psychology and a professional goal of becoming a) a best-selling author or b) something that helps people somehow. By luck, fate, or something else, I ended up mentoring under a pioneer of applied behavioral science, and learned some of the most powerful performance management practices I’ve encountered to date. I thought I was diverting from my chosen path into the business world for a ‘little while’. What I ended up discovering was that understanding how to improve individual performance in a business absolutely helps people, improves lives, builds companies, and makes a difference.

There are many ways to look at performance management. I recommend a twofold approach. First, I like to train new (and even seasoned) managers on the basics of your profit and loss statement. I’ve found through the years that this is worth reviewing even with long-time managers, because sometimes there is not the clarity you think and it’s often the case that your managers won’t tell you if they don’t understand something. Make sure everyone understands your revenue lines, your costs of goods sold, and particularly the labor line items. They should also be educated on gross profit, operating expenses, net income, and EBITDA. Some company owners are uncomfortable sharing all the financial information, and some prefer open book management. Regardless of your preference, sharing the how’s of a P&L will enable your managers to make better decisions, and to start looking at the business as a business, and not a bottomless well.

Once managers have a strong business understanding, you can introduce a more robust performance management system. This intervention is where my team and I get the most excited, because this is where you get to make more money, keep more money, experience less stress, invest more in your people, and start loving your business again. In other words, this is where the fun is!

Performance management (as we teach it) is based on the understanding that a business – any business – is comprised of the activities performed by the employees. The goal of performance management is to clarify your business outcomes, identify the milestones, and map out the steps needed to hit the milestones. Once that’s done, we look for the ‘tracks’ that proper task achievements leave, figure out the most effective way to measure them, and provide feedback on those measurements to each individual employee.

If it sounds like work-process mapping, it is. If it sounds like behavior-based training, it is. If it sounds like individual performance metrics, it is. If it sounds like individual, team, and departmental key performance indicators, it is. If it sounds like the only proven way I’ve ever seen to drive double digit improvements in top and bottom line performance, it’s that too. But it’s more than that.

What I love (love, love) most about performance management is that at the end of the day it’s connecting employees to the big picture of the company, and about connecting managers with their employees. It means making sure important conversations are happening. It means that great performance gets recognized, not taken for granted. It also means that people who need help, receive it. It’s also exciting, because while there are certain predictabilities (like, you as the owner will be super frustrated at the first set of metrics because of how hard they were to get, and how much less is happening than you assumed) there are also always exciting gains, and huge increases in morale as employees come together to solve problems, figure out the best ways to do something, and feel heard.

So, while the best-selling author thing is still a work in progress, doing something that helps people has become a reality, and it’s even better than I thought it would be!

If you found this article helpful, you may also be interested in the three things you should train all your new managers (one of which is performance management, of course). If you believe your small or growing business could benefit from performance management, or other management training, please feel free to email me and we can chat.

Carrie Maldonado is the founder of Today’s Leadership Solutions, a Seattle-based consulting firm providing comprehensive organizational development solutions for companies who are growing and who truly value their people.  With certified Executive Coaches, Organizational Behavior Management (OBM) practitioners, SPHR-certified HR professionals, and Organizational Development Specialists, Carrie’s team brings a unique perspective and a cross-functional approach to providing workplace solutions that work.  Carrie can be reached for consultation at carrie@todaysleadershipsolutions.com

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Do you still love the business you started?

If you’re like many business owners I’ve encountered, you started your company because you are passionate about the service or product you provide and confident that you can do it better than anyone. It may be true for you that you know that your employees have a choice when it comes to where they work, and you appreciate that they’ve chosen you. You’ve most likely always succeeded as a result of your hard work and perseverance, and therefore you enjoy having employees and managers who have the same qualities. If you promote from within, it may be because of this, and you likely feel a lot of loyalty to the people who are passionate about your business. Many business owner start their company to give people a great place to work that will support them and their families, and they want to provide an above average lifestyle for themselves and their families as well.

As you’ve started to grow, if you’re like most business owners, you’ve noticed that things are falling through the cracks that never used to. Even though your managers were superstar employees, they might not always be able to get the performance out of their employees that you could in their role. Although you probably don’t feel like you’re asking for too much, maybe it seems like a struggle to get performance evaluations, productivity updates or labor hours managed to expectation.

Most business owners hate feeling like they’re coming down on people all the time, but they also hate never quite knowing how the company’s performing and if they’re going to meet budget. There’s usually so much more they want to do, but don’t feel like the team’s ready. You may have noticed an increase in turnover, with employees starting to complain that they’re not getting treated fairly, or trained enough. It costs far too much to replace employees to keep losing good people and you almost certainly didn’t get into business to train the competition. Sometimes you even ask yourself if it’s worth it. Any of this sound familiar?

Now imagine a different scene:

Your managers treat your company like it was their own, and are diligent about managing your resources so that waste is minimized and you are highly profitable and able to re-invest into your employees. You have systems that identify and reward the hardest working employees, who as a result love working at your company, and recommend it to others. You’re able to give back in multiple ways because there’s so little waste and dead weight. Everyone’s on the same page about the company goals and how to get there, and employees and managers love finding creative ways to make the company better. You truly feel like you’re a team, and the people in your company are all working together to succeed. You actually love coming to work and so do all your employees and managers.

This isn’t a dream. This is the company you deserve, and we can help you get there. Let’s talk.

www.todaysleadershipsolutions.com

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Business Owners: Is that training or system worth your money?

As a business owner you have thousands of opportunities every day to improve your sales, leads, prospects, manager effectiveness, employee productivity, profitability, safety…you name it. Some of these might be the key to success and some of them might be a waste of time. We’ve all been there: an ad, program or service that touches just the right note or pain point we’re feeling and convinces us that THIS ONE THING will solve our problems! Maybe the ‘constant drip’ of cleverly crafted emails finally reaches the tipping point, that free webinar just grabs you, or that vendor calls you right as you’re experiencing the same problem AGAIN – and before you know it you’ve purchased a solution.

None of us are stupid, so when we make the decision to buy it’s either because we are convinced that it will work, or we’re so tired of the problem that we’re willing to take a chance on something we’re not convinced about ‘just in case’.  I’ve been there-done that more times than I can count. Sometimes it’s been the best thing I’ve ever purchased and sometimes I’m left feeling like an idiot who was complicit in my fleecing.

Now don’t get me wrong – I’m not knocking these forms of marketing. When you have an awesome product or service of course you want to tell people about it!  But as a buyer, how can you determine if you should buy it, or once you have, if it was worth it?

One thing I’ve noticed as both an Organizational Development executive, Business Coach, AND Entrepreneur, is that there is a preponderance of solutions that, while they sound great, do not offer a lot in the way of guarantees. The biggest problem with most of these solutions is that they are necessary, but not sufficient, components of change. Taken in the wrong context they are unlikely to achieve the results you’re paying for, but it’s hard to see that because they just make so much sense!
•    Tired of employee turnover? Increase engagement with roundtable meetings!
•    Want higher productivity? Improve your line managers’ communication skills!
•    Need less injuries? Have more safety meetings!
•    Want this, that, or the other? Training, training, training!

Now, I’m overgeneralizing to make a point, but you get the idea.  Here’s the irony – I AM a coach, I AM a leadership trainer and I love training people in communication skills! HOWEVER…I am diligent about explaining the role of training in behavioral change, and the inadequacy of training alone in creating sustained change. It’s not that I enjoy complicating marbles (much), it’s just that right out of school I was mentored by a pioneer in the applied behavioral sciences field. Because he was a professor, he made sure I was rock solid on a few key concepts before he set me loose in any organizations and some of the major premises that were ground into my SOUL were:

  • Results happen when the right behaviors occur at the right time with the right frequency.
  • There are very predictable laws as to what interventions lead to more behaviors, less behaviors or no change.
  • You need to measure something to understand where you’re starting so that you can determine the effect of your interventions.
  • Everything is measurable and if you’re spending money on it, you’d better be able to quantify it.

This holds true no matter what your industry. Whenever we’d go to a convention or organization to talk about how to get increases in performance people would listen and then say ‘that sounds great, but you can’t measure what we do’. But we could, and we did.
Because we were essentially conducting experiments, we had to measure the baseline as well as the effects on any intervention we introduced.  For any business owner, the immediate takeaway is that:

  • Before buying ANYTHING to ‘increase performance’, figure out how to objectively determine where you are NOW. Get a baseline and do not spend money until you know where that baseline is. Distill it down to the individual level as much as possible (You can learn more about that on my free download).
  • After applying the intervention (training/tool/meeting/whatever) measure again. What was the effect directly after the intervention? This will tell you if there was any short-term effect. Then measure again after several weeks.

Even though years of applied research definitely declares that training has only a moderate short term effect on performance, that doesn’t mean you shouldn’t measure it. That’s better than NO impact, right? And if you’re investing in a more comprehensive system or tool, you will absolutely want to measure performance and results on an ongoing basis. If it’s an awesome system, you’ll be gratified to see the continual results and you will quickly become aware when it’s time to change it up a bit. If it is having no effect, you’re going to want to find out soon, and hopefully get your money back. If that’s not an option, you’ll at least know and either tweak things or mitigate the time and money on the system.

At the end of the day, you’ve worked too hard to waste money on solutions that don’t solve anything. You deserve to know how solutions are working, and the only way to do that is to get a performance baseline first!

Carrie Maldonado is the founder of Today’s Leadership Solutions, a Seattle-based consulting firm focused on helping organizations, leaders and job seekers to identify workplace solutions that work.  As a certified executive coach, organizational development expert and resume writer, Carrie consults with small to medium sized businesses on OD, human resources and recruiting solutions in addition to providing career coaching to managers and executives in transition. Carrie can be reached for consultation at carrie@todaysleadershipsolutions.com 

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Has leadership training really helped your managers be more effective? It’s okay to say no, and here’s why

It only takes about half a day to review trending topics on leadership, motivation and organizational culture to walk away feeling like all one has to do to have an awesome company is a) hire great people, b) treat them like adults and let them do their job and c) ensure leaders are busy removing roadblocks, managing change, fostering innovation and championing creativity and you will have an amazing fortune-100-worthy company with people beating down the doors to come work for you. I’m not saying that’s not true but if you’re a business owner, is this your reality?

The companies I work with are private companies in the manufacturing, construction, and retail industries. The owners of these businesses highly value loyalty and nearly always promote from within. They want a high performing culture with a family feel. This usually means very low tolerance for corporate red tape and bureaucracy and a fierce determination to retain as much control as possible over the employee/employer relationship while still remaining on the right side of the law. They want to manage their companies using common sense, fairness, and the underlying premise that hard work pays off, and doing the right things lead to the right results. The owner is usually an expert in the product or service that the company provides and understands that his/her value is not derived from performing the work anymore (even though that is not always possible).

 By the time these companies have grown enough to have a management ‘team’ the owners almost always have the same growth challenges:

·      How come my managers can’t seem to maintain the level of performance and morale we had when we were smaller?

·      Why do employees complain that they’re not being paid enough, or not being trained well enough?

·      Why is it so hard for my managers to quantify our team and individual performance?

·      When did this stop being fun and become such a headache, and is it too late to scale back to when things seemed to be working so much better? (Is this even worth it?)

At this point one of two things usually happens; the business owner either blames him/herself or the managers. What usually comes from this is an assumption that someone else could do better under the circumstances (whether as owner or as manager). This leads to looking for replacements or additions to the team to ‘shore up’ a lack of talent or research and training for the leaders. In most cases though, a perfectly good solution is applied to the wrong problem!

Trying to solve the above problems by simply empowering leaders to empower employees, or giving unlimited vacation time, or doing more ‘team building’ is not the answer. All those things may be good, but in absence of solid management systems, you will likely have a highly inspired team wandering around unproductively or, worse, your best and hardest working employees will become bitter and cynical. It’s very similar to what we’ve done over the years trying to instill ‘self-esteem’ in our children rather than focusing on resiliency. Just telling someone they’re great doesn’t do much if you’re not teaching them how to do great things, which requires pushing through failure.

The answer for the companies I work with is to help managers help employees do the things they need to do to make the organization successful. It means thoroughly understanding your business to know what are the things that need to be done to achieve the results that achieve your results.  It means differentiating between task purpose and task behaviors (or what to achieve versus how to achieve it). Successful business owners know this intuitively, but when their company grows beyond their own personal sphere of influence it can be hard to articulate and pass this down to managers.

Helping managers focus on employee’s behavior has been villainized because of fear of taking the humanity of the workplace, of ceasing to see employees as the creative, independent people they are and of focusing on the bottom line more than the value of the people. Which is absurd. The best environments I have ever seen are ones where everybody understands the goals of the company (revenue, profit and social), how their job fits into those goals and…HOW THEY ARE DOING performing the behaviors required to hit the goals. Absent this, companies rely on annual performance evaluations (or NO evaluations) and kneejerk responses to unanticipated financial setbacks. The result is fear and uncertainty and you don’t need a psychology degree to know what that does to performance.

So if you find the preponderance of leadership and management articles interesting, and you agree with them, but you don’t find them helpful to get the results you want in your company, it’s not you! It’s all (most of it) good stuff, it’s just not sufficient to get you where you want to be. Your time might be much better spent clarifying for managers and employees your goals, the achievements that lead to the goals, how to achieve them and how people are doing at achieving them.

If you found this article interesting, you may enjoy a deeper look at the Targeting Handout from our Organizational Behavior Management teaching series. 

Carrie Maldonado is the founder of Today’s Leadership Solutions, a Seattle-based consulting firm focused on helping organizations, leaders and job seekers to identify workplace solutions that work.  As a certified executive coach, organizational development expert and resume writer, Carrie consults with small to medium sized businesses on OD, human resources and recruiting solutions in addition to providing career coaching to managers and executives in transition. Carrie can be reached for consultation at carrie@todaysleadershipsolutions.com