Categories
Business Management Organizational Behavior Management

Getting down and dirty with Performance Management

Fellow writers may appreciate the incredible amount of angst involved in trying to write about this highly technical subject in a way that conveys how exciting and powerful it really is without boring the stuffing out of all the non-geeks. Performance management, simply put, is the single greatest tool I can think of to drive tangible, measurable performance improvement in your company that results in more revenue and more profit. All the time. Every time. The problem is that it’s not particularly sexy, or magical. It’s just the thorough application of six behavioral science-based interventions. I write about it because it’s my passion to share this with small and medium sized businesses, to give them a strategic advantage in the marketplace. But it’s a constant internal geek/entertainer struggle, and the struggle is real!

In my last article we talked about targeting and about purpose. The geek in me loves targeting, because that’s where we get to dissect your company down to the gnat’s behind and figure out exactly which behaviors will drive your success. The coach in me sees the value, but would much rather talk about purpose. The purpose of your company is your ‘why’, and will keep you excited about it even after that strange letdown that occurs when goals are achieved. And they will be achieved.

The great thing about this performance management system is that it always works. The bad thing is that it works even if you’re ‘managing’ the wrong thing. The very first step, identifying your critical behaviors, is done by working through, together, the processes and workflow of your company until we’re all confident we’ve hit on the critical behaviors.

One of my business mentors always said that if 51% percent of your decisions are good ones, then you’re doing well. So there is at least the possibility that the behaviors or accomplishments in the targeting phase are not the ones that actually drive your success. Hold on to this scary thought, because it’s coming up later (and don’t worry, it’s not as bad as you think, just something to be aware of).

The next steps are task clarification and tracking. In laymen’s terms, that means explaining to your employees what, why and how to do the tasks you’ve targeted, and then figuring out a way to measure those tasks to make sure they’re occurring.

So to recap the process; you figure out what the most important behaviors are, you explain all this to your employees, and then you start measuring these behaviors. In a perfect world, we’d collect baseline data and do a whole ABA thing (which I’ll explain if you’re interested…just email me). I’ve rarely seen this happen in organizations for two reasons. First, once companies see improvements, they’re reluctant to do something out of scientific interest to see if the improvements go away! Second, some of the interventions just can’t be taken away. You can’t take away the information employees receive in the task clarification.

Task clarification and tracking WILL increase the behaviors you’ve targeted. But what if we picked the wrong behaviors to measure? For example, perhaps we want to even out a revenue stream that is too unpredictable. Maybe during targeting we identify that they problem is the customers we’re going after, and decide we need to pursue clients in Industry X to avoid the fluctuations. We go through the sales process and decide to track initial meetings with clients in the new demographic.

After explaining this, and tracking the meetings (and conducting random, unpredictable cross checks to ensure the meetings are actually taking place), after about six weeks we see a definite increase in these initial meetings. It’s working! Depending on the length of the sales cycle, we find out that we’re proposing and closing more of these clients. Great! But is the revenue really evening out? That’s why you’re doing this, after all. If you are seeing results, fantastic! Mission accomplished and now let’s make sure your operations team is doing all the right things to keep up with your sales demands.

On the other hand, if you’re getting significant improvement across the board in calls, closed sales and revenue in industry X but it’s just as cyclical as before, we might need to dive back in and see if we can even out the revenue, or if it would take you too far away from your core competence and you are better served figuring out how to manage to the fluctuations. In any event, measure the calls, measure the closed sales, AND measure the outcomes. That will allow you to course correct as necessary.

The benefits of embarking on this far outweigh any costs, even including the risk of targeting the wrong thing. A properly executed performance management project has far reaching benefits to your company and more than pays for itself with the financial improvements you’ll reap. Are you interested in trying out this powerful technology in your own department? I’d love to chat with you. We have a variety of options for small and medium organizations to take advantage of this powerful tool.

If you’re eager to get started, click here to get a free targeting tool so you can begin to identify the mission-critical behaviors in your company.

Did you like this article? Please share the love, or come hang out with me on Twitter or Today’s Leadership Solutions FB page. If you want to try out

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

Categories
organizational development Uncategorized

What are you measuring (and why)?

Are you sick of hearing ‘you get what you measure’ yet? It’s one of those crusty old sayings that we (and by ‘we’, I mean ‘I’) really want not to be true, because it would be so awesome if businesses would just thrive without going to all the hassle of recording, collecting, and reviewing all that data. As a business owner or senior leader, there’s also sometimes a fear that you’ll seem too ‘Big Brother’-ish or focused on profit and not people by measuring performance. We (many of us) want to be the kind of leaders that inspire others to greatness, innovation, and dedication, without having to resort to what can feel like petty meanness such as charts, dashboards, and the like. Right?

As I’ve mentioned, my professional background started with extensive training and application of Organizational Behavior Management (OBM), which is all about defining and measuring the behaviors that lead to success. If you’re looking for inspirational leadership, transformation, motivation, you will not find it in this applied science. The problem is that it works. Frankly, after about five years (two years longer than my mentor predicted anyone could manage OBM projects without experiencing burnout), I wanted to believe success was possible without all the work of measuring.

The good news (for me at least) is that there IS a place for leadership that can’t be measured. It’s not always easy to teach, but when you can help leaders adopt the mindset that they’re mining for gold, and that there’s gold to be found in everyone, it’s life-changing. When I can help people get – really get – that there’s so much more to true leadership than profits, I feel like I’m doing what I was put here to do. It doesn’t mean that every business needs to become a non-profit. You can love the people you are serving as a leader, and still sometimes need to coach them on their performance and even let them go. This can be a life-affirming or life-destroying process, literally, and when leaders understand this and apply their influence with compassion and kindness the world is a better place.

And we STILL have to measure things! For your business to be able to provide a means of financial provision for yourself and your employees, you need to be profitable. For you to be profitable, you need to know what’s working and what’s not. Even more basically, you need to know how much revenue will be incoming in the short and long term versus your expenses. Most owners know this intuitively when the business is small enough that they’re in it exclusively, but this can get out of hand very quickly
There are a lot of excellent resources to assist you in defining your organizational metrics and dashboards and the best way to depict your measurements. What and how you measure varies greatly in complexity. In OBM, we differentiate between organizational outcome, team or individual accomplishment, and individual behavior. The rule of thumb is you want to measure at as high a level as is sensitive to your tracking and feedback interventions. Unfortunately, top line revenue metrics do very little to change individual performance (but you’ll be hard pressed to find a good argument for not tracking top line revenue).

My simplified approach is to look at the four main areas of your business: getting the work (Sales), doing the work (Ops), getting paid and paying vendors (Accounting and Finance), and legally finding, paying, and providing benefits to staff (and all accompanying employee relations) – (HR). Each of these four areas can be measured on a high level, intermediate, and behavioral level, and what to measure and how will depend on your business and the performance of each. In companies where the operations team is not fulfilling on sales’ promises, you’d measure different things than in areas where there’s not enough orders in the pipeline to pay all the bills.

Most businesses do a pretty good job of measuring where they were, and less good at seeing where they are, which can be fatal. Determining what and how to measure takes skill, time, expertise, and the input of several key leaders in your business. I can’t do it justice in one or two articles, and in fact have created several training webinars and seminars around targeting and tracking alone. However, there are some things you can start doing today that will get you further ahead than you are now. If you’re interested, check out the Leadership Tools section on my site and download the Tracking Cheat Sheet or any of the Targeting Tools for free.

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