The Myth of Results Based Performance

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“I’m curious, though,” Jonas was thinking out loud. “As we create these tests for Rudy, to determine his capability in longer Time Span tasks, I am wondering how long this assessment period will take? If we test his capability on a 12 month Time Span task, does that mean we have to wait for the results after 12 months to make our decision? We base our Performance Appraisals on results. In fact, we hired a consultant to come in to develop our Results-based Performance Appraisal System.”

I held back, all but the glint of a smile. “Interesting question. Many companies proclaim an undying commitment to a results orientation. Management For Results. But let me ask you this, Jonas. When you observe a 12 month Time Span task, do you have to wait 12 months for the results to determine whether the person is being effective in the position?”

Now, it was Jonas’ turn to smile, as he shook his head from side to side. “No, you don’t. You can tell way before that.” Jonas stopped, then continued. “I wonder about our system of Performance Appraisals. Perhaps instead of Manage for Results, we should Manage for Effectiveness?”

Blessed Are the Flexible

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So, what is this recovery going to look like. My primary economic forecasters, Alan and Brian Beaulieu are not expecting a double-dip, but they are predicting a long slow dig out.

Victor Cheng is issuing a strong warning anticipating a double-dip. Victor’s observations are based on conceptual trends and events, while Alan and Brian pay more attention to numeric indicators.

My sense is that we are looking, not at a V shape or U shape recovery, but something that looks more like an L shape recovery. Seven actions to take.

  1. Examine your revenue budget to make sure it is realistic. From your budget, create at least a tactical 6 month forecast, aggressively updated every 30 days.
  2. Take a long look at your personnel plan for the next 12 months. Determine which positions are absolutely necessary based on your revenue budget. Now, lay your tactical 6 month forecast on top of that personnel plan to see if, in the short term, it is survivable. Update aggressively every month.
  3. Eliminate any operational function that is not necessary to meet your customer demands.
  4. Simplify every operational process. It is likely, you will find an effective solution inside most of your methods and processes that is simpler and at a lower cost structure.
  5. Consolidate methods and processes, so that similar tasks are staged and cross-trained. This will allow you to maintain operations in the event you have to reduce headcount.
  6. Outsource any process that is not part of your core value stream. Outsourcing allows you to fix costs and jettison overhead in the event that process is no longer necessary.
  7. Technology. Before adding headcount, explore technology to see if there is an alternative to labor intensive processes.

    8. During this time of uncertainty, blessed are the flexible, for they will not get bent out of shape.

    Credit to the Four Hour Work Week, for some of the central themes of survivability.

Over-runs, Under-runs and Backorders

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“It’s just that, with our volume down, it seemed that the supervisor’s role could be covered by one of our managers,” Rene defended.

“For that matter,” I replied, “your production roles are simple enough, couldn’t the manager step in and cover those as well?”

Rene laughed. “We joked about that, but you don’t save any money by laying off a production person. You save more by laying off the supervisor.”

“And how much are you saving, now, running your manager in a supervisor’s role and letting your systems go to hell in a handbasket?”

The smile left Rene’s face. “I know, I know. We haven’t counted up what this is costing us, but with the over-runs and under-runs, and customers on backorder, I figure it took us two weeks to lose back what we may have saved in the last 18 months.”

Put Out Fires, Or Work on the System

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“You are running short and running long,” I repeated. “Are there any patterns to the fluctuations that would help us understand.”

“Absolutely, but the manager is working as a supervisor and doesn’t have the time to lay it all out,” Rene continued. “We have spreadsheet models that we used two years ago, but the assumptions don’t hold up, need to be tweaked. You know, it’s funny. The manager asked me last week if, what he is doing now, as a supervisor, is really the best use of his time?”

“What did he mean?”

“I don’t know,” Rene replied. “For a minute, I though we might have a motivation problem. You know, right now, everybody has to pitch in and do whatever it takes. But it did get me to thinking. We didn’t hire him to be a supervisor, it’s just now, that’s what we need him to do.”

“That’s what you need him to do, or someone else to do? Do you need someone to put out all the fires or do you need your manager to work on the system that will prevent most of those fires?”

Volume Ramps Up

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“What gives?” I asked. (This is known as a probing diagnostic question.)

“We’re having difficulty ramping back up,” Rene replied. “It’s interesting that when we were doing four times the volume, things seemed easier. We had almost no back-orders. We never built excess inventory in our finished goods. I know we are running with fewer people, but we have brought back plenty of production people to cover the output.”

“How do you get both backorders and excess finished goods at the same time?” I wanted to know.

“Easy. One product line runs short, the next one runs long. And we’re not that busy. You would think this would be easy.”

“And, what does the supervisor say?”

“Well, we reorganized last year, to deal with the recession,” Rene explained. “So, we have a manager watching the area, actually three areas. And that’s where the problem seems to be. He tells me that he is constantly putting out fires. Like yesterday, we ran short on raw materials for one of the lines.”

“I thought you had an MRP system that was supposed to take care of those issues?” I pressed.

“We do. But we adjusted our min/max re-order points to deplete some of our inventory during the recession and the manager hasn’t had time to go back and re-adjust as our volume ramps up. Not to mention, lead times from our suppliers, the ones still left, are all over the place.”

Short-Term Precious Time

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“Why is it important to get your team involved in problem solving?” I asked.

Carl had been promoted to manager six months ago, after two years with the company as a supervisor. Stress cracks had begun to show.

“Well, some decisions, I have to make. Between me and my boss, I am still accountable for the productivity of my team,” he replied.

“I understand. But why is it important to get your team involved in problem solving?” I repeated.

“Well, I would get them involved if I thought it would help, but I have to tell you, sometimes the things they come up with are way off base,” Carl continued to resist.

“So?”

“So, it wastes a lot of time. And you know how busy we are around here. Time is precious.”

“Short-term time is precious,” I agreed. “And team problem solving eats time for breakfast. In the short term, it might appear that little is accomplished. So, think about this. What is the long term impact of team problem solving?”

Interest, Passion and Value

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Donna was quiet. “You talk about necessity. It was a volunteer team, so the necessity had to be something inside each of us. To create a new team on my new project, I have to find people who find that same necessity, inside.”

“Okay,” I nodded. “What do you look for?”

“To be on this team, you have to be interested in the work. You have to have a passion for the work,” she replied.

“And what work do we have interest in, as individuals? As a manager, how will you identify the passion we might have for the project?”

Donna was searching. Her eyes moved up and to the left. “I know I have an interest, or passion, for work in which I place a high value. If I don’t place a high value on the work, I will not be interested. I mean, I may show up and slug my way through it, but I will not pursue it, with enthusiasm.”

“Value?” I asked.

“Value. If I see high value, you have my attention.”

“As a manager, how will you see that in another person?”

Something Inside Each Team Member

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“How could it be necessity. I thought you said it was a volunteer project?” I pressed. “Volunteer means you had a choice. How could it be necessity?”

Donna sat for a minute. “You are right. We were volunteers, as a team. But to us, it was necessary. It was necessary to show up on time. It was necessary to support each other. It was necessary to challenge each other. It was necessary to finish the project.”

“Look, you said it was necessity that made your team perform at such a high level. But if you were all volunteers, what made this project necessary?”

“I don’t know,” Donna replied. “It was something we saw in the project.” She stopped. “Or something we saw in ourselves that made the project necessary. For each person on the team.”

I let her words sink in. She had just made the connection. The necessity that drove her team was something inside each team member, that made them push forward.

And then I pressed again, “So, how do you, as a manager, create that necessity, with your team, on this new project?”

Moving a Group to Become a Team

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“If you want to build a team, give them a real problem to solve,” I started. “Forget about sensitivity training and communication seminars. Give them a real problem to solve.”

“You mean I should forget about the team circle with all the falling and catching?” Donna smiled.

“Yes. Think about a high performing team you were once a member of. And tell me all about it.”

“Okay,” she responded. “I remember a team. I was just out of college and a group of us got involved in this community service project. We were together for only six weeks, but it was pretty intense. After the project, we all moved on to different things, but when we worked together, against all odds, we were unstoppable.”

“Don’t tell me about the project, tell me about the team. Who was on the team, why the intensity, what was it that made that team so powerful?”

“We were focused. The project was very clearly defined, along with several problems, issues and challenges. The more difficult the problem, the better we worked together.”

“What was it, about the team that made it work so well?” I pressed.

“The biggest thing,” Donna nodded, “was that no single person could do the project alone. It was necessary to cooperate, necessary to ask for cooperation, necessary to communicate. It wasn’t that we were good at being a team, there was just no other way. It was necessity.”

Creating the Crucible

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How often do we sit in meetings, watching people check out? Fred surreptitiously checks e-mail on his Blackberry when he thinks no one is looking. One ear open to the meeting, one eyed glancing at a report he was supposed to review yesterday. Jill brazenly has her laptop open on the table, supposedly taking notes of the meeting. A sideways glance shows she is downloading e-mail and checking her horoscope.

Who is responsible for creating a different atmosphere, a different context? Who is responsible for creating the crucible in which a problem can be explored, alternatives generated and a solution selected? Who is responsible for creating the kind of meeting where each team member is engaged from beginning to end? Who indeed?

If that’s you in the mirror, the next question is “how?” How can you create maximum participation from every person in the room? How can you create full engagement?