Are you taking the right actions to drive people performance? Are you taking enough time to really understand who the underperformers are? I have found that there are three simple steps to driving people performance and most organizations are not doing them well.
Step 1: Establishing High Standards
Building a high-performance organization starts with having high standards. Many times the benchmark leaders use for their standards is too low. This happens because they are only looking internally to set the standards, and internal standards have always been low. In addition, it is important to use the proper metric.
I recently had a conversation with a client who was excited about his new Area Director, who made some pretty bold comments at their last management meeting. The conversation started like this. “We are not getting enough growth in new business from our key areas.” This was based on the fact that very few deals from new clients were coming out of the region. This was a surprise since the company was pricing very aggressively. The new region manager quickly tried to impress everyone with the question, “Is there a limit to how many opportunities they can bring from that region?” The answer was “no,” and that was the end of the discussion.
The problem was that no standard was set for the organization so anything more than today was an improvement. A company needs to establish a minimum number of deals expected per week and per month for each sales representative. This should be determined based on the how much growth is expected from existing versus new customers. This should be calculated by mapping a sales representative’s daily activity. This activity should be broken down into calls and visits to new potential and existing customers. One must factor in travel time, administrative time, and other non-selling time. These sales activities should be funneled into conversion ratios. For example, if a sales representative consistently visits 15 new prospects a week, possesses the proper skills and knowledge, and performs well, this should result in 3 new customers a week, a conversion ratio of 20%. As a result, the minimum standard would be 12 new customers a month. Failure to achieve 15 new prospect visits or 3 new customers a week would indicate that a salesperson is an underperformer. A salesperson who achieves results better than 3 new customers a week but is not visiting 15 new prospects has more potential. This person should be pressured to visit 15 new prospects, which is still the standard weekly activity. If it is determined that there are a number of representatives that perform at a higher-level conversion ratio, then the standard should be raised on conversion.
Step 2 – Hold People Accountable
Once standards are set, employees need to be held accountable. This is where many leaders fall apart. This happens for several reasons. First is fear of conflict. In these instances, leaders avoid the conflict of addressing an underperformer. Many people are naturally uncomfortable with conflict and have a heavy dose of the “need to be liked” by the others around them. Second is the “time trap.” This is where someone believes they do not have the time to deal with someone or the time to replace them. This is misleading because the time they spend in rework, doing someone else’s work for them, or fixing mistakes far exceeds the amount of time it takes to replace someone or coach and develop them properly. Thirdly, there are misguided belief systems. Many leaders believe that everyone should be given lots of chances as long as they try hard and are loyal. Or that anyone can learn anything. These 3 traps cause good established standards to become irrelevant and for accountability to fail.
Step 3 – Identify the Reason for Underperformance and Take Proper Action Quickly
The last element related to performance is identifying the issue. Once you have determined that someone is not performing you have 3 choices: 1) coach, train or develop; 2) move the employee to a more suitable job; or 3) terminate employment. This is a simple decision that can usually be made very early in someone’s tenure, but leadership does not approach the question properly. The question should be, “why is this person not performing?” There are five reasons why someone may not perform:
- Lack of knowledge
- Lack of skills
- Lack of talent
- Cultural misfit
- Poor leader
If the issue is lack of knowledge and/or skills, leadership has to understand how they failed to provide the proper training for this person. First recognize that this is a leadership failure, and if the problem is persistent, get that leader training on how to be better at employee selection. The leader should have recognized the skills and/or knowledge gap during the interviewing process. In these instances, if the gap is too wide, or there is insufficient time to close the gap, the person should be moved to a position where they possess the proper skills and knowledge. If there is no suitable position, acknowledge the mistake and hire the appropriate person. If there is sufficient time, coach and train the person until they have the proper knowledge and skills to perform well.
If the issue is lack of talent, a person should be fired. Talent cannot be learned. While one can improve a talent someone already possesses, talents such as conceptual thinking, problem solving, self-starting ability, and work ethic cannot be taught. In addition, there are different levels of skills that cannot be taught. For example, in basketball you can teach everyone to shoot a jump shot. However, not everyone will shoot close to 50% from 20 feet out consistently with an opposing player in their face. If someone lacks the level of talent you need, there is no sense in waiting, training, coaching, trying to motivate, discipline, etc. They just don’t have it. The patterns you see will continue.
The same goes for cultural fit. If the person is consistently violating your core values, he or she does not share them. They need to go. Period!
Determining if leadership is your problem can get tricky. Is there a lot of turnover in the department? Is it rare that someone get high marks from a particular leader? Conversely, does almost everyone get high marks from a particular leader? Is it rare that someone speaks up from a particular department when speaking up is common from others? Is it common that new employees start off great in a department and then a year later seem to be no good? Is it rare that someone ever gets promoted out of a particular department into other departments? These are all examples of signs that you have a poor leader. Just like with the subordinates, you have to determine which of the 5 issues your leader is facing and take the appropriate action.
Driving performance in organization seems complex and it can be simple. Identify, set and update your performance standards for every role in your organization at least annually. Hold people accountable. When they do not perform know what action to take based on which of the five reasons they are not performing.