Companies need to build a 'performance enabling culture' where employees are driven by purpose to achieve common goals, go the extra mile, take ownership and consistently achieve.

There is news going around that COVID-19 has altered the story of Performance Management in many companies. One cannot be sure whether this is going to be a lasting change or only temporary. However, the truth is that any change that happens around us do send some signals – weak or strong – and rightly, draw our attention to revisit the subject and the thinking behind it when it was created or adopted.

Given the impact the pandemic has had on employees’ work, professional lives, and on the overall business priorities, industry leaders are looking at the upstream of Performance Management and the intangible wings.

In 2020, the leaders of several companies realised that it was unfair to assess employees against objectives that do not consider the impact of COVID-19 on employee morale, resourcing and productivity.

They confronted two vital questions – Should companies or leaders still hold formal reviews? Should they adjust to account for disruption? In the given context, it is interesting to look at Gartner June 2020 survey report mentioned alongside.

“Of the organisations not conducting formal performance reviews like usual, 14% are making the reviews optional, 8% are delaying reviews and 5% are completely cancelling them. These decisions may be necessary for organisations or specific business units that have experienced significant disruption due to COVID-19.”

The above data clearly reveals the ‘humanisation’ of the leadership, who, through their actions, provided a higher purpose, empathy, and shared meaning. They embraced the white space between the boxes, and imbued it with deeper meaning and purpose.

The issue of the unintended impact on current practices of performance reviews also prompted us to think seriously and prepare for unpredictable disruptions. Further, it prompted us to readjust and see the system beyond the ‘measurement’ and ‘Care for Intangibles’.

We are aware that organisations have always struggled with performance, but it is not due to the absence of intellectual competence in designing or measuring performance - it is because of the inability to go beyond it.

It appears that many companies, unfortunately, have ignored the horizon, and have not looked beyond ‘managing performance’ and failed to enable it. We notice that excessively left brain-engineered Performance Management systems give a feeling that everything is great, much akin to “God’s in His heaven — all’s right with the world!”. In the true sense, it overemphasises the role of targets, numbers, KPIs, control, measurements, adherence and compliances.

And in the process, companies, though unintentionally, killed the intrinsic motivation (power of inside out) of employees to grow, succeed, contribute and deliver consistently superior results. In other words, the natural drive of employees for breakthrough performance was suppressed due to excessive or coercive managerial control, when they ideally should have enabled performance, also as part of building and sustaining ‘performance culture’.

Companies need to build a ‘performance enabling culture’ where employees are driven by purpose to achieve common goals, go the extra mile, take ownership and consistently achieve. They also need to ensure an adequate enablement for employees to perform at their best. Such an approach will ensure sustainability and progress for any business in the long run.

From the above discussions, the following questions emerge very strongly –

i. How should companies or leaders prepare their managers differently to look beyond managing performance?

ii. Should companies indulge in exploring some of the intangibles to enable performance? iii. Should companies identify and eliminate excessive and unproductive reviews not contributing to enhancement of employees’ performance?

iv. Is it important to critique our culture to boldly assess its adequacy and relevance?

v. Should companies also review their organisation design and work flows?

vi. Should companies also deliberate their doubts and anxieties on change management? vii. Is there a pressing need to make a shift?

 viii. Is change inevitable?

We say, Nothing lasts forever - everything around us is changing, changing for good and gaining more power. One needs to look at the Mission statements of Microsoft CEOs –

Bill Gates (1975-2000): ‘A computer on every desk and in every home’

Steve Ballmer (2000-2014): ‘To help people and businesses throughout the world realize their full potential.’

Satya Nadella (2014 -): ‘Empower every person and every organization on the planet to achieve more’

On 28th August, 1963, on the steps of the Lincoln Memorial in Washington D.C., while delivering the historical speech, Martin Luther King Jr. departed from the prepared text and used the phrase, “I Have a Dream…” which changed the course of the American history.

To repeat, nothing lasts forever, should we take a deep dive and debate on making a shift from ‘Managing performance’ it is more about the ‘tangibles’ to ‘Enabling performance’ it is more about ‘intangibles’? Intangible data are critical in any system.

At this stage, one is not in favour of lowering the beam on elements of existing Performance Management system (Balanced Score Card, OKR, SMART goals, Alignment, KPIs etc.) and also, it is not appropriate. It is best advised to think along the lines of ‘humanising’ Performance management.

In an organisational perspective, the Metaphor of the Iceberg would be an apt explanation on valuing the ‘intangibles’ –

The ‘ice below the water’ is dangerous to ships, particularly the treacherous part of the North Atlantic Ocean. When RMS Titanic hit the iceberg, the ‘sharp, hidden ice’ bumped along its starboard side and punched several holes in the ship’s steel plates, badly ripping them and flooding the six lower compartments. In a little over two hours, the monstrous Titanic filled with water and sank.

Here, it is important to acknowledge the fact that the ‘values, behaviours and cultures’ are the ‘invisible’ and ‘intangible’ elements which reside ‘under the water’ and ‘support’ the tips of the iceberg which is standing tall ‘above the water’.

Gaining Ground

Let us see why ‘Enabling performance’ has gained so much ground in recent times. Following is an excerpt from HBR Spotlight. The military planners use ‘Commander’s Intent’ to provide a simple and clear picture what success shall look like. It further recognises the unpredictability, chaos, imperfect information, surprises, sudden changes in enemy situation, and other relevant factors that may make a plan either completely or partially obsolete when it is executed. This is a clear prompt to us to keep our systems and practices relevant considering the unpredictable world we live in.

If we look at the doctrine of ‘Commander’s Intent’, it also focuses on ‘intangibles’ like empowering and providing people with the right resources, authority, autonomy, opportunity and motivation to enable accomplishment of their tasks under the most difficult situations as well as making them more responsible for their actions and feel fulfilled, engaged and ultimately be more productive in their jobs.

‘Employee empowerment’ refers to the manner in which companies prepare employees to succeed here culture, values and behaviours matter. The story of General Motors that shall follow is a suitable example to the same.

We have observed that when companies provide employees with adequate freedom and support, they also integrate employees more closely into the company’s mission. In other words, allowing employees to take leadership of their roles and have a voice in how the work is executed would result in high engagement and long-term positive impact.

As we are aware that ‘Good and bad’ are two sides of the same coin; we should therefore not lose sight of what we should be careful about. It is important that we remain prudent in our action and not go overboard. Therefore, I am not suggesting that Post COVID-19 companies should go all out for promoting the culture and practices of ‘Enabling performance’ without calibrating the robustness and maturity of their existing system, culture and management practices.

The General Motors Story

We may recall the incident of the General Motors faulty ‘ignitionswitch’ in 2014. It actually turned into a serious crisis that was linked to several accidents leading to injuries and deaths. Subsequently, the analysis of this case also revealed how the unethical behaviours of employees regardless of company’s stated values, affected many lives for years.

Problems with the ‘ignition-switch’ could shut off the car while it was being driven, disabling the airbag, power steering and power brakes - and putting drivers and passengers at risk.

The story goes like this. General Motors had to face a grave problem in the year 2014 that involved recalling 29 million units of cars that were assembled between the years 2005 and 2007.

The issue had its roots from the year 2002 when an engineer approved an ignition switch model that was not according to design specifications.

• The big question on this is why was only one man responsible for the switch?

• Better yet, why was it acceptable for one man to sign-off on something so significant to a vehicle?

GM could have improved their approval process by adding more people/layers to look over the requirements, design and test results to ensure that the product is right and safe.

There are many questions surrounding the aftermath of the recall:

•  Who should be blamed for the recalls?

• Should the entire company be at fault or just the individuals responsible for the part?

• What about the manufacturer of the ignition switch?

• Some even pushed the blame past both purchaser and part supplier to the individual material suppliers.

• While many fingers are being pointed at many different people, it boiled down to two responsible parties: GM and Delphi (supplier).

It was a serious negligence that caused the part to be approved and carelessness that kept the problem hidden for so long.

What looked like a technical problem relating to ‘ignition-switch’, it was more a people and culture problem.

General Motors’ CEO Mary Barra told employees at a town meeting that the automaker, “Let its customers down…” “We didn’t do our jobs…”

And the good news is that after six years of the ‘ignition-switch’ episode, General Motors was recognised by Ethisphere, USA (a global leader in defining and advancing the standards of ethical business practices), as one of the 2020 World’s Most Ethical Companies.

What we learn from the story of General Motors is that the organisational culture assessment and overall readiness is critical when considering a shift from ‘Managing performance’ to ‘Enabling performance’ where lot of freedom is provided to employees. However, we should venture into this space only after building a guard rail to deter access to dangerous off-limits. But the new space will have more new entrants and this space will be crowded slowly!

It might be interesting to examine a ‘Hybrid model’ in the context of our discussion on shifting from ‘Managing performance’ to ‘Enabling performance’.

Let me further explain with reference to the following matrix –

• Today, a large number of companies may have a pure ‘Managing performance’ culture or a blend of High ‘Managing performance’ culture (MPC) and High ‘Enabling performance’ culture (EPC).

• Quadrant-1 & 4: The desired movement will be from quadrant 4 to quadrant 1 i.e. nurturing High ‘Enabling performance’ culture (EPC) and slowing down ‘Managing performance’ culture. It is difficult to say at this stage without sufficient data, that ‘Managing performance’ culture will completely make way to the desired ‘Enabling performance’ culture.

• Quadrant - 2: It is also possible that within the same company, a few functional leaders may still continue with High ‘Managing performance’ culture (MPC) and a few leaders will go all out for ‘Enabling performance’ culture (EPC).

• The other school of thought – within the same company, two extreme cultures i.e. High ‘Enabling performance’ culture (EPC) and High ‘Managing Performance’ culture (MPC) may not exist.

• The transition from High ‘Managing performance’ culture to High ‘Enabling performance’ throws one more possibility i.e. creation of a ‘Hybrid performance’ culture, where both the cultures – ‘Managing performance’ culture and ‘Enabling performance’ culture would exist. The dominance of the culture may vary in line with the adherence to the core values of the company.

• Most likely the ‘Hybrid performance’ culture will sustain and it may be a reality…this subject is open for discussion. A shift from ‘Managing performance’ to ‘Enabling performance’ culture and practices may be quite demanding, nonetheless, it looks inevitable. Satya Nadella, Chief Executive Officer, Microsoft.

“Every person, organisation, and even society reaches a point at which they owe it to themselves to Hit Refresh - to reenergize, renew, reframe, and rethink their purpose. If only it were as easy as punching that little refresh button on your browser. Sure, in this age of continuous updates and always-on technologies, hitting refresh may sound quaint, but still when it’s done right, when people and culture re-create and refresh, a renaissance can be the result.”

References:

Hit Refresh by Satya Nadella, CEO, Microsoft Manage Uncertainty with Commander’s Intent, HBR Spotlight General Motors case study Gartner survey report 2020