Building Sports Culture in your Company

India has finally started performing well in sports other than cricket. Indian sportswomen/men performance in CWG , 2018 games was commendable and was one of the best in a decade.  Per my understanding, there are 3 main reasons for this much-awaited success:

  1. Better Coaching.
  2. The discipline of practice with better equipment.
  3. Improved reward & incentives.

Many companies can succeed & executer better on their growth plans if CEO & leadership team can make each individual in the company(or at least 50%) behave and execute like a sportsperson.  Though linking sports directly with business is not fair; as in sports you practice 90% to 95% of the time, and the actual performance is only 5% of the time. In business, you have to perform every day. You don’t have that much time & budgets to practice.

To build sportsmen culture in your people, you have to follow the same 3 principles stated above: “Better Coaching Culture”,” The discipline of execution with better equipment” and “Better Reward & Incentive System”.

Build Better Coaching Culture

Managers are the coaches in a company. A coach is someone who helps in “Understanding the strength and weakness of the coachee”, helps in “Making sure the coachee remains disciplined every day” and “Motivates the coachee whenever she feels down”. In sports, coaches are a former player(might not be the rockstar player of their time), but now has the ability and hunger to make the coachee perform best at the highest level.

To get the managers who are better coaches in your company, 2 critical touchpoints are when you are “hiring a new person as managers” and “promoting individuals to become managers”. When you are hiring the new person as a manager, she should possess all the required coaching competencies. And when you are promoting the individual contributors to the manager role, make sure that you have enough data points on following core competencies a manager should posses

  • Ability to understand the strength and weakness of each report
  • Should have required functional and technical know-how
  • Should have the ability to get execution done with discipline every day
  • Should have the ability to give feedback & coaching on a regular basis
  • And above all, can communicate well in written/verbally

 The Discipline of Execution

I played badminton at my school level and have represented the school at the district level. But failed to perform better because I was not disciplined enough.   When a company performs better than its competitors, its because at every level every person brings disciplined of execution towards the direction set by the CEO/Management.  And the managers play a very important role in bringing this discipline. The managers will be able to bring a better discipline to the team ONLY when there is a high level of alignment within the company forwards business priorities that need to be achieved.

The process starts with CEO’s ability to cut down the complexity and put in company’s strategy and 3 to 4 business priorities/goals very clearly. And communicates this to the entire company. And than HOD’s take those priorities up and work within the functional unit on what, how and who will work on which goals which will impact CEO’s priorities.  Once the managers exactly know what they and their teams need to work on, only then they will be able to bring the discipline of execution in their teams. Currently, the way I see we implement qilo, managers to get hell lot of work done from their team, but lacks the focus on what should be executed.

As a company, you & your managers can get many things executed from your teams. But if they are executed on wrong priorities all this time, it will result in you working for your competitor.

Adopting an efficient goal-setting framework like OKR or Hoshin-Kanri or One-Page Strategy framework can help here.

Better Reward, Recognition and Incentives

Money is a universal motivator. Most companies fail to put in an effective and transparent reward and incentive system in place. And because if this you fail to deliver the message clearly to employees about “What’s in it for me to execute with discipline every day?”.   And more than anyone else, it should be the managers who know your reward and incentive system in and out.

A better reward system should always link the people performance with business performance. It should be data-driven and above all should be able to generate enough data points for better decision making on individual performance. And this data should be communicated to employees/managers on the monthly/quarterly basis. Your reward policy and the process should always reward the end tail of the company on their individual performance, managers should be rewarded for their individual + team performance. And HOD’s should always be rewarded for the company performance.

Building the sportsmen culture in your company is not an easy task. But if you are able to bring this change in your company, you will have a far better competitive advantage.

Summary

  1.  As a coach, your managers should be able to (a) Understanding the strength and weakness of their team members (b) Put discipline of execution within the team every day and (c) should be able to motivate/give feedback to the team members on the continuous basis.
  2. To get the discipline on execution, you manager should clearly be knowing what they are trying to achieve. And how their achievement is linked with bigger picture/CEO priorities
  3. Your reward system should link people performance with business performance.

 

Are you Executing Better than your Competitors?

As leaders, we tend to focus very hard on ensuring that we build robust quality metrics for our products and satisfaction metrics for our customers.

We invest heavily in capacity, sales dashboards – try to look at the lead indicators minutely, keep a check and the pulse of the market.

Breaking News – Even your competitors are doing the same!!

Let’s get a reality check no one running a business wants to give an inferior product or service in the market. Capeesh!

Then what makes your competitor grow faster than you?

The Answer is simple they are Executing Better than You.

The best part about my Job at qilo is meeting leaders understanding their success stories and growth barriers.

One theme that has emerged out clearly for successful leaders is needed for Fast Execution.

Going to market quicker, learn from the customer, change the plan and Redeploy.  Which requires hell load of Organization Agility and most importantly all hands on the deck.

Of all the conversations I selected, 5 factors, which the leaders claimed to have succeeded to drive fast execution

  1. Leadership Sincerity (Hunger) – How sincere and committed leadership team is to achieve the vision
  2. Defined Purpose – A well-defined purpose get’s half the job done and purpose cannot be financial gains (Sorry), hard question to ask what impact we want to bring to our customer?
  3. Show the big picture – If you want people to execute faster, the urgency is built by showcasing the big picture not by pushing deadlines on someone’s throat
  4. Enrollment – Team who execute faster are enrolled for the purpose and they execute creatively
  5. Communication – The most important element to drive fast execution, companies which talk gets talked about.

We see teams being aligned with roles, functions and result areas – for companies who execute faster – they get aligned with a common goal!

Execute Faster and Better or else get ready to be executed by your competitor!

 

Why OKR Implementation Fails

OKR is a management tool helps you to link business priorities with people. Adoption of OKR in companies as a goal-setting framework is still at a nascent stage. In most companies, the age-old KRA and KPIs are used as a goal-setting framework which is more role-centric than business-centric. While implementing the OKR in many companies, we have learned and picked up few things which results in the failure of OKR implementation:

  1. Force fitting KRA & KPI approach in OKR : For OKRs, the input is CEO/business priorities with respect to cash generation, margin, growth and enhancing customer satisfaction & success. For KRA/KPI’s the input source is the Job Description.
  2. CEO and Department Head not getting involved in the process: Since OKR’s is a business-centric approach of goal-setting, leaving the process to HR to someone else in the company will lead to failure. The process starts with CEO defining the Business Priorities that the company has to achieve in that particular financial year, followed by leadership team owning the accountability among themselves on how those priorities will be achieved. And then subsequently, its given to team below the HOD’s. If the leadership team doesn’t get involved in the OKR implementation, the end result will again be a mere formality.
  3. Company-wide lack of communication why we are implementing OKR. The KRA centric approach of goal-setting is there from last 30 years. When implementing the OKR, you need to invest the time in education your people what OKR is and how its different from the KRA approach of goal-setting.
  4. Delaying implementation of OKR when the new financial year start’s:- When the new financial year start’s, leadership teams put up an Annual Operating Plan(AOP).   The output of AOP is your business priorities. Delaying the implementing of OKR  means the delay in putting AOP in action.
  5. Failing to put Monthly/Quarterly Review Process: Unless the cadence of review from top to bottom is not put in the place, people will not take updating the progress on OKR’s seriously.
  6. Not using OKR performance data in your Rewards/Incentives: Failing to link the OKRs with Rewards/Incentives of the individual employee will fail to answer the question for employees “What’s in it for me to help the company implement OKR successfully “.
  7. Not leveraging a tool to implement OKR: OKR helps you to link business priorities with people and helps you to align the teams and individuals better. Implementing the OKR in excel sheet might suit for the small company with the size of 10 to 15 people, but implementing OKR with employee size of more than 20, will increase your administrative time of managing the OKR’s across teams and individuals.

 

Getting ready for the future of performance, Part -2

In Part 1 of this post, we looked at what should be the purpose of your Performance Management(PM). If the core purpose of PM is beyond annual Performance Measurement, keep reading. If you think that process of performance management can be one of those interventions that can help you to achieve higher levels of productivity and performance at the organization, congratulations you are able to realize the potential of PM. At qilo, we call this new potential of PM as Performance Enablement.

Just think of your organization as a machine, a well define PM process can help you to enhance the accountability on running those parts of machine smoothly and helps you to visualize how those parts are working with each other.

Let’s look at how the 3 core processes involved in traditional PM processes can be reinvented:

  • Re-inventing the Goal Setting
  • Re-inventing Manager / Employee Conversations(1-On-1’s)
  • Re-inventing the Acknowledgement and Feedback

Re-inventing the goal setting

The traditional approach to goal setting is to define the goals & KPI’s with respect to roles people play in the company. During the annual ritual of PM process, every person in the organization tries to prove that they have moved beyond what the KPI’s are stating. Here are the flaws of traditional goal setting process :

  • Goals are too longish in nature that it’s difficult to remain focused on them. By the time you finish define the goal, because of the dynamics of the business environment, goal post changes.
  • The KPI achievement is rating and perception driven NOT data driven. Per Phycology Today, humans tend to lie about their performance.
  • Defining KPI weightages add to more confusion and doesn’t help an employee to judge where she should spend her time.
  • KPI’s itself are too subjective in nature defined in a complex way that a normal person can’t understand it.
  • Most of the KPI’s are lag indicators and are not combined with the lead indicators which can tell us more story on why its not achieved what you are supposed to achieve.
  • Word matter. Pick up any goal or KPI statement, most of them are hardly motivating that a person feels like chasing those.

The new way of goal setting should be Agile in nature and should focus on:

  • Shorter duration goals (monthly or quarterly) backed by the action plan on how that goal will be achieved. The action plan will reduce the subjectivity involved.
  • The progress on action plan should be updated on the weekly or monthly basis, which will help reflect how the person is going on the goal, and whether it will be achieved or not.
  • Each goal should be linked to the overall company objectives thus giving visibility to the leadership on how the company is performing on strategic and operations priorities.

While the advantages of setting the Agile goal process are enormous, implementing the agile process at scale need a high level of discipline within the company.  The success of implementing the new way highly depends on the content(which means goals and its action plan) which goes into the system. Otherwise , the new way will also face the same challenges of traditional way which lacks adoption by people.

Re-inventing Manager / Employee Conversations(1-On-1’s)

While the manager-employee conversation is the core to enable employee evolution, most companies don’t know how to facilitate this in right way. In the traditional way of PM, the formal performance discussion between the employee and manager leads to manager justifying the rating given to employee. The successful implementation of manager and employee conversation starts with

  • Training managers on how to conduct a conversation and give feedback to the employee on how to be more productive and perform better.
  • Give the context to the conversation which forces the open-ended discussions between employee and manager.
  • Collect data points from the discussion to check at company level how conversation are going and how managers are leading these conversations.
  • Combine this process of discussion with the Agile process of goal setting so that manager and employee have the conversation about goal progress.

Re-inventing Acknowledgement and Feedback

At the time when you give feedback to your Uber driver by the time you are out of your cab, feedback to an employee is given once a year. Feedback and acknowledgment of the work should be continuous & real time. While setting up the 1-On-1 process and conducting in quarterly will help you to re-invent the wheel of feedback, what if someone has to give feedback to someone after the meeting or a product launch or after a particular event in the company.

The data generated from the agile goal process, 1-On-1 and continuous feedback should generate enough data for you to help understand how your culture, people, and metrics are performing. And as Ray Dalio, famous CEO of Bridgewater Consultants and author of the book Principles says

“If you can’t visualize how your culture, your people, and your metrics are performing, you will inevitably fail to realize your organization potentials and growth”

Getting ready for the future of performance, Part -1

Performance Management(PM) is dead. The existing way of performance management has become increasingly bureaucratic/burdensome, costly, low-value to employees and managers. Further to this, it has zero or sometimes negative contribution towards overall company growth.

You probably have read many blogs/articles stating these claims. Everybody is talking about it, but nobody is talking about what is missing in current approach and what needs to be done to be future ready. By merely shifting the annual activity to quarterly will not help. And by just doing way from ratings will also not help, in fact, it can be counter-intuitive and will result in socialist culture in the organization where high-performing people are not rewarded.

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Image Credits:rawpixel @ unsplash

This post is focused on how you can identify what is missing in your current approach of PM. There are two aspects when we talk about getting ready for future:

  • Evaluation of Present Situation: It’s about knowing what is missing in your current approach of PM. And whether you are ready for the change in future or not.
  • Preparing for Future: How to prepare for the future. Part-2 of this post will cover this aspect

Evaluation Of Present PM System

Purpose of Performance Management

The primary purpose of PM should always be to enable and enhance organizational & people performance. The organization performance can only be increased when its people become more accountable towards driving organization objectives, managerial effectiveness is enhanced, and people feel more motivated at work.

Once we have a clarity on the purpose of PM, we can decide whether PM will help us to achieve the organizational performance or not. Your purpose of PM could be one of the items listed below or cloud be the combination of them:

  • Driving accountability towards achieving organization business objectives.
  • Enabling people to perform better in present and future.
  • Compensation/Reward/ Promotions decisions
  • Identification of the high-potential’s for leadership pipeline
  • Future L&D initiatives

The primary purpose of PM till date was to support the decision making related to Compensation, Reward and Promotions. And this decision making is primarily supported by data coming out of annual performance review activity, which was always received with the lowest level of interest by people in the organization. And the core reason of failure was the ‘Design Thinking’. The existing design of PM has brought in too much subjectivity & complexity in the processes which resulted in side effects like ‘Recency Bias’. And because the entire exercise was not data-driven, it has led to more politics and favoritism within the teams.

To prepare for future PM process, you can answer following questions with respect to ‘PM Purpose’

  1. What should be the purpose of my future performance system?
  2. Is my purpose getting fulfilled with existing PM in a way that it reduces subjectivity and complexity?
  3. Does my PM give me enough data points to achieve my PM process

Business Strategy

The strategy is a new management jargon which has come in limelight just 10 to 15 years back. Only few people beyond HBR writes about this. In its simplest form, the strategy is about set of choices CEO and her leadership team makes about the business.  These choices are primarily in following areas

  • How winning future looks like?
  • Where will we play?
  • How will we win?
  • What capabilities are required to win?
  • And what kind of systems and processes are required to win?

It’s often heard that strategy is an execution and people problem. If that’s true the PM is the perfect system to support execution. And further, it can support the change in people behaviours to achieve those strategic priorities.

To prepare for future, you can answer following questions with respect to your ‘business strategy’

  1. Should my PM support execution of my business strategy?
  2. Will we able to drive the behaviours using our PM to achieve our company strategy?

Nature of Work

The nature of work has changed in last 30 years because of the growth of service economy. Employees are expected to play multiple roles during their company tenure and must deliver results at a much faster pace. This has resulted in more stress at work and the human brain is still getting adapted to new norms of speed, and high levels of anxiety. At the same time, employees are demanding much more flexibility at work to reduce their level of stress

The kind of work which is happening in the companies’ demand people to work in teams and that to cross-functionally. Your PM should be supporting the team ecosystem to achieve your goals. And should support performance evaluation not just based on how the individual has performed, but also how the team has performed to which individual was part of. Once this approach is supported, you are giving a clear signal to your people that team performance also matters.

To prepare for future, you can answer following questions with respect to your ‘Nature of Work’

  1. Should my Performance Management(PM) support team performance evaluation plus individual performance evaluation?
  2. Do I need to capture data points against all the action plans/KPI individual people have worked on throughout the year?

Millennial Readiness

The service-based economy is mostly supported by new age employees a.ka. millennials. Millennials are people who have joined the workforce post-1984 and have grown up with the social networks and heavy usage of technology. They don’t hesitate to share their views publicly. They have a very high quotient of finding the meaning of their life through their work. To find the meaning they need more feedback from your managers and more growth opportunities. And they can’t just work in a fixed role, which in-fact is good for you as an organization. They want to move horizontally and vertically. And they expect much more transparency from the organizations. In a nutshell, they are way more demanding of their employers than previous generations.

Your PM should support transparency or at least improve the perception of transparency. And it should support frequent feedback in a very informal way. If you can achieve this, you will see more stickiness of this generation with your organization.

To prepare for future, you can answer following questions with respect to your ‘Millennial Readiness’

  1. Should your Performance Management(PM) support in improving the level of transparency or at least improving the perception of transparency?
  2. Should your PM support more frequent feedbacks, which should be enabled every day/week/month/quarter?

Organization Culture

Organization cultures is about how work gets done in your company. Organization Culture can be divided into 4 archetypes.  You need a good mix & balance of all the 4 types to achieve the success.

  • Market-driven culture: where people are result-oriented, competitive and goal-oriented. The leaders are hard drivers, producers, and competitors. And the success is defined in terms of market share and penetration.
  • Hierarchical Culture: where procedures govern what people do. The leaders pride themselves on being good coordinators and organizers. And the Success is defined in terms of dependable delivery, smooth scheduling, and low cost.
  • Clan Culture: where people share a lot of personal information where leaders or heads of the organization are seen as mentors. And the success is defined in terms of sensitivity to customers and concern for people
  • Adhocracy culture: where people are entrepreneurial and creativity is valued at work. The leaders are considered innovators and risk takers. And the success means gaining unique and new products or services.

Your PM should help you to achieve the proper mix of above-stated culture archetypes. Let’s say, if you want to enhance the market-driven culture in your company, whereas your culture is still inclined towards Clan or Hierarchical, can your PM support in achieving the desired organization culture.

To prepare for future, you can answer following questions with respect to your ‘Organization Culture’

  1. Should my PM support in achieving the kind of culture mix I want to achieve in my organization?
  2. Can I drive the behaviours using my PM that can help me achieve my right culture mix?

Cost of PM 

The cost of your PM can be determined based on two variables, direct cost, and indirect cost.

According to a study, one company has spent close to $11 million dollars in last 5 years in supporting the traditional approach of PM process (direct cost involving people + technology cost).And according to Deloitte, companies spend approx. 2 million hours of effort on completed the PM process which employee and managers don’t even see value in(this is an indirect cost).

The indirect cost includes attrition because of post-performance review, negative employee morale, loss to productivity and overall employer brand image.

To prepare for future, you can answer following questions with respect to your ‘Cost of PM’

  1. What kind of direct and indirect cost involved with PM?
  2. Is my PM enabling us to enhance the organization performance resulting in more revenue growth and cost saving?

 

Every change starts with evaluation or needs to change. You might be wondering can a PM impact so many areas. If you look at PM through the lens that its core is compensation or HR compliance, it might not. But if you look at it through the lens that its core is organization performance, the possibilities are immense.

The part-2 of this blog post covers details that when you have decided to look at your Performance Management as a way to enhance Organization Performance , how you can achieve that.

Summary

  • Start by identifying the primary purpose of your PM.
  • Evaluate is your PM supporting the execution of your business strategy.
  • The nature of work has changed and became much more complex. Is your PM supporting the team to chase the goals?
  • Is your PM supporting the kind of culture mix you want to achieve in your organization?
  • What kind of direct and indirect cost involved in the current Performance Management process?

Book Review: ‘CUT THE CRAP & JARGON’

If you really want to understand how & what it takes to build a scalable real business, you should be reading this book. I am glad that finally someone from Indian start-up eco-system is NOT just giving advice (usually called as #gyan) but practical inputs on:

  1. What it takes to build a start-up.
  2. How to build a high-performance culture.
  3. How to improve the processes of raising money, hiring, goal setting, leadership development, compensation and incentives in start-up context.

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Who should read this book:

  1. Founder, senior leadership & HR heads of early-stage start-ups. Read the book if you want to improve your people operations & practices, how VC eco-system works and how NOT to raise the money and most importantly what it takes to cover the journey from start-up to scale-up.
  2. Everyone who wants to understand what it takes to be an entrepreneur. The book actually talks about things, which you might not enjoy doing being an entrepreneur, but you have to do.

This book is not for: This book is not for those who understands and believes that they can build a lifestyle business by just focusing on chasing funding.

My learning from this book:

  • It’s ok if few things are broken in your start-up because few other things are way more important. You have resource and bandwidth constraint, unlike the large organizations. By the way, even in the large matured organization, there are many things which are broken(mainly how to enable people to deliver their best at work) which is very difficult to fix.
    • The BEST LINE: What differentiates start-up from mature firms: “Substance trumps style every day”
  • Start-ups are different from large organizations because decision makers are working close to problem solvers & quite often one and the same. Free tip for matured organizations: Reduce your hierarchy if you really want to bring the start-up agility in your eco-system.
  • Finally, someone in Indian eco-system is talking about organization culture and its importance. Culture matters and right culture can swing the business results by 30%.
  • Founders need to understand the behaviors and habits they need to inculcate to build a successful business. Behaviours will drive culture, execution, and will keep agility in your start-up.
  • Liquidity preference is the single biggest clause you have to get right when you are raising money.
  • Building and hiring team is a time taking process. Don’t leave the hiring process to your recruitment team, get involved and make sure that people getting-in your system are aligned with your culture and vision.
  • Stories of Alan copper and Viral Shah was narrated in a very engaging way. Your goal/purpose of building your start-up should be so big that your ego and team tussles should be small in front of it.
  • It is the responsibility of the entrepreneur to pitch the story right every time by understanding whom they are talking to.
  • When hiring a person in a leadership team, give them autonomy to execute the way they want to do it. Founders don’t want to lose the control, but if you want to scale, you have to do that. The right people at top levels will result in right hires at lower levels too.
  • Another best part of the book is the interview with Sanjeev Agarwal(founder of Daksh, a BPO start-up that was acquired by IBM in 2004). Sanjeev, Narayan Murthy, Shiv Nadar and likes of those leaders were part of 1st entrepreneurial cycle of Indian start-up ecosystem. Sanjeev talks about achieving alignment within the organization with goal-setting, sugar-free feedback and continuous review. And overall how to create the overall high-performance team and organization.
  • Last few chapters of how and whom to fire, the importance of internal communication and how to do that, continuing the innovation while doing execution, founder/CEO compensation, ESOP’s and organization structure are worth reading and giving time. Founder give far less importance to these topics while chasing top line numbers. Generating revenue is of course number 1 priority for any organization (be it a start-up or large company), but all these topics mentioned here are enablers of revenue & growing your organization.
  • The best chapters at the end talk about how to improve your incentive planes and hiring your sales head.

My biggest learning from this book is: If within your meetings & discussion if you as founders and your people underplay on discussions on what feature you should build in your product, where you should sell, whom you should sell to, whom to hire; you as an organization are bound to doom.  Don’t create a culture of soft-pedaling on difficult conversations relating to performance and accountability.

At the end, I must say that if you don’t enjoy reading this book, don’t think of becoming an entrepreneur.