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, managers and overall company growth.

You probably have read many blogs/articles on this. 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.

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Image Credits:rawpixel @ unsplash

This blog is focused on how you to identify what is missing in your current approach of PM. And it will enable you to get ready for the future of the performance. There are two aspects when we talk about getting ready for future:

  • Evaluation of Present Situation: It’s about knowing what is missing in current approach of PM and whether you are ready for change in future or not. Part-1 of this post covers this aspect.
  • Preparing for execution for Future: How to execute to get ready for the future. In part-2, we have covered this aspect.

 Evaluation Of Present Situation

  1. Purpose of PM

The primary purpose of PM should always be to enable and enhance organizational performance. And organization performance can only be increased when employees become more accountable towards driving organization strategy, managerial effectiveness is enhanced, and people feel more motivated at work to do their best at work.

The right point to prepare for the future is to find the purpose of your new Performance Management. The following could be the purpose of your PM:

  1. Compensation decisions
  2. Promotions
  3. Identification of the high-potential’s
  4. Future L&D initiatives
  5. Driving and bringing agility to company strategy
  6. Enable employee to perform better in future

The primary purpose of PM till date was to support the decision making for compensations and promotions. PM has failed to deliver on these two expected outputs(Compensation + Promotions). The core reason being the ‘Design Thinking’ was not right. The existing design of PM has resulted in ‘Recency Bias’ and has brought in too much subjectivity in the systems and processes. And because the entire exercise was not data-driven, it has led to more politics and favoritism within the teams; thus resulting in creating a more bureaucratic culture.

To prepare for future, 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 gives more data points for better decision making?

2. Business Strategy

The strategy is a new management jargon which has come in limelight just 10 to 15 years back. Few only 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

  1. How winning future looks like?
  2. Where will we play?
  3. How will we win?
  4. What capabilities are required to win?
  5. And what kind of systems and processes are required to win?

Your PM should support in achieving your organization strategy. It’s often heard that strategy is an execution + people problem. If that ‘s true the PM is the perfect system to support execution. And further support change in people behaviors to achieve those strategic priorities. And the strategy is not your goals. Strategy leads to your short-term and long-term goals and action plan with respect to those goals.

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

  1. Is my PM supporting execution of my business strategy?
  2. Are we able to drive the behaviors using our PM to achieve our company strategy?

3. 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, multitasking, 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 that team performance also matters.

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

  1. Is my PM support team performance evaluation plus individual performance evaluation?
  2. Is my PM supporting an individual to play multiple roles and evaluation is supported by those roles?

4. Millennial Readiness

The service-based economy is mostly supported by new age employees also called millennials. Millennials are people who have joined the workforce post-1984 and have grown up with the social network. 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.

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’

  • Is your PM supporting in improving the level of transparency or at least improving the perception of transparency?
  • Is your PM supporting the more frequent feedbacks, which should be enabled every day/week/month/quarter? And is the PM support feedback and acknowledgment even if the employee and managers are not sitting in the same location?

5. Organization Culture

Organization cultures is about how work gets done in your company. And how work gets done depends on your culture and sub(hidden)-cultures. Culture a.ka how work gets done are of four types. And you need a good mix & balance of following 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 arch types.  If you want to enhance the market-driven culture, whereas your culture is still inclined more towards Clan or hierarchical, and your PM is still supporting that, your chances of success will be far less.

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

  • Is my PM supporting the kind of culture mix I want to achieve in my organization?
  • Can I drive the behaviors using my PM that can help me achieve my right culture mix?

6. 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 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 post-performance review, negative employee morale and loss to productivity and overall employee brand image.  Just make sure that the direct & indirect cost involved in conducting and completing the PM is justified.

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

  • What kind of direct and indirect cost involved with PM?
  • 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, 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 PM beyond compensation, and want to prepare for future, how to go about that.

Summary

  • Start by identifying the primary purpose of your PM.
  • Evaluate that is your PM supporting the execution of your business strategy.
  • The nature of work has changed. Is your PM supporting the team evaluation + individual evaluation in a data-driven way.
  • Is my PM supporting the kind of culture mix I want to achieve in my organization?
  • What kind of direct and indirect cost involved with the current PM?

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.

People Practices in Indian Companies are still @ 1990’s

A couple of months back I was reading “Drive by Daniel Pink”. It’s a masterpiece to understand what motivates people at work for doing the work.  It talks mainly about intrinsic & extrinsic behaviors. And the main theme of the book is about purpose, mastery, and autonomy as dimensions of achieving the productivity at work.

anton-mishin-328089                But if I co-relate the concept mentioned in the book with Indian context, I see challenges of India companies are bit different. Here am I am NOT talking about Indian companies serving fortune 500. Indian companies serving fortune 500 global companies are still able to improve or have been forced to improve their people operations & practices by working closely with them. But for companies working in India serving Indian customers; people operations & practices are still at very early stage.

The two reason when companies in a specific economy start improving their people operations & practices:

  • There is a huge gap between talent supply and demand. And the cost involved in losing a high potential/performing employee is very high.
  • As an organization, you are aspiring to scale faster, bigger and going beyond your current boundaries & potential.

At qilo, we are meeting and working with CEO’s and HR leaders across industries and was fortunate enough to work with all levels of the hierarchy. Here are learning that we had in our journey so far.

  1. Most of the businesses are still focused on daily execution and lack strategic orientation for the organization. If you focus on getting more transactions & time from your employee, you will get that only. As economy will improve and grow, competition is going to increase in every field with entry barriers for every business going down. Winning organizations will be those will strong people, process and technology practices. And it’s not that leadership don’t’ understand that, but bringing the required change in the organization about strategic orientation is not an easy job.
  2. Non-supporting government policies, infrastructure issues and being a cost-sensitive market, doing business in India is still very difficult. Companies are always under the constant pressure of keeping the cost low. This means that organizations are always in the survival mode. To keep the cost low, they don’t invest in the improving the people operations & practices. All this leads to leadership being in-the-business rather than being on-the-business.
  3. The nature of work we have done so far as a country is mostly services oriented. As India moves from service-based economy to product and innovation-driven economy, organizations are bound to focus on giving more freedom and autonomy to people to be more creative and innovative at work.
  4. The spiritual gurus of Indus culture have always encouraged people to seek the meaning of their life. And it’s been always prescribed that to achieve meaning of life; the person should see herself as a separate entity from her relationship, family, and profession. The approach towards life was always exploratory rather than goal oriented. But this is changing fast with new generation. The new generation is finding the meaning of their life through the work they do. Thus organization are bound to improve their hierarchical structure to give more growth opportunities to their people

Blitzscaling 16: Reed Hastings on Building a Streaming Empire

This is my 13th  blog on the notes and my interpretations on the Blitzscaling sessions. In the fall of 2015, Reid Hoffman began taking session called Technology-Enabled Blitzscaling at Stanford University.Blitzscaling is what you do when you need to grow really, really quickly. It’s the science and art of rapidly building out a company to serve a large and usually global market, with the goal of becoming the first mover at scale. And its also about why organization culture is important for Blitzscaling. Because when you’re growing an organization very fast, you have to make people accountable to each other on a horizontal or peer-to-peer basis, and not just vertically and top-down through the hierarchy.

The previous blog related to Blitzscaling is here.

In this session, Reed Hoffman interviewing Reed Hastings, the Co-Founder and CEO of Netflix. And the most sought-after mentor of silicon valley shares his mantras of building the culture and scaling the company.

  1. Netflix culture deck is the most evolved culture decks out their. And here are the details of the deck for you :

  2. Putting your culture in writing not only helps you to get right kind of people in your team, it also makes the entire thing more debatable to get more understanding. At Netflix, every new employee goes through the deck to understand about the company.
  3. With the right kind of density of people in the company, you need less processes to manage them. More the people, more processes are required. Reed call this as “Right Talent Density”.
  4. Your manager should always be giving the context of why they are doing what they are doing. And then just give them autonomy to people to execute freely.
  5. Reed highlighted that NefFlix company culture is different from Google. And he emphasised that one company culture is different from another. Organization culture is an expression of what you and your senior leadership want to be. Thought I believe that while it’s important to define that expression of what you want to be, it is also very important that it should be aligned with what your customer wants from you as an organization.
  6. You can only have a strong culture in your company if you can have a strong & clear mission. The funny thing about mission statements/plan is that “it doesn’t wort rk out most of the time”. But one thing it for-sure helps in to help the current and prospective employees and customers see what company want to achieve in next 5 to 10 years.
  7. When attacked by the big competition, focus on your core rather than expanding the offering; because it will further lead to more fronts to fight the battle.
  8. Being too intellectual to your customer on why you are offering what you are offering doesn’t work, as customer care doesn’t care about that. Your customer care about value, price and service.
  9. “The only prediction about the future that comes out to be true is that prediction itself will be wrong”. When Netflix was seeking funding in 1997,  they thought that online video streaming will pick up in next 5 years by 2002. By the time 2002 came, internet bandwidth was still at the nascent stage. So they thought & projected that by 2007, online streaming will be contributing 50% to their business. But it was still ZERO after 2007.
  10. The right time to become an entrepreneur is when you got the idea that to make it work you are ready to go and touch the poverty line. Or other way around is when you can’t get that idea out of your head for next 1 to 2 years.
  11. You can’t let friendship come in the way of professional or business judgements. So when you are hiring your friends or friends of friends, just make sure of this thing.
  12. Use more data when you are picking stocks, but less data when you are picking your spouse or new hire.
  13. As a CEO, you have to invest in yourself on the continuous basis. Because when you become better, your company become better. As you grow your company, you focus on creating the culture, mission/vision, hiring right guys so that they can hire right guys further. To make this all happen, you need to improve every single day.
  14. There is no right answer whether you can become an entrepreneur or not. From Reed perspective, if you have got a strong grit and if you are a generalist who can do multiple things(most of it will be very boring) for many years to come, you can try your luck.
  15. The biggest mistake you can do in your life or as a founder is try and to be someone else. So all Steve Jobs lovers, it fine to read about him and get inspired, but dont want to be one.
  16. Successful teams and employees act like a sportsman/women. Treating your employees like family means you probably need favour’s from them or want them to work for you cheap.

Book Review: ‘Sell’ By Subroto Bagchi

“To sell is human”. But I used to hate sales and sales guys; because their commitments to customers have caused me and my team spend days and nights in the office working like crazy. Now learning and doing sales myself, I understand the importance of this profession and what it is NOT about.And what sales guys in my previous organizations were missing in their approach. And what we need to improve as a team on the sales front at qilo.

Copywriters Hachette, India
Copywriters Hachette, India

Read this book, if you are able to correlate with my challenges.

Who should read this book: The book will help people who want to improve their understanding of the B2B sales, specifically about technology B2B sales. This book will be more beneficial if you have been involved in sales function from few months, but looking for understanding it more from the perspective of

  • How to improve your prospecting, funnel management and sales process,
  • Importance of consultative approach in B2B sales,
  • EQ management in sales,
  • Impact of your company culture on your sales.

This book is not for: This book is not for people who are specifically looking for a manual or how-to guide on understanding and improving your sales process. But then you only need nuggets from the master like Subroto to tell you what is going wrong in your sales process or what you are missing in your approach.

My learning from this book:-

  • Best sales people never give-up on follow-up’s & having conversations. And in you are an introvert like me and lacks the ability to have conversations, you will have a tough time initially in the sales job. Read a-lot on different topics, about your prospect and what’s happening in the world in general. And slowly you may learn the art of sales.
  • Don’t take rejections at heart. You will get plenty of that in your sales life.
  • Your funnel size decides your conversion rates.
  • As a salesperson, you need to be good at understanding people and what makes them successful.
  • The best line of the book is “The prospecting process has changed. Your future customers are already doing prospecting about you and your company“. Read the book to understand this in detail.
  • There is a thin line between selling and helping the customer find a solution. The minute you sell, your prospect goes to the shell of not sharing their problems and challenges. People like to buy the things rather than being sold the things.
  • Be yourself and don’t take yourself too seriously. Customers want to buy from people who are genuine and comfortable being themselves.
  • The best read is when Subroto shares story “The Naked Burger” when he attended the Apple sales conference. I will buy this book again just to read this chapter.
  • Never ever lose hope while making a deal. But you should have a strong belief in your product and its value, if you don’t have, don’t sell it.
  • We may be living in a digital world with bots and AI, but people still buy from people. Simply quoting data and facts will not appeal to your customer. Humans are beings. Connect to a being to allow your customer to open up. Best line “Authenticity is in short; hence in demand”.
  • Another gem in this book is this chapter “DO IT LIKE SWEDES”. It talks about how progressive companies around the world are embracing the different set of behaviours to influence their organizational culture. Customers want to buy products & services with a certain culture at its core.
  • To build a successful profitable organization, it’s not enough to win few wars (customers). You have to do it for many years to come without excreting yourself. A successful salesperson learns to be effortless by planning well, choosing their turf wisely and prepare themselves to play a long game.

There are only few books on B2B technology sales. And specifically from those who have done sales, and that too large deal sales. It’s definitely worth a read without much heavy weight jargon.

Blitzscaling 15: Diane Greene of VMware on Scaling Product & Culture

This is my 12th  blog on the notes and my interpretations on the Blitzscaling sessions. In the fall of 2015, Reid Hoffman began taking session called Technology-Enabled Blitzscaling at Stanford University.Blitzscaling is what you do when you need to grow really, really quickly. It’s the science and art of rapidly building out a company to serve a large and usually global market, with the goal of becoming the first mover at scale. And its also about why organization culture is important for Blitzscaling. Because when you’re growing an organization very fast, you have to make people accountable to each other on a horizontal or peer-to-peer basis, and not just vertically and top-down through the hierarchy.

The previous blog related to Blitzscaling is here.

Diane Greene was a founder and the CEO of VMware from 1998 until 2008. Currently is senior vice president for Google’s cloud businesses. VMWare was the pioneer and the first successful company to provide software that can enhance the utilization of computer resources, called Virtualization.

  1. Organization culture is important when you scale your organization. And people whom you hire should be aligned with the organization culture.
  2. Help your people to leave if they are not culturally fit for your company. One way to check that is giving them the opportunity to be part of critical conversations early on and see if they are able to match with energies of people
  3. Hire ex-military people if you like them, as they are far more disciplined in their approach towards work
  4. How to bring discipline and reduce chaos in teams: Ask each team members of yours to share what’s going on in their teams by Sunday night. And as a manager, highlight what is important, collate all the notes and share it with everyone in the team.
  5. You can share the same notes with new hires so that they come to know what kind of things are going on in the team.
  6.  It is founder and leadership responsibility to put up a plan on how the team and individuals in the company should communicate with each other.
  7. When establishing your partner network, the strategy is NOT to give special preference to any one of them.
  8. If your salespeople are not giving results, its either you have a bad product market fit or your salespeople are NOT able to perform or messaging is NOT right.
  9. If you have a complex technical product to sell, put a team of 3 people in sales chasing same numbers. These 3 guys will be:
    1.  A guy, who is trying to sell product on phone
    2. A guy who is going & meeting clients and explaining things to customers from technical perspective(also called as solution’s guy)
    3.  And the third guy, who will be closing the deal. All these 3 guys should be chasing the same numbers.
  10. Establishing a partner network will act as your another direct sales channel, but make sure you have a win-win model with them. At VMWare, channel sales partners which are hardware vendors like HP & Bell, every VMware solution they sold, it leads to more hardware sales for extra storage and extra servers.
  11. To create a high-performance culture, hire people who are self-driven at all the levels in all the roles. Self-driven people who set high-expectations from themselves have high expectations from their team too.
  12. Appreciate the behaviors showcased by employees which as a founder you want them to display
  13. An advantage of under promise and overdeliver is not just it gives customers WOW, but also you decide your own pace.
  14. Best advice: “As CEO’s you never overcommunicate”