Category Archives: Performance Management

Are you failing to Execute your Strategic Projects

It’s the department heads and teams under them who takes care of executing companies strategic projects (strategy execution). And these strategic projects are the ones which will in-turn drive companies growth in future. And most of the time these strategic projects & goals are delayed because of the number of reasons. The CEO’s/PMO office struggles to get the work done on these strategic projects; forget about getting them done faster. “Capitalizing on time is the critical source of competitive advantage”.And most of the time, execution is delayed because:

a) No one is focused on how we can shorten the planning loop. Defining -What needs to be done, -How it will be done and -Who will be accountable takes too much time. And the processes & endless meetings take over the actual work to be done.

b) Companies fail to answer “What’s in for me” for the people involved in executing the strategic projects.

In this post, let’s focus more on answering point (b) here – “What’s in for me”.  If as a company, you can answer this question for your people-especially those who are involved in executing these strategic initiatives and projects that “how failed execution is going to impact their growth in the company”, half of the battle is won. This is what Infosys, one of the most respected IT services companies in India did recently.

Infosys has struggled to keep pace with changing times of IT outsourcing model and recent changes in top leadership have lowered the confidence of all the stakeholders in the company. As per a recent article in one of the leading newspapers, now Infosys has linked their leadership performance & bonus directly with the successful execution of companies growth agenda and strategy execution; which is driving revenue from the digital services. Digital services mean providing software services in the area of cloud computing, analytics, IoT, and machine learning. The entire article is worth reading, but the most important line is “measuring growth in digital as a component of executive compensation is a good way to ensure alignment with stakeholder expectations”. 

If you are not as big as Infosys, but still thinking about applying the same concept of linking your people performance with your strategic project execution, here you get one more validation about your idea. But if the thought is that these big company things are not for your company, think again. Or you probably have tried to apply it in your company, but have failed( in this case, qilo can help you).

If your company is also struggling to grow your revenue in your new line of business OR want to introduce a new product/service to market OR want to take your existing product/service to new territories. And your company also fails to go to the next level of growth because your team and department head not taking ownership of your growth agenda with best best strategic planning & execution of projects. If that’s the struggle, then link your team performance & bounces with the execution of your strategic projects. And make sure that this entire performance measurement is data-driven and quantifiable in nature.

Another very important point highlighted in the above article that out of 3 business priorities which are assigned to Infosys’s CEO “Revenue”, “Margin” and “Organization Effectiveness & Development”, how many resources & budget have you put in against enhancing your “Organization Effectiveness & Development”. Taking your company from point B to point C needs investment in enhancing your team capabilities, especially when you cannot have access to the talent which Infosys has.

Summary

  1. Someone if the company should be continuously focused on shortening the planning loop to define WHAT, HOW AND WHO of your strategic growth projects.
  2. Linking the part(please note I am saying only part) of your team compensation with the execution of your strategic growth projects will ensure that your people get the message straight.
  3. Investing in your “Organization Effectiveness & Development” often takes back seat among other top priorities of driving “Revenue” and “Margins”. But your journey of growth will get unlocked only when you invest your resources in your “Organization Effectiveness & Development” too.

Execution is the Key For Business Growth !

 

The biggest challenge for leaders who drive strategy execution is the lack of visibility on who is executing and who is not. And most importantly building predictability in Achievement. 

Very soon, qilo will be unveiling it’s Navigator feature. Which will empower CXO’s to clearly see the depth of the iceberg!  Whatever Strategy Execution Software model you use, OKR, BSC, Hoshin. If not executed well is just theory without impact.

Unveiling soon…

Goal Setting gone wrong

In most of the companies, goal-setting is done to either achieve one or all three perspectives mentioned below.

  1. To achieve the annual sales targets.
  2. To achieve the annual operational plan and strategic priorities.
  3. To fulfil the annual checklist activity of performance management.

Ever wondered why all 3 works in silos and doesn’t connect with the big picture? Almost all the companies do the exercise of annual sales target setting but do the half cooked job for setting goals to achieve the annual operational plan and strategic priorities. If done right, goal-setting helps you to accelerate growth, bring alignment and accountability across the organization.

If your goal are not the guiding force of your day to day work, they are not the goals, but just a formality.

There are various goal-setting frameworks that a company can opt to drive their sales, operations and strategic plan. 3 of the major goal setting frameworks that are widely used are:

  1. Hoshin Kanri
  2. Balanced Score Card
  3. OKR

Hoshin Kanri

Hoshin Kanri (also called Policy Deployment) is a method for ensuring that the strategic goals of a company drive progress and action at every level within that company. This eliminates the waste that comes from inconsistent direction and poor communication. Hoshin Kanri strives to get every employee pulling in the same direction at the same time.

It achieves this by aligning the goals of the company (Strategy) with the plans of middle management (Tactics) and the work performed by all employees (Operations). The 4 steps for Hoshin Kanri are:

Hoshin Kanri Step 1: Clarify your current state and identify Mission, Vision, and Behaviours

Your company’s Vision and Mission statements are a good place to start if they have been well written and are still relevant. Answer these questions to help you identify your vision, mission, and behaviors

Mission: Why do we exist as a company? or How is the world a better place because of us?

Vision: Where do we want to be in the future (5-15-30 years)

Behaviors: What are the behaviors that you and your employees should be living by on daily basis to achieve your mission. These behaviors are different from the values which live on your website.

Hoshin Kanri Step 2: Define Breakthrough Objectives (Hoshins)

The breakthrough objectives are mission-critical objectives. These objectives may take 3-5 years to fully accomplish.A few good questions to ask your team to get to these Breakthrough Objectives are:

Q1. In 3 years from now, if we look back on what we have accomplished from now till then, what is the biggest, most significant accomplishment we could achieve?

Q2. What is the single most important objective we need to accomplish to remain competitive 3-5 years from now.

Hoshin Kanri Step 3:  Define Annual Objectives (Goals & Metrics)

Breakthrough Objectives should then be broken down into Annual Objectives. These annual objectives are the basis for your departmental and even individual annual strategic plans.

Hoshin Kanri Step 4: Deploy Annual Objectives through the organization (Catch-ball)

Cascading your goals is a powerful and important part of Hoshin Planning. Each Annual Goal or Objective must be broken down into specific goals and projects for each functional group or team. It is only when each team member has a challenging yet achievable goal that they can see how they contribute to the overall Hoshin Plan.

Balanced Score Card

KPIs traditionally have had a bias by measuring past costs, revenues, and profits but offering little insight into how an organization was likely to perform in the future. Robert Kaplan and David Norton’s balanced scorecard framework, introduced in 1992, revolutionized how businesses connected KPIs to the company’s broader mission. The balanced scorecard, incorporating financial and nonfinancial measures to guide operational and strategic goals achievement.

If you’ve ever seen the Balanced Scorecard in action, you’ll know it’s essentially a strategic framework, divided into four areas (called “perspectives”) that are critical to business success.

OKR(Objective & Key Result)

Objectives and Key Results (OKR) is a management tool that brings in the discipline to achieve excellence in execution aligned with organization and CEO’s priorities. OKR is a goal setting framework originally created by Intel and later adopted by Google in the way back in 1999 when it had had not even celebrated its first birthday. OKR has supported Google’s growth from 40 employees (when it first started using OKR) to more than 60,000 today, proving that it can be used by small organizations as well as large corporations. Today, both technology and non-technology companies are moving fast to leverage OKRs to enable a high-performance work culture.

Here are a few examples of what objectives could be:

1)  Reduce the variable cost in production by 2.5 %.
2)  Increase revenue from product X by 10%.
3)  Become a more effective sales machine.
4)  Move to the new office by December end to provide a happy environment to employees.
5)  Solidify brand and position as market leader.

And following are some example of ‘Key Results’ with respect to above-stated objectives. There can be more than one key result(s) that can define how one will achieve one’s objectives.

1)  Hire a consultant to review and improve the six-sigma process.
2)  Ensure at least 75% of the sales team members achieve their quota.
3)  Hire three sales managers by end of June.
4)  Identify an office that facilitates company and employee growth for 250+ employees.
5)  Hire a new branding agency by end of Q1.

Whatever goal-setting framework you are selecting, expecting it to work out magically and contribute towards your company growth without the involvement of your leadership is naïve. At qilo, we have seen many implementations succeeding when leadership from the CEO to every business gets involved, and many fail when you implement these frameworks just for the sake of implementing it because someone else is also doing it.

 

Why have we made Performance Management Complex?

When we started qilo, we had only one Purpose in mind- how can we make Organizations Perform Better?

During this journey meeting with hundreds of CXOs across the globe, one unifying theme that came out – THE only matrix of Performance which matters is Company Performance if that is not happening rest all is just execution with zero results.

So, if this is the main agenda then what is the reason for the disbelief amongst CXOs and employees is the way Performance Management process is executed?

Here are my top reasons why companies are struggling in this.

1) Lack of Alignment; on company’s goals with teams and individual’s execution. How many of us know the execution we are doing every day is contributing to companies goals and it’s growth?

2) Ownership of the Process; Performance management is one job which no one want’s to own and is passed to HR who is not the right owner. Performance management has to be designed, owned and executed by business. HR plays an important role which is organization capability building and design and it has to stick to that only, doing interventions on low performers and transforming them.

3) 1980,s style of Management. While things around us have changed, some of our management practices haven’t changed, not going to debate, why? Today we need Agility in organizations and our MBO driven industrial style of managed limits that. Perhaps we need to rewrite few of old schools management books, which were written by executives of GE, Ford etc.. relevant in that era not NOW! 

4) Culture– Haha! Another monkey which has no takers. We all want to build High Performing Culture, and what do we do to drive this? Make cool offices … Culture is built on the foundation of purpose and vision. Things we put as posters on the wall and are discussed during induction!! (Pun intended) There is only one person responsible for culture -CEO! Accountability starts from his office. We take about open work environment but don’t trust employees while sharing Strategy, numbers.

5) Technology – Companies have invested heavily in capacity management, sales, and financial software. What about business alignment? As an organization, we want everyone to go beyond their role, your technology is binding them in ‘roles’ and giving a clear message it’s not my job, why bother? 

6) Communication – An organization that talk’s get talked about. The sheer concept of communication misleads us; every engagement survey throws out lack of communication in an organization and what we do post that -Town Hall or employee newsletter. We need to understand what communication means. What the employee is seeking is very simple- where are we going, how can I help and how am I performing? Rest all is gibberish and that’s the reason why a stupid question like cafeteria food comes often in Town Halls. Managers have to own communication on performance while CEO is aligning on vision and direction.

7) Going beyond frameworks – Business management frameworks like OKR, BSC, Hoshin Kanri are amazing guiding principles, don’t make them Holy Grail, use them as guiding principles and build your strategy execution customized to your needs around them. Cascade them in teams, unifying them with Objectives, not Roles!!

My learning so far is that; when the leadership has the intent and wants to make people accountable for Performance, Organisation’s Culture and Execution goes to the next level.

Rest all plans for the next QBR to identify the reasons and necks for failures.

On a parting note – Just ask one question to yourself, does your organization have 4 Objectives or 400?

Cheers – Do share your views …

 

 

 

 

 

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”

The ABC of Performance

 

winning

Ram Charan wrote in his book execution – the future companies are the ones who will execute well in Strategy, People, and Operations. While strategy and operations are very well defined the challenge has always been in the crucial link “people” – aligning them is the key to organizational success.

Performance Management is a subject where sometimes process’ overwrite people and culture. And somehow we create an environment wherein performance of an individual is judged like a Miss Universe pageant, where you are asked the most clichéd question – why should you be the miss universe and the participants compete how they posses superpowers to heal the world.

 

With so much cacophony around performance management – at qilo we call it performance enablement, the organizations have to first create an ecosystem for an individual to perform and we call it performance ABC driving attitudes, behaviors, and capability.

 

Even if you have best your strategy and process’ in place if your people do not have the right attitude display the right behaviors and are capable to execute their role – growth will never happen.

 

I have heard a lot of leaders talking about lack of readiness in their organization – actually it’s not readiness its fear of change and fuzzy vision of future.

 

So what should be done? My learning so far.

 

1)   Question the design of the performance management framework – it is meant to build leaderboards or create an ecosystem for people to perform

2)   Keep it simple – Business imperatives (strategic) next the role I play in achieving them and how I am doing it

3)   Pay for potential – Build the team that will take you to achieve success in future or lives in the past glory?

4)   Feedback – Tell me how can I improve and do my job better now! Not when I have done it

5)   One size does not fit all – Try to make your performance design align to people, not a stiff upper lip

6)   It’s not a checklist – Do not run a process just for the heck of running it, define the core why you need to do it?

7)   Enroll people not force them into a process – enrollment has larger powers and drives accountability

8)   Start from the top – leaders have to walk the talk, there is simply no way out

9)   Highlight and showcase the positive behaviors even if they are low in numbers glorify them for others to see and follow

10) Make it transparent – there is nothing grey here – it should be either black or white

 

Bring the change now, if you don’t your competitor will.