Many organisations aspire to build a performance culture, but this process must start with measuring the right things, writes Stacey Barr
In simple terms, a high-performance organisation is one that can perform at a very high level in the game it’s playing. The game an organisation is playing is the fulfilment of its mission and the pursuit of its vision. All this means is that the organisation can do well at what it says it wants to do well at. It’s true that there are organisations that exist that say they want to be profitable, and do well at being profitable. There are plenty of organisations that have done this, but at the expense of their people, their customers, or the planet. They haven’t made the world a better place, they’ve made the worlds of their shareholders a better place.
If we instead believe that success is about profit as an enabler for people and the planet, high-performance becomes more about the culture of the organisation, as well as the pursuit of the results it wants. This culture is one of continuous improvement, measurement of performance, alignment with strategy, and consistently reaching targets. High-performance is a way of being, even more so than it is a place to be. It’s a journey, more than it is a destination. It’s about the behaviours even more than it is about the results.
The practice of performance is what enables a performance culture
Because they don’t have a strong high-performance culture, many organisations will delay investment in the programs and processes that will instill the behaviours of measuring and improving what matters until there is a stronger performance culture. But the opposite is actually true: the organisation needs to invest in how it measures and improves what matters, right now. That’s because the practice of measurement – done properly, of course – is transformational.
“High-performance is a way of being, even more so than it is a place to be”
In their HBR article, Culture is Not the Culprit, Jay W. Lorsch and Emily McTague rightly point out that fixing the culture is rarely the right solution to organisational performance problems. Rather, they described how leaders focused more on changing the way performance is practiced in order to shift the culture. The use of performance measures was one thing that the leaders used to shift the culture. They didn’t wait for a performance culture to enable measurement. They used measurement to enable a performance culture.
We have to stop measuring people
Culture is an outcome of, not an input to, organisational performance. And the way that performance measurement and performance improvement is practiced will have a direct impact on the culture that emerges. This has everything to do with what exactly is measured, and how exactly those measures are used. In HR, it’s common to associate KPIs and measures with employee performance appraisal. But this is one of the most insidious constraints on the evolution of a performance culture.
In their book, Measurement Madness, Dina Gray et al. share story after story of how measures used in the wrong way end up driving all the wrong behaviours. They say “people focus on the measure at the expense of the real objectives of the organisation.” And the resulting behaviour varies from gaming the measure to downright unethical behaviours to ‘hit targets’. Delivery drivers deliberately failing to deliver goods on the first attempt, because they are measured and rewarded by the number of attempts to deliver. Teachers focusing just on borderline students to help them meet threshold grades, and consequently ignoring the gifted and the struggling students, because they are measured by pass rates driven by the school strategy to rank higher in league tables. In so many examples like these, measurement is not about learning and improving business results. It’s about judgment of people.
“People focus on the measure at the expense of the real objectives of the organisation”
Teachers focusing just on borderline students to help them meet threshold grades, and consequently ignoring the gifted and the struggling students, because they are measured by pass rates driven by the school strategy to rank higher in league tables. In so many examples like these, measurement is not about learning and improving business results. It’s about judgment of people.
A performance culture is about working ‘on’, not just ‘in’
If measures are used to monitor people’s performance and reward or punish them, it’s not hard to imagine the kind of culture that will emerge from that. People will not embrace accountability for performance. They will fear bad results and the blame that will come, and consequently will hide those bad results, turn attention to good news only, or do whatever it takes to hit the numerical targets. Trust, openness, and collaboration will deteriorate, and performance won’t improve. If we want a true high-performance culture, the spotlight that measures radiate needs to be taken off people and shone on something else.
The shift is in what we hold people accountable for. Holding people accountable for hitting targets assumes people have full control over results. But the results are actually the product of business processes, policies and systems, and people have to work within the constraints of these. W. Edwards Deming had much to say about this, pointing to the overwhelming observation that most of the constraints on business performance are in the processes, not the people. So we need people not just to work in their processes to get the results we want. We need people to work on those processes too, so the constraints can be identified and elevated to make the process more capable of producing the results we want.
Accountability needs to be redefined
Accountability can be framed in a more constructive way, a way that drives the right behaviour; the behaviours that create a performance culture. And this way has three parts to it. The first is to hold people accountable for monitoring the important results. When someone is responsible for a specific business result, like problem resolution or accuracy of advice or eliminating rework, they can be accountable for routinely monitoring that result with a performance measure. This drives the behaviour of people focusing on the results that matter.
Secondly, hold people accountable for validly interpreting the measures they own. When someone is responsible for monitoring a performance measure, they can be accountable for interpreting what that measure is telling them about the business result it measures. This drives the behaviour of people seeking feedback about how the results are actually tracking.
“People will embrace accountability as the practice of problem solving, not judgment or blame”
And thirdly, hold people accountable for initiating action when action is required. When someone is responsible for interpreting a performance measure they own, they can be accountable for deciding what kind of action is needed, if at all. This drives the behaviour of people working on their processes, and not just in them.
Measures are a tool in the hand, not a rod for the back
So if performance measures are used to monitor process results and diagnose how to elevate process performance, a different culture emerges. People will embrace accountability as the practice of problem solving, not judgment or blame. They will be curious and collaborative, and consequently will appreciate how to work on the business and not just in it. Ownership and transparency will increase, and performance will improve.
When performance measures are a tool in people’s hands, to inform and empower and enable them, the performance culture is in motion! This is what Dean Spitzer, author of the landmark book Transforming Performance Measurement, meant when he said “measurement is potentially one of the highest leverage activities any organisation can perform… in a high-performing organisation, measurement is everybody’s job.”
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