#1 Reason Performance Management Fails

Facilitating a session on Performance Management and OKRs recently,
somebody asked “How do you deal with the day-to-day work as well as doing these
additional objective projects?”  Bingo!  We had moved beyond the tick-boxing exercise,
that performance management typically is, to getting into the meat of what it’s
all about.  The questioner had hit on the
million-dollar question of Performance Management – the very serious and large
assumption underpinning it.  Rather than
answer, I challenged the participants to name that assumption. 

The answer, of course, is that there is an implicit
assumption that companies have the capacity to absorb additional objectives.  What drives capacity is capability.  Do we have the excess capacity and the right combination
of skills, abilities and mindsets required at each level of the company so that
we can take on and deliver extra projects, over and above the day-to-day work?

There was a pause in the conversation, as participants
considered whether their own company had the capacity to deliver both the bread-and-butter
work alongside the additional work required to position them for the future and
realise their strategy.  I think they tacitly
acknowledged that perhaps they didn’t and perhaps that explained a few things about
their business performance. 

Performance Management is the process of aligning people’s
effort with the goals that need to be achieved, both in the bread-and-butter daily
sense and in the strategic longer-term.  If
people are already struggling to deliver their bread-and-butter goals, then do they
really have the capacity to deliver additional goals?  Will they really succeed in achieving their
goals?  Will the company be left with egg
on its face as it feels it has to reward people for goals that weren’t
delivered, because it might lose them?  Does
it unwittingly compromise the bread-and-butter work as people ditch some aspects
to free them up to focus their effort on strategic goals that will be noticed and
rewarded? 

How can companies prevent themselves from falling foul of
this assumption that they have the capacity to deliver both day-to-day work and
strategic goals.  Capacity boils down to having
the right resources in the right amounts at the right times to deliver all of
the collective goals.  Questions to for
companies to ask themselves and answer honestly are:

Do we have the right capacity to deliver all aspects
of the day-to-day work of the business currently?  If the answer is No, then the company is
already under pressure and is going to struggle to absorb additional strategic
goals, that might require additional skills and knowledge. If Yes, then where is the excess capacity in the
system and does this downtime match with our strategic goals?   For example, having excess capacity in supply
chain when you’re strategically trying to break into a new market is of no use.  Those in supply chain are unlikely to have
the necessary skills and knowledge required. If our excess capacity in the system matches our
strategic goals, do we have the skills, knowledge, abilities and mindset to
achieve the strategic goals?  Having the
skills and experience to execute a marketing campaign does not equate to the
strategic understanding of branding and brand positioning required to break into
a new market. If we suspect that there should be excess
capacity but the grapevine keeps insisting there isn’t, what are the blockages
to freeing up that excess capacity?  This
is where cultural patterns of behaviour, such as everything gets escalated for
sign-off or poor communication flows, can erode performance.    If we suspect there could be excess
capacity, are our expectations correct? 
Do we really know how long tasks take or do we resort to the age-old
management assumption of “sure that’ll only take a few minutes” while in
reality, they take twice (or more) as long. 
Or are people struggling with mastering their work, resulting in them
taking longer than they should take.  

By honestly answering these questions, companies can pinpoint
where their performance issues really are and focus targeted objectives on building
up the capacity to consistently deliver their immediate and longer-term goals,
resulting in improved business performance for today and tomorrow.