In 2013, CEB research found that 86% of organizations had recently made significant changes to their performance management system, or were planning to. In 2014, a Deloitte survey found that 58% percent of companies surveyed did not think performance management was an effective use of time, and many media outlets jumped on the opportunity to air their grievances.
At gothamCulture, authentic community is one of our five core values. As you may have read on our website, “We connect with each other in authentic ways because we know that together we can do more than any of us could alone. Each of us plays a unique part in fostering a community of involvement and inclusion.”
This sounds nice, but what does it mean? And more importantly, what does it look like in action?
Remember when your mom told you, “If you can’t say something nice, don’t say anything at all?” Turns out, there’s a lot of merit to that advice.
No one likes a complainer. When you show up to work and try your best to add value while being as positive as possible, the resident Debby Downer of the workplace can instantly turn your best intentions into another bad day.
Having to tolerate a perpetual complainer in the workplace has many downsides, not only for you but for the rest of the team. Here’s how.
We live in an age of data. Big data. The ability to collect and use data to make business decisions has become table stakes for any organization looking to gain operational efficiencies, drive innovation, obtain market share, and manage targeted and timely development of human capital. Looking back even five years, a McKinsey Global Institute report communicated the value of big data.
“We estimate that a retailer using big data to the fullest has the potential to increase its operating margin by more than 60 percent. Harnessing big data in the public sector has enormous potential, too. If US healthcare were to use big data creatively and effectively to drive efficiency and quality, the sector could create more than $300 billion in value every year. Two-thirds of that would be in the form of reducing US healthcare expenditure by about 8 percent.” (MGI, 2011)
Over the course of these past five years, we have gained a lot of capability and capacity to help us manage all of this data. And yet, many organizations still feel as though they’re falling behind.
It amazes me how many executives are knuckle-draggers. A knuckle-dragger, for purposes of this conversation, is someone who is unintelligent (or makes unintelligent decisions) and is stuck in the past, promoting and using antiquated and ineffective methods.
This is the person who is still wandering out of his/her cave with a club in search of something to knock in the head and eat for dinner. There isn’t a lot of thought that goes into a knuckle-dragger’s actions. In an office environment, it is the executive that screams at people when they make mistakes. Or a C-Suite that performs mass layoffs.
Yep, I said it. If you do mass layoffs, you are a knuckle-dragger.
According to CNBC, in January of this year, layoffs surged to a 6 month high. Over 75,000 planned job cuts by US-based companies were announced last month. That’s 200% more than December, and 42% higher than this time last year. Two of the major contributors are Wal-Mart and Macy’s, cutting 16,000 and 4,820 respectively.
People try to justify mass layoffs by talking about the good of the company, looking out for shareholders, blah, blah, blah. Here’s what they don’t tell you: They are laying off people because of their failure. Simply put, most executives rely on mass layoffs to compensate for their inability to lead properly and make the right decisions.
A great example is Al Dunlap, aka “Chainsaw Al.” He was famous for downsizing. Everyone thought his methods caused companies to become successful by “cutting the fat.” However, what people didn’t realize was his turnarounds were elaborate frauds. When Sunbeam brought him in to solve their financial issues, he downsized. Sunbeam went bankrupt, and he was caught trying to engineer an accounting scandal.
The simple truth is that downsizing and mass layoffs are BAD for your company. They will give you an uptick in profits at the end of the year if done at the proper time, but they are not a viable long term solution. In fact, in the long term they are detrimental to the sustainability of your company. Here are four myths and realities about layoffs:
Improving Productivity
Downsizing and mass layoffs are thought to improve the productivity of the organization. It supposedly motivates employees (which we will talk about later), consolidates resources, and makes the organization leaner.
But the simple truth is that organizations aren’t any more productive after a mass layoff than they were before it. The budget sheet looks better because there are less expenses, but productivity doesn’t increase. In fact, studies show you are likely to see a drop in productivity in the short and long term. Here’s why: When an organization has a mass layoff, they usually don’t determine who are the talent players (often because the people making the decision have no idea who they are laying off). So they choose some metric, and get rid of people using that.
Because they are only measuring performance based on a single factor, they get rid of both talented and untalented employees. The result is a smaller workforce, not a more productive one. Often mass layoffs cause employees to look for work elsewhere. Would you want to work where you could get laid off any minute? Usually, the better employees get hired at other places and leave. Once this happens, the level of talent at your organization actually decreases.
Motivating the Workforce
Downsizing and mass layoffs are thought by some to motivate employees. They don’t motivate, they distract. Think about it. When a company has a mass layoff, it causes widespread uncertainty and fear. Every employee wonders if they are the next to go. While they might work a bit harder for a short time, they are constantly worried about losing their job.
At best, mass layoffs motivate your most talented employees to look for jobs elsewhere.
Solving Financial Issues
Many people think mass layoffs will solve an organization’s financial problems. But rather than actually solving the problem that caused the budget shortfall, layoffs are usually used to offset it. An organization fires a large amount of people to help their budget and then, as things seem to get better, they hire all these people back until they are in the same spot they were in to begin with. 3-5 years later, they have to have another mass layoff. The cycle repeats itself.
In addition, studies show that layoffs actually drag down a company’s stock value.
Making the Company Stronger
There is this perception that mass layoffs make companies stronger. They don’t. Usually, its because they don’t solve the root of the problem. The problems might even be making the layoff decisions.
Other than some major external factors shifting without warning, the failures that lead to a mass layoff are the responsibility of the C-Suite. And in the end, it is the failure of company leadership that causes mass layoffs. Sadly, they often don’t see it and aren’t held accountable. Instead, they hold others accountable for their failure in leadership and decision making.
It saddens me how many executives think mass layoffs are a viable option. To be fair, in some rare cases they are, but not usually. Yet, we have created a business culture that says it is just another way of doing business. But the ways of doing business are changing, and mass layoffs are more of a detriment to your organization than ever before.
Think about millennials, for example. We constantly hear companies complain that the millennials don’t want to work for them, or are more concerned with personal gain than their loyalty to the company. I’ve heard many business executives shake their heads, tsk and complain about this behavior. Guess what, knuckle-draggers? You caused it. Who’d want to be loyal to a company when mass layoffs are a just another way of doing business?
Financially, layoffs reduce stock prices. They reduce productivity and cause a need for payouts in severance, plus the cost of rehiring employees as business improves. They cause a burden on the tax payers because of the increase in unemployment recipients. They make people wary of working there, have a severe negative effect on employee health, and often leave the organization with a less capable workforce in the long run.
So, with the overwhelming amount of evidence about the detrimental effects of mass layoffs, why do they still do it? How do we get the knuckle-draggers to put down the clubs, become leaders, and make better decisions?
There I was, sitting in a conference room with my client, the Chief Human Resources Officer (CHRO) of a large, San Francisco-based company. I wasn’t quite sure what I was getting myself into. I had been onsite supporting an unrelated project when my client asked me to join her in a meeting with another consulting firm to review the results of the company’s recent employee engagement survey.
Guest article written by Levi Nieminen, Ph.D.
As part of the debate over whether to end traditional performance management and where to go from here, one fundamental question that needs to be addressed is whether a single HR- Talent Management system can achieve both evaluative and developmental objectives? In this brief article, I describe a few of the principles that OD professionals live by and the challenges they present for the designers and overseers of “performance management 2.0.”
Over the last several months, the list of high-profile companies who have “blown up” performance management (PM) as they (we) once knew it has grown to include GE, Microsoft, Adobe, Gap, Accenture, and Deloitte. These are just the most recent public denouncements of what is certainly a long standing and widely held discontent over PM and appraisal practices. Two years ago, CEB’s research indicated that upwards of 90% of companies were looking at major overhauls to their PM systems.
These days, it appears that the debate over PM is taking on both on new heights (see Bersin by Deloitte report) and adding new angles of aerial attack. As an Organizational Development (OD) professional looking in from a semi-outsider perspective, it occurs to me that the latest round of scrutiny has focused on the many ways in which traditional PM systems fail not only from an evaluative perspective (i.e., valid appraisal of people), which is old news, but also from a developmental perspective. That companies want to invest more in the development of their people makes good sense. Whether this responsibility can or should be housed within traditional HR departments and aligned in other ways with formal PM systems remains to be seen.
I am biased however, to think that PM 2.0 will fail on developmental objectives until the old principles of PM are replaced with a radical new set. Though a much longer list is certainly possible, here are 3 principles that most OD professionals I know live by, and which might provide useful guideposts for PM 2.0… if we are to take the new focus on development seriously.
PM 2.0 needs to turn the concept of who owns employee development on its head. In the past, we have pointed to management, the HR-Talent Management-OD department, and most recently, team leaders (see Deloitte in HBR) as the owners of the development process. While we talk about the idea that managers need to “develop their people,” from the employee perspective, this makes development feel like something “they’re doing to us.” Once the whole activity takes on an odor of compliance, what follows more often than not are check-the-box actions and commitments. There is an art form to giving ownership to employees that will no doubt involve learning new and productive ways to lead the horses to water. And some leaders and some cultures will support these coaching behaviors more than others.
One organization that has been leading this charge is the Federal Bureau of Investigation. Rather than focusing their efforts on manager-supervisor engagement in the process, they have recently begun to shift toward fostering employee ownership. One practice involves training employees in how to seek, receive, and use feedback. Culturally, they recognize the need to attract and hire the right people for this strategy to be effective.
Many of the emerging trends of PM 2.0 [so far] have focused on solving the old problems of how to evaluate people, for example, how to fix ratings. As a result, many of the proposed solutions focus on giving bigger and better data to management so that organizations can make smarter decisions about how to compensate and utilize its people. On the hand, this is really good progress!
On the other hand, this progress seems to do little to address the development objectives. While new data-driven solutions are certainly needed on this side too, what’s needed will likely look very different than the recent clamoring for big data. Instead, it’s much more likely to look like small data–informal, ongoing, un-documented, and owned by the individual.
Every coach who has used a 360 with a client knows that there comes a moment-of-truth question when it’s time to ask the HR sponsor: “Who will own the data?” The old PM script that gives HR co-ownership of the data is one of the best ways to compromise the individual’s ownership of the process and certainly conflates the purpose of development with a new possibility that evaluation will sneak in. Even the best and most well-intended HR partners cannot be expected to un-see performance data they’ve seen and this can be a problem when it later comes time to weigh in on personnel decisions.
For PM 2.0 to truly prioritize development, organizations will need to add a healthy dose of small data that is owned by individuals and off-limits to corporate. This does not mean that the new systems will lack transparency, but that the modes for achieving transparency will need to be different. For example, the assessment data or feedback can be held and owned privately by the employee, so long as the process also encourages honest conversations about the key insights gained from that data. Those conversations are essential in order to gain the input and support of the boss, co-workers, and HR as the employee embarks on new development priorities and goals. As the next section describes, there is a certain “art form” in the coaching that is needed to guide a person through this process.
Freeing managers from the burdens of ownership (Principle 1) does not let them off the hook. But it does allow for a shift in how they interact with the process and the skills they will need to build. In the big scheme of things, organizations might get more return-on-investment from PM 2.0 by wrestling a little less with the measurement of performance and a little more with teaching managers how to be good coaches for their people.
Recent research confirms that providing feedback without the adjacent support of a coach leaves a lot of the value in these exercises on the table, and in particular, whether the individual sees growth in him or herself as a leader over time. One reason is that the translation of the feedback into priorities and specific actions is rarely self-contained in the feedback. This takes work and requires not only a motivated individual who wants to change but also a supporting process that builds awareness and alignment with the key people around him or her.
In this respect, PM 2.0 will need to replace the old “compartmentalized” view of individual performance with a wider-lens that also shines a light on key elements of the team, organization, and strategy. The most value will be created when the development strategies for people accurately reflect the specific needs of the business strategy (read J. Boudreau’s, “Trouble with the Curve” for an interesting take on this). And it seems reasonable to expect even more demand on coaching and coaching skills as a more complex view of individual performance and the surrounding context is embraced.
Stanford business professor Charles Bonini described how it is not possible to create a model that is both accurate and useful. A model that is fully accurate is too complex to understand, and thus, we must compromise some accuracy in order to achieve some practical value. This is called “Bonini’s paradox.
As with the HR sponsor in the 360 moment-of-truth, the designers of PM 2.0 will need to decide what their ultimate priority is. If development is the priority, the new systems will need to be engineered with development principles in mind, and the solution will be as much about changing the culture as it is about improving the measurement. As my description of each principle has highlighted, these cultural shifts will most likely entail:
This article first appeared on Denison Consulting.
Levi Nieminen, Ph.D. is the Director of Research and a Senior Consultant with Denison Consulting. His work focuses on conducting applied research on organizational culture and leadership and translating that research into improved solutions for clients and shareable knowledge for the larger scientific community.
When I was a young child, I was convinced that the characters I saw in the glowing image of my family’s television set were actually running around inside the box. They walked, they talked, they even told jokes. As far as I was concerned that was all I needed to conclude that they were, in fact, real.
Only later did I learn that those wonderful images on the television screen were actually created by electromagnetic waves that passed through the air to produce the illusion—a manifestation that captured my attention all those Saturday mornings.
When I talk to people about the concept of organizational culture as it relates to business challenges, a similar phenomenon tends to occur. Our conversation centers around what people think the reality of their situation is. What they often describe when sharing their experiences are the manifestations of the underlying culture rather than the culture itself.
This is what makes the study and shaping of an organizational culture so difficult. We can only really see the impact of a culture on us as the roots of what drive those behaviors (the culture) remains beneath the surface.
Whether it’s high turnover, lack of sales growth or declining customer service, business leaders tend to focus on visible business challenges. It makes sense, as these challenges are easily measurable. The real question becomes, how does one dig beneath the visible manifestations of a culture to begin to understand the beliefs, values and assumptions that are driving behavior and results to begin with?
Here are four tips to help you begin to really understand what is driving behavior in your organization:
Take a moment to look at your organization’s culture. What do you see? How are the collective behaviors of your team helping or hindering business performance?
Whether you can see it or not, there is a lot happening under the surface. We may not always be able to best determine what it is that drives behavior. We might be influenced by own values or assumptions, or the behaviors of others. But once you see through the looking glass, you may find that your culture is impacting business outcomes in more ways than you realize.
This article originally appeared on Forbes.
Last year, Deloitte released some startling statistics about leadership development in their 2015 Human Capital Trends Report. According to their global survey, 50 percent of respondents rated their leadership shortfalls as “very important.” Yet only 6 percent of organizations believe their leadership pipeline is “very ready”—pointing to a staggering capability gap.
This capability gap will only widen if organizations don’t make leadership development a priority. So, how can organizations get back on track in 2016?
Leadership development is a fairly common phrase in business. Most professionals understand and appreciate leadership development for its intangible benefits: growing our cadre of business leaders, improving our workforce, developing core skills such as communication and management. It’s all those things, AND it’s more.
Understanding how leadership development provides a positive return on investment is critical in establishing and sustaining an effective program.
There are three core areas through which leadership development can affect your bottom line:
1. Setting/executing corporate goals. Providing skill development for leaders in the area of both setting and executing corporate goals is a foundational component of their development.
Emerging leaders in an organization are counted on to become champions and contributors to organizational planning. They will be the guiding forces within business units or departments to see those plans are executed. Over time, these emerging leaders will direct the planning at the highest levels. Because of this evolving set of expectations, providing these individuals with a proper tool set is paramount.
The investment up front for personnel to develop their skills in strategic planning, business planning and related actions will provide a return on investment in both the short and long terms. In the short term, they help direct the goal execution in a more efficient (read: cost minimizing) way. In the long term, they will take their knowledge and expertise to make the key decisions that directly affect the bottom line.
2. Getting the best from individuals and teams. The second impact to the bottom line relates to these developing leaders getting the very best results from the individuals and teams they lead. Through skill development in the areas of communication, management, coaching, emotional intelligence, presence, and others – leaders will be able to more effectively redirect their personnel’s ineffective approaches.
A leader can better motivate an individual by being actively present on-site, in a very supportive and approachable manner. A leader can make significant contributions to individual performance because of a refined set of skills as a coach. Knowing and working with team members who have different levels of emotional intelligence could provide difference-making insights.
All these outcomes provide stimulus for greater efficiency, time savings, cost savings and profitability.
3. Driving accountability. Finally, leadership development supports more effective levels of accountability. First, the leader is held accountable in having an active stake in the business, as one of the key contributors to organizational goals. Additionally, these leaders provide an improved approach to driving accountability for the individuals and teams they manage. And improved levels of accountability leads to improved results in terms of financial outcomes.
While the intangible benefits of leadership development have grown increasingly visible to organizations, the return on investment has not received as much attention. Understanding the ways in which your financial investment intentionally leads to improved performance helps reinforce the importance of the leadership development. It also makes a direct impact on the dollar signs that your stakeholders find important.
A quick coffee and pastry from Starbucks for breakfast. Microwaved leftovers at your desk for lunch. Fast food on the way home for dinner. For many Americans, sitting down to eat a freshly cooked meal with friends or family seems like a lost luxury.
We all know the importance of gathering around the family dinner table. According to The Atlantic, “the dinner table can act as a unifier, a place of community. Sharing a meal is an excuse to catch up and talk, one of the few times where people are happy to put aside their work and take time out of the day.”
Unfortunately, eating with others at work doesn’t hold the same kind of significance for many people. Research has shown that only 1 in 5 people step away from their desks for a meal during the workday. And while it may seem harmless to grab a quick bite at your desk through the lunch hour, creativity suffers, productivity lags, and the sense of belonging among coworkers can slowly erode if it becomes a habit.
When considering the need for collaboration, creativity and teamwork in today’s work environment, eating alone at your desk doesn’t make sense. If the goal is to share ideas and increase productivity, why are we actively engaging in activities that do just the opposite? If the dinner table can act as a gathering place at home, why wouldn’t we work to equip our offices with the same kind of unifying space?
Companies like Google and Pixar have used the idea of “casual collisions” to design their workspaces in a way that promotes spontaneous, random discussions among employees. In fact, Google intentionally designed their New York City campus so that no part of the office was more than 150 feet from food. Whether in a restaurant, kitchen or cafeteria, team members are encouraged to collaborate and share ideas in common gathering places.
A recent study by Cornell’s Kevin M. Kniffin, Brian Wansink, Carol M Devine and Jeffery Sobal found a direct link between sharing meals together and higher performing teams. Their study of a fire department in a large city in the U.S. included visits to 13 different firehouses and 15 months of qualitative and quantitative research.
A typical firehouse has a kitchen, but it’s the responsibility of the firefighters to stock the kitchen and cook meals. Without any official mention of roles and responsibilities, these firefighters have adopted meal planning, cooking, eating together and cleaning up into their firehouse culture.
Firefighters reported that eating together makes them feel like a family; strengthening the bond between coworkers in a way that was lacking from other activities throughout the day. Further research found an undeniable positive correlation between eating together and higher team performance. The skills that underlie simple meal planning—cooperation, communication and collaboration—show up through performance on the job.
Research has shown that eating meals together can lead to higher performing teams. So how do you begin to apply these findings to your office?
Encourage Employees to Eat Meals Together. There are several ways to encourage employees to eat meals together. Hosting an offsite team lunch, or ordering in for a meal around the conference table are both easy options. Or, it may be as simple as scheduling team lunches on the calendar, setting the expectation so employees can plan ahead.
Additionally, consider how you’re spending your own lunches. As a leader, are you role-modeling the behaviors you’re trying to promote? Or are you staying at your desk through meals, too?
Give Them a Reason to Step Away From Their Desks. What are you doing, as a leader, to encourage your employees to step away from their desks for a meal? Many companies – particularly startups – tend to offer perks like catered lunches. But in practice, these might actually discourage employees from venturing outside during their lunch hour.
Be mindful of how the culture of your company may be unintentionally keeping employees glued to their seats.
Take Team-Building to the Kitchen. Forget the trust falls; schedule a team building activity that involves cooking together. Whether offsite at a culinary school, or a chef-hosted event in your office, getting people together to plan, prepare, and enjoy a meal together can help your employees learn to better perform as a team.
Many leaders today are searching for that silver-bullet solution that will solve their company performance problems, but maybe the answers are much simpler. Though it’s often overlooked, cooking and eating together as a team can help foster engagement, innovation, creativity, and ultimately help your entire team perform better on the job.