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Performance Management is NOT Execution Management

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Performance management and execution management are very different. In short, performance management is not execution management. They’re two separate entities with some overlap. I just came from giving a speech to about sixty senior executives who are all leading organizations throughout the Midwest, and there was a lot of confusion between Performance Management and Execution Management. So let’s compare & contrast them across five different areas: Ownership, focus, linkage, measurement of success, and monitoring.

Performance management first. The ownership of performance management is with human resources. They own the process. The focus is on individuals throughout the organization, and the linkage is to their professional development goals, competencies, and talent development. The measure of success is the achievement of their performance appraisal goals. And, the monitoring of it is static – most usually on an annual basis.

For the vast majority of people in the room just this morning, about 80% of them gave the review process annually. About 15% or so did it every six months, and there were actually four people in the room who raised their hands and said they don’t even have any review process. The risk is, this confusion causes a problem with execution management. They think they have execution management covered, and they don’t.

So let’s now contrast this with execution management. First, and foremost, ownership of execution management is with the senior leader. And that is because they own the goals, the strategic plan, and the key initiatives for their organization.

Quite often, when senior leaders initiate contact with us to talk about execution management, they want to have human resources at the table, which is fine with us. They could also have the CFO, the CIO, the CMO, and the COO. And it’s fine if they do. When we ask why HR, the most pervasive reason is they think HR is going to own the process, until we ask them who owns the goals of the company. And, of course, say they do. So once they get that distinction, then we generally meet with just them.

The ownership for execution management belongs to the senior leader. The focus is on the organization, whereas on performance management, it’s on individuals. The linkage for execution management is to the initiatives, the strategic plan, the annual plan, the visionary goals of the company. And again, for performance management, it’s the competencies and goals of individuals.

The measurement of success for execution management is the achievement of organizational initiatives, or the achievement of the strategic plan, the achievement of their goals. And the monitoring is done at least quarterly – every three months, at the very least. We get a lot of push back on this, until they go through a year of that process, and then they take the affirmative step to have those reviews once every other month so they can answer the question, “Where are we now vs. where we hope to be?”, and make adjustments and determine next steps.

So HR is not going to tell senior leaders the difference between these two. For the most part, HR doesn’t understand it, and when they do, their noble intent is to want to own the process. And the fact is, they don’t. It belongs to senior leaders.

Successful Strategy Execution at the C-Level

The overall rate for strategic plan failure is incredibly high. It is researched to be 80 to 85 percent. The high failure rate is why so many leaders roll their eyes, sigh and stall when making strategic plan decisions. Many people have had bad experiences with strategic planning. The good news is that the failure rate and the causes for the high failure rate have been heavily researched. The causes are very consistent and simple to understand, but the remedies are not easy to execute.

The first main cause for such a high rate of strategic plan failure in organizations is the senior leadership teams taking on too much. When they get together to think more deeply and clearly about what they really want, there is a level of excitement. That excitement can result in setting too many priorities. The first objective is to prioritize very clearly and carefully because strategic plan initiatives tend not to be day-to-day work. Strategic plan initiatives are work that is outside of the day job. So, if those objectives are not really important, they are going to be put to the side in the face of the day-to-day heat. Prioritization is not only important when we are creating the plan, but also when new business opportunities and dynamics develop over time. We may feel very good about a tight strategic plan for a two-, three- or four-year period of time, and we may continue adding to it, but if we are not aware of the degree to which we are making additions, suddenly we have an untenable situation where we are prioritizing too many objectives.

The second key reason for strategic plan failure is a lack of a dashboard, or the lack of an easy way to answer the question, “Where are we now, relative to where we hoped to be?” The dashboard is actually the result of a clear conversation about what our success indicators are. We may know or have a sense of what we are shooting for or what good will look like, but unless or until we talk definitively about what we will measure that will tell us when to celebrate and when we have a problem to resolve, it is going to be very difficult to be able to answer that question.

The third consideration regarding strategic plan failure is the lack of specific action plans. Too often, leadership teams do not see their strategic initiatives through to project plans, and that is actually what we do. We create special projects that we need to put resources against, talk about and monitor. Unless we see those initiatives as project plans and get them to that actionable level, it is extremely difficult to implement them.

The fourth key consideration and reason for failure is a lack of accountability. Lack of accountability is clearly tied to a lack of project planning. If we do not have a project plan, we are not clear on our milestones. And if we have not determined who is doing what by when, we cannot see the team being accountable and we cannot hold individuals accountable because we do not really know what we are expecting, and we have not organized ourselves around being monitored.

Senior leaders who achieve the 20 percent success rate understand where the finish line is for strategic planning. The finish line is not consensus around the strategic initiatives. It is the specific action plans and the monitoring process to bring them home.

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Buy-In for Leadership Directives

Buy-in for leadership directives cannot come just from organizational leadership. It must be about the whole organization. Buy-in starts with leadership. Leadership has to set the direction, and buy-in has to move down from leadership throughout the organization. In nearly all organizations, there is a natural distribution of people. Some are naturally positive. They like challenges. They like overcoming obstacles. They comprise about 10 percent of the organization. Usually, about 15 percent of people in organizations are negative. They are the ones who are critical. They say things like, “We’re never going to get there,” or “How are we going to overcome these obstacles?” That leaves about 75 percent who listen to the loudest voice. Most of the time, the loudest voice is a negative voice unless leadership deliberately focuses on taking an affirmative step forward to answer the questions about where we are going, how we are going to get there and what is important.

Leadership does not immediately know that they did not achieve organizational buy-in. They find out after they have lost momentum. They end the year with the same goals with which they started and they do not know why. The biggest problem with not getting buy-in is that it culminates in a breakdown of the integrity of the planning and execution process. Next year, when they go through the process again, everybody has been through it and knows what to expect. They go through the flavor-of-the-month process knowing that, after three months, they will not hear about it again, and they will just attend to their jobs the way they do every day, and they will act independently. They will answer e-mails and phone calls and attend to whatever issue is most urgent instead of the ones that are most important to achieving goals.

One warning sign that the organization has not achieved buy-in shows up as what leadership interprets as a lack of engagement. Lack of engagement is the effect. The cause is lack of buy-in. Leadership will focus on engagement. They will look at research on engagement to find out why people are not engaged, but the real question should be, “Why aren’t people buying in?” and that is a leadership issue.

Another sign is that since everybody has more to do every day than there is time to do in the first place, there are a lot of things that take the place of where their focus should be. There is always a reason that, in the weekly and bi-monthly meetings, you end up in the same place you were two weeks before or the week before. There are other priorities that are moving in place of what should be done to achieve the key initiatives and move forward. There are always new priorities that we can rationalize, justify and believe in because, from the beginning, we never really bought into the direction we should be going.

There are three ways to know buy-in is working.

-There is a lot of conversation around it. You hear people being authentic and candid in their conversations. What makes it work from their position is that they are part author of the decisions that are being made because they are getting to express themselves in the conversation.

-People are talking about the right topics. They really think this is what they should be talking about and they express their opinion and they listen to others. They gain an understanding and sometimes change their opinions, but at the end of the day, they perceive themselves as authoring the plan.

-There is evidence of progress and momentum. People actually do like change. What people fear most about change is being promised that things will change when no change actually occurs. When change begins and slow progress is made, even through little steps, people get behind the change. They also get excited, and they start to give priority to the milestones.

Team Building

There are several distinct warning signs that senior leaders are not operating as an effective team.

-Real meetings happen in the hallways, bathrooms or in people’s individual offices. They are not having the discussion around the table together. If you were to film the actual meeting, you would not hear the important topics and discussion. You would not see constructive conflict. You would hear quiet, and you would see a lot of head nodding and people leaving the meeting and then having real conversations.

-People lobby for position before or after the meeting. They do not expect to have a real discussion around the table, so they concentrate on their own agendas and they do everything they can to line up people for an agenda prior to the meeting.

-Meeting agendas and meeting outcomes show that they are not talking about the hard or important issues. It is a warning when agendas and outcomes show that they are taking care of business, but they are not going deeply enough into the things that are truly significant that are either helping or derailing them.

-Decisions are revisited. They talk about an issue and we think we have made a decision, but week after week or month after month, we are coming back to the same topic.

There are a number of big reasons why senior leadership teams struggle in the context of team building, and they are tied to human nature.

-Conflict avoidance – It is hard to address the elephants in the room. Addressing them takes courage and requires candor, and it is daunting when you do not really know how people are going to react. It is easier to not talk about them. A relatively extreme example involves a board we were invited to help. They wanted to make progress and I learned of an issue they had been stuck on for two years. When I asked how they typically make decisions, they said they voted. When I asked if this particular topic had come up for vote, the answer was no. The reason it had not come up for vote was because they knew they did not have consensus, so they kept avoiding putting it on the agenda. Conflict avoidance is huge.

-Time – Talking about the real issues requires time. We take on too much. We are always pressed for time. The important issues are not always the urgent issues, so we rush to the urgent thing without talking deeply enough about the meeting material to resolve issues that stand in our way.

-Resistance to collaboration – Senior leaders struggle with team building when they resist collaborating with their cohorts to co-create solutions. We have some senior leaders who have an impression that they must bring the answer, and if they do not have the answer, they let the issue rollover and they will let it roll over for quite a while. In reality, collaborative sharing and even showing vulnerability, as in, “I need your help. Let’s go forward on this,” is an indication of really good leadership.

-Relationships – Many senior leaders do not spend enough time on one-on-one connections with people to instill in them the feeling and belief that they matter, that they are connected to the work and that their voice counts.

There are six keys to effective team building.

1) Senior leader’s courage – This is probably the most important element of effective team building. When the warning signs are in play that the senior leaders are not operating as an effective team or at as high a performance level as they could, somebody must put that issue on the table, and that is the job of the senior leader. He or she must not avoid potential conflict, but be vulnerable and put issues on the table, call attention to the elephants in the room, and articulate those things that need to be addressed. The senior leader must make sure that the agenda is aligned with the most important work. Again, this requires courage. Without courage, we cannot address the hard issues.

2) Constructive disagreement – The team must organize solidly around the concept that the reason for our meeting is constructive disagreement. If we are going to come into a room and nod our heads without ideas, and if we are going to withhold our points of view, there is no point to our meeting. The leader could go around to every team member individually and gather input to present an idea for a solution at the next meeting. That is not the best way to construct solutions or to work together. We need a framework for constructive conflict.

3) Commitment to making decisions – A senior team needs to commit to make decisions. There are important decision-making processes that could help. The clear articulation of the issue to be decided, what our decision-making pathway will be, what each team member’s role in the decision is and by when we want to decide will help a team to move forward and feel a sense of momentum as they do their work.

4) Individual accountability – There needs to be an understanding that when we come into this room, each one of us around the table is accountable and responsible for upholding our standards and our commitments. We basically hold hands in agreement that this is where we are. This is where we are going. These are our most significant issues, and we are going to work on these issues constructively until we get completion.

5) Commitment to results – The team must recognize that we are here to get results. We understand clearly what our key priorities are, what are goals and targets are and we can answer the question, “Where are we now, relative to where we’d hoped to be?”

6) Relationships – Interestingly, this ties into project management work where the most successful project teams enjoy being together. It is tough to enjoy being together if we do not know each other well enough and if we are only spending time together around the meeting table. So, having some free, fun time together, getting to know each other better and appreciating each other, are important components of effective senior teams.

An example of a company, specifically, a senior leadership team implementing the best practices, is a midsize accounting firm that felt stagnated. They knew they had a growth opportunity with some new rules and regulations, and they had some trouble getting organized around making the most out of this opportunity. They decided to apply the best practices. One of the first things they did was really learn from their past experiences. They were fabulous at what they did, so they decided to take the time to study what they had done that was similar to the kind of challenge that was in front of them. They got a very good shared understanding of what their goals were, where they were aiming, what they thought was possible, and then they were able to apply learning from all their good years of experience. With that kind of confidence, they were more willing to take some risks and do some things differently. They were somewhat bolstered by the rich discussion they had about what had gone well in the past. They were courageous, and they took risks in both the actual work they were taking on and in the communications that they were implementing around the office.

Morale was up as they set their track. They were talking about what was really important. They were talking about why their goals and new initiatives were important, what difference they would make, and what people’s personal connections to them would look like. People understood very clearly what was in it for the firm and what was in it for them personally, and you could see the momentum building. They recognized the plan’s milestones, clearly monitored progress and celebrated when things went well. When things did not go so well, there was an organized effort to get back to the table and learn what was next.

The most obvious benefit of the good team building was concrete outcomes. This firm tripled their growth in three years because they fully leveraged the opportunity that was presented in a way that kept people unified, enthusiastic and motivated to accomplish their goals.

Common Barriers to Execution

There are three common barriers to execution.

  1. Not knowing where the finish line is – In the strategic planning process, there is a lack of understanding of where the finish line is. Most of the time when we work with a client, they perceive the finish line to be setting the initiative after a thorough conversation to gain good ideas about how to grow their organization and sustain its growth. But that is not where the finish line is. The finish line is identifying who is going to do what by when. We need to have a process to monitor progress and determine how employees will be accountable for their tasks.
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  3. Inadequate performance management – Performance should be tied to execution. It should be tied to each person’s progress on those strategic plans (or organizational goals). In nearly all organizations there are performance evaluations. They are usually done annually or bi-annually, but they should be done at least every three months to ensure the employee knows that a supervisor is monitoring progress and evaluating work, and that the employee will be rewarded for it.
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  5. Lack of priorities – We often start the conversation about strategic planning, put all the pieces in place, and then two months later, forget about it because another opportunity arises and we are going to go in that direction instead. When this happens, leadership tolerates, and even encourages, a lack of performance on the execution plan. Whatever a leader tolerates, they endorse.

 
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Team Building Best Practices

An example of a company, specifically, a senior leadership team implementing the best practices, is a midsize accounting firm that felt stagnated. They knew they had a growth opportunity with some new rules and regulations, and they had some trouble getting organized around making the most out of this opportunity. They decided to apply the best practices. One of the first things they did was really learn from their past experiences. They were fabulous at what they did, so they decided to take the time to study what they had done that was similar to the kind of challenge that was in front of them. They got a very good shared understanding of what their goals were, where they were aiming, what they thought was possible, and then they were able to apply learning from all their good years of experience. With that kind of confidence, they were more willing to take some risks and do some things differently. They were somewhat bolstered by the rich discussion they had about what had gone well in the past. They were courageous, and they took risks in both the actual work they were taking on and in the communications that they were implementing around the office.

Morale was up as they set their track. They were talking about what was really important. They were talking about why their goals and new initiatives were important, what difference they would make, and what people’s personal connections to them would look like. People understood very clearly what was in it for the firm and what was in it for them personally, and you could see the momentum building. They recognized the plan’s milestones, clearly monitored progress and celebrated when things went well. When things did not go so well, there was an organized effort to get back to the table and learn what was next.

The most obvious benefit of the good team building was concrete outcomes. This firm tripled their growth in three years because they fully leveraged the opportunity that was presented in a way that kept people unified, enthusiastic and motivated to accomplish their goals

Team Dysfunction

There are several causes of team dysfunction.

One is a lack of leadership courage. The leader decides which hard issues need to be addressed. The classic example is when there is a personnel issue. There is a person either on the leadership team or in the ranks that is not a good fit, but the organization does not deal with that issue.

Another is a lack of safety and security. We say that we want to share our points of view and that we encourage a diversity of points of view, but the reality is that we have seen our cohorts actually being asked off the team when they have spoken their minds. So, we go into a meeting organized around the right issues, but it is not safe to speak.

A third is simply too much stress. We have taken on too much. We are trying to do too much with the resources we have, and we are trying to move too fast. That stress, that piling-on, if you will, results in changing the subject too often. We do not stay with the subject long enough or go deeply enough to get to a satisfactory conclusion. We start to feel like we are running in place. There is a sense of being stuck or being in an eddy current, and we do not have the momentum that we would like to have because we are not concentrating on the few most important things.

There are three primary practices for addressing team dysfunction.

The first is a discovery phase. Everybody knows there are issues and problems. However, there often has not been a true revealing of everybody’s perceptions and perspectives with regard to what is really happening. That discovery phase has two pieces. One is one-on-one discussion that gives each individual on the team the opportunity to share his or her perspective and be heard.

The second component of the discovery piece is a team assessment. Having the team say together what they feel is going well, what is not going well and what their concerns are so that you can see across the spectrum to what degree there is consensus regarding the issues and potential solutions.

The third component to addressing team dysfunction is to seriously consider outside facilitation. An outside facilitator can organize a process and ensure that the process is completed. An outside facilitator can say things that other people will hesitate to say. He or she can listen to the different points of view, help to crystallize them and move the group succinctly to conclusion. The facilitator takes a lot of pressure off the senior leader who is then able to become part of the group instead of watching both the content of the discussion and the process of the meeting. The down side to outside facilitation is that almost all leaders have had an unsatisfactory consultant experience. Doing the due diligence to find the person with the right fit is an important part of the equation.

Accountability

Accountability is a very big issue. When I speak to C-level executives in a small group during an executive briefing or to senior leadership teams, they commonly ask me how they can get their organization to be accountable. They want to know how to get the people in their organization to be accountable, but they are not asking the right question. The real issue is that you cannot get people to be accountable. You cannot make them be accountable. People choose to be accountable.

So the better question is, “How can I put a process in place that invites people to choose to be accountable?” First, you have to get the right people on the bus. People know that they are supposed to be accountable, but that unaccountability is being tolerated. They know of someone else who is not being held accountable. They are not performing, but they still are where they are. By tolerating it, senior leaders are endorsing it throughout the whole organization. It appears that they really do not care about accountability.

Another issue is that there are not clear expectations. I have my interpretation of what my expectations for this year are, and my supervisor has a different interpretation of what expectations he or she has for me. As I am moving forward, I am moving forward divergently from my leader. So, I am moving forward and I am thinking I am making significant progress, but I am hearing from my leader that he or she needs more out of me. It is very demotivating. We need clear expectations and shared understanding, and then we can move on.

A third issue is piling on. Everybody has more to do every day than there is time to do. What happens is that every time or every other time I meet with my supervisor, something else is brought up that is important and I focus on it without something being taken away.

Best-in-class companies start to drive accountability with a dashboard. Dashboards provide a way to have information available and accessible to everybody. Everybody has the same information that they can reference from moment to moment to know where we are now. They also have specific goals that are broken down individually. Every key initiative or objective in an organization is really a system of goals, and every goal is something that applies to each individual throughout the organization. Each individual has to have a real understanding of their goal and how and to what it links. The third way to drive accountability is to align resources with the goals. With alignment as we move forward, we have what we need, to do what we need to do, in the time that we have to do it.

Building Momentum and Engagement

In the context of senior leadership teams, we define momentum by progress on the track toward goal attainment. The track is the specific objectives, and by laying track we mean having a shared understanding of where are we going and why are we going there, and being able to tell where we are now relative to where we hoped to be.

There are two key indicators that we have momentum. One is that we are either accomplishing our milestones or we know why we are not. We are very clear on the status with regard to our journey. The second indicator of momentum is how people are feeling. They are feeling a level of engagement and a notion of pride. They know they are making progress even if they are having challenges. There are conversations happening on the subjects. There is unsolicited participation, support and advice being offered. You can visit an organization or a team with momentum, and just by watching and listening, you can tell they have gotten traction on their plan.

Organizations have a hard time with momentum because of obstacles from two places. One is that they leave their strategic initiatives at too high a level. Everybody has the shared idea of the initiatives, but there is no real action plan. We do not know who is doing what by when. Therefore, the track is not really laid. Secondly, organizations and teams take on too much. They have too many objectives they are trying to accomplish, and then they pile on the business opportunities and dynamics that occur after they have made decisions about their initiatives.

Momentum requires that everybody have a shared understanding of why we are doing what we are doing. It is hard work and it is not really the day job. A strategic initiative is on top of the day job. Everyone must understand why the strategic initiative is important, what difference it will make, what his or her role is in the initiative, why we care about it and how we are doing. When those shared understandings are communicated and people get them, there will be good momentum toward the goal. Momentum also requires feedback. When people get direct feedback about how they are doing as a team and how they are doing as individuals relative to the initiative, it is very meaningful. They want to be able to connect the dots. They want to know, “Do I make a difference? How am I making a difference? What am I doing well? What might I do more of or less of?” Ensuring that meaning is established builds momentum and engagement.

New Strategy/ New Goals

There are three big obstacles to rolling out a new strategy.

1) Fear of the unknown – When a group is looking at doing something they have never done before or going in a direction with which they have never had experience, it is scary. It requires courage to look at what it is going to take. There is also ambiguity, which a lot of people are very uncomfortable with, so getting more comfortable with ambiguity is part of the equation. Along with fear of the unknown is fear of exposure. Not being totally sure we are going to be successful can be part of the challenge in this first obstacle.

2) New strategy that is inconsistent with the current organizational culture – For example, if the current culture demands that functions of the business think separately but our new strategy is going to require some cross-functional work together, that is not the way we have normally done business. Thinking out what that change is going to mean and how we are going to do things differently is challenging.

3) Time – Time is required to do anything new and different. Patience and a long-term view are required. We are quite used to going for the short wins, the low hanging fruit, the quick and sometimes the easy. New strategies and new goals are rarely quick and easy. Patience, fortitude, perseverance and being willing to commit over the long term can be very challenging.

Best-in-class companies think about four best practice steps when implementing a new and very challenging strategy.

Center on the process. They understand that there is a process and that there will be several moving parts, and they commit to seeing that process all the way through. The first step in the process is thinking about and identifying all the stakeholders. What are the levels of engagement that will be required from these stakeholders to really do a quality job?

Achieve clarity about decision-making. They know who gets to decide what. Nothing will upset a team faster than a feeling of unfairness or a lack of equity regarding who gets to decide. Being very clear about the levels of decision-making and when the leader is going to decide versus when the team is going to come to consensus is critically important.

Allocate resource. Frankly speaking, this means putting your money where your mouth is. If you are going to take on a significant new strategy, your resource allocation should look a little different. It is important to think about what resources the new strategy will require and how to stage those resources, and to secure enough resources to make a difference.

Understand the pitfalls to strategy execution. Only about 20 percent of organizations are successful in implementing a new strategy, so considering support is important. That support could be internal from other areas or departments that have had success with significant goals and strategies, or it could be outside support. Either way, the pitfalls are significant enough to warrant some good thinking about support.