by Dr Philip Stiles, co-director of the Centre for International Human Resource Management
Thousands of people go to work every day really wanting to do a good job – but fail to impress anyone. Sometimes they’re in the wrong job, or they don’t have the right skills, but in many cases, there’s a fundamental – and perhaps surprising – cause: the leadership structure and organisational culture of their employer lets them down. So how can organisations get better?
I recently did some work looking at how organisations can alter their routines, and how cognitive and motivational factors influence this change. I and my co-authors talked to staff and managers at all levels in a number of leading organisations, including American Express, IBM, IKEA and Rolls-Royce. We found that there is a lot of wisdom out there about how to facilitate good performance – but a lot of organisations just aren’t applying it.
One size doesn’t fit all
One problem is that many have a one-size-fits-all approach, using the same performance management techniques for sales managers as they do for finance, or R&D. Of course, this is easier for managers, many of whom don’t want the effort of thinking about who’s the best or the worst in their team, believing that the best ones will leave, and the worst – well, you don’t want to have that conversation with them. But the result is that everyone is unhappy and many are hugely disappointed, having joined an organisation believing they could make a difference.
In many such organisations, things rumble on perfectly adequately, but the truth – and the problem – is that they are attaining probably only 70 per cent of what they could be achieving. As James C. Collins says in his book Good To Great: Why Some Companies Make The Leap And Others Don’t: “Good is the enemy of the great. We don’t have great schools, principally because we have good schools. Few people attain great lives… because it’s so easy to settle for a good life.”
I’m not advocating that everyone has to be a world-beater, but does your organisation really get the best out of you – and are you getting the best out of your people? One striking response to our research was that when we asked if people wanted to give more, most replied “yes” – but when we asked if their organisation got the best out of them, many said “no”.
Training and being valued
There are fundamental solutions to this, but unfortunately many organisations seem to have forgotten them. The well-known definition of performance is ability x motivation x opportunity. But when it comes to ability, companies could give better training – not just in practical matters, but looking at emotional intelligence, too. As for motivation, the automatic assumption might be that money talks, but our research showed pay does not feature that highly as a motivating factor. For most people it’s about: “Is my contribution valued? Is my job meaningful? Does my boss actually care about me?” It has nothing to do with finance and everything to do with leadership.
And opportunity knocks when categories are not fixed. Too many people are pigeonholed into a set level of expectation that doesn’t change. But many participants complained their bosses had a fixed view of who they are, which gave them little or scope to move on or up. Managers should be much less fixed in their judgements, even of high fliers – if someone is flying high and fails, they should not automatically keep that exalted status.
So the theory of enhancing performance is very basic – but getting there is, of course, more complex. A change of management at the top of an organisation can change its culture overnight, but what of the companies where the management remains the same?
Top-down edicts can alienate employees and make them cynical, which has the opposite of the desired effect. In contrast, we found the secret to change seems to be local – even individual – initiatives that gain momentum across an organisation. As a theoretical example: in most hospitals there is no major surgery on a Friday afternoon because consultants aren’t around at weekends for follow-ups. But waiting lists are huge. So why not do minor surgeries on a Friday? If one or two surgeons decide autonomously to do that, it would clear some of the backlog, and suddenly others may buy into the idea – and it spreads and starts to change the culture. It makes everything run better but, most importantly, the organisation is serving its customers – the patients – much better than it did before.
Making the change
Change can be hard to implement in established organisations where any shift is fairly slow. At start-ups and younger companies there is more opportunity to set out with a fresh way of thinking. From the start at Netflix, for instance, they had no staff rating system, no appraisals, and the only people who get promoted are the superstars. This made them an exciting company to work for and meant that, for all employees, anything was possible, which engaged and motivated them. As Netflix gets bigger, of course, it will have to bring in more structure, but its fundamental approach to performance management is likely to remain all about equal opportunities and meritocracy.
Ultimately, of course, change is sustainable only if the leaders in an organisation are behind it. The biggest cause of failure is bosses saying one thing and doing another, which is demotivating, breeds cynicism and makes it extremely difficult to introduce a new culture. In contrast, leaders who really make the effort to apply that fundamental wisdom of enhancing performance, and then truly practise what they preach, enable a company to develop from a good organisation into a great one.
Dr Philip Stiles teaches on a number of executive education custom programmes on the subjects of leadership and organisational behaviour. He is also responsible for the ‘People & Management’ portfolio of open programmes including “Best Practice in Managing People” and “Creating High Performance Teams”.