Performance Management: Beyond Individuals
I can’t tell you how many times I’ve heard a company leader complain that their various departments don’t work together for the good of the company. When performance isn’t meeting expectations, sales blames customer service. Production blames sales. And so on. It calls to mind the end of three out of every four Quentin Tarantino movies. Everyone’s got a gun pointed at someone else and everyone’s got a gun pointed at them. It can make for great cinema, not so much a great work environment – either in terms of culture or results.
There can be a lot of reasons for this, but one place any organizational leader should at least take a look is at how performance gets managed. An organization is not an individual; it’s a group of individuals who, in an idealized world, are pulling together to meet a common market need. Coca Cola exists to quench people’s thirst in a way that they find enjoyable. A lot goes into that. The organization has to develop products that people enjoy. It has to produce enough of those products to meet demand. It has to get those products to people. It has to find people capable of working together to do all of those things, which is no small task when you have a global reach. All of those people constitute the organization, and how well they work together determines how well Coca Cola fulfills on the reason for its existence. There are measures to evaluate how well Coca Cola is doing with respect to its reason for existence, and the organization measures its success against those.
However, when an organization manages the individual’s that constitute it, leaders and managers often stop looking at organizational success and focus squarely on individual performance. Of course, individual performance is important. If a team of 10 has a goal to deliver 100 units, with each accountable for 10 of those, and one person delivers 8, the team isn’t going to meet its goal. Given that there was one person who didn’t meet expectations, it makes sense to manage that individual’s performance individually.
Most organizations, however, aren’t that simple. Though a salesperson is accountable for selling and revenue generation, the sales team can often impact production, customer service, and cash flow. Those are things that, typically, the performance of a salesperson is not evaluated against. Yet, when those things suffer, the organization misses its goals, delivers sub-standard quality, and in the long run, loses revenue. The impact of a salesperson goes well beyond some bottom line number of revenue generated, number of new accounts, or profit margin of goods sold. If their performance is going to be managed with an eye toward the health and growth of the organization, and eye should be given to the measures that reflect the health of the organization.
I can already hear protests being raised. “A salesperson’s job is to make sales! Are you telling me a salesperson should be evaluated on workplace injuries?” No! That would be silly. But if all you are evaluating salespeople on is revenue, that’s where all their attention will go. Where their attention won’t be is on making sales to clients who are likely to pay their bills. Or making promises to the client that production can actually deliver.
Therefore, when setting your key performance indicators, it pays to look beyond the immediate results of performance, but the performance results of the people whose work is connected with the individual whose performance is being measured. You’ll usually find that any person has someone else counting on them in order to be able to do their job well. Include measures for the people who are counting on them. It’s an old saying that what gets measured is what gets done. If someone is being measured against the performance of someone their performance impacts, it sets the occasion for more teamwork and less finger-pointing.