It’s the Performance, Stupid

August 2017 | By Professor J. B. Kassarjian

Estimated reading time: 12.5 minutes

Key Takeaways

  1. Performance trumps Promise & Potential.
  2. A demanding new challenge is the only way one can truly realize the amazing human capacity to stretch beyond one’s past performance.
  3. Promote employees to a new role that have already demonstrated 75 percent of the new job’s requirements. If not, design a demanding challenge for the employee to successfully deliver prior to the promotion.
  4. An incisive de-brief of this demanding challenge, irrespective of the outcome, is the best way to link coaching with performance and make coaching more meaningful. 
  5. Innovative firms are today replacing the sacred and out-dated Annual Performance Evaluation with real-time and immediate feedback upon the completion of a challenging project.
  6. For your best performers, don’t let clever and carefully calculated yearly performance based income raises supercede or derail real and meaningful recognition and reward.

In a typical year, every business executive, especially those occupying a senior line position, is faced with a daunting task: how to select and introduce a new leader to take over—either a newly formed unit, or, more frequently, a business unit where performance is declining. The textbook admonition that every important position should have a backup candidate, and that keeping bench strength is a vital duty, seems to join the well-paved path of good intentions.

Based on my personal experience of working with business executives, I have learned a few lessons that do not conform to the dictates of academic research. Recently, I was reminded of a metaphor that originates in architecture and landscape design that can shed light on the selection of management talent. I believe it also can inform the wider arena of “performance evaluation”: a subject rife with competing models and prescriptions and a subject that is attracting increasing challenge from some cutting-edge companies, e.g., GE, Zappos, Amazon, VMWare among others.

“Form Follows Function”

Looking out of my second-floor office window at Babson College, I can’t help notice and analyze the architect’s intentions in the landscape design of the new quad and how students respond to it. This gently sloping quad forms a peaceful space of grass, trees, and some elegantly sculpted benches. But, it also includes a concrete walkway that zigs and zags from one side to the other, creating a meandering path for foot traffic, and possibly to accommodate wheelchair access. Students often stop in apparent confusion at which way to proceed, as the concrete walkway is long and circuitous. More often than not, they take the shortest and most direct path straight across the grass.

Students’ preference for the direct route, based on criteria at odds with the architect’s plans, reminded me of a decades-old story about a legendary professor of landscape architecture at MIT. He would start the first session of his course by projecting an aerial photo of a college campus, showing a quad that was in the process of being formed by new and old buildings, with much dirt and construction materials covering the area. While students looked at the unattractive site with puzzlement, the professor would rub his white beard, and, in a stern German accent, he would challenge the students with the question: HOW should we determine the location of the pathways in this quad? After a moment of considering the picture on the screen, he would turn to the class and add: There is only ONE correct answer to this question! It is quite simple: as the new buildings are being finished and starting to be used, plant grass everywhere, wait for six months: the location of pathways will then be clearly visible!

Architecture has had a long-abiding principle, usually referred to as form follows function, which unambiguously stipulates that how a building or a landscape is formed, or shaped, should be determined by the function it serves for the people who will be using it.

In the very different realm of designing organizational forms and processes, in particular when we are selecting and mobilizing management talent to achieve specific strategic goals, we don’t have an equivalent to this architectural principle. There is ample literature about human motivation and how it may apply to forming and leading a team, and there are endless studies and prescriptions about the application of theories regarding traits, leadership styles, problem-solving approaches, and so on. But, in practice, we encounter examples that seem to violate every conceptual scheme and the bounded logic of every typology. In this short paper, I suggest that the placement of pathways in a quad can provide a central metaphor when we are confronted with quite a wide range of decisions about the selection and deployment of management, or, for that matter leadership, talent.

Formalize the Functional – Design a Realistic Challenge

In my work with organizations, whether large or small, long-established or struggling to scale up a startup, one of the most common dilemmas is how to identify, select, and handle the transition of a newly appointed leader to take charge of a unit. In a recent engagement, I was asked to interview external and internal candidates to head a division with declining performance. As the CEO and I reviewed the possible strengths and weaknesses of various candidates, it became clear that the CEO was not comfortable bringing in an outsider, even though it appeared easier to identify how each external candidate would measure against our list of the required skills, competences, and experience required to head the division in question.

I think the CEO’s dilemma centered on two sets of concerns: if an external candidate were hired, how would that reflect on the talent available in the organization? (I suspect he also was aware that all too often an external candidate who came regarded as “too good to be true,” turned out to be precisely that.) His second concern was the effect on colleagues of appointing an internal candidate, who would need the full support of ex-peers, yet whose appointment held the possibility of creating jealousies, or triggering uncooperative behavior.

After much discussion, Christine (I have disguised the names), Director of Marketing, had been identified as the most promising internal candidate, though there were concerns about her ability to handle the full range of issues in the division, including the inputs of the engineering department.

As we discussed Christine’s qualifications and how her peers would react to having her as their boss, the CEO admitted that Christine had not had a significant–and highly visible–opportunity to show how well she could implement the changes she had been arguing were needed in the division. So, with the benefit of the “how do we decide where to place the footpaths in the quad” story, the CEO realized that Christine needed a well-designed and highly visible challenge to demonstrate her real competence to implement what she preached—to her peers as well as to herself.

It took some clever bargaining by the CEO to “loan” her to another division to head a special task force, charged with bringing a new product line from pilot-plant to full market introduction, including working with engineers and product designers. We agreed that Christine would only get the promotion if it was broadly agreed that her task force had been truly successful. Fortunately for the CEO, for Christine, and for my own reputation, she did prevail.

When I told this story to a good friend, who heads a large multinational company, he jokingly ridiculed my efforts, “Why do you academics always need a complicated methodology, and two-by-two tables, to arrive at the obvious? For me, it is very clear; I never give a promotion until the candidate already has demonstrated the mix of abilities needed to perform at least 75 percent of what the new job would entail.

From Promise and Potential to Actual Performance

In recent years, there has been a growing chorus about the critical importance of identifying and deploying management talent, but the action agenda seems to be steered by well-meaning euphemisms. When I ask senior line executives about mobilizing leadership talent, they often claim to “empower their people.” But, when challenged to provide concrete examples, they tend to veer off to describe how a particular younger manager had demonstrated potential by asking penetrating questions at a recent meeting, or how another had refined the mandate of a task force to focus on more essential objectives.

There is a fundamental error in the assumption that a business leader can actually empower subordinates, a notion that confuses the sources of responsibility and initiative. In a recent interview, a German engineering manager (in a globally operating U.S. high-tech company) declared: “Every time we had a meeting in California, my American colleagues would talk about ‘empowerment.’ I didn’t understand what they meant; in German we don’t even have a translation for this word. But, last Friday evening, after some drinks, I finally figured it out: you have to empower yourself!” She reminded me that, with the best of intentions, empowerment cannot be simply bestowed, it has to be earned.1

Another popular dictum often cited by HR managers is “scouting for talent,” a prelude to compiling a list of High Potentials, fashionably abbreviated as the “Hi-Po List.” Some years ago, I had the chance to follow up on the actual performance of these potential stars, and the results were noticeably underwhelming. Typically, these publicly identified Hi-Po’s were rotated through multiple departments to be groomed for future promotion, often with special assignments for each posting. But, in addition to producing some reports, they often left behind a trail of resentment and envy by the very colleagues they were meant to later lead. Not surprisingly, when they got a promotion to head a unit, team members demonstrated all manner of creativity to undermine their new leader.

How Useful Is Coaching?

The latest mantra about finding, and especially developing, management talent revolves around coaching, which has become widely recognized as a practice and skill that deserves to be injected into every executive development program. In fact, programs with such titles as “The Coaching Manager/Leader” have proliferated across the U.S., though Europeans and the Chinese seem to regard its claims with greater skepticism.

Skillful coaching can, in fact, raise awareness about blind spots in a manager’s self-regard, and it can expose repeated instances of dysfunctional behavior, thus performing a useful purpose by providing a focused impetus to examine personal patterns. However, as critical as gaining self-awareness may be as a first step for personal change, coaching alone is rarely sufficient to bring about adaptive change that can enhance actual performance.

From Coaching to Performance: The Missing Links

The good news is that cutting-edge companies are starting to question, and increasingly to abandon, age-old rituals, such as the once sacred Annual Performance Evaluation. Companies ranging from GE to Amazon, Microsoft to Adobe, and Deloitte to Gap have set aside these annual rituals of mental and emotional torture for both the evaluators and those being evaluated. The new champions in the arena of developing talent are Coaching Leaders.

The once famous (or infamous, depending on your point of view) GE system of dividing all managers into A, B, and C categories, and getting rid of all the C’s (which one magazine recently referred to as GE’s “rank and yank” system) has been replaced with individual or team coaching by the leader, conducted at the conclusion of a project or assigned task, or upon completion of a novel initiative, whenever that occurs. Practice has finally caught up with one of the few unanimous findings in industrial psychology: conduct evaluations, or reviews, or de-briefs, as close to the actual completion of the task as possible, in real time, not on an annual designated date.

Can an incisive and thorough de-brief of an important project lead to higher performance? Quite likely, especially if the leader ends the de-brief with very specific challenges for the next task or assignment. For some decades now, I have been advocating to line managers to tap into the amazing capacity of human beings to stretch beyond the arc of past performance, to clear not only a raised bar, but one tilted to unfamiliar angles. In real life, none of us seems to be fully aware of our true potential unless and until we face and accept a demanding challenge and are willing to stretch hard.

De-briefing and Coaching Session Feedback Loop

As the simple diagram2 above suggests, crafting an appropriate and timely challenge can certainly benefit from a de-briefing and coaching session, especially if the latter includes active listening. A hard stretch is more likely to be triggered by a deserving challenge. And, the result of any significant performance is determined by the efficacy of the cumulative crescendo produced by the preceding three steps.

How to Recognize and Reward Exceptional Performance?

Even though producing exceptional results often serves as its own reward, human beings yearn for some form of recognition. Traditionally, the Annual Performance Evaluation process ended with a carefully calculated percentage raise in income, based on a detailed algorithm that translated the total score on the evaluation form to dollars per hour, month, or year. On particularly visible projects, often a bonus was announced publicly. The reasoning behind such computed generosity was the Pavlovian assumption that tangible rewards would drive performance, not only for the individual involved, but also for all those who witnessed such public recognition.

The problem with raises and bonuses is that the responsible executive is inadvertently painted into a corner: because the reward is monetary, it sets a benchmark against all future such rewards, hence becoming a source of endless feelings of betrayal, or the basis of perceived unfairness. At a publicly held company, where I served on the Board of Directors, I remember the seriously disruptive effect the annual bonus payments had on one of the four divisions. Bonuses were calculated on the basis of a complicated formula that included both top line and bottom line results, as well as rate of growth, percentage of newly acquired customers, and so on. Division Managers A and B, who had been longtime friends, had graduated from the same university, and had joined the company and received general manager promotions within a year of each other, received bonuses that were unequal by 1.72 percent. Even though the dollar amount involved was minimal, the GM who received the lower bonus was outraged enough to let his division results deteriorate sharply, and he eventually quit. I remember thinking at the time: what a price to pay for less than $2,000!

I don’t have a clever formula to offer that calculates raises. But, I do know that symbolic rituals that avoid easy translation into dollar amounts can have very positive impact, both on the team being honored and on the future performance of peers and colleagues. I am not sure who coined the phrase “unusual celebrations” (at a younger age, I used to claim authorship, but I have grown wiser), but there are endless variations of the reward-celebrations you can create. For example, at the conclusion of an important project finished on time, with strong results, you can make a public announcement that project team members, along with their spouses/partners, are being given tickets to the World Cup Finals (or the U.S. Open Tennis/Golf, etc.), and a dinner at a prestigious restaurant! And, the recognition is loudly cheered at a public meeting of the division. In my experience, you are not likely to get eager-beaver colleagues calculating the total dollar amount, though if the tickets were for a ballet performance you may get some catcalls!

Developing talent and rewarding performance can be challenging. I offer two simple but effective ideas that come from decades of working with real companies and curious executives. As described in the diagram above, astute coaching can inform the shape of a fitting challenge, which can act as the impetus for a hard stretch, all leading to actual performance. Rewarding that performance at the time of its achievement with a highly visible “unusual celebration,” rather than a formula-driven compensation increase, can create a positive impact on both individuals and the organization.

  1. For a fuller discussion of this, see: J.B.M. Kassarjian, “The Paradox of Leading Change”, in IMD Perspectives for Managers, Volume 40, Issue No. 12, and November, 1997. Lausanne, Switzerland.

  2. I developed a less elaborate diagram connecting “tough challenge to hard stretch” many years ago. See J.B.M. Kassarjian, “Jolt Your Managers…,” in IMD Perspectives for Managers, November 4, 1991. Lausanne, Switzerland.