This is a guest post by James Lawther, who describes himself as a middle-aged middle-manager. To reach this highly elevated position he has worked for multiple organizations, from supermarkets to tax collectors in a host of operational roles, including running the night shift for a frozen pea packing factory and doing operational research for a credit card company.
Based in the U.K., James is also an ASQ Influential Voice blogger and writes about quality issues at www.squawkpoint.com.
There is a lot of talk about culture.
No doubt you have heard it before but Peter Drucker once said, “Culture eats strategy for breakfast.” Management gurus fling the word “culture” around with abandon, proclaiming that if you fix your culture it will fix your business.
If they are right, then your culture is worth worrying about. So what is culture? As a concept it is a little nebulous and vague. I flipped open my laptop and Googled it. Here is the most relevant definition I found:
Culture (noun): The ideas, customs, and social behavior of a particular people or society.
All of which leads to a question:
How can we manage ideas, customs, and behaviors to improve business performance? How can we create a “Performance Culture?”
How do you create a performance culture?
Is it possible to manage behaviors and influence performance?
Of course it is. Children are taught how to manage behavior from an early age. Toddlers get chocolates if they are good and the “naughty step” or worse if they are bad. At school the same approach is used. Teachers give their pupils certificates for being good and detention for being bad.
Business schools reinforce the logic. They teach us that effective management is all about getting people to perform at their best. The recommended approach involves SMART goals, targets, 360 degree feedback, and incentive systems. The naughty step has morphed into “spending more time with the family.”
For all the management science it boils down to the same thing; the academics teach us to manage business performance with carrots and sticks. Targets, bonuses, and performance ranking drive behavior and behavior drives performance.
What sort of behavior do they drive?
They drive a desire to hit the target, an overwhelming desire which manifests itself in a whole host of ways:
1. Jumping up and down on poor performance.
The minute something goes wrong it is corrected. If a target-driven manager sees any adverse variation in the data (the enlightened call this common cause variation) he wants it explained and removed. An inordinate amount of time is spent chasing data points that look bad.
Unsurprisingly, data points that look good are celebrated.
2. Challenging management information.
When it becomes clear that it isn’t so easy to explain the cause of poor performance, the logical next step is to challenge the data. If there isn’t an obvious reason why performance is going the wrong way then the data must be wrong.
Any manager with a bonus (a.k.a. college fees or mortgage repayments) riding on the data will tell you that it needs to be right.
3. Changing the calculations.
Unfortunately challenging the measurement system rarely improves performance. The next approach is to change the calculations instead. Many targets are ratios: customers served per man-hour or sales made per lead. So denominators are pushed down and numerators forced up. This approach is guaranteed to improve performance (at least optically).
All it takes is a little brow beating of the measurement improvement team, who will in turn – when performance appears to improve – be applauded for their accuracy.
4. Blaming and shaming.
Sometimes the man in charge of measures is unwilling to be brow beaten. If he refuses to yield he will be blamed for poor performance (how can you improve performance if you can’t rely on the numbers?) If the man from M.I. is big enough to shrug it off then somebody else is found to blame. Blame a supplier, blame a customer, blame the person in recruitment, or the purchasing team.
Blame doesn’t improve performance, but it does create an excuse. It is well-known that poor performance plus excuses equals good performance.
5. Emphasizing the positive.
Managers utilize bullet points to emphasize the positive. With all the noise in the system there is always something on the up.
• This week saw a 5 percent rise in sales.
• Last week customer satisfaction reached an all-time high.
• Retention rates (month-to-date) exceed last year’s performance (year-on-year) by a full three basis points (allowing for inflation).
If managers can’t find something that looks good they can always create more metrics until they identify something positive.
6. Minimizing the negative.
Nothing is ever reported voluntarily that looks below target or “Red.” Anybody foolish enough to declare a “Red” level of performance will receive a real grilling about the situation. This approach ensures that the “Reds” disappear… Well, they certainly won’t be talked about or shown.
If there is no “Red” to be seen, then performance must have improved.
Does culture drive behavior and performance?
Of course it does. Though perversely “performance management” doesn’t create a culture of high performance. It creates one of low performance and fear.
Maybe Mr. Drucker was right, but his quote needs some context from his peers:
Culture Eats strategy for breakfast ~ Peter Drucker
Drive out fear ~ W. Edwards Deming
The way to create a high performance culture is to seek out poor performance, embrace it and fix it, not punish it.
What are your “dos” and “don’ts” of creating a performance culture?