Creating a Performance Culture: What Not To Do

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?

September Roundup: What's the Best Approach to Strategy?

Do you have a preferred way to approach challenges and opportunities? If so, you have a strategy.  In September, ASQ’s bloggers wrote about their approach to strategy after ASQ CEO Bill Troy shared his.

Approaches and methodologies: Tim McMahon approaches strategy with Hoshin Kanri, the process to select annual objectives that will give the organization the greatest possible advantage.

Nicole Radziwill developed a strategy called EASE, which stands for Expectations, Actionability, Sustainability, and Evaluation. Manu Vora discusses balanced scorecards, SWAT, and Hoshin. Lotto Lai wrote about Motorola’s Six Steps to Six Sigma deployment when developing a strategy for the Hong Kong Society for Quality.  Rajan Thiyagarajan uses a balanced scorecard approach to develop strategy. Bob Mitchell writes about strategies deployed by ASQ’s Statistics Division and the ASQ Minnesota section. Edwin Garro champions continuous improvement as part of strategy.

Implementing strategy: Unfortunately, there is  little focus on building the capability of the organization to execute strategy, writes John Hunter.  Similarly, Scott Rutherford discussed whether your strategic plan can survive when it first contacts reality.

Other Views: Jennifer Stepniowski writes about strategy in her personal and professional life.  And Dan Zrymiak explains how to use mission, mobilization, and governance to deploy strategy.

Charting A Strategy For Quality–And Beyond

Before joining ASQ, I spent my entire career in the U.S. Army. As you may guess, strategy was an essential part of my education.  I was fortunate to attend the British Army Staff College and the Naval War College, the Army having given up educating me at an early age. I had the chance to help develop and implement strategy at several stages in my career.

In recent months I have had the opportunity to work with the ASQ Strategic Planning Committee and see how the board and the staff work together to develop ASQ’s strategy.  I have been impressed by the passion, openness, and collaboration that characterized our process.

I am someone who loves the study of strategy and I firmly believe that the underlying principles of strategy apply to almost any field of endeavor, whether you’re working in a corporation, a nonprofit, a small business, an NGO, an educational institution, healthcare–you name it.

The purpose of strategy, after all, is to answer this question: How do you get from where you are to where you want to be?  What is your path?  How are you going to get there, what steps do you need to take, and in what order?

This month, I’d like to offer five key questions about strategy that you may find useful as you work on your own strategic planning. These principles served me well when I was in uniform, and I think they will serve ASQ well now.

One caveat: Determine how much time you have to spend on strategy and act accordingly. We all must get things done, so we must not fall to “paralysis by analysis.” We can only admire the problem for so long. A good rule of thumb many of us learned in the military is the one-third, two-thirds rule.  Each level of command (or management) takes one-third of the allotted planning time and leaves two-thirds to their subordinates.  If each level of command disciplines itself to that standard, there will be a fair allocation of planning time for everyone.

1.  What are your key facts and assumptions? All strategies are based on certain essential facts and assumptions. My suggestion: Write down your facts and assumptions.  Having them in your head isn’t enough. Expose them to the scrutiny of your boss and your colleagues.  If one of your key assumptions is the availability of a certain material, is it safe to assume it will be available to you at the price and in the quantity you need?  Finally, be especially aware of hidden assumptions—these are dangerous.   It’s an assumption you may take as a given, but, in fact, it may not be.

2.  What is your theory of victory? That is a way of saying,  okay, let’s say you can accomplish all the components of your strategy- will it get you to where you want to go?  There are many examples of both nations and corporations successfully accomplishing the vital aspects of their strategy only to find their theory about where it would get them was fundamentally flawed.

3. Can you actually accomplish each aspect of your strategy? I call this the feasibility test. Something in your strategy may sound good, “be first to market,” or “cut our price by 50%,” but can you actually do it?  If the honest answer is no, it cannot be part of your strategy.

4. Is your organization doing things that sit outside your strategy? These things may be good to do, but if they seem to be outside your strategy you should question them.  They are consuming resources – time, people, and money–, but you are not balancing their cost and benefit compared to the rest of your strategy.  I am very suspicious of activities that seem to be outside my strategic framework.

5. Have you left enough planning time to test your strategy? You must test your strategy before you deploy it.  The testing might be as sophisticated as thousands of computer-run simulations or it may be as simple as a bunch of your best staff people sitting around a table trying to poke holes in your strategy.  Ask others, especially other leaders, for feedback on your strategy before it’s finalized and presented.  I have learned that an 80% solution that has been tested can often be quickly improved and you will be far better off than a more polished product that is deployed with little or no testing.

That’s my approach to strategy. What’s your approach–in your organization, your business, your professional association, or even in your personal life?