What Constitutes a Performance Break-Thru to Improve Business Results?
Updated: Mar 30
Just what do we mean by "transformation" or a "performance break-thru?” For us it means 21% or more improvement within 21 weeks or less. The question comes up when potential clients are evaluating their appetite for change and our capability the help them navigate from the present situation to a desired situation - some place with better performance - with minimal disruption and risk.
When I’m talking with the decision teams of potential clients this is an important issue to cover. Over the last nearly twenty years I’ve lost count of the number of CEO’s, MD’s and Exec Teams who have said “We are looking for organic growth - 5% will be fine.” After further questions my response is often along the lines of, “My team has done a basic situation assessment and tell me you can get 20% (and sometimes much more) improvement in 6 months - and it’s on that basis that we’d work with you.”
You may be surprised to hear the majority of Execs doubt a 20% sales or productivity improvement is possible. They don’t believe they could be running their business so poorly.
So, why is it that organisations have such low expectations for the potential for improvement and why do my team have such high expectations? The answer comes in two parts. The first relates to what organisations are not doing. The second relates to the research on the economic value add of a one standard deviation improvement in performance (in essence moving from average to above average).
Front-line Leaders Do Not Attend to the Basics Business is behaviour. Staff behaviour is the only way actions are taken and outcomes are achieved. Increasing business performance is about managers and supervisors taking leadership actions that increase the front line behaviours you want and decrease those you don't want. This is leadership 101. This is so simple it’s surprising how rarely it is consistently and effectively done.
Many organisation do not attend the these 101 basics. They do not set performance expectations (in terms of setting results targets and defining the core set of behaviours that are critical for success in a role). Their leaders have no system for noticing what their teams are doing and providing feedback. They fail to recognise (reinforce) successful results or the desired critical success behaviours that delivered them. Leaders do not confront poor performance nor coach for effective use of ‘high performer’ behaviour and performance improvement.
You may wander into an Apple store and wonder why your retail experience was so positive. Apple define in precise detail the critical behaviours that deliver customer experience, they teach them to their staff, and their leaders observe their teams in action and provide frequent feedback.
Economic Value Add of Performance Superior performance is defined as “performance that delivers results one standard deviation, or more, above the mean”. You can probably recognise behind this thinking is the bell curve you learned about in high school mathematics. This superior performance definition of competence (specifically one standard deviation above the mean or the top 15% of performers in a job) is preferred because the value add of competency improvement programs that deliver superior performance is easily calculated.
Researchers, starting with (Hunter, Schmidt, and Judiesch 1990) have repeatedly verified that, depending on the complexity of the job, performance one standard deviation above the mean in non-sales jobs is worth 19% in low complexity roles, 32% in moderate complexity and 48% in high complexity roles. And it results in a 48% to 120% increase in productivity in sales jobs. These percentages are actual productivity or measured economic value added "performance distribution" figures - not merely "global estimation" guesstimates by employees, managers, or human resource staff.
The top performers have skills and capabilities that are a potential gold mine in terms of developing organisational effectiveness and productivity.
As the old saying goes, “If you think staff development is expensive - try ignorance.” When your leaders attend to the basics and ensure everyone is consistently executing the 5 to 7 activities and key behaviours of high performers (the ones that drive results), a one standard deviation performance improvement is a simple, fast and lasting consequence.