Reading notes by Yan Tougas
Organizations need both tactical and adaptive performance, in the right balance.
Performance management systems usually disrupt the balance.
Ninety percent of HR executives believe that their performance management systems yield inaccurate results. That said, the absence of an evaluation system also leads to lower ToMo. Absent a formal process, assignments and promotions appear to be based on favoritism. Lack of transparency creates new forms of emotional and economic pressure.
One of the worse systems is stack ranking. It shifts motives from play and purpose to emotional pressure and economic pressure. Employees focus on what will keep them away from the bottom rather than what’s good for the company. They will reject the addition of star players to their team for fear that it will push them down on the ratings. Managers keep low performers on their team to protect high performers. Unfair review processes reduce ToMo by 33 points.
We are biased to evaluate behavior based on its outcome, not the input, even if the outcome was driven by luck. This outcome bias ensures that most performance reviews don’t do anything to improve performance. You have to think about how someone will perform going forward, not just depend on past results.
Most performance review systems prioritize tactical performance. By balancing reviews with adaptive performance measures, ToMo goes up by 28 points (which means adaptive performance will go up as well).
Unlike natural ecosystems that eventually achieve equilibrium, business culture never do. There are too many changes to the environment and too many shocks to the system. Performance calibration is what keeps the balance.
First and foremost, performance calibration must manager the career ladders.
Second, performance calibration must manage the connections between the bottom-up adaptive goals set as part of the daily rhythm and the tactical goals being communicated to parties outside of their society.
Performance calibration is positive in its intent, not punitive.
Igniting a movement
The process by which you build or rebuild your culture must itself be high ToMo. You have to lead change in ways that create play, purpose, and potential, not pressure. Fear and pressure do not make for adaptive people. We must create conditions within which other will motivate themselves. It’s never too late to change.
To build or rebuild a culture you need to create the ultimate form of human adaptability: a social movement. There are six necessary conditions for collective action to form:
Relaxed control. The dominant authority must not be willing or able to prevent collective action.
Common belief. People must share a common view of the problem and a common perspective on the solution.
Strain. People must emotionally feel the difference between their current state and their desired future state.
Conduciveness. People must have the ability to interact with one another to enable collective action.
The spark. Some kind of catalyst to trigger action.
Mobilization. Processes mobilize people within the system to act collectively, while still enabling individuality and adaptability.
To get started:
Measure your ToMo or your team’s. http://www.vegafactor.com/survey/
Teach these concepts to your leaders.
Understand how much you are spending in time and money on culture. You can often build your culture without spending any additional money.
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