Agile Performance Development
A framework inspired by two Giants: Gallup and McKinsey
Isaac Newton once said: “If I have seen further it is by standing on the shoulder of Giants”. I can say the same when it comes to my humble understanding of organisational performance and health. From creating my own consulting company in Venezuela to working with incredible organisations, Gallup and McKinsey have been the giants that guide me.
As a lover of challenges, recently, I had the opportunity to present to an amazing and humble team in Gallup. I presented a major challenge to organisational performance faced by managers & leaders today and provided my recommendations to minimise the impact of this challenge. Based on my organisational experiences and after surveying about 100 Founders in my LinkedIn, I took Performance Management without hesitation. It was identified as the major challenge to organisational performance by eighty-three percent of the Founders and I am troubled by the consequences of this challenge. My recommendation was Agile Performance Development.
Let me share with you what Agile Performance Development is and its importance for your organisation in today’s context. I created Agile Performance Development as a process framework inspired by Gallup’s amazing approach and proposal of Re-Engineering Performance Management & McKinsey approach to Organisational Health and Performance.
If you don’t like it at least check out these giants solutions and dare to thrive performance.
Today’s Organisational Context: Turbulent Markets that demand higher Organisational Performance & Agility
Since 2009 we became aware that organisations face turbulent markets. Turbulent Markets demand higher organisational performance and agility (Sull, 2009).To achieve performance organisations must overcome an unstable economic climate, ever-changing customer needs, up-and-coming technology market stirs, and most importantly disappointing return on investments & changes in the workforce (Wigert and Harter, 2017). These last two forces are particularly worrisome. They disrupt the technical, management, and behavioural systems underlying performance. Salient is their direct impact on performance management (Image Nº1. Impact of Disappointing Return on Investments and Changes in the Workforce on Performance Management).
Image Nº1. Impact of disappointing return on investments and changes in the workforce on Performance Management
Now, why does it matter?
Performance Management has traditionally been the navigational compass of an organisation by creating a shared understanding of what is to be achieved and by providing an approach to leading & developing people that guarantees the achievement of the performance goals.
Hence, it’s optimal functionality it’s fundamental for the learning and growth infrastructure that supports internal core processes, customer value proposition materialisation, and shareholder value. No wonder why is so important ( Image Nº2. Performance Management Impact on the Learning & Growth Infrastructure).
Image Nº2. Performance Management Impact on the Learning & Growth Infrastructure
Nevertheless, evidence by Gallup (2017) paints a scary picture. Our organisational capital is underperforming. We have ineffective managers, shortfalls in alignment, and working cultures with a defacto transactional orientation (Image Nº3. Organisational Capital Overview).
Image Nº3. Organisational Capital Overview.
Even worst our human talent is disengaged. According to Gallup’s Re-Engineering Performance Management (2017), fifty percent of employees clearly know what is expected of them at work. The rest doesn’t. Only thirty-three percent of U.S employees is engaged in their job. The other sixty-seven percent isn’t. Finally, eighteen percent of employees tends to strongly agree that employees who perform better grow faster at their organisation. The rest doesn’t think that (Image Nº4. Human Capital Overview).
Image Nº4. Human Capital Overview.
This is TRAGIC. Why is this happening?
My answer: performance management became predictive and too controlling. It became what I am going to refer to as predictive performance controlling. Linear or with a Waterfall lifecycle approach. Measurement centric. And biased with what we call in behavioural economics: an illusion of control bias (Image Nº5. Predictive Performance Controlling).
Image Nº5. Predictive Performance Controlling.
Linear because performance is mainly evaluated once and at the end of the year, with few deliveries of feedback, based on the associate (employee) past behaviours, assuming a low degree of change, inconsistency and complexity; and guided by a top-down leadership approach.
Measurement centric because it over-focused on ratings and ranking overseeing the flaws associated to them: halo effect, central tendency, spillover effects, leniency and strictness, and others (Wigert and Harter, 2017).
And the illusion of control biased because performance management became obsessed with fixing and controlling people rather than growing them.
No individualised development can be achieved by this approach. It doesn’t respond optimally to turbulent markets.
Predictive performance controlling hinders performance. We need to re-engineer performance management. As Wigert and Harter (2017) proposed. Re-engineering means, as pointed out by Harmon (2007), that we need a new conceptualisation of performance management to cease the new strategic opportunities and threats that supports our fundamental supply chain & fundamental business processes (Image Nº6. Implications of Reengineering as a Change Process Approach).
Image Nº6. Implications of Reengineering as a Change Process Approach
Agile Performance Development
Our Re-Engineering must have the right aim. The aim that I propose is Agile Performance Development. It contemplates Gallup’s development recommendation but it also contemplates the demand by turbulent markets that organisations face today: “agility”.
Agile performance development is iterative and incremental in its lifecycle approach of performance. Is development centric. And it’s biased but towards an outcome (Image Nº7. Agile Performance Development by Nastasha Velasco).
Image Nº7. Agile Performance Development by Nastasha Velasco
Iterative and incremental because it evaluates early, frequently, and continuously. It provides feedforward rather than feedback. Is based on collaboration, transparency, results, and customer value. It has “coaches” as leaders. And it assumes a high degree of change, inconsistency, and complexity.
Development Centric because it can individualise associates (employees) natural talents, performance needs and sense of purpose (Wigert and Harter, 2017). It sets clear expectations and mechanisms for transparency & accountability. Leverages on our associates (employees) strengths. Aligns individuals uniqueness with the Team and Organisation´s Objectives. And, it provides constant training and career path opportunities.
Finally, is outcome biased because it’s delivery oriented and constantly engaged in planning and re-planning as information becomes available.
Agile performance development cultivates “agility” and individualised development.
Is this a theoretical need?
No. Let’s look at the evidence. Evidence by Gallup (2017) on engaging performance management practices show:
- Thirty percent of employees strongly agrees that their manager involves them in setting their goals at work. Those who strongly agree are 3.6 times more likely than other employees to be engaged.
- Twenty-three percent of employees strongly agrees their Manager provides “meaningful feedback” to them. Those who do strongly agree are 3.5 times more likely than other employees to be engaged.
- Forty percent of employees strongly agrees that their manager holds them accountable for their performance goals. Those who strongly agree are 2.5 more likely than other employees to be engaged.
Our employees and organisational performance management are demanding involvement in the goals, development, and an approach that allows outcomes and their accountability.
Agile performance development its an organisational demand.
Image Nº8. Performance Management Practices Evidence by Gallup
Agile Performance Framework
Now, what could agile performance development look like?
It looks like a continuous cycle seeking excellence iteratively and incrementally with associates (employees) at the core ( Image Nº9. Agile Performance Development Framework).
Image Nº9. Agile Performance Development Framework
Agile performance development:
- Assess performance and anchors expectations continuously with a focus on organisational alignment and associates (employees) strengths.
- Architects performance with a focus on engagement and transparency.
- Reviews and Retrospect with a focus on accountability.
- Integrates learnings with a focus on excellence.
Agile Performance Development Implementation
In terms of implementation, how could agile performance development be implemented?
It can asses performance and anchor expectations by understanding employees baseline performance, needs and strengths; educating on the vision (yes! EDUCATING!), setting expectations collaboratively and agreeing on the communication style and frequency.
It can architect performance by establishing the workflow development methodology that would meet the scope and deliveries expected from the associate (employee). Establishes tools for tracking and evaluating the objectives, results, and deliverables. Defines the results, work or sprint cycles. Very important: emphasises agency and trust. And finally, it contemplates risks, alternatives, and an agreed measurement approach that is multi-sourced.
It reviews and retrospects understanding that review is oriented towards the result/deliverable and its quality; and retrospect is focused on how to improve the result, work or sprint cycle process. Hence, it achieves meaningful conversations.
Finally, it integrates by asking constantly to the associate (employee): “If tomorrow we were 1,000% more efficient, what would we do to get there?”. Identifies the key lessons and best practices to include and act upon in the next result, work or sprint cycle.
Image Nº9. Agile Performance Development Implementation
Image Nº10. Agile Performance Development Implementation
Synthesis
The major challenge that I identified was Predictive Performance Controlling. It creates ineffective managers, employee disengagement and disappointing future for employees.
My recommendation for my fellow Founders and organisational performance innovators is Agile Performance Development. It would create effective managers, engaged employees, and excellent performance.
Agile Performance Development it’s a process framework that can be implemented through easy steps and tools. I created it inspired by the amazing work by Gallup on Re-Engineering Organisational Management and McKinsey Organisational Health and Performance approach. Is an incrementalist innovation. Nothing more. If you don’t like it, it’s fine. But check out these giants solutions!
Dare to thrive performance. Lead agile performance development.
Nastasha Velasco
E: solutions@growth-vikings.com
Website: www.growth-vikings.com
Note. Thank you, Gallup, for the cool question provided and for inspiring this work with your incredible performance development approach and CliftonStrengths. Thank you, McKinsey, for your OHI. Thank you to all the agile movement seeking to help organisations become better adapted to today’s context.
References:
Wigert, B and Harter, J. (2017). Re-Engineering Performance Management. Gallup.
Rath, T. (2007). Strengths finder 2.0. New York:Gallup Press
Keller, S and Price, C. (2011). Beyond Performance. How Great Organizations Build Ultimate Competitive Advantage. McKinsey & Company.
Kaplan, R. and Norton, D. (1992) The Balanced Scorecard — Measures That Drive Performance. Harvard Business Review, 79.
Laloux, F., & Wilber, K. (2014). Reinventing organizations: A guide to creating organizations inspired by the next stage in human consciousness. Nelson Parker.
Beck, K., et al. (2001) The Agile Manifesto. Agile Alliance. http://agilemanifesto.org/
Williams, L. and Cockburn, A. (2003). Agile Methods. Pittsburgh: IEEE Xplore, pp.39–42
Sull, D. (2009). How to Thrive in Turbulent Markets. Harvard Business Review, 87(2):78–88
Harmon, P. (2007). Business process change: A guide for business managers and BPM and six sigma professionals. Amsterdam: Elsevier/Morgan Kaufmann Publishers.
