Creating A Performance Culture

May 6, 2010 - PRLog -- Creating a Performance Culture

by Charles L. Gruner, Managing Partner, Lenox Partners, LLC

This article is an excerpt from Charles L. Gruner’s upcoming book, Turning Losers into Winners: People and Companies, based on his 20-plus years as a corporate turnaround specialist.
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     Creating a culture that is performance driven requires focused leadership with a strategy and a process. The strategy must be centered on the accomplishment of critical objectives.  These objectives are defined as being those objectives that will yield the largest short term impact, while achieving the longer term strategic goals of the company.  Management often develops plans with specific operational and strategic objectives such as reducing inventory by 20%, growing market share by 50% or increasing gross margins by 20%, all over a defined time period.  The failure to achieve these objectives occurs because these goals are not driven down to the individual business unit managers and the individual contributors charged with making these goals a reality.
      Everyone in a company must own a piece of the overall goals of the company.  What gets lost is:
     
           The translation of the business plan to everyone in the company
           Development of business unit goals for disciplines such as manufacturing, sales, engineering and finance so that everyone will own and contribute to the overall success.
        Tracking and management of performance toward achievement of the goals at the business unit and individual contributor level.
     
             What is necessary to keep a company, management and individuals focused on successful performance outcomes is a process that translates plans into measureable actions that over the course of the planning period results in successful achievement of the critical plan objectives.  Successful execution of any plan requires:
     
        Clearly stated and assigned objectives
        Measurement, tracking and feedback of performance results
        Constant monitoring, discussion and review of results in a formal follow-up process
     
      The following model was developed as a resolution for how to keep people focused and accountable. In a culture of performance everyone is expected to be successful in meeting the obligations of their individual and corporate objectives.  The 4-step model is balanced between the obligation of management to be clear and precise about what it wants to achieve and the requirement of everyone assigned responsibilities for objectives to complete them on time and successfully.
Each of the corporate objectives must be broken down into smaller objectives and assigned to the appropriate business units.  Within each unit’s objectives there is a further breakdown of the objectives so everyone is assigned a part of the objectives.  The elements of the model and key strategies for each element are as follows:
     Responsibility:
      Everyone must clearly know their individual responsibilities.  To stay focused and assure enough concentrated effort, no one should have more than three or four items they are working on.  The potential list should be much longer, however, so that as objectives are completed, items further down the list can take their place.  This approach will create continuous improvement and contribute toward the development of a performance culture.
Accountability:
      No one can be responsible for anything that is meaningful unless they are held accountable for meeting and successfully achieving the objectives of their assigned responsibilities.  Accountability is the single scariest word in business.  Accountability should not connote an opportunity for failure.  Instead, when people and businesses understand the importance of measuring their performance on the way to achieving their responsibilities it becomes another tool for measuring and achieving targeted improvements.
      Accountability requires measurement.  Selecting the most meaningful data points to collect and analyze in order to measure performance against individual responsibilities is critical.  As data is collected and reviewed, daily and weekly trends develop which will demonstrate performance trends to which the individual and management must respond with new actions or continuance of the same activities.  Accountability is the cement that holds a performance culture together.
      Ownership:
      Ownership is the outcome of clearly defined responsibilities, followed by accountability with a feedback system that forces people and groups to see the results of their programs and actions.  When people are allowed to see that they can succeed, they will take personal pride in the trend to improvement.  When pride starts to grip their imaginations, people will take ownership of their work and results.  With ownership, the management challenge becomes easier.  The model for people and business units within a company itself is dependent on management being able to energize people to the point where they can view their performance with satisfaction.  When this happens they gain a sense of worth that helps them to continue striving for success. Ownership of responsibilities and performance results are the key to maximizing the ability of everyone in an organization to fit into the performance culture.
      Reward and Recognition:
      Reward and recognition is the reinforcement tool of management for performance that meets expected goals and beyond.  Ownership will change people and attitudes.  It will drive people to do extraordinary and unexpected things.  Often, people have not had the opportunity to be successful because they didn’t know what was important and were never given the guidance and tools to see how they could influence an outcome.
      Leadership is at its best when leaders are able to identify people and their important contributions toward meeting company goals.  Rewards and recognition vary in size and scope and may just be a “Thank You” or a financial award.  Whatever the reward or level of recognition, they are a critical reinforcement and necessary to changing the culture of a company to become performance-driven.
      In summary, a performance culture is the result of having focused corporate objectives which are shared throughout the organization. The objectives are broken down into critical elements which are assigned to the appropriate business units within the company.  Within each unit, objectives are further broken down so that individual responsibilities are assigned with accountability in the form of measurement, tracking and feedback of data.  The data is collected daily and trends are monitored weekly and monthly.  This results in a clear definition of the performance of individuals and business units.  As success becomes apparent, people take ownership of their responsibilities and performance.  This success is reinforced by management with rewards and/or recognition.  That completes the cycle of creating a performance driven culture.
     Article © 2009 by Charles L. Gruner
     http://www.lenoxpartnersllc.com

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Lenox Partners LLC is a team of senior executives specializing in the management of distressed companies with the goal of bringing them back to viability by improving cash flow, restructuring the company and working with creditors and investors.