Set Standards of Excellent Performance
IF YOU WANT your people to perform at the highest levels, then you have to set the standards of excellent performance. Staff members must know exactly why they are on the payroll, what they are expected to accomplish, and what constitutes excellent performance.
The job of the manager is to determine and define excellent performance for each job, setting it as a target that each person can aim for in her or his area of responsibility. Effective executives will set standards of excellent performance for their companies or their units, and for every job that they delegate and supervise.
There is an important distinction between standards of “ordinary” and “excellent” performance. A standard of ordinary performance is the bare minimum that employees must attain so as not to run the risk of being demoted or losing their job. Standards of excellent performance are what people must attain to ensure job security and to put themselves into a position where they are paid more and promoted faster.
Setting standards of excellent performance is also key to effective delegation. When you delegate a job, you want to know that the person taking on the job or task will perform that job at the highest level of quality and efficiency.
Measurement-Based Management
The most important buzzwords in management today seem to revolve around measuring performance. Businesspeople and thought leaders use words like benchmarks, metrics, standards, and economic denominators. Each of these terms refers to the fact that all business activities can be measured in some way. This emphasis on measurement-based management is the key to continuous and never-ending improvement for both the individual and the organization. The determination to measure each activity is the key to greater sales and profitability in the future, especially in aggressively competitive markets.
The rule is, “What gets measured gets done.” This is one of the most important of all rules of managerial effectiveness. For you to set standards of excellent performance, you have to be able to set measures in terms of time, money, or turnover. Fortunately, all business activities can be defined in quantitative or numerical terms. If any activity is not being measured regularly, then there is no way people can tell whether they are doing a good job.
Post the Numbers
W. Edwards Deming, the quality management guru who transformed postwar Japan into an economic powerhouse producing some of the highest-quality products in the world, developed his fourteen-point formula for total quality management. One of his fourteen points was simply to “post results.”
He encouraged companies to describe every activity in numerical terms, and then to post those numbers on large sheets of paper all over the company so that everyone could see them. He found that the more people knew about their performance and how it was being measured, the more creative and determined they were to improve those numbers.
Compare Performance Regularly
Soon after studying Deming’s work, I was working with a real estate company that had thirty-two salespeople. I suggested that we post the listings and sales results of each person in the office on a large board in the staff room, with the highest-earning person at the top and the lowest-earning person at the bottom. Because the list was situated in the staff room, every one of the agents would have to walk past the board every day. What eventually happened was that no matter where agents might find themselves, even at the very top or very bottom of the list, they always tried to compete against the agents closest to them on the list. They didn’t try to jump from number ten or twenty to number one. Instead, they focused on doing enough to jump over the person above them on the list. And of course, the people above them tried very hard to avoid losing their spot.
By posting names with their results next to them, on a weekly basis, the managers created an ongoing dynamic competition among the salespeople to move up at least one level in the ratings, or at least not to move down because someone else had outsold them in the previous period.
Within a year, that real estate office was the highest-performing branch office in a city where the same company had twenty-two other offices. The simple act of giving people clear numbers and allowing them to compare themselves with their own past performance, and the performance of others, led to continuous and never-ending improvement in sales results.
National Comparisons Work as Well
One of my clients, a national corporation with sales offices in almost every major city in the country, started to use this simple method of “social comparison.” At the beginning of each month, the company would send out a report to the manager of each office in the country, showing where that office ranked on overall sales and profitability, average sales and profitability per sales representative, and average growth or decline rates, as compared with the other branches.
In no time at all, the same dynamic took place that occurred in the real estate company. Each manager in each office across the nation decided to concentrate on surpassing the results of the office that was just above him on the list. Instead of trying to jump from number ten or twenty to number one, the managers just focused on moving up one level at a time. As before, this led to positive competition that increased overall levels of sales, branch by branch, for the company.
Strive for Excellence
Excellent performance motivates; average performance does not. People don’t derive any motivation from doing an average job. If they do a poor job, their self-esteem actually goes down and they become increasingly demotivated. But if they do an excellent job and get recognized for that excellent job, their self-esteem goes up and they are motivated to do an excellent job again and again.
When you review the companies in the annual “Great Place to Work” surveys, you find that they all set standards of excellent performance. When you take the time to get agreement among your staff members on their key result areas (see Chapter Five) and the standards of performance by which they will be measured, you become better and better at both delegation and management overall.
Make Them Feel Like Winners
In terms of motivation, what does every person want? The answer is that every person wants to be a “winner.” People want to feel excellent about themselves; simultaneously, they want to be recognized by other people around them as being excellent at what they do.
The way to get that winning feeling is to win, to come across the finish line first, to achieve high standards that others can see and give you credit for.
This is very important. When you set key result areas and standards of excellent performance, you create “finish lines” for each of your staff members. Each time they start and finish a job to a high standard of performance, they feel like winners. Their self-esteem goes up. They feel more competent and capable.
There seem to be five keys to motivation:
1. Clear goals, objectives, and key results areas
2. Clear standards of measurement
3. Success experiences—the feeling and fact of actually completing the job to a high standard
4. Recognition from the boss, and from other people
5. Rewards that are directly tied to excellent performance of the business task
With this simple formula—and with a commitment on your part to make your people feel like winners—you can use the twin tools of key result areas combined with excellent standards of performance to build individuals, to build top teams, and to achieve extraordinary results in your position as a manager.