Performance consulting is a skill you can apply within your area of responsibility, or to help you diagnose the challenges your entire business is facing.
Every organization is dysfunctional, in its own special way
A manager of mine shared that little nugget, and I’ve always remembered it because it rings true. Every business I’ve ever worked for has been dysfunctional, in its own special way!
To help you make sense of your business, embrace performance consulting.
The factors that drive performance
First, consider the factors that drive performance. Distill them down into a model that you can use to make sense of your business.
My performance consulting model looks like this:
Here’s more on each of the factors in the model:
Leadership capability: defining the future of the organization and its purpose. Establishing the strategy that will deliver that future, and the culture that will enable the strategy.
Resources: the systems and processes within the business (including business models), the physical and virtual environment, and access to people and information.
Incentives: the total remuneration packages available to staff, and the recognition received and the performance management systems in place.
Knowledge and Skills: the desire that employees have to learn, their ability to shape their role, and their willingness to take risks in order to enhance their performance.
Capacity: the capacity of the workforce, this includes factors such as emotional resilience, energy management, and personal strengths.
Mindset: the desire to grow, overall attitudes towards work and the clarity of purpose of the individuals within each team.
In the most successful organizations (or the least dysfunctional!) all these factors integrate and work cohesively together, so that the whole is greater than the sum of the parts, to drive business performance.
The performance consulting process
To apply this model to drive performance improvement, work through the following steps:
1. Identify opportunities
What big areas of opportunity do you see for enhanced performance?
Perhaps your company culture is not fit for purpose. Or perhaps your systems and processes are working against your strategy. Or perhaps your teams lack the skills, or incentives.
The model provides you with a complete overview of factors driving performance.
2. Set goals and metrics
What existing metrics do you have, or will you need to create, that will measure the impact of your performance improvement work?
Be willing to embrace qualitative and anecdotal measures, as well as quantitative measures. And the bigger the opportunity, the less likely that there will be a 1-for-1 relationship between your efforts, and the metrics.
For example, you may identify improved staff retention as one measure of your work, but there will be many other factors influencing staff retention too. You will have to live with this ambiguity (and sell it to other stakeholders too!).
3. Define performance drivers
Now is the time to get down into the details. Exactly what are the detailed changes in performance drivers that will deliver the goals you’ve set?
If you’ve identified a ‘knowledge and skills’ opportunity, you’ll need to define exactly the knowledge and skills required and by whom.
If total remuneration is not fit for purpose, this is when you get into the details of defining the required compensation packages.
4. Design / implement solution
Solution design builds on the previous step and takes a wider perspective. This is when you need to consider resources, timelines, stakeholder management, and change management. Everything required to implement the change.
5. Measure results
Track the metrics that you’ve agreed. Measure the impact. Return to Step 1!
Business performance consulting: Microsoft’s digital transformation
This Forbes article reveals the 6 actions that Satya Nadella took at Microsoft to create a trillion-dollar gain.
The company had reached a strategic inflection point, and took six actions to recover.
The six actions were:
- Kill losing business models
- Establish a customer-focused purpose
- Define areas of opportunity
- Address culture up front
- Make empathy central
- Inspire and unleash the hidden agile army
The result was a trillion dollar increase in business value.
Use the model and process above to help you identify the steps required to unleash the potential of your business (or team!).