How to waste $41 billion dollars on performance management
My open letter to Bill Morrow, recently appointed CEO of the National Broadband Network
Dear Bill,
Congratulations on your recent appointment as CEO of NBN. It’s a big job, even with your history of telecom turnarounds.
I read with interest the article in The Australian about your plans to fix the cultural problems at NBN. As an expert in performance management, I’ve seen cultural problems of all shapes and sizes. But it sounds like the mess you’ve inherited at NBN is truly something unique!
I’m amazed by some of the cultural and engagement problems. So I wanted to offer you some friendly advice and a second pair of eyes. Here’s my thoughts about your strategy to turn NBN into a high performance organisation.
Increasing workplace engagement
I know that the NBN has been a bit of political kick-ball. And that there’s been a lot of changes.
But you’re building a transformational piece of Australian infrastructure. The goals of what you’re setting out to do are very big (and very clear). NBN is almost the definition of a mission driven organisation. So there’s no reason that you should be dealing with an organisational engagement score of just 44%!
In my opinion, your workforce at NBN has to be inspired by a mission driven culture. Every employee needs to get up in the morning ready to shape the future of the country. And you can do this by giving them clear expectations that are directly connected back to the goals and mission of the organisation.
Setting clear expectations and holding people accountable
I can see that you’ve recognised the huge role that performance management has to play in fixing the culture. In fact, I know that you’ve “set about reforming the way the company measures performance”.
But I wanted to issue a word of warning. Measuring performance is typically only half of the challenge in a dysfunctional culture. The biggest problem is clearly setting out what high performance actually looks like in the first place.
In my experience, you get high performance when every employee can explicitly state what high performance looks like for their role, on a day-to-day basis.
And I bet this isn’t the case at NBN today. In fact, I’m going to make a wager that you have thousands of employees running round with unclear position descriptions and requirements. These employees have no real clarity around what they need to do to be successful. And as a result, they start playing the blame game.
Ending the blame game
The blame game that’s going on at NBN at the moment is typical of what I see in organisations with badly broken performance management. How it happens is clear from one of your quotes in The Australian:
“An independent assessment by KordaMentha and Boston Consulting Group cited a fear among staff of “being blamed for mistakes” that “generated a lack of willingness to accept responsibility in some functional groups”.
When you do performance management well, it’s clear who is responsible for delivery. The process ensures that your employees are deeply invested in their goals and objectives.
Remember that at heart, great performance management really isn’t much more than an organisational process for accountability.
I’ve seen the impacts of a ‘blame-game’ culture before. And I’ve got no doubt this is how NBN got to an engagement score of 44%. Because in the ‘blame-game’ environment, everyone is watching their back. Right now, your staff don’t have the time (or the energy) to care about their role in shaping the future of Australia.
Getting visible alignment
I think it’s great you’re working to show a more aligned culture by knocking down the walls. Every high performance organisation I work with makes effort to show how everyone is working together. As you said:
“If we really want to change this culture then we have to start at the top and drop this hierarchical feel. These things are minor in nature but they are symbolic. It shows us getting off our pedestals so we can align together and work together.”
Getting off the pedestal is important. And so is showing everyone that the mission of the organisation is more important than your harbour-view office.
People at NBN do need a symbol of change. And tearing down the office walls might help with that. But don’t confuse the quick win of knocking down the walls with the long-term change in behaviour that you need. You can tear down physical walls in a weekend, but good performance management and a culture of accountability takes hard work over many years.
You’ve got a big job ahead, so good luck
We both know this is going to be hard work. Cultures don’t transform themselves overnight. But with hard work, you can keep people accountable to delivering high performance at NBN. Here’s my four-step action plan:
- I’d remind every employee of the role they play in delivering the mission of NBN.
- I’d quickly get rid of those that don’t care.
- I’d make sure that for those that do care, the expectations of high performance are explicitly set out.
- And finally, I’d focus on making the connection between every individual’s performance and the mission of building a better Australia.
Once everyone can see how those expectations connect back to the big mission of NBN, you’re in with a fighting chance.
Good luck – I’m looking forward to seeing a very engaged team coming through my neighbourhood to connect us to the NBN soon!
Jon
Image credit: Bidgee used under CC-SA 3.0 License
Do organisations still use Position Descriptions?
Some years ago it wasn’t uncommon to find organisations where performance reviews were done by evaluating people against the Position Description for their role. In my experience very few are doing this now. I’m specifically referring to the traditional Position Description that provided an overview of the role and some of the inherent responsibilities, but not competencies, behaviours and strategically aligned goals.
So why aren’t organisations evaluating people against their Position Description to determine performance? On the surface it would seem to make sense. The Position Description describes the role so why wouldn’t you evaluate a person against it. Surely you can look at the Position Description and more easily understand if a person is meeting expectations or exceeding them.
In the last 60 years, much progress has been made in understanding how to make performance and development processes work. New ideas arise from time to time. They are tested and some prove to work, while others fail in the real world. It would seem that evaluating against the Position Description has proved the latter – it produces no benefit to the organisation and potentially does harm. Why is that?
Issues meeting role expectations need to be resolved more immediately
If a person isn’t meeting the expectations of their role, leaving the resolution of this problem to formal performance review periods is leaving it too late. Most organisations formally evaluate performance either quarterly, half yearly or annually. Not solving the problem immediately and leaving it to one of these performance periods can potentially do harm to the organisation. Managers need to coach people on a day to day basis if necessary to ensure people meet the minimum requirements of their role.
Position Description evaluations are too subjective
For any given team member, one manager could evaluate them as having met the role requirements, while another might rate them as having exceeded them. It’s too subjective. A better and less subjective approach is to use measurable criteria like behaviours, goals or KPIs.
A Position Description describes your role, but it doesn’t tell you what great things the organisation is currently working on and what part you play. But goals do. Setting specific, measurable and actionable goals enables the organisation to align people to the strategic plan. It helps people understand how they contribute and it stretches them.
More granularity is needed
To move forward, individuals and organisations first need to understand where they are now. Reviewing a person against their Position Description tells you very little. Whereas assessing people against a defined set of competencies or behaviours does, particularly if they are role based. It gives the team member very specific criteria they can use to understand expectations and improve if needed. It helps managers understand where to coach team members. And it gives the organisation the ability to analyse its workforce to understand the gaps between required and actual capabilities.
Fairness and transparency
Under the old approach where performance is evaluated against the Position Description, it is difficult to demonstrate fairness. For example, if one manager can evaluate someone as having met their requirements and another can rate them as having exceeded them, where is the fairness in the allocation of salary increases? On the other hand, specific, measurable and actionable criteria like behaviours and goals are transparent. It isn’t perfect, but it is a much more fair approach. It also ensures that organisations spend their money (salary increases and bonuses) on the things that produce a benefit. It doesn’t make sense for an organisation to trade money in return for someone exceeding their role requirements if that doesn’t provide a benefit. But it makes a lot of sense to trade money in return for things that help to achieve the strategic plan.
Talent Retention
This is a huge area of tension for many large organisations in particular. Especially with the challenges in managing, retaining and motivating Gen Ys. The move away from traditional Position Description based performance management is a great tool to keep Gen Ys working hard. As one Gen Y team member told me, this is because this generation does not like hierarchy/seniority based performance management methods. Focussing on goals and behaviours allows the individual to feel more valued for their own ability rather than their position in the hierarchy.
That’s what I think. What do you think?
Free stuff – how to write objectives guide
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Ummm – increase distance from ground by 1 metres – before I get called in for dinner.
