The Key Thing to Understand About Performance Improvement

Executive Teams are under constant pressure to reduce costs and increase performance in their business.  Unfortunately, most of them try to manage their way there instead of leading the way.  This puts your company in a place you don’t want to be – in the middle of the pack of under-performers.

Here’s the key thing you must understand about organisational performance – it has four dimensions.

The first 3 Dimensions are very familiar – they are what we measure and manage routinely, day in day out.

The first 3 Dimensions of Performance are what we call Enablers:

1. Schedule & Production – and what it takes to achieve these goals & targets i.e. structured right, aligned on Vision, Mission and Values.
2. Costs – are determined by Dimension 1, but are achieved through people.
3. Systems and Processes to achieve Dimensions 1 & 2.

• Achievement is built on a foundation of effective systems and processes
• Systems must continually be refined based on feedback and focus on operational excellence
• Processes must be owned and continually improved to achieve goals & targets

It is essential that we get these 3 Dimensions right as they are enablers of performance.  If any of these Dimensions are not adequately planned or managed, then performance will suffer or possibly fail all together.

However, what seems to not be understood by many business managers is that getting these 3 Dimensions right is not enough, these 3 Dimensions are merely enablers of performance; they create compliance with a system not commitment to a value. 

The 4th Dimension – Performance Leadership

The 4th Dimension is about people and people are influenced by leadership.  It’s the 4th Dimension that drives performance. We measured team performance and the leadership practices that drove that performance in more than 1,000 work teams in 3 companies. We found that more than 70% of the team’s performance was directly linked to leadership practices. The first 3 Dimensions accounted for less than 30% of team performance.

In every successful company that we have worked for this 4th Dimension, what we call Performance Leadership, was present and was being done very effectively.  Note that when we talk about a successful company we mean a company that performs in a professional manner, is cost effective and safe.

There is no getting away from the fact that a business that is not managed well will fail to perform.  This is why the first 3 Dimensions must be understood for what they are: enablers of performance.  To restate this point, fail in the planning and management of the enablers and the business will fail.

We are now seeing industry statistics that tell us that as many as 90% of incidents that occur are happening because people are not implementing and following established systems and procedures properly.  The problem here is not one of training and complacency; it has to do with commitment.  The solution to a lack of commitment is a leadership challenge not a management one.

Start with 4D Safety – Why? The reasons are simple:

1. Safety is personal for every worker – you don’t have to “sell them” on it. Not all your workers care about your maintenance costs, downtime and production costs or your quality.  They typically see those things as the job of managers to look after.  But here is the rub, it’s your people that create the performance in these areas and you can’t manage your people – you have to lead them.
2. • production levels and productivity increases,
   • costs – reduced maintenance & equipment damage,
   • improved quality and reduced rework, and
   • improved morale and decreased turnover.
   The leadership practices that drive safety performance are the same ones that drive:
3. Sustainable performance in all of these areas is achieved through building internal leadership capability that creates engagement and discretionary effort.
4. Show your people that you genuinely care about them and they will care about your business.  Then you can have conversations with them about costs, production targets and quality.
5. Creating engaged, self-directing work teams is the outcome. But you only get to this place through leadership (very good leadership) not management.
6. Safety leadership can be measured and its objective – you’re either injuring people or you’re not.
7. The difference with the 4D approach are the metrics and dashboard that allow you to measure, monitor and develop the leadership practices that are needed.

Whose Business is it Anyway?

If you want your workers to care, you have two options:  they need to have skin in the game or they need to care about you and the company.

Wherever you stop paying bonuses that’s where the level of ownership stops.

Managers get paid bonuses because we expect them to influence business performance.  Influence is a leadership practice not a management practice.  Management is about rules and processes; managing people is very different from leading them.  Only leadership creates engagement.

When you only manage your people you reduce your relationship with them down to a purely transactional one.  They will just do what they get paid for; you lose discretionary effort.

Mass layoffs where performance doesn’t enter into it confirms your company as a manager of people, not a leader.  Compare this to the company that has agreed with their people to have them take a pay cut or work a shorter week to reduce the wages bill.  They do this because they value their people and the teams they have created.  They are not just numbers to be cut at the first opportunity.  I’m not criticising or making judgements about companies that have used mass layoffs to manage costs.  I’m just stating the reality that this is a management solution not a leadership one.

Start with safety performance and when that is right, then you can use the same process to focus on costs, production, schedule and quality.  Then stand back and watch morale improve – people love being on a winning team.

Contact Safety Leaders Group for More Information

Brett Read is the Managing Director of Safety Leaders Group and is the creator of the 4D Safety App.  Safety Leaders Group is a team of international research and leadership professionals, dedicated to converting research information into knowledge and action.  We work collaboratively with individuals, teams, and organisations to enable them to transform performance to eliminate Health, Safety and Environment (HSE) incidents and create world class business performance.  To find out more visit www.4dsafety.org