What Constitutes a Performance Break-Thru?

Definitions of Performance Improvement, Break-Thru and Transformation

Just what do we mean by "transformation" or a "performance break-thru?”

For us Performance Breath-Thru means 21% or more improvement within 21 weeks or less. Anything less, say 11% uplift, we call a performance improvement. And for us Performance Transformation means more than 100% improvement within 26 to 52 weeks. To you these transformation numbers may seem unbelievable. But for me they are tangible and real - I’ve seen too many clients achieve them.

We do have two very different approaches for the two outcomes (break-thru and transformation).

The first, break-thru, is focussed on getting your middle management through front-line leaders consistently executing the coaching behaviours that build high performance and directing those behaviours to ensure the front-line is consistently executing the front-line actions that deliver results safely. Surprisingly the research says most organisations are poor at this.

The second, transformation, is focussed on building the capacity to innovate without risk. We build a virtual world simulation of your business - an accurate map of the real world and commercial models and constraints in your business. Most organisations want to innovate but fear the cost of getting new ideas wrong. With the simulation you can rehearse the how to and the commercial consequences of innovations. New ideas, when tested, can break the virtual company when the idea is wrong, but the cost is virtual and the learning real. Companies that use this approach do find the innovations that work (through iterative failures) and when they deploy them in the real world drive transformative outcomes along targeted dimensions.

The question about the difference between improvement, break through and transformation comes up when potential clients are evaluating their appetite for change and our capability the help them navigate from their present situation to a desired situation - some place with better performance - with minimal disruption and risk.

For the balance of this article I will limit my dialogue to what I’ve defined as performance break-thru projects. Performance transformation is another topic.

Organisations Underestimate Their Potential for Improvement

When I’m talking with the decision teams of potential clients this is an important issue to cover. Over the last nearly twenty years I’ve lost count of the number of CEO’s, MD’s and Exec Teams who have said “We are looking for growth - 5% to 10% will be fine.” After further questions my response is often along the lines of, “My team has done a basic situation assessment and tell me you can get a 21% break-thru within 21 weeks (and often the number I share is more - especially if the focus is sales performance) - and it’s on that basis that we’d work with you.” And their buying process can end there, we offer more than what they want.

There are those buyers who don’t want any change more than 5% because they see this as disruptive. They want their ship to stay on an even keel. They also just don’t want the effort or disruption they imagine will come with significant change in performance. In our experience, of course, the path to performance break-thru or performance transformation an be navigated while maintaining business as usual for your customers.

You may be surprised to hear many Executives doubt a 21% sales or productivity improvement is possible. They get stuck on believing such potential means they could be running their business poorly. Of course that’s not the case - given their existing systems they are usually doing very well - we just propose a different system that works better.

What many who fear change have not figured out that 21% in 21 weeks is just 1% per week, and that it comes in manageable bites.

So, why is it that organisations have such low expectations for the potential for a performance break-thru and why do my team and I have such high expectations? The answer comes in two parts. The first relates to what organisations are not doing. The second relates to the economic value add of a one standard deviation improvement in performance.

Front-line Leaders Do Not Attend to the Basics

Business is behaviour. Staff behaviour is the only way actions are taken and outcomes are achieved. Increasing business performance is about leaders (i.e. managers and supervisors) taking coaching actions that increase the front line behaviours you want and that decrease those behaviours you don't want. This is #leadership and #coaching 101. This is so simple it’s surprising how rarely it is focussed upon, systemised, measured consistently and effectively done. CSO Insights (2016) says less than 27% of organisations have a coaching system that addresses all the elements required for consistent high performance.

Many organisation do not attend the these 101 basics. Surprisingly they do not set performance expectations (in terms of setting results targets and defining the core set of behaviours that are critical for success in a role). Their leaders have no system for noticing what their teams are doing and providing feedback (e.g. managing by walking around). They fail to recognise (e.g. reinforce with praise) successful results or the desired critical success behaviours that delivered the results. Leaders do not confront poor performance nor coach for effective use of ‘high performer’ behaviour and performance improvement. Of course this means there is a significant latent performance uplift potential in most businesses.

You may wander into an Apple store and wonder why your retail experience was so positive (and consistent from one visit to the next). Apple define in precise detail the critical behaviours that deliver customer experience. They teach them to their staff, and their leaders observe and coach their teams in action and provide frequent feedback.

Economic Value Add of Performance

Superior performance is defined as “performance that delivers results one standard deviation, or more, above the mean”. You can probably recognise behind this thinking is the bell curve you learned about in high school mathematics. This superior performance definition of competence (specifically one standard deviation above the mean or the top 15% of performers in a job) is preferred because the value add of competency improvement programs that deliver superior performance is easily calculated.

Researchers, starting with (Hunter, Schmidt, and Judiesch 1990) have repeatedly verified that, depending on the complexity of the job, performance one standard deviation above the mean in non-sales jobs is worth

• 19% in low complexity roles, 
• 32% in moderate complexity roles and 
• 48% in high complexity roles (e.g. leadership).

In sales jobs one standard deviation is worth 48% to 120% increase in productivity.

These percentages are actual productivity or measured economic value added "performance distribution" figures - not merely "global estimation" guesstimates by employees, managers, or human resource staff.

The top performers have skills and capabilities that are a potential gold mine in terms of developing organisational effectiveness and productivity.

Staff Performance Conforms to Paretian Distribution

The ‘Bell Curve,’ in the image above, represents what statisticians call a ‘Normal Distribution’ or ‘Gaussian Distribution.’ A normal distribution is a sample with an arithmetic average and an equal or symmetric distribution above and below average. This model assumes that there are groups of people one standard deviation above and below the mean. We call these low or high performing and each group makes up around 16% of the population. There will also be a very small number of people two standard deviations above the average. Typically we call these ‘hyper performing’ and they make up between two and three percent of the sample population.

But performance research across a range of sporting, business, government and political professions shows 94% do not follow a normal distribution (O’Boyle Jr. and Aguinis 2011 and 2012). Rather these groups fall into what is called a ‘Power Law,’ ‘Paretian Curve,’ or ‘Long Tail’ distribution. We’ve found the same in our work modelling experts and expertise. As roles and competencies shift towards greater levels of complexity and information density - like leadership and sales - the result is a shift towards Paretian performance distributions.

In the Paretian Curve statistical model there are a small number of people who are ‘hyper performing,’ a broad swath of people who are ‘average performing’ and a smaller number of people who are ‘low performing.’ It has very different characteristics from the Bell Curve. It essentially accounts for a much wider variation in performance among the population. In the Power Curve most people fall below the mean. Roughly 10% of the population are far, i.e. more than two standard deviations, above the average, a large population are below average, and a small group are far below average. So the concept of ‘average’ becomes meaningless and the familiar Pareto 80:20 rule gives us the long tail image.

Think about how people perform in your business. There will be superstars in every functional unit. Some software engineers are 10 times more productive than the average; some sales people deliver two to three times their peers’ sales. The ‘hyper performers’ are often gifted in a combination of skill, passion, drive, and energy and they actually do drive orders of magnitude more value than many of their peers.

The recognition that around 95% of human performance follows a Pareto distribution is a much deeper insight than you might realise at first glance. There are two components to this. One is the step size of the potential performance improvement. Two is that the bulk of the population can improve. Paretian performance distribution is significant concept. We need to free ourselves from ‘average’ and bell curve thinking.

The Bell Curve performance distribution sets expectations that moving from average to high performance delivers one standard deviation improvement. Likewise moving from poor to high performance delivers two standard deviations in performance improvement. The Paretian Curve prediction is for multiple standard deviations of performance improvement - due to the much wider performance spread. A shift from average to high performance results in two to three standard deviations improvement. While moving from poor to high performance yields between four and ten standard deviations of performance improvement.

Conclusion

As the old saying goes, “If you think staff development is expensive - try ignorance.” If you think your leaders don’t have time to coach their teams - try looking at what they do with their time. Then try to leave things as they are when you find up to 50% of their time is administration. When your leaders attend to the basics and coach to ensure everyone is consistently executing the 5 to 7 activities and key behaviours of high performers (the ones that drive results), more than one standard deviation performance improvement is a simple, fast and lasting consequence. And it yields a very high ROI.

If you want to talk with me about your situation - see the link to my calendar in the comments.

#performancebreakthru 

About the Author

Geoffrey Wade is the founder of Onirik World Group, a consultancy that helps organisations duplicate the expertise of high performers and implement leadership and coaching systems to drive performance break-thru. Among the elements of their solution are systems and analytic tools to provide radical transparency of leadership and frontline on-the-job behaviour (with special attention upon the 5 to 7 habits that drive results).

References

CSO Insights. (2016). 2016 CSO Insights sales enablement optimization study (p. 27).

O’Boyle, E. H., & Aguinis, H., The best and the rest: Revisiting the norm of normality of individual performance. Paper presented at the meeting of the Academy of Management, San Antonio, Texas, August 2011. 

O’Boyle JR., Ernest and Aguinis Herman, The Best and the rest: Revisiting the Normality of Performance, Personnel Psychology, February 2012