Why CEOs Struggle to Solve the Talent Trifecta: Performance, Culture and Leadership

For more than 20 years, I have been helping CEOs and the C-Suite tackle challenges related to organizational performance, building culture, and having skilled leaders. I have seen the good, the bad, and the ugly. I have also observed some great successes as well as major catastrophic failures. This has led to a desire to share the learnings, the missteps, and the “ping between the eyes” moments that led to meaningful change.  

My ways of thinking about the Talent Trifecta (a term I coined to ensure the relationship is given due respect) are not radical by any means, but they may not be mainstream or popular with the masses. In part, because I am challenging the systemic issues that have plagued HR professionals and businesses alike. But also because I challenge those same people for their role in those behaviors and outcomes. I am simply offering a new way of thinking and working that may not be easy. But nothing really worth having ever is.  

I have the utmost respect and empathy for the challenges businesses face and the leaders who are genuinely working to make a difference. Change is hard for people and even harder to lead. I understand the barriers to real transformation. But I think about the years that CEOs have identified these are issues and reported how they are important to them. And I really ponder the fact that CEOs are noting that they are becoming growing concerns because they are not being solved.  

So that leaves me with one question.  

How is having an unsolved problem for years that is impacting your business effectiveness worse than the pain of change?  

Changing the Mindsets about the Talent Trifecta

In simplest terms, Organizational Effectiveness means the Organization is achieving the results they set out to achieve. It sounds easy. Just post the business strategy, KPIs, and current financials. Ah, if it was only that easy. Real organizational effectiveness is a complex, integrated system of human behaviors, mindsets, biases, and group dynamics. It can be toxic, have unintended impacts, and patterns of consequences and rewards that are incentivizing and rewarding the opposite behaviors that executives want.  

Organizations continue to revamp their performance management systems, create roles and committees to deal with culture, and spend billions on leadership development in search of effectiveness and results. Solving the Talent Trifecta means acknowledging that Performance, Culture, and Leadership are so intertwined that they should never be addressed separately. After decades of research and revamping, the reality is that these things are still not working as they should in organizations. 

It is time for radical mindset changes.

First, we need to ask why it even matters.

• Why do we have performance management systems?  
• Why does culture matter?  
• Why do we have leaders?

Second, we need to define what success really means.

• What does an effective performance management system look like?  
• If we had the culture we wanted, what would people be doing, thinking, saying, behaving? 
• If every leader was skilled, what would they be doing? Not doing?

Finally, we need to acknowledge what is going on today that is stopping us.

• What are you willing to do about the real pain points in the Performance Management System?
• What is our current culture really like and role are you playing in how it’s evolving? 
• What are leaders not doing that we need them to and have you told them? 

Why Talent Trifecta Strategies Fail

There are a few mindsets that need to be addressed before we talk about the specifics of Performance, Leadership, and Culture. Those things include adopting a systems thinking mentality, being clear about who is accountable, and be willing to have metrics and measurements.  

1. They are tackled separately - Strategies, programs, and projects to enhance performance, culture, and leadership are being developed and discussed separately. You cannot adjust one without impacting the others. This work should be integrated and monitored by the same group of people. The C-Suite. That leads the second reason current strategies are flawed.  
2. They are delegated to Human Resources - HR has been made responsible for all things people. This impossible task has created a disconnect between execution and accountability. Truth be told, the CEO is the champion of all three of these elements. The CEO must define performance outcomes, standards, and expectations. The CEO must define culture. And, the CEO must lead the charge on the development of leaders by establishing the leadership standard. Then the C-Suite can and should execute on those standards. The CHRO has the same role as the rest of the C-Suite in terms of leadership. They lead their teams to meet CEO’s standards. CHROs also have the added role of integrating people program design into the Employee Lifecycle. Just like CIOs have the responsibility of providing secure, efficient infrastructure to enable people programs. CEOs, not CHROs are responsible for Performance, Culture, and Leadership.  
3. They have the wrong measurements - What gets measured gets done. So measure twice and cut once. Another reason that talent trifecta strategies fail is the success is not measured correctly. It is easy to find yourself tracking and chasing the wrong numbers. Measurements need to reflect the important performance impacts and then need to be agreed upon by the CEO and the C-Suite.  

So consider looking at Performance, Culture, and Leadership as a system, seeking clarity about roles and responsibilities, and new ways to measure success.  

Driving Organizational Performance 

Organizational Performance should never be confused with performance ratings. Sadly, sometimes the two end up having nothing to do with each other.

Myth #1: Performance ratings are a reflection of organizational performance - Performance ratings are reported in distributions but are really reflections of many leader's assessments of the goals for a particular employee. Performance occurs all the time outside the traditional performance management system. Sometimes the rating is not all-encompassing. There are many reasons this happens. The quality of the goal, the measurement of the goal, application of the rating, and the calibration of ratings to name a few.  

Myth #2: Employee performance means organizational performance - See Myth #1. Because of all the issues with Performance Ratings, it is impossible to have a broad employee population reflect organizational performance. In fact, organizations post large EBIDTA numbers and have employee performance gaps all over the place. Organizations also have high performing employees be part of an underperforming organization or department.  

Managing the work, performance, and outcomes of every employee so that organizational performance occurs means dissecting the Performance Management System. Remember, ask why it matters, what success looks like and what is in the way.  

• Why even have a Performance Management system?  Have you built a system that has become a bunch of administrative tasks and papers to justify bonus payouts? Is it a way to deal with the problem employees? Did you purchase an HRIS system and now trying to design performance to fit the technology?  
• What does an effective Performance Management system look like? Are you starting with the right talent? Do they have the skills and willingness to do the job? Do you have the right scoreboard to win the game? Is it flashing the score daily? Is your pay for performance system a farce? Are people getting bonuses that did not perform? Is the money fairly aligned with outcomes? Are leaders offering the right information, goal setting, support, and feedback? Are barriers to performance being handled immediately? Are performance and development being confused?  
• What are the real pain points with the current Performance Management System? Once you know why and what success looks like, you have to take a hard look at your current system. Look at it with no defensiveness or arrogance. Really look at where you are at. And make sure you look at it broadly. Ask the CEO, the C-Suite, key executives, leaders, employees.  

How Performance relates to Culture 

• Do you have a culture of performance and willingness to measure, track, and insist on results?
• Do you have a culture where people give feedback effectively? Timely and clearly? 
• Do you pay for performance, or is it based on comfort and politics? 

The Role of the Leader in Performance 

• Do leaders really know how to set goals aligned to strategic priorities? SMART does not always mean valuable.  
• Do leaders know why they exist? Leaders exist to drive performance. 
• Are leaders capable and equipped to give effective feedback?  

Why Performance Systems Fail

1. The C-Suite has not defined the “why” or lack alignment on the “why” before jumping to the “how”.
2. Lack of alignment in the C-Suite on success indicators of what having a system will achieve. 
3. Too defensive to identify the gaps with the current performance system. 
4. Overcomplicated processes and technology and a resistance to change them. 
5. Performance is disconnected from Culture and Leadership. 

Building Organizational Culture 

Organizational culture defines and guides the way people are supposed to behave within an organization. It is a blend of shared beliefs and values established by the CEO and driven by leadership. It is communicated and reinforced to shape perceptions to drive those behaviors.  

Myth #1: Organizational culture cannot be measured - Once organization culture is clearly defined by the CEO and communicated to the masses, it can be measured. Behaviors, beliefs, and perceptions are at the core of the assessment and should be measured regularly. 

Myth #2: Building culture takes years -  If you are willing to do the work, then culture can shift quite rapidly. CEOs must invest time upfront. Time to clearly articulate the cultural standards. The C-Suite must be aligned on the behavioral expectations and be willing to lead them. Communication must be clear in order for people to understand. Lastly, courageous decisions to remove employees at all ranks who cannot or will not adapt to the new cultural norms must happen.  

Guiding, shaping, and monitoring the attitudes, beliefs, and actions of the workforce means having a deep understanding of cultural dynamics. Remember, ask why it matters, what success looks like and what’s in the way.  

• Why even focus on culture? What impacts does culture have on business results? What impacts does culture have on your external brand with customers, investors, potential employees? What impact does culture have on the ability to retain top talent?  
• What does the ideal culture look like? What would employees be doing? How would they behave? What would they be telling their spouses and friends when they go home? What would you want employees to feel about the culture?  
• What is the current culture really like? Once you know the why and what success looks like, you have to take a hard look at your current culture Remember, no defensiveness or arrogance. Sometimes culture is tainted in certain subgroups or departments, in the hands of a few leaders or a few behaviors that are blocking success.  

How Culture Relates to Performance

• Do misses in performance get overlooked or not deal with swiftly? 
• Does your culture support clear, direct feedback that holds people accountable? 
• Do you have a culture where differentiating performance is expected and done consistently?

The Role of the Leader in Culture 

• The role of the CEO in culture - The CEO must clearly define the culture and hold the C-Suite Accountable for leading it with their own teams.
• Are leaders clear on the cultural standards and behavioral expectations that all their employees must abide by? 
• Are leaders skilled to handle employees that don’t align with cultural expectations?  

Why Culture Transformation Fails

1. Don’t have clear guidance from the CEO on what culture means to them.
2. Lack of alignment at the C-Suite on the behaviors and standards that everyone is willing to uphold. 
3. Unclear on the gaps between the CEO standards and current culture. 
4. Lack of measurement and governance to monitor success.
5. Culture is disconnected from Performance and Leadership. 

Building Leadership Capability  

Leadership is hard and leadership is rare but leadership can be developed. It takes clearly defined standards and competencies, fair and accurate assessment, and effective interventions to close the competency gaps.  

Myth #1: Leadership Development is about courses and content - Too many times organizations send their leaders out like dry cleaning hoping a trip to the school on the hill will return them perfectly pressed. Leadership Development starts in house and is as complex of a system as performance and culture. It involves moving pieces like standards, assessments, support, feedback, and monitoring just to name a few. 

Myth #2: Leaders are born, not made -  We all have some genetic predispositions for personality and intelligence but leadership can be developed. The reason leadership is so rare is that it’s hard. Leadership is a multi-billion dollar industry with millions of books, programs, models, and approaches. Building leaders means the CEO and C-Suite are fully invested in defining leadership, identifying talent, and investing in leadership pipelines.  

Being able to lead yourself, lead teams, and lead the business means knowing the skills, behaviors, and tactics needed to perform. Again, ask why it matters, what success looks like and what’s in the way.  

• Why do leaders matter? Are leaders being promoted because there is an empty box on the org chart? Are leadership roles being created to give people titles and raises to retain them? Are spans of control defined by work processes and demands and consistent across the organization? Are leaders clear that they exist to drive performance?
• What do great leaders need to do at your company? What are the most critical behaviors and competencies that leaders must have? What are the behaviors that leaders cannot engage in or they will be held accountable? What skills are needed for future business strategies?  
• What are current leaders not doing that you need them to? What are the biggest gaps in leaders currently? What are the top 5 things leaders must be able to do before they get promoted? What are the mechanisms in place to evaluate and communicate leadership gaps? 

The Role of Leader in Performance 

• Do leaders really know how to set goals? SMART doesn’t always mean valuable.  
• Do leaders know why they exist? 
• Are leaders capable and equipped to give effective feedback?

The Role of the Leader in Culture 

• The role of the CEO in culture - The CEO must clearly define the culture and hold the C-Suite accountable for leading it with their own teams.
• Are leaders clear on the cultural standards and behavioral expectations that all their employees must abide by?  
• Are leaders skilled to handle employees that don’t align with cultural expectations?   

Why Leadership Development Fails

1. Not clear why you have leaders in the first place.  
2. Lack of alignment at the C-Suite on the behaviors and competencies you need in a leader.  
3. Inconsistent, outdated, or inaccurate information about leadership competency. 
4. Lack of consistent interventions to close competency gaps. 
5. Disconnected from Performance and Culture. 

Three steps to get started on the Talent Trifecta

1. Ask the CEO, every C-Suite Executive, HR, and other key stakeholders all of these questions and encourage an honest and transparent conversation. Analyze the answers - you might be shocked by what you hear.  
2. Be clear about roles and responsibilities and what you’re willing to change and not willing to change.  You might be shocked by what you hear.  
3. You can do nothing else until there is alignment here. You cannot make a meaningful change until the CEO and entire C-Suite are aligned and onboard with why change is needed, what needs to change, and how you will measure the change.  

Summary and Conclusion 

Decades of research have been dedicated to understanding and solving the issues related to performance management systems in organizations, building a thriving culture, and having leaders skilled to take on the challenges that businesses face. Yet, CEOs still identify what I have coined the Talent Trifecta, as one of their biggest talent concerns. Year after year research and reports show CEOs remain frustrated about the effectiveness and results in these three areas. In many cases, the program designs, system launches, and revamping of current processes have just not yielded the results that CEOs, C-suite executives, and CHROs intended.  

We must look beyond our traditional ways of thinking to take a deeper into the systemic issues that exist in organizations. By challenging the mindsets and the myths we can disrupt and change the ingrained ways of working that are stifling the effectiveness of talent management programming and real organizational effectiveness.  

About the Author

As the Founder of Results with ACT, Tonia Emery provides products and services that help organizations deliver on their performance, culture, and leadership strategies. Tonia has over 20 years of experience in organizational effectiveness, leadership development, human performance, and strategy development. Tonia has worked with organizations in various industries including retail, healthcare, energy, technology as well as supported organizations at various stages of growth and maturity. Tonia holds a Bachelor of Science in Psychology, Master of Science in Counseling, and Ph.D. (ABD) in Organizational Psychology with a focus on Organizational Effectiveness. Blending the academic knowledge with hands-on Human Resources executive-level experience allows Tonia the opportunity to take the complex people issues and make them simple and easy to implement to help businesses achieve results faster. www.resultswithact.com.