By Ron Price
In my own experience as an executive, I sought to put as much power as possible into hands of those I supervised. I wanted them to “own” their jobs and to always know how to accurately evaluate their performance. Once I retired from corporate management and started supporting other leaders, I discovered they are equally interested in providing clarity to their subordinates and nurturing a higher level of accountability. This led to formalizing a process for defining and measuring executive performance.
We start by asking our clients, “What are the three to five key results that will reflect superior performance in a job?” They often answer, “if we’re making money or if we’re growing, that hits the mark”.
However, there is a lot more to superior performance in today’s world. What about the creation and quality of strategy, the “how” of execution, the health of the organization’s culture, the details of the customer experience, and the demonstration of continuous improvement?
After expanding our conversation about how to measure performance, almost everybody wants to have more than five key results. However, we know from experience that once you go beyond five, you hit the law of diminishing returns. There is a saying that, “if everything is important then nothing is important.” Simply put, if you have more than five key results, you’re spreading yourself too thin.
So we help clients through a process of defining three to five compelling key results, then planning around those results, and ultimately how to measure superior performance. In order to bring a fresh perspective, we build four different lists;
- What are the relationships key to achieving superior performance?,
- What activities will lead to superior performance?,
- What character or personality traits will be necessary?
- What technical and leadership skills will be important?
After drafting our initial set of key results statements, there are seven questions we ask to validate these statements:
- Are these describing results statements or activities?
- Are they distinct from each other? Or are we just saying the same thing in different ways?
- Can we come up with a way to measure each result?
- Is this the right position to own this key result?
- Are the results in alignment with the organization’s mission, vision and goals?
- Are we wiling to limit at least 80% our evaluation of a person’s performance in this job to the metrics around these key results?
- If the employee in the job achieved these key results, would we say ”WOW!”?
Once we define the key results for the position, we develop metrics for each result, usually as a set of annual goals. We then break each result down, depending on the position, into quarterly, monthly or weekly goals. It depends on the rhythm of the organization. By implementing a simple tracking system, we have a way of creating a scorecard and we can create goals for each time period under each key result.
At the end of the first month, we evaluate the goals that were established under each key result. Each section will be color-coded red, yellow, or green, based on the degree of success. At the end of 90 days, that scorecard becomes a permanent record, and an easy visual representation of performance. The report card represents 80% of how we measure success, with the remaining 20% left for discretionary evaluation that considers context and constraints.
This process has provided a very practical model of how employees can strive toward and eventually achieve superior performance. Even when people fail, this process helps us determine why. We can understand if it was outside factors, if the goals weren’t managed well, or if we chose the wrong results to begin with.
Our clients who use this system year after year keep getting better and better at defining and achieving superior performance. Choosing and monitoring key results helps us understand, identify, and eventually close the gap so we can consistently achieve success.
If you would like to talk to Ron about Defining Success, email him at email@example.com.