How well do you really know your top performers?
I was speaking with a friend about a recent executive move within her business. Describing the new Retail Director, she explained, “He must be the luckiest guy alive.” Apparently, his predecessor’s final months had seen the worst of the year’s weather, but the minute the new guy took over, out came the sun and out came the shoppers. In his first month, his team set a new sales record for the company, and he was already being quietly lauded as the best thing to happen to the business in years.
“Surely,” I said, “people can see that it’s just the weather, can’t they?”
“On one level, yes.” She replied, “But I think people want to believe in the new guy. Why wouldn’t they?”
As many a disgruntled shareholder has often pointed out, Boards tend to loudly applaud and richly reward the individual CEO when stock prices rise, only to blame extraneous events when they fall back down again. We want to believe in the power and influence of the individual leaders, even when the evidence suggests it might not be that clear-cut. And it’s a bias that unfortunately prevents us from making whole raft of easy but significant improvements in performance.
Most organisations know who their best performers are, but very few actually understand why – what is it that makes the difference between the best and the rest? The more we understand what really drives performance, the more we can replicate it. But in my experience, this is probably the single biggest hot-spot of flawed assumptions and personal biases in most businesses.
Many years ago, when I worked in the pub industry, the conventional wisdom was that the pub manager or landlord, was the single biggest factor that could make or break a pub. Put a bad manager in a good pub and s/he would kill it in weeks; conversely put a great manager in a struggling one, and they’d turn it around just as quickly. But, while the former may be true, it turns out that the latter generally isn’t. In fact, the analysis of over 2000 pubs over a three-year period, showed there were actually seven critical factors, each of which played a significant role in turning around performance.
A few years later, I encountered a similar situation with a client in the Social Care sector. Everyone knew that the quality of a Care Home was entirely dependent of the quality of its manager. And so, when my client acquired a struggling chain of homes, the CEO decided that some of the best managers should be moved over to help turn around the newly acquired homes, despite the “obvious concerns” of the regional teams that their existing homes would suffer as a result.
As it turned out, the existing homes did just fine, but many of the managers who were moved had a far more difficult time: they struggled to turn the acquired homes around, and many lost confidence as a result. But not all of them struggled – some succeeded remarkably well, and once again, it turned out that there were multiple factors, of which manager quality was just one, that would define if a turnaround would succeed.
So, here’s my question to you. The next time you look at a breakdown of relative performance in your business – whether that’s in the sales team, the customer service department, between different divisions, regions or countries, how confident are you that you genuinely understand what’s driving those differences? How forensic are your people in objectively looking at the data and the evidence, and getting past the personality biases, before forming conclusions about what really produces your best performances, and what the rest could learn from them?