Why Excellent Performance Isn't Nearly Enough

Last Updated Jul 6, 2011 3:14 PM EDT

Your team is highly competent, producing well and hitting all their milestones. Things are great. Right? Not so fast. According to research, excellent performance is no guarantee you'll still be around in a year.

In the new book, "Beyond Performance- How Great Organizations Build Ultimate Competitive Advantage", authors Colin Price and Scott Keller warn that the history books are just full of companies that operated (apparently) well, but still fell victim to sad fates. Think about Atari, MySpace (they're cool, have first mover advantage and are still dying on the vine), Lehman Brothers and many others.

The problem, according to Price, is that operating excellence doesn't really tell you about the overall wellness of the organization. In an interview on the Cranky Middle Manager Show he got specific about what to look for, and how managers can help. Even with remote teams, there are signals that your company may not be as healthy as it appears.

Research involving over 100 companies shows that there are 9 elements of organizational health. If you're doing your job as a manager you should be able to see signs that things are going well- or maybe your company- needs a checkup:

  • Direction. If you asked every member of the team to write down the top ten goals for your company or your project, how many would have the same answers. This might be an experiment worth trying. If everyone isn't pulling in the same direction, it's hard to make headway.
  • Leadership. According to the research, companies where the leadership "walks the talk" and models the values they say they want outperform the competition 59% of the time.
  • Culture and organization. Is there a stated "company way" of doing things that everyone signs on to? Managers can start on a team level, even if the company isn't there yet.
  • Accountability. Do team members do what they say they'll do? What happens if they don't? This is where lip service really gets separated from the reality of day to day work.
  • Coordination and control. This isn't micromanagement, but it's knowing your key metrics, who's responsible for them, and how you can adjust quickly if they're out of whack. Companies that confuse control with maintaining the status quo often fail to innovate and become bogged down in red tape.
  • Motivation. All the skill in the world won't matter if, as a leader, you can't get people to give you more than the contractual minimum. Are you also developing an attitude of helpfulness, pro-activity, and passion? Do people like working for your organization and for you as a boss?
  • External orientation. You might be doing everything on time and on budget, but what do your customers think of you? What's your company's reputation in the market place? Your team can be great resources, because they're hearing from family, colleagues at different companies and out in the social media. Are you encouraging those conversations or just asking them to shut up and get those tasks done?
  • Innovation and learning. Are you getting smarter as you go? Are people sharing what they learn with each other so the whole organization gets better at what they do? Do you even encourage people to get training or learn new skills? The book cites lots of precise correlations between innovation, learning and economic performance.
What's important to realize that if you're trying new things, you might make more mistakes than if you keep doing the same thing all the time, no matter how well. The desire to do everything perfectly can squelch the discussion, dissent and innovation that will keep your company and your team relevant and successful in the long run.

Measuring performance is relatively easy. To take the pulse of your team or company means managers must go after information, engage in dialogue, ask uncomfortable questions and really listen to their people. This is even harder (but no less crucial, maybe even moreso) when we work remotely from each other.

You can hear the entire interview with author Colin Price on the Cranky Middle Manager Show podcast.

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