When the markets for our products or services are reasonably stable and predictable, managing performance makes sense. We are, however, no longer in such a world. Managing will lead to performing to short term goals while missing the fact that markets may be moving away from us. Managing focuses on mitigating uncertainty by making business processes predictable and efficient. Hitting the quarterly goals is, of course, right. That is until we find we are efficiently providing what isn’t wanted in the marketplace we serve.
We all can recite companies that have fallen prey to such a
management process — Borders, Kodak, and more recently, Sears. There is no reason why you might not be next if you aren’t focused on forward-looking trends instead of backward-looking performance goals.
Our business, our vendor’s business, our customer’s business, as well as our individual lives will continue to experience greater complexity. There is a new trend toward what some call “reverse globalization.” Of course, technology will continue to advance unabated. Professor Dan Cable, London Business School, refers to the old model as Performance Management. He believes we have to move to Performance Leadership.
According to Professor Cable, Performance Leadership “is when each employee understands and feels responsible for working on the airplane while flying it.” In our business leadership groups, we refer to that as “working on the business, not just in the business.” Either way, the point is we no longer have the luxury of having a lot of time to make incremental changes to our products or services. The markets and consumer needs are changing much too rapidly. We must LEAD performance rather than MANAGE performance. We need to be much more forward-looking and less concerned with measuring past results. Professor Cable goes on to say, “performance leadership is when an employee understands that her job is to find ways to do her job even better, and brings her unique talents, passions, and interests to the work.” In other words, employees are engaged.
That word keeps coming up in business conversations, communications, and presentations these days. Our world has always been complex. We didn’t (and mostly don’t) have to understand how things work in order to survive — up until recently. We human beings have made our own world very complex through the tools, technology, and large tribal membership we have created. It is no longer appropriate for us to ignore something that is complex and go about our business. We need to understand how what we choose to do perturbates the interdependent natural systems we live in. Yes, a great example is climate change.
The same is true for our businesses. We will see an accelerating complexity in our markets, business models, and supply chains. We will continue to see rapidly changing markets. Creating an environment in our businesses that allows employee engagement will be no different. And providing a product or a service that meets the ever-changing demands of our markets is and will continue to be more difficult each day.
As leaders, our task is to make sure we build an environment that thrives in a world of accelerating change.