Death to the Performance Review!

I came across a blog post on the Lean Blog about “Professor Channels W. Edwards Deming and Writes "Get Rid of the Annual Review” that comments an article in the Wall Street Journal by Dr. Samual Culbert, a Professor at UCLA Anderson School of Management. The premise of the article is that 

“It [Performance Reviews] destroys morale, kills teamwork and hurts the bottom line. And that's just for starters.”

Amazing, finally somebody has successful articulated exactly how I feel and what I want to say after every performance review that I have ever experienced. I am sure many of us have experienced this inexplicable sense of anguish, desperation and “I am not good enough” that follow the days after a performance review. It doesn’t matter how many positive and how many “great”, “excels in”, and “could not do without you” comments you get. We always focus on that one “needs improvement” or “could do better” comment that is probably in there, as Prof. Culbert points out, to justify the pay increase (or not) that has nothing to do with your performance.

“It isn't, "How are we going to work together as a team?" It's, "How are you performing for me?" It's not our joint performance that's at issue. It's the employee's performance that's a problem.”

I believe that the practice of performance reviews is in fact a symptom of lacking leadership skills. In this modern age we love the new shiny tools, and the diet pill. There is no substitute to the social interaction and personal sacrifice that a leader needs to exert in order to create a winning team. Dr. Culbert points out, which is so much in line with my experiences - it brings a chill to my spine:

“Instead of energizing individuals, they are dispiriting and create cynicism. Instead of stimulating corporate effectiveness, they lead to just-in-case and cover-your-behind activities that reduce the amount of time that could be put to productive use. Instead of promoting directness, honesty and candor, they stimulate inauthentic conversations in which people cast self-interested pursuits as essential company activities.”

When lacking skill we naturally look for tools as a substitute. If you don’t know how to fix a car, then it certainly will not help to use the expensive wrench. The scary part here is that there are even software tools for this! You need to acquire these skills and expertise, which in the case of leadership requires both years of experience and some fundamental personal traits that not everybody has. 

As Dr. Culbert also points out we love to measure, yet measuring requires some kind of baseline.

 

“In almost every instance what's being "measured" has less to do with what an individual was focusing on in attempting to perform competently and more to do with a checklist expert's assumptions about what competent people do. This is why pleasing the boss so often becomes more important than doing a good job.”

We love quantifying for many reasons, but it does not work for everything, especially when it comes to leadership and team work. It is another example of “Quantifying the Unquantifiable”.The end results are much more destructive than they are helpful or performance enhancing. Mark Graban points out in his blog post that this is very much in line with the teachings of Dr. Demmings. Demming in fact pointed out: 

"Running a company on visible figures alone is one of the seven deadly diseases of management. "

I have had this blog post bottled up so long that just finally writing it feels good. Thank you for the inspiration Dr. Culbert, I am now officially a fan!

What makes a good leader?

I have observed that discussions about what makes a good leader focus on personal traits, achievements and personal experience. It is always about the individual. We have the notion of leadership and heroism, which in fact have nothing to do with each other. Actually heroes are not necessarily good leaders because they tend to do things by themselves - alone.

I find it interesting that most of what has been written about the making of a good leader or leadership development is by persons who have achieved a position of power and influence and use retrospect. My view is from a position in “the weeds”. Although it is very important learn from history and experience, we also have to understand the “Now” and that “Now” is already history. We live in a dynamic environment that is every changing. What makes a good leader is specifically the ability to deal with this dynamic environment from all the different aspects, most importantly social, organizational, and business. It is as if we always hear about the successes and not the failures. E.g. you always hear about seamless child births that take an hour or two in labor, not the ones that take 22 hours in labor and end with an emergency C-section.

I believe that just as important to leadership development is environmental influence. The environments in which we are able to operate, interact and transform also say a lot about leadership capability. We are all products of our environments and I would venture to say that being in the right environment has a lot to do with leadership development. Someone may have all the right things to be a good leader but if he is in an environment that never lets him emerge as the leader he is, it is not going to happen. Some of the things that foster these are social interaction, experiences (both success and also importantly failure) in the context of a group, not personal failure. Great leaders emerge when they rise to the occasion typically by mobilizing a group of people to perform and achieve success by empowerment, motivation, and inspiration. If the environment is inhibitive, such as micro management, short term performance goals, positions that are not a good fit it may never happen – they will never realize their true potential. The people that I look up to as great leaders do not necessarily have prominent personality, but rather the ones that are highly regarded by their peers for guiding shared successes and achievements.

Product Management & Leadership

Over the last period I have been pondering about the Product Management and Leadership. The obvious connection has to do with the fact that setting strategic direction in both cases is a main component. However how can one even talk about these in the same breath? Product Management is function or role in a company while leadership – well so much has been written and discussed about it that it is hard to even find a starting point. For example about Technology Leadership.

That being said I have some ideas about where there are things that are may be important to understand between the two. Why you may ask is this even important to write about? Well not for any specific reason other than interest and current observations in my professional life that have been lacking, misused and/or I feel not being done properly. So this blog posting maybe nothing more than venting, letting some hot air out – if you know what I mean? Yet there may be some lessons to learn, for me at least by merely trying to articulate some of this.

Since good leadership involves the ability to develop a strategy, or strategic direction, it is natural to think that a Product Management role needs to have somebody with good leadership skills. However in many cases the Product Manager is used to nothing more than gather and define market requirements, while assisting in market positioning. Doing these tasks in the absence of the ability to affect the strategic direction relegates the Product Manager’s job to a secretarial nature. I call such Product Manager – Product Secretaries. Their contributions are more administrative in that they are conveying other people’s needs, in this case the Market or customers to the product development organization. 

Leadership is about empowering, motivating and inspiring people to do more than what is expected of them. Empower, motivate and inspire – that cannot be said enough times. It is the ability to guide a group of people to perform better than the sum of their parts – or individual contributions. Empower, motivate and inspire – did I mention that? Not enough… In the context of the Product Management role collaboration is also very important. Another of those forgotten aspects since most cases Product Managers are focused on one or many products. Think if we can foster collaboration (yes empower, motivate, and inspire them to collaborate) the group will work together, learn from each other and find many aspects of the market needs that may be complimentary as well as new ones. We as humans are inherently social beings. It is actually quite easy for us to collaborate. However when management is applied instead of leadership, personal goals and adherence to process wins, quenching the elemental fundament for collaboration. A posting in the "Agile Management Blog" gives an example.

Another interesting observation about leadership in product management roles is the fact that personal opinions become factual. Since we are trying to set a strategic direction with the lack of market evidence or data we shape opinions into facts. We need something to base decision on right? It has not been said enough times “Your opinion although interesting is irrelevant” (from Pragmatic Marketing, a version of an Albert Einstein qoute). We may take a word of warning from the current financial crisis, some say caused by the thinking that we are invincible in our actions and opinions. As long as we achieve our short term goals – let’s just ride it. Well at a certain point we will hit the wall, which apparently they just did, and we get smacked in the face with reality.

Organizational Performance

I recently answered a question on LinkedIn that I tought would complement some of the earlier discussion in the post about Agile Manufacturing Systems.

Dumitrescu Bogdan asked: When and why do network organisations(companies) perform poorer than hierarchical ones? The structure of organizations certainly has great impact on their performances, network forms of organizations have emerged under cultural impact (see Guanxi business) or under the pressure of poor performance of hierarchies/bureaucracies; networks forms of organisation have proven their potential (see the Asian Tigers) but sometimes networks fail, when and why?

In order to answer this question you need to take a look at the pros and cons of each type of organization. A hierarchical organization is well suited in sustaining its current business model. Think of it as highly tuned and very god in dealing with its known business environment. Everybody knows their role including the politics and therefore as long as the environment is stable – not a lot of changes both internally and externally such as new products, emerging markets, etc – then it is pretty well functioning. Such an organization is less suited for example in turbulent markets, where there may be a need for a dynamic and risk prone business strategy. Flat organizational structures, i.e. networked or sometimes also referred to as Heterarchical, are better suited to this situations since they can change easily and tend to leverage people’s inherent adaptability. This type of organization, when it is well run, adheres to “Holonic” principles – a term used to describe the mechanics of a social system. The weakness of a flat structure is that it is typically not very efficient. When the business environment is relatively stable a hierarchical structure will in probably perform better. Also flat structures are typically much better in fostering innovation and creativity. People tend to feel more engaged since they share responsibility, as compared to a hierarchical organization where they are told what to do. This is an important point – the ability to motivate and inspire people (aka leadership) can make any organization excel. One of the methods to do this is to make people feel that they have an effect on the outcome, shared responsibility etc. This is probably why Toyota is so successful.