The Performance Pipeline E-Book

Stephen Drotter

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 342

Veröffentlichungsjahr: 2011

Beschreibung

The guide that defines the results required at each organizational level to sustain business success It's not enough to build a company full of people with leadership skills. The Performance Pipeline digs deep into the real work of executing business results at each leadership layer. * Filled with lessons and examples from the author's 40 years of experience * Shows how to set performance standards, make sure the right work is being done, and remove performance barriers * Illustrates how leaders can make the transition to the next level and achieve full performance This book gives leaders in any industry an advantage over the competition.

Leseprobe

Table of Contents

Cover

Title page

Copyright page

Dedication

Preface

Part I: The Performance Pipeline Concept

Introduction: Dealing with Pervasive Uncertainty

1 Defining Your Performance Pipeline

Defining the Purpose

Collecting Data

Sorting and Codifying the Data

Validating the Standards

Allowing Some Flexibility

Part II: Expected Results at Every Level of Leadership

2 Enterprise Chief Executive Officer

What a CEO Must Produce

Business Results

Leadership Results

Management Results

Relationship Results

Innovation Results

What CEOs Must Not Produce

Finding the Right Balance

3 Group Managers

The Most Overlooked Results for Group Managers

The Whole Job

Management Results

Relationship Results

Results We Don’t Want from Group Managers

CEO Succession Candidates

4 Business Managers

Critical Requirements for Building a Profit-Making Machine

Summary of Critical Results

The Whole Job and the Measurements

Inappropriate Results for Business Managers

5 Function Managers

Who Are the Function Managers?

Critical Results That Underpin Strategy

How Function Managers Hurt the Business

Putting Results into Practice

6 Managers of Managers

Who Is a Manager of Managers?

Other Sources of Confusion About MOMs

Critical Results Needed from MOMs

Results We Don’t Want

7 Managers of Others

Critical Underlying Results

A Unique Aspect of the Role

The Whole Job

Results We Don’t Want

No Individual Contribution Is Sufficient

8 Self-Managers

The Purpose of the Self-Manager Layer

What the Self-Manager Population Should Deliver

The Whole Job

Results We Don’t Want

Enabling Exceptional Performance: The Technical Performance Pipeline

Benefits of a Technical Performance Pipeline

Defining the Technical Performance Pipeline

Part III: Successful Implementation of the Performance Pipeline

9 Creating a Context for Performance

Test Yourself

How Your Context Is Defined

Cultural Requirements

Other Cultural Elements

Operating Model

Organization Design

Recommendations for Improving Your Context

10 Enabling Layer Transitions

Creating Risk for the Person and the Business

Figure Out What’s Wrong

Transitions and Neuroscience

The MEALER Model

Recommendations for the Boss

Recommendations for the Individual

Recommendations for Human Resources

Tying It All Together

11 Implementing Your Performance Pipeline

Getting Your Philosophy Right

Building Your Own Tailored Pipeline

Conducting Motivational Performance Discussions

Engaging at All Levels

Getting HR to Understand and Accept the Pipeline

Pursuing Performance Improvement Relentlessly

Conclusion

Tool 1: Actual Performance Pipeline from Company E

Tool 2: Interview Questions

Acknowledgments

The Author

Index

Copyright © 2011 by John Wiley & Sons, Inc. All rights reserved.

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Library of Congress Cataloging-in-Publication Data

Drotter, Stephen J.

 The performance pipeline : getting the right performance at every level of leadership / Stephen Drotter.—1st ed.

p. cm.

 Includes bibliographical references and index.

 ISBN 978-0-470-87728-9 (hardback); ISBN 978-1-118-08646-9 (ebk); ISBN 978-1-118-08648-3 (ebk); ISBN 978-1-118-08659-9 (ebk)

 1. Leadership. 2. Performance. 3. Management. 4. Organizational behavior. I. Title.

 HD57.7D76 2011

 658.4'092—dc23

2011021312

To Lynn, Stephanie, and Eric

Family is everything!

Preface

It has become clear to me that leaders everywhere make the same major mistake: they work at the wrong level. In other words, they personally produce results that should be generated at lower levels. This mistake is readily observable in every major industry around the world. What I see most often is leaders spending much of their time solving today’s problems personally and not spending enough time anticipating and planning for the future or developing their people. Business performance suffers because leaders are not prepared for the inevitable new challenges. The Performance Pipeline addresses this deep-seated, long-standing problem by defining the purpose for each layer of the organization and the specific results required of leaders at that layer to ensure long- and short-term business success. Further, to make people below them successful, leaders have to pass down the things required for them to succeed. These are also spelled out in The Performance Pipeline.

This book reveals how work flows from top to bottom and defines the results each layer must produce as well as what each layer must pass down to make the layers below successful. Over the last forty years I have worked with over one hundred companies on five continents for a week or more, assessed over 1,400 leaders, completed over forty CEO succession plans, and conducted several hundred work interviews (designed to learn what leaders actually do). This book is based on what I have observed, learned, and practiced. Its premise, borne out by my experience, is that leaders develop best when they pursue the results that are right for their layer. This in turn makes businesses more likely to succeed. Contrary to other schools of thought, I have discovered that focusing on behavior has some value but does not produce the needed development because the new behavior is too often applied to the wrong work.

Ten years ago, a book called The Leadership Pipeline, which I coauthored, was published. New language and a new framework were introduced that changed the dialogue on leadership development and succession planning. The Leadership Pipeline is now known and accepted worldwide. One critical Leadership Pipeline idea that has added particular value is that transitions from one layer of the organization to the next are major events requiring changes in skills, work values, and time horizons. I have been asked repeatedly by leaders at every level for help on making these transitions. In The Performance Pipeline I address these transition challenges on the basis of ten years of new learnings and practices for transition management. Knowing the specific results required at each layer helps everyone understand more precisely what these transitions mean to the business and to the leader.

The Performance Pipeline addresses three critical business needs:

1. How to improve business performance by defining the unique purpose of each organization layer and providing clarity and focus on the results to be achieved. That is what a performance pipeline does.

2. How to make all leaders successful by having leaders at every layer pass down to the layers below them the things that leaders there need in order to be successful.

3. How to help leaders make the transition to a new layer and how to remove performance roadblocks so that leaders can deliver the results required at their new layer.

My overarching goal for this book is to help leaders get the results they need in today’s highly uncertain business environment. Seeing the work of leaders as results to be achieved expressed as performance standards in the areas of finance/operations, leadership, management, relationships, and innovation, rather than as a set of behaviors, is the key. Addressing the problem of the leader working at the wrong layer, which I described earlier as universal, is also a major objective.

Given the increasing importance, and difficulty, of achieving desired results for all businesses, I hope you will find this book both timely and useful.

Stephen Drotter

Carlsbad, California

July 2011

Part I: The Performance Pipeline Concept

Introduction

Dealing with Pervasive Uncertainty

While a Performance Pipeline would have helped organizations years ago, current events and trends make it even more useful today. Let’s start out by examining how an uncertain and rapidly changing environment drives organizations toward the Performance Pipeline model.

We have entered a period of great confusion and volatility for business and its leaders. Executives at all levels have to deliver results under difficult and changing conditions. We are uncertain about a wide variety of issues, including

The rate and nature of the recovery from the Global Financial CrisisEconomic viability of customers and key suppliersThe shifting balance of economic powerChanges in consumer spendingWhen and how to invest capitalFinding needed skills in the available labor poolThe consequence of government decisions on tax rates and regulationCommodity and scarce resource prices

Combined, these and other external uncertainties put leaders at every level under great stress and every business in a high-risk situation.

At the same time, businesses are living with great internal uncertainties—about organization capability, leadership effectiveness, alignment of priorities, ability to get all the work done, legal compliance, and the like. While these uncertainties have always existed, they are less tolerable in a more economically challenging environment. We can no longer accept leaders who don’t work on defining and delivering the future, who don’t work collaboratively with the rest of the organization, who don’t know what their people are doing, who don’t develop their people, and who don’t learn themselves. In a highly uncertain external environment, we should be making every effort to build more certainty in our internal environment—in the organization’s ability to perform. In the same way a violinist must know what her instrument will do when played faster or slower and with more pressure or less, we need to know what our organizations will do when strategy must change, when operating conditions change, or when customers’ needs change. We need to know that our leaders can handle the new challenges. Without a performance architecture that defines exactly what every leader at every level must produce for the business, all this change and uncertainty will blindside companies. That’s one reason the Performance Pipeline is such a timely tool.

Dramatic Changes in the World Economy Make Matters Worse

During boom years, there is room for error and inefficiency. Businesses make money and grow despite their shortcomings. Fueled by growth in India, China, and other developing nations as well as insatiable consumer demand that powered unprecedented consumer spending in the developed world, the global economy boomed. Winners were everywhere, and internal structural problems were papered over with profitable growth. Then, abruptly, it was over; the economy crashed. The Global Financial Crisis affected every business. Downsizing, outsourcing, and in some cases disappearance became the orders of the day for businesses around the world. Dramatic action was required, and painful choices were made. Survival was, and still is at this writing, a fundamental driver of leadership effort.

As we slowly climb out of the recession, we face many critical questions and the uncertainty seems even greater. How fast will the recovery happen? How should our strategy change in light of the uncertainty? How quickly should we rebuild inventory? When should we begin to hire, and how many people should we bring in? Where can we get the capital we need for investment; where should we invest and how quickly? What changes are likely in health care and in taxes, and how do we respond?

As a direct consequence of the uncertainty exemplified by these questions, every leader’s job has gotten harder. Under this kind of pressure, leaders at all levels have become focused on the short term and reactive just when they need to be looking forward and planning rigorously.

As leaders attempt to address these externally driven challenges, they will need new solutions and much more alignment and flexibility inside their companies to be sure they can respond effectively. Going back to old practices developed to address a very different set of business conditions doesn’t make any sense. Leaders at every level need to think more broadly, find new methods, provide greater clarity, and enable sharper focus. These must become the guiding ideas for leaders at all levels. Delivering the right results at the right time in the right way has to be primary, and new tools and practices are required to do it. We must make a fundamental shift in our basic leadership practices if we are to succeed in this uncertain environment. As we’ll see, the Pipeline model makes this shift possible.

Four Imperatives

I would like to focus your attention on four key imperatives for leaders in our current environment. These imperatives dovetail with the changes sweeping through organizations today; the Performance Pipeline makes it possible to address these imperatives. Before looking at how the Pipeline does so, let’s look at the four imperatives and why they must be addressed.

1. Thinking More, Learning More

Thinking about the current performance and future direction of your business or function has to include major economic trends, world political events, currency fluctuations, new competitors, global best practice, rapidly evolving technology that is changing how we work, consumer preferences in many countries, and so on. Specific needs associated with your products, customers, suppliers, competitors, likely new market entrants, and your workforce change how you look at the world, not whether you should look at it. We all have to consider a wider range of variables. Learning about the world around us requires time every day.

Fortunately we have computers and the Internet to help with information flow and retrieval. Although we cannot trust it implicitly, information is plentiful in cyberspace. Before we make decisions, however, this information must be validated by firsthand experience, personal observations, and input from trusted sources. We also have to think carefully about what the information means once we are satisfied it is valid, since the context in which we work has changed.

Thinking takes time. The more variables we must consider, the more time we need to think. As you no doubt are aware, leaders lack thinking time. Meetings from morning to night, one hundred or more e-mails per day, voice mail, family demands, and travel are the norm. Thinking deeply and reflectively under these conditions is difficult. We become caught in “activity traps” and thus fail to think and learn.

THE FIRST IMPERATIVE: Every leader spends thirty minutes to one hour or more daily in uninterrupted thought.

2. New Methods for Almost Everything

It isn’t an exaggeration to say that most businesses need new methods for just about everything they do—a rapidly changing environment demands it. Unfortunately, most companies are better at squelching new ideas than they are at encouraging them. Think about what happened to the last new idea you put forward. How long ago was it? How was it received? What was the result? How do you feel about putting forward another new idea?

In the midst of all the chaos that exists in most companies, new ideas often aren’t heard. Loud, powerful voices defend the status quo at strategy and budget meetings. There isn’t enough time for creative thinking, and even if there is, the culture or management may eschew the risk that comes with “new.” So, we do the same old things but perhaps a little cheaper or a little faster. It is so much easier to just keep doing what we did yesterday.

THE SECOND IMPERATIVE: Everyone must innovate as a natural and expected part of one’s daily routine.

3. Clarity of Role and Purpose

When people show up for work, they should know what is expected of them, when it is due, what the cost should be, and what standards must be met. Everyone wants to know these things. Management practices commonly used now don’t deliver role clarity. In fact, many current practices confuse rather than clarify.

While balanced scorecards are valuable frameworks for directing and measuring team or business performance, they don’t tell individuals what they should work on and are usually silent on leadership work. Strategy is critically important for the business but generally doesn’t naturally penetrate to lower levels. Strategy needs to be translated downward, layer by layer, but seldom is. Lower layers are left with the responsibility for interpreting what their contributions should be. Several recent studies on this subject concluded that employees at the bottom are more likely to do what they have been doing even if it doesn’t fit the strategy. Goals and key performance indicators (KPIs) tend to be operationally focused or financially oriented. They are great as far as they go, but softer parts of leadership work don’t often make the list.

Company programs for developing leaders are designed generically and focus on corporate citizenship. They don’t help much with clarifying the role and purpose of an individual job. How to do your specific job is rarely taught.

THE THIRD IMPERATIVE: Leaders must provide true role clarity and purpose for every employee.

4. A Focus on Delivering Value

Leaders who are tied up all day in meetings, who spend their time “doing,” and who work at the layer they came from, or even lower, rather than at the layer to which they are assigned, don’t add enough value. They can’t possibly engage properly with their people. As a consequence the priorities are often unclear or nonexistent for their teams. The proper focus required to deliver the right results at the right time in the right way is missing. Extraneous or simply urgent matters override important work. Well-meaning and motivated employees do what they think is right, but it often is disconnected from what really adds value.

Electronic traffic—e-mail, voice mail, instant messages, and the like—provides speed of communication. It also destroys concentration and focus. Our lives, both at work and at home, are overrun by these electronic intrusions. It seems that any electronic message or phone call is more important than what is going on face to face or what you are doing by yourself. It has never been harder to focus for an extended period than it is right now. It also seems that communication between leaders and their people has never been worse.

Some highly regarded management tools and Human Resource programs actually cause focus to be on activity rather than results. Competency models are widely used and accepted. In their original form they were meant to spell out how specific job families were to achieve specific results under specific circumstances. Now they are generally applied to all job families and are completely disconnected from results under specific circumstances.

THE FOURTH IMPERATIVE: Leaders must create an environment where sufficient focus is achievable.

The Performance Pipeline Concept

To respond to these four imperatives, you don’t need an expensive “change management” program or a new CEO. Rather, a top-to-bottom architecture that distributes the accountability by layer and defines how work flows down to the appropriate layer is what’s needed. This architecture, the Performance Pipeline, was developed to help leaders increase think time, encourage innovation, provide clarity, and enable focus.

The Performance Pipeline architecture is based on these ideas:

Every layer has a unique purpose.Every layer delivers unique results.Every layer contributes to the success of the layers below.All layers are connected, not gapped or overlapped.

Translated into visual form, the Performance Pipeline model for a big company looks like Figure I.1.

Figure I.1 The Performance Pipeline Model

Now let’s examine each “turn” in the Performance Pipeline. I realize that some of the following may seem obvious; bear in mind that the value of the Pipeline is how it focuses attention on each layer’s results, and on the interconnectedness of the layers. The Pipeline provides a total picture for making the whole enterprise efficient and effective. After the following brief descriptions of each layer, we’ll be better able to discuss the Pipeline’s value to organizations and to see how it operates.

The person at the very top is responsible for defining what the enterprise should look like in the long-term future. She collects information from large groups of customers, external partners, associates, and governments. She makes decisions about future requirements based on a forecast of future conditions in the world, the market, and the industry. She also decides what the internal architecture must be. These decisions are expressed as a corporate strategic framework. Definitions of vision, mission, and values are often included.

The layer just below uses the corporate strategic framework as the basis for evaluating the longer-term fit and viability of current business and likely areas of exploration for new business. A portfolio strategy is defined, enabled by an investment plan and a succession plan.

The next layer down produces a business strategy and delivers short- and long-term profit based on its position in the portfolio and the capital made available to it. This layer assembles a multifunctional team and gets the team to work together.

Using the business strategy for guidance, the layer below determines how to achieve a competitive advantage for the business through the effort of the function they run. Appropriate functional capability—people, methods, and partnerships—is acquired and installed.

The next layer uses the functional capability to deliver productivity, trained management, and information flow, holding everyone to the standards and ensuring delivery of the competitive advantage. An operating plan captures the actions to be taken.

Within the context of the operating plan, the layer below delivers clearly defined roles, trained people, feedback, and coaching to enable delivery.

At the bottom level, individual contributors produce the designs, products, sales, distribution, and the services and support for all of these according to the timetable and standards set by their leader.

Now with these foundational elements in mind, consider if your organization connects the dots from layer to layer. In other words, does it translate strategy into roles and responsibilities unique to each layer, and does it attempt to coordinate the work and results produced so that overlaps and gaps between layers are minimized?

How the Leadership Pipeline Produced the Performance Pipeline

The Leadership Pipeline model (Figure I.2) has been used in many companies, including Johnson & Johnson, Marriott, IBM, Microsoft, Gap, Newmont Mining, and Citigroup, in the United States; British American Tobacco, Aker Solutions, and Coca-Cola Hellenic, in Europe; Westpac, BHP, and QR National, in Australia; and De Beers, Sasol, and Murray & Roberts, in South Africa. The Leadership Pipeline presents a model for looking at leadership work and career development. At each passage, important changes are required in skills, time application, and work values because the required results change and the time horizon extends further into the future.

Figure I.2 The Leadership Pipeline Model

My work with these organizations and many, many more not only helped clarify my thinking about the Leadership Pipeline, but it demonstrated the need for companion architecture to help each company define required results for each layer and provide a basis for transition from concept to useful tool. Defining required results by layer gives additional meaning and utility to the Leadership Pipeline. Career guidance, planning for development, succession planning, and course work all gain deeper meaning when the required results are identified. The two concepts work hand in hand. By defining the required results and downward flow of requirements (the Performance Pipeline) and the upward flow of leadership careers (the Leadership Pipeline), organizations can ground their performance and development in their critical business needs.

In Table I.1 the two Pipelines are combined. From this point on, I’m going to be using Leadership Pipeline terminology for each layer—just glance at Figure I.2 and Table I.1, and you’ll quickly become familiar with the key terms.

Table I.1 The Leadership Pipeline with the Performance Pipeline

Leadership Pipeline: PassagePerformance Pipeline: Business Purpose/ContributionFocusEnterprise ManagerPerpetuate the enterprise/Enterprise strategic frameworkWhat should this enterprise look like in twenty to fifty years? How will we get the resources we need?Group ManagerRight portfolio/Portfolio strategy; strategic differentiation for business investment; business general manager successionDo we have the right collection of businesses? What should be added or removed? Are we developing people to run our businesses both today and tomorrow?Business ManagerProfit, long- and short-term/Strategy, including products, markets, customers, etc.Do our products/services add appropriate value for our customers, shareholders, and employees? How should our strategy change if we want to fit the portfolio and add more value?Function ManagerCompetitive advantage/Functional excellenceHow can we do this better than our competitors? Do we have the right functional capability?Manager of ManagersProductivity/Integration and focus; capable managersDo I have the right leaders and the best processes? Are they working together?Manager of OthersEnable delivery/Assignment clarity and coachingAre my people trained and motivated to add value for customers? Do I have the right mix of talent?Self-Manager (Individual Contributor)Delivery/Customer satisfactionAm I doing my best to deliver the right product/service? Am I being a good corporate citizen?

Business Case for the Performance Pipeline

Whenever it comes to a new model, the question is always whether implementation is worth it. There is always a learning curve to climb. There are always naysayers to convince. In my implementation of Performance Pipeline concepts in organizations throughout the world, I’ve found that using the Pipeline approach is more than worth it. The benefits aren’t simply incremental or limited to one area. From what I’ve observed and what I’ve heard later from leaders of these companies, the benefits of using results with performance standards differentiated by layer include these:

1. Clear differentiation of the results required, by layer, enables better results through improved clarity and focus for all leaders. Everyone is able to understand the work required by his layer. While good organization design is supposed to accomplish this, most design effort is spent on the horizontal structure. My work with organizations has convinced me that the bulk of the problems exist in the vertical structure. Identifying specific purposes for each layer helps cut through the clutter of daily work life that exists in the vertical structure.

2. The demand for leaders can be reduced. Operating with fewer but better leaders is now possible because spans of control can be greater if all the leaders understand their purpose, work at the right level, and stop doing the work from their previous level.

3. Measuring all the required results, not just the financial results, enables better performance and drives development from the work itself. Both objective and subjective measures are needed, and both kinds work.

4. Clear definition by layer enables transparency. A chief executive sitting in Athens, Greece, can have a clear picture of the work being done by a first-line manager in Moscow, Russia. A few simple questions can validate that understanding or signal a problem to be addressed.

5. Decision making about people improves dramatically. Selection decisions in particular are improved by enabling better specifications for the position and better performance data on the candidates. By using a more complete set of measures, it is easier to tell who should move up and who shouldn’t. Consistent standards for these decisions improve consistency across the enterprise.

6. Leadership time is spent more appropriately because all leaders know the results they must deliver in order to work at the right level. Well-paid senior leaders are measured on doing more sophisticated work. The vast majority of product and service work is done by the lower level and lower-paid people. The problem of paying executive prices for “getting the windows washed” goes away. Also, the scope of all leadership positions is expanded at no extra cost.

7. Development and coaching have clear, results-based targets, producing better business outcomes for the time and money invested. Coaching becomes purpose-driven, and development outcomes become measurable.

Other benefits besides these seven exist, including alignment of all Human Resource programs and consistency of performance measurement across functions and businesses. Rather than detail all the benefits, I would simply ask that you keep the following overarching benefit in mind: the Performance Pipeline changes the source code on the human side of the business. It shifts the focus from behavioral science or activity to results differentiated by layer. In short, leadership and management are defined as results.

Leadership Development Frustrations . . . and Solutions

Companies have benefited from the Performance Pipeline in many ways, and I’m going to share their stories throughout the book. Here, though, I want to zoom in on one particularly significant way that the Performance Pipeline helps organizations: leadership development. This is such a critical issue when it comes to building sustainable enterprises, and it’s also one that causes many management groups sleepless nights and stress-filled days.

Ask yourself why your organization doesn’t have enough good leaders. You are hiring “A players.” You have a wide range of leadership development programs. Everyone loves your competency model. Coaches are all over your business or company. Succession planning is done religiously.

Every year, I receive many calls about this issue. The callers insist that they are doing everything right, yet their leadership development is all wrong. Here are three typical calls and capsule descriptions of how the Pipeline model revealed what needed to be changed:

Case 1

“We are having trouble developing Country Business Managers even though we have a broad range of leadership development programs. We have to go outside for talent way too often.”

What I found was an excessive focus on sales and revenue, and not enough emphasis on getting results in strategy and planning, people development, and organization-building at all levels. Jobs were defined too simplistically. Country Business Managers and their direct reports were measured and focused like salesmen.

Case 2

“We have a broad array of leadership development programs; we run them all over the world. One magazine gave us an award for being the best. We have a large staff of management development experts, but there isn’t any cumulative effect. We don’t have five years’ worth of progress from five years’ worth of effort.”

What I found was undifferentiated attendance at programs; that is, employees from several different levels attended the courses at the same time. These courses encouraged leaders at different layers to do the same things, not different things. Also, the course content changed as the person in charge of the course work changed. Without a performance anchor, each new leadership development leader changed content according to his view of requirements.

Case 3

“We have formed a task force to figure out how to address the upcoming mass exodus of leaders. We do succession planning, we run many leadership develop­ment programs, and we have external coaches here every day, yet we don’t have any bench strength.”

What I found was that the key layer for addressing their bench strength issues—the Managers of Managers—was not being asked to develop or manage to a budget. These managers were not asked to participate in strategy development. They were not held accountable for developing successors. Consequently, they looked “too narrow” to move up.

These three companies have been very successful for a long time. You would be proud to work for any of them. Great people work there, and the companies invest heavily in leadership development. Yet they were all committing a leadership development sin. All of them had chosen the wrong starting point. People and programs are not what leadership development should be about. Getting the work done is what matters. These companies failed to define the work appropriately, so the number one leadership development tool—the work itself—was hindering the development of the incumbents. Courses and coaches don’t fix this problem.

From working with these and other clients, I drew two conclusions:

1. Successful leadership development starts with defining completely the results to be achieved.

2. The Leadership Pipeline is of more value if you are clear about the results to be achieved.

Establishing the work to be done at each layer and creating standards for measuring performance must be done before the Leadership Pipeline can be used effectively. This is where the Performance Pipeline comes in. It is the starting point for leadership development, and it enables delivering the right results in the right way at the right time.

What You Will Read

The central idea of The Performance Pipeline is that a unique purpose and measurable results can and should be established for each layer of the organization. In Part II, in defining the results to be expected from each layer, I focus first on the most critical results relative to the layer’s unique purpose. Expected results may include some important but overlooked or misunderstood results that make a difference. There may also be some results that underpin better-known results. For example, competitive analysis underpins strategy. Those results will be summarized and listed, along with the enabling results that must be passed down to the next level. An actual, in-use definition of the total set of results and the expected performance standards will also be presented. These whole pictures were developed at successful enterprises and are being used now. The names of enterprises will be withheld in order to protect their privacy. To help diagnose any problems, I have identified results that are commonly but erroneously delivered by each layer.

Making the layers below successful is another central idea of The Performance Pipeline. Each layer must contribute a few key results that help those below understand what to do and how to do it.

The chapters in Part III address the most important imple­mentation challenges. Removing the inevitable, deep-seated performance roadblocks that exist in most companies is discussed at length. A new method for enabling the transition from one layer to the next is spelled out in some detail. Other actions required for success, based on actual experience, are in the concluding chapter.

As you read this book, I hope you will see how to embrace uncertainty rather than fear it, how to seek new experiences rather than avoid them, and how to broaden leadership capability, not narrow it, as you face your daily challenges in a highly uncertain business environment.

You may find it helpful to look at an actual performance pipeline before reading further. In the back of the book, Tool 1 is a complete performance pipeline in use today. This book will tell you how to build one yourself, and use it.

1

Defining Your Performance Pipeline

The Global Financial Crisis of 2008–2009 has provided compelling evidence for why organizations need a performance pipeline—as well as evidence that many companies lacked such a pipeline during this massive economic downturn. Consider the following questions and whether you could have answered them then—and now:

Do you know what every leader in your organization is trying to achieve today; do you have a convenient way to find out?Are all critical results assigned?Are requirements for full performance clear to every leader?Is every leader working at the level to which he or she is assigned?Is the right work being done in the right way?Do you know which leaders are inhibiting the performance of the people who report to them?Are you clear about your own role?

Over the last several years and especially during the financial tumult, I found that many leaders couldn’t answer these questions. It seemed that no one knew what was really getting done. While companies may be able to avoid these questions during periods of growth and economic stability, they can’t ignore them during any type of crisis or any significant period of change. As observed in the Introduction, we live in extremely volatile times; even if companies emerging from the Global Financial Crisis are doing well, they are likely to face many other challenges around the corner. If they are not able to answer these questions, they will struggle with this challenge.

Facilitating answering these questions for leaders has been my mission in recent years, and it has motivated me to define the Performance Pipeline.

Reflect on your answers to these questions. If your answer to any of them is no, you need a performance pipeline to help you get to a yes. Goals and KPIs (key performance indicators) aren’t enough, because they don’t encompass all leadership, management, or relationship results. The budget and the strategy aren’t reliable indicators of what is being done today—in fact, they are usually misinterpreted or not guiding the work for other reasons. When this is realized, it provides a strong incentive to implement the Pipeline process.

Yet how do you implement it? At first blush, the need to define all results at each leadership level may feel like an overwhelming task. Let me assure you, it’s eminently doable, as long as you follow a tested process and benefit from the experiences of those who have gone before you.

The Performance Pipeline process consists of the following six steps:

Defining the purpose—being clear about what outcome you wantCollecting the data—finding out what’s really getting done, or not getting done but should beSorting and codifying the data—organizing data in a useful wayDefining the results to be delivered at each layer and the standards for measuring those resultsValidating the standards—getting leaders to agreeAllowing some flexibility—allowing different groups to adapt the standards in order to reflect specific needs

I’ll next discuss each of these six process steps in detail, referring also to examples in Tool 1 at the end of the book, which should make it easier to understand and use the information provided. And I’ll include boxes, “Lessons Learned,” which will share the knowledge that comes from hard experience—my own as well as the hundred or so companies that have used this Pipeline process. In fact, let’s begin with the first and one of the most important lessons.

Lessons Learned

Most leadership performance problems can be traced to the vertical structure

The questions at the beginning of this chapter relate to organization, and organization is the black hole of business. Great effort (energy in) seems to produce little improvement (nothing out). Almost all of the effort goes into the horizontal structure—deciding whether to organize around customers or functions or geography or products or business units is the great debate. There are only a few choices for the horizontal structure. While the horizontal structure is important, the vertical structure is where the real problems reside. Gaps between layers due to managers not managing, overlaps resulting from micromanagement, doing lower-level work at higher layers, and defining lower-level jobs too narrowly create performance problems at many companies. These vertical problems are close to infinite in number and deserve much more attention. Not only do they hinder performance; they also block transparency and hurt leadership development.

As you may have suspected by this point, thinking of the Performance Pipeline as an organization model for distributing work is appropriate. It distributes work from top to bottom, from strategy to low-level tasks. To get full value, you should develop your company’s own unique version and not just use a generic version or copy one from another company. The process for developing your company’s unique model is actually quite simple. A small team of people can complete it in about ten work days if they have a basic knowledge of the company, the business, and the work being done, as well as some experience in structured interviewing techniques.

You don’t have to reinvent the wheel. If you want to design a performance pipeline to fit your organization, you can benefit from the methodology I’ve used in the last twenty years of practice. The essence of this methodology are the six process steps just bulleted. Let’s look at each of these steps in detail, thinking about the lessons learned regarding these steps and how you can apply these lessons in your design.

Defining the Purpose