Effective leadership is not about making speeches or being liked; leadership is defined by results, not attributes. – Peter Drucker
As a leader looking to make an impact, you need to take specific actions to ensure that those results follow from your team’s ongoing efforts.
We’ll walk through the four elements that create a focus on results:
- Establishing high expectations for measurable business outcomes and holding people accountable for achieving them
- Reducing the organizational complexity that gets in the way of producing results
- Building your people’s capabilities to get results, particularly when it requires new ways of working
- Maintaining execution discipline through regular metrics reporting and operational reviews
Focusing on results at XL Insurance
To get started, Macia brought her team together to analyze the data of the business.
She then required each member of her senior team to create specific, measurable, strategic growth plans showing how they would deliver their portion of the stretch goal.
Finally, Macia set up a disciplined system to monitor the ongoing operational performance of the organization.
She identified the metrics to measure not only top-line results, but also aspects of the business that pointed to the health of her new initiatives and of the businesses’ growth in particular.
Setting high performance goals and holding people accountable
The first element of focusing on results is to set aggressive goals for your unit’s performance, and to hold your team accountable for those goals.
Ratchet up expectations
To set a challenging performance goal, start by identifying one or two key performance measures that can tell you whether your team or unit is moving toward your aspirational vision (or not).
Robert Schaffer pointed out in a classic HBR article “Demand Better Results – and Get Them,” the ability to establish high-performance expectation my be “the most universally underdeveloped” leadership skill in organizations.
How do you develop a stretch goal for your team?
If you want your team members to focus on a stem-up result, you need to challenge them with a stretch goal. But how do you come up with the right one? Hear are several approaches you can take:
- Ask internal or external customers to identify something your team could do to help them be more successful.
- Ask your own people to identify their most intractable problems.
- Predict a possible crisis.
Hold people accountable
What makes it even harder is that most of the time your people truly are working diligently, putting in long hours and extra effort. Add in the fact that they probably are loyal and committed to you and the organization, may have been around a long time, and are critical contributors in lots of other ways.
As reasonable as this sounds, making this the standard way of dealing with your team will lead to a breakdown in accountability and likely failure in achieving your stretch goals.
The process of holding people accountable for results is not just the purview of a CEO or senior executive. Leaders at all levels need to do this in order to create a culture of accountability and results delivery.
Reducing organizational complexity
In the HBR article “Simplicity-Minded Management,” Ron describes four kinds of organizational complexity. It’s up to you as a leader to simplify these types of complexity when they appear:
- Structural mitosis: changes in organizational design that get in the way of getting things done.
- Product proliferation: adding new products and services without taking any away or creating multiple variations of products or services.
- Process evolution: ways of getting things done that are outmoded.
- Managerial habits: behaviors that get in the way of results.
Macia recognized that there were opportunities to improve this process. She organized a Work-Out session for underwriters and businesspeople to jointly figure out how to streamline the process so that they could instead spend their time moving into new territory to grow policy revenues, without creating undue risk for the company.
Every organization, of course, has undue complexity that limits performance. Sometimes the complexity is baked into the culture and becomes invisible, as with the barriers that Macia dealt with at XL. At other times, the complexity is visible, but considered to be like a sacred cow that people can’t do anything about. How well you eliminate or simplify it will dictate how quickly you can reach your business goals.
Building capabilities while growing results
Improving business results is not just a matter of working harder and doing more. Rather, it requires new approaches and smarter ways of working that may not be obvious. Increasing sales could also mean that your team should do more cross-selling, team selling, consultative selling, shifting to indirect sales, creating online or outbound sales, or some combination of them all. But what if the team has never done those things? It actually requires the sale teams to develop new capabilities.
General Stanley McCrystal, former head of Special Operations, emphasized, in the HBR interview “What Companies Can Learn from Military Teams,” that effective operations in the army require clarity of mission, trust, and the continual development of team capabilities.
Russel Eisenstat and colleagues concluded, in the HBR article “Why Change Programs Don’t Produce Change,” that the most effective change in organizations comes from bottom-up experiments in which managers and their people learn new capabilities and experience success, and then spread the new approaches to others.
The power of small wins
Harvard Business School professor Theresa Amabile and coauthor Steven Kramer describe these psychological benefits in the HBR article “The Power of Small Wins.” Their research shows that making progress in meaningful work is the most important booster of emotions, motivations, and perceptions during a workday. The positive reinforcement of seeing progress gives us a sense that all our effort is worthwhile for more than just a paycheck. To counter that sense of malaise, many leaders feel that their job is to pat people on the back and encourage them to keep going.
Maintaining organizational discipline
The fourth element of focusing on results is to create and maintain a disciplined approach to monitoring the ongoing business performance of your unit. This involves choosing the right kind of metrics, establishing an effective operational cadence, and holding candid discussions about the results.
Making decisions when you don’t have all the data
Charan suggests a number of ways that you can forge ahead in his HBR article “You Can’t Be a Wimp – Make the Tough Calls.” First, you need to sift through the information that you do have and select the few most critical factors that will truly matter in making the decision. Second, use your imagination to shape a few options – that we could do A, B, or C – and play out their implication.
Ultimately, you’ll have to make a decision and trust your now well-informed intuition that it’s the right one, or at least mostly right. You’ll also have to back it up and be courageous in defending it, whether to more-senior leaders, customers, partners, or the board. As you do this, remember that making this kind of decision is probably better than trying to do more analysis and more data collection, which only kicks the can further down the road and delays getting anything done. And also remember that the more you learn how to make decisions without all the data, the better you’ll become at doing it.
Get the right metrics
Part of this decision depends on your own inclinations. Some leaders want to base their decisions on as much hard data as possible. Others want just enough data to either reinforce or challenge their intuition.
- Are we focusing on the right questions? Many companies collect the data that is available rather than the data needed to help make decisions and run the business.
- Does our data tell a story? Most data comes in fragments. To be useful, these individual bits of information need to be put together into a coherent explanation of the business situation, which means integrating data into a “story.”
- Does our data help us look ahead rather than behind? Most of the metrics that leaders review are retrospective.
- Do we have a good mix of quantitative and qualitative data? Neither quantitative nor qualitative data tells the whole story.
Business data and its analysis are critical for your department or organization to succeed, which is underscored by the fact that the business intelligence and analytics space is becoming a billion-dollar industry.
Set an effective operational review cadence
Your job as a leader is to establish this kind of cadence if it doesn’t already exist, refine an existing cadence if it needs to be improved, or integrate the cadence for your team or division into that of the company.
You can use the operational cadences to integrate your work in many areas of the business – and in many of the practice areas discussed in this book, from strategy and innovation to employee performance.
Consider some of your team’s own processes: can they be more tightly linked, with the learnings and decisions of each feeding directly into the next? If so, as your unit goes around the track, more and more managers and leaders will practice and learn about vision, strategy making, people recruitment and development, sustainable growth, and so on.
Lead candid dialogue at operational reviews
As a leader, you can’t just set up reviews at which your team reports on metrics and results: you must use those meetings as opportunities to push on every aspect of your team’s work – often brutally.
To make your reviews fruitful, your questions should be tough and direct, but always clearly in the spirit of accelerating progress, illuminating unconscious assumptions, and solving problems.
When in an operational review, first ask probing questions about the team’s or individual’s current results, plans, and projects. What’s working well? Where are you struggling and why? Has anything surprised you so far? Where do you need help, guidance, fresh ideas, or resources? Asking these questions not only teases our what’s really happening and what needs to be done, but also gives you insight into your people.
One of a leader’s most critical tasks is to help everyone connect their projects, results, and measures with the work of others so that they don’t look at each individual issue or problem in isolation.
The leadership difference in achieving results
Improving your organization’s business results doesn’t happen by itself or by random chance, and a focus on those results is not a onetime set of activities. It takes hard work and courage and, most importantly, has to be done again and again to eventually create a culture of high performance.
Culture and results
Most leaders want their organizations to have high-performance culture. This means that the drive for results and improvement is an ongoing norm, not a onetime event; that delivering on goals and commitments is expected; and that people at all levels understand that achieving results is a key criterion for personal success.
In their HBR article “Three Steps to a High-Performance Culture,” Carolyn Dewar and Scott Keller describe a similar process at ANZ bank that also took several years. In their situation, executives too three key steps to change the culture that are similar to those we outlined in Chapter 3.
First, the ANZ executives explicitly stated what they wanted the high-performance culture to look like – that it would be characterized by alignment around vision, execution of goals, and continuous improvement beyond competitors’ performance levels. They also created metrics to gauge progress on all three of these imperatives.
Second, ANZ focused on a few key cultural attributes (such as customer focus) to reinforce every twelve to eighteen months instead of trying to change everything.
And finally, ANZ integrated work on cultural issues into its business initiatives instead of dealing with them separately.
The result of all this work was a significant rise in productivity per employee and other key performance metrics – all of which were sustained for ten years.
Questions to Consider
- Stretch goals. What goals could your team reach for that would make your customers and your senior leaders take notices? How high can you raise the bar?
- Accountability. What consequences have you set if members of your team do not achieve their goals? Do they truly feel like they must achieve the goals you set for them?
- Reducing complexity. How can you make it easier for people on your team to get things done? Can you run interference for them with other groups in your organization so that can concentrate on what they need to do?
- Building capability and confidence. What 100-day projects can you create as good opportunities for people to learn about how to get results on a small scale first, even while achieving your team’s biggest goals?
- Metrics. Do you have a clear and concise dashboard that tells you and your team how you are doing against your most critical goals? Do you have the right real-time measures for tracking progress and leading indicators that can help you make fast and nimble decision?
- Operational cadence. Have you created a regular rhythm and discipline for reviewing progress with individuals and teams that report to you?
- Review candor. Are you satisfied with the candor of your team’s reviews ? Are you and others constructively challenging how things are done and then working together to solve problems and make improvements?