What is Necessary to Lead Well Today?

Leading well involves setting appropriate objectives from day one.

Most organizations are often halfway through their year before the get around to this which eviscerates their effectiveness.

Those tasked with producing have half the time to produce remaining and over-achieve and are now fixated on the challenges of delivery. 

This entrenches the whole process in an adversarial setting; especially if bonuses and promotions prospects are involved which of course they should be…

So… Rather than talk about the myriad problems of doing this badly, let’s start with a clean sheet of paper.

As those who have read some of my other posts, they will remember (I hope) the 5 P’s; especially numbers 3-5 which are particularly relevant i.e. KPI’s, aligned Pay and Process.

So… Objectives are necessary but how do you set them? 

Most corporate environments start with the “producers” claiming that indicatively 10 units are possible. (the producers of course, knowing bonuses etc. are involved, try to lowball this number). The boss then says “great, but 20 would be better”. Rug-trading then follows with little reason or process generally settling for 15 with both parties unhappy.

So… How do we create a more robust data-based approach?

Most companies setting goals have been around for a while, so they have a History (H) i.e. we produced 4 units 2 years ago and 6 units last year. Then we have the Current (C) production run rate which, for discussion, let’s assume 8 (see the diagram above).

So… Against this backdrop 10 looks good and 20 unreasonable, at least on the face of it. However, there is no relativity e.g. trends in the market, new technology, competitive frame, individual performance variability etc.

So… How do we reduce this to a systematic, quantitative, fair but challenging, i.e. reasoned process?

Please refer to the diagram. It builds up from H, then C, then

Goal/Objective i.e. G with a performance band to allow individual or team contribution to be assessed. However as shown in the diagram, they are in order of ascending delivery levels i.e. H, then C, then G. Sometimes though, H is higher than C when a company has lost its way which can create a death spiral if allowed to continue.

My recommendation is to also pull the performance of competitors which, assuming it is not your company, gives you “Best-in Class” (BIC). This must be used initially as a north star of future performance or the company will almost certainly lose (more) market share. 

So… The goal or objective should be set at a minimum at that level — this defines “minimum acceptable” future performance even if resources inside the company are challenged. 

Your customers don’t care about your budget or your constraints when there are competitors. Goals set in this way are table stakes. They cannot be argued away later for any reason- the customers viewpoint is defined by competitive alternatives. 

So… How do we set levels above acceptable?

One way is to consider all markets from which legitimate comparisons could be pulled from e.g. call center performance. Using the retail energy industry BIC in call center performance from this vertical is a legitimate initial frame. However, any call center performance from any industry vertical is also a legitimate perspective. This latter standard is “BIC Global” (BIC-G). If the producer hits this level of performance, then they should be judged exceptional from a bonus standpoint. 

So… How would said producer achieve exceptional from a potential/career viewpoint?

This is where the producer establishes and achieves aspirational levels of performance. One high-profile example of such is Elon Musk. He reimagines capability unconstrained by current reality e.g. Starlink, the Boring Company, Tesla, humans on Mars. He is admittedly an outlier but an aspirational performer and visionary. This is Aspiration (A) on the diagram.

Taking this approach, grounded on actual data, allows us to have meaningful robust discussions that allow key connections to be made for setting performance goals. A simple qualitative outcome could be a boss acknowledging that your company doesn’t have the resources of a competitor and therefore can’t meet a customer’s desired performance. In this case if you can’t find an aspirational new approach, I would suggest looking for a new job as bonuses are unlikely to be paid. If they are, it will hasten the end of the company. 

Before everyone starts polishing their CV I have found that once clarity and objectivity (maybe the source of the word “objective”?) creativity and hard work can often transform the company’s/team’s/individual’s ability to deliver extraordinary results. 

In a later post I will illustrate how company/division/team and individual perspectives mesh together in a way that creates an effective, respectful culture.

So… (using that word way too much) Try it and let me know how it goes, it has been instrumental in the successes I have been part of both in the past and currently. 

Good luck.

— Written By Steven Murray