Nasdaq dropped 33%, Down Jones 20%, Bit coin down 60% so far this year. Regardless of what “experts” you listen to about the official declaration of a recession or the accurate % of inflation in the USA, it’s clear that the economic season of winter is upon us. In winter, your business could perform the same as it did in Autumn but you’ll lose cash flow, profit, EBITDA. If you have lived through previous “winter” seasons, you know 85% topple, while only 9% flourish. (Harvard Business Review*) To be the 9% that take market share and flourish, there is 1 step, the single most important step you must take RIGHT NOW in order to survive, let alone thrive, in an economic season of winter =
RAISE YOUR STANDARDS!
It’s trite, but true. Time to raise your standards. If you simply roll out higher goals, KPI’s (Key Performance Indicators) etc… you know that will go over like a lead balloon. (I call that Goal-itis. “Itis” is inflammation – inflaming your business causes disease and we are talking of improving the health of your business!)
Here is where you start to raise your standards within your organization …
Better Management of Expectations!
Better Management of Expectations is your 1st step because you can’t hit a goal if you are not clear what it is. If you are TM3 trained and you are committed to Mastering your business, then you know you draw 3 lines in the sand when it comes to setting goals on your Key Performance Indicators. If you have yet to give the 3 lines a name, consider using:
Will – Should – Could
You need to define the minimal KPI that they “Will” hit in order to be in good standing. What they “Should” hit if they are doing a good job. What they “Could” hit if they are an achiever.
Let’s start with the slow killer, seed of disease which is the poor management of the “Will” line in the sand. Have you ever defined the minimal acceptance level of performance for each roll in the company? If not, you can’t blame your team for not being efficient enough. No the “Goal” is not enough because Minimums become maximums. Meaning, most people who aim for the top of the mountain, but hit the side. So let’s use an arbitrary goal of 10, only your top 20% will hit it, majority 70% will fall short 7-8, and 10% will hit 5.
I’m going to make a sweeping generalization, however speaking with business owners EVERY DAY, majority have fallen down on utilizing PIP. Remember the old Performance Improvement Plans? If you are like so many others, there is no longer a plan to improve, rather PIP has become the last ditch effort to write up your employee before you fire them. At one end of the spectrum your business is damaged when the bad employees are kept on too long because hiring is tough right now, “It’s the Great Resignation don’t you know?” On the other end we rush to let them go, but you invested heavily in hiring them and training them.
Here are the appropriate steps to leverage PIP Performance Improvement Plans.
Transparency – Powerful for creating a culture of achievement! I could speak to transparency for an hour via video or write a chapter of a book but here is the gist. Share dashboards with all team members that transparently shows how they measured up on the KPI. Yes, especially those who are under-performing. Story Time: John has been with you the longest, you tell his stories of success often in team meetings, however, lately he is behind the 8 ball and not performing. All of your new people will emulate his performance because you edified him in the past, and he is a legacy employee. This is where transparency will mitigate nepotism / favoritism.
3 steps to “Up or Out” PIP process
1st PIP for falling below the “Will” line in the sand, provide training NOT just negative feedback. Managers are quicker to give negative feedback because it is easier, versus providing training, which takes more time. Let alone leveraging emotional intelligence and “stay on the high road”, because that takes discipline and skill. I promise, when the staff member asks leadership for help, it will be much more effective than when it is dictated to them, especially when no training was provided to improve. Leaders go 1st…give the support first by training them Up so they don’t have to step out.
2nd PIP for falling below the “Will” line in the sand, you provide training + a negative consequence. I was onsite with a client, observing our consultant Jerel helping them roll out a PIP process. I recall the negative consequence was going home without pay for the day. He shared how many managers expressed fear that they would not be liked and it would become personal. Jerel shared the perspective that the manger is “helping” the staff step Up so they don’t have to step Out. By not making this about the relationship between manager and employee, rather about the standards the company keeps and the SOPs (standard operating procedures) they were able to grow that $65MM/year company to generate $140MM/year just 18 months later.
3rd PIP for falling below the “Will” line in the sand, after they have consistently performed under the minimal acceptance level, they and their managers have signed off on acknowledging these requirements when they set the goal, at their 1st PIP and their 2nd PIP, now it is time to love them out. Because you have implemented the previous two steps, you loved on them to help them step Up, you now have a chance to move them into another role within the company that they are more suited for. This may not be as common yet, highly valuable when appropriate. Remember, everyone is watching how you and/or your leadership team handle this; even the achievers. This shows your character and this is fundamental associative conditioning for your staff, molding them into achievers and away from complacency.
Stay tuned for part II of “Raise Your Standards” when I’ll share how to keep your middle 70% hungry, striving to be your top 10% and how the top 10% can break new grounds beyond what you previously thought possible…and they will LOVE IT!