The Performance Improvement Blog

Do You Need a CCO and CLO?

Should your organization have a CCO and CLO? Paul Hebert argues against organizations appointing a Chief Culture Officer.

Hebert writes:

…as soon as you codify, quantify and assign responsibility to something it ceases to be everyone’s responsibility…Culture is a defined as a set of shared values, behaviors, norms.  Shared.  Operative word.  Shared means we all have a part in the outcome and the input…If you create a job called “Culture Chief” you’ve just provided a backdoor for every manager, every employee to use as their personal escape route when culture starts to go wrong at your company.

I agree with Hebert and I have similar concerns with having a CLO (Chief Learning Officer). Learning is what employees in high performance organizations must do continuously as part of their jobs. Companies don’t have CWOs (Chief Work Officer), so why do they have CLOs? I suspect CEOs appoint CCOs and CLOs because it makes them feel like they are doing something about the work environment and employee development. The risk is that responsibility for employee engagement and learning will be relegated to a department and not owned by every executive, manager, and employee in the organization.

For a long time, organizations have built a department around training and given it a director in order to give it status and to protect it from the budgetary absorption of other units. The unintended consequence has been to reinforce the notion that work and learning are separate and that one has higher value than the other when, in fact, the success of the organization depends on continuous learning. To break out of this mental model, companies should stop doing things that appear to centralize responsibility for learning. Don’t put all the emphasis on a course catalogue and don’t hire a CLO.

I see the need for a CFO and a CIO. They are leaders of operational areas that require specialized focus on managing, maintaining, and improving systems that support those operations. Those areas need a voice at the executive table. But culture and learning are who we are and how we work collectively. They should be nurtured and actively fostered daily by everyone. 

On the other hand, any kind of major change in an organization needs a champion. Employees want a face on actions that affect the way they do their work and how they are rewarded. They are more likely to commit to doing things differently and going in a different strategic direction if they believe that the leadership of the organization fully endorses the new direction.   A credible, respected leader that frequently reminds people of the change can play a key role in ensuring that the change happens and that it sticks. Also, it’s good to see the visibility for culture and learning that comes with appointment of a person in those positions. However, if sole responsibility for the change rests with that leader, it will not be sustained over time. Eyes will roll every time that person opens his or her mouth. A high performance culture and continuous employee learning will not become woven into the fabric of the organization.

Change in culture, such as transforming an organization from high fear to high trust, has to be done collectively and requires that everyone in the organization accept responsibility for doing things differently and recognizing and rewarding people differently. Change in learning, such as managers forming an alliance with their direct reports around learning and performance improvement, also requires shared responsibility and mutual support for doing things quite differently. Learning is everybody’s business whether at the individual, team, or organization level.

Leadership for culture and learning should come from CEOs. It’s their job to set the strategic direction for the organization and ensure that the organization is aligned with that direction. Culture and learning are the foundation for that alignment. I understand the desire of CEOs to departmentalize those roles, but the downside risk is significant. 

 

The 0% Solution to Learning

Ideally, organizations should be striving for a culture in which every aspect of the workplace supports continuous individual, team, and whole organization learning. It should be a place where Individuals are learning how to help the organization achieve its strategic goals, where teams are learning how to help the organization achieve its strategic goals, and where the organization as a whole is learning how to achieve its strategic goals.

In this kind of culture, formal classroom training is superfluous. The most important learning occurs in the conversations that employees have with their supervisors and co-workers, in the conversations that teams have about team development and effectiveness, and in whole organization experiences with problem solving and planning. Learning occurs from the feedback and reflection around individual, team, and whole organization successes and failures. Learning occurs because of a performance management system that permeates every aspect of organizational life, not because of isolated instructor-based courses, workshops, and seminars.

Robert O. Brinkerhoff makes this point in his writing about measuring the contribution that training makes to learning and performance improvement. He argues that the isolation score, that indicator of how much training contributes to performance results, should be zero. He writes:

An isolation score of zero, on the other hand, seems to me to be the perfect solution: it means the organization has figured out a way to drive a desired performance improvement and resultant business result solely by manipulating the performance system, so there is no need for any training at all. Isn't this scenario exactly what the performance-oriented practitioners would seek? Training is always an expensive solution. If you can get to the desired business outcome without spending a dime on training - by just adjusting incentives, motivation, performance support, etc. - isn’t this what a thoughtful HRD leader should strive for?

The implication of striving for an “isolation score of zero” is that the whole organization owns learning, not just HR and the CLO, and when the organization needs performance improvement, training is not the first course of action. We have to change the way we think about learning and performance improvement, especially as people need to learn faster and achieve better results.

Unfortunately, it’s a very difficult mental model to change. In a recent post on ASTD’s Learning Circuits Blog, Connie Malamed asks, “What do you think the future role of the training professional will be?” She offers this model of future roles:

Malamed's model is an accurate representation of the current state of things but not where I think the field needs to go in the future. My model would not include “design and create courses.” My model would put “align learning with the strategic goals of the organization” at the center and “create a culture of learning throughout the organization” as the next key role. We have so many learning support options now, including just-in-time elearning (desktop and mobile), coaching, mentoring, simulations, on-demand video, experiential learning, internships, and on and on, that we rarely need to develop courses. Learning and development professionals need to be focused on performance results, not on training. 

 

Performance Management is Broken

What is intended to pass for performance management in too many organizations today is the annual compulsory performance review. To label this a “performance management system” is to give the process much more credit than it deserves. A perfunctory meeting between a manager and employee once a year to review a standard rating sheet that lists competencies and goals that are probably no longer relevant is not a performance management system.

Elaine Pulakos and Ryan O’Leary have recently published a well-documented paper in Industrial and Organizational Psychology that explains the strengths and weaknesses of common approaches to annual reviews (Elaine D. Pulakos and Ryan S. O’leary, Why Is Performance Management Broken? Industrial and Organizational Psychology, 4 (2011), 146–164.). They examine: 1) linking individual employee goals to overall organizational goals; 2) setting SMART (specific, measurable, attainable, relevant, time-bound) performance goals for each employee; 3) rating performance on a list of pre-defined competencies; and 4) collecting, analyzing, and reporting performance data from multiple sources, such as co-workers, customers, and supervisors. I would add one more: ranking individuals according to their managers' opinions  of their performance (observed or not). The authors didn't include "ranking" in their study probably because they can't believe any organization would actually use such a disruptive method as its performance management system. 

Each of these common approaches sounds good in theory. What could be wrong with aligning goals, having SMART objectives, being judged on the basis of needed competencies, and getting evaluative data from multiple sources (triangulation)? The problem according to Pulakos and O’Leary is in implementation of each method over time. Follow-through is highly time-consuming, is inconsistently applied, and relies too heavily on subjective and capricious ratings of managers. The alternative, according to the authors, is to improve the on-going manager-employee relationship. They write:

…concerns on the part of managers and employees prevent formal performance management systems from working well and have turned them into largely administrative drills that add little value. Contributing to this is the fact that performance management implementations tend to focus on rolling out formal administrative processes and tools (e.g., competency models, rating scales, and automated systems) rather than training managers and employees how to engage in effective performance management behavior (e.g., setting expectations, providing feedback, and helping staff solve problems). However, it is the informal process of engaging in these behaviors day-to-day that determines performance management effectiveness, not the tools and steps that comprise the formal system. (p. 148)

They recommend that organizations stop installing new performance management systems and start paying greater attention to manager-employee relationships. They cite a study by the Corporate Leadership Council that found that managers, not performance management systems, were the key to improving employee performance.

The results revealed that specific manager behaviors are some of the most important drivers of performance. These include (a) helping employees understand what they are expected to do in sufficient detail to deliver it, (b) supporting and helping employees find solutions to problems, (c) playing to employees’ strengths rather than their weaknesses by giving them assignments they can do well, (d) developing employees productively by finding a balance between acknowledging strengths and contributions and addressing development needs, and (e) engaging in regular, informal performance conversations in which managers provide feedback that is fair, accurate, and helps employees do a better job.

In essence, performance management depends on effective communication and trust between managers and employees. A "learning alliance" must form between them in order for both to contribute fully to the organization.  If the purpose of performance management is for managers to check off that an annual performance review has been completed for compliance purposes, then one of the four common approaches identified by Pulakos and O’Leary will do just fine. However, if the purpose is to improve performance, then the focus must be on the quality of manager-employee relationships.  (For examples of effective communication and trust-building, see Communication in High Performance Organizations: Principles and Best Practices.)

 

The Course Catalog Is (Should Be) Dead

Recently, I was asked a very thought-provoking question by the director of HRD for a large organization. I was explaining the “5As Framework” to her and she asked, “What are the implications for what we do here?” I immediately launched into my usual speech about getting managers of learners
involved in actively supporting the learning process. This led to a discussion of all the excuses she hears from managers to explain their lack of involvement in employee learning. It wasn’t until later, after further rumination, that I realized the better answer to the director’s question is, “Throw out the course catalog!” 

Like HRD departments in many large organizations, each year they offer a long list of courses and programs that have all of the current buzz words in their titles. I have no doubt that her department delivers excellent, world-class courses and programs. And I’m sure employees enjoy the courses and even say that the knowledge and skills will be very useful to them in their work. However, I’m also quite sure that very little has changed in the wider organization as a result of the many outstanding events put on by this unit. The problem is the lack of alignment between event-based instruction and important business results.

The competency model, which provides the underlying theory of event-based training, is doing a disservice to the current needs of organizations. Training and development professionals seem to believe that if they can identify the competencies that people need in order to do their jobs and then offer courses to teach those competencies, employees will be more productive and successful. The problem with this way of thinking is that performance has as much (if not more) to do with work culture as it does with job competencies. To be successful, employees need supervisors and co-workers who are supportive of learning and performance improvement, they need a supervisor/boss/mentor who talks to them regularly about learning and results, they need the opportunity to apply new learning and to receive feedback, and they and the organization need to be held accountable for learning and results. If there is this culture of learning, employees will continually improve performance.

According to my colleague, Ralph Jacobson, we have to change the local environment so that people actually “work differently”, not just learn how to work differently. All the courses in the world will not change behavior and improve results unless the local culture supports change. At one time, when jobs were static and organizational change came slowly, a menu of well-designed courses was sufficient. Now, when change has to happen rapidly, when we have to find ways to lower the cost of learning, and when we have better and better online, just-in-time, mobile learning resources, event-based learning is no longer the best answer.

We must provide learning experiences to people when and where they need it and in ways that optimizes application to achieving important business results. We need training and development that is timely, short duration, and project-focused. We need frequent on-the-job feedback from supervisor/boss/mentor to employee. For example, leadership skills are best taught during a challenging, team project while the leader is trying out new behaviors and receiving ongoing feedback from a coach. This way of learning will have much more impact on performance than a course or conference on leadership.

What do you think? Can we throw out the course catalog?

St. Jude Trains Its Leaders

We could have been invited to speak about org charts, making tough decisions, managing finances, etc. Instead, we were asked to talk about vulnerability, trust, and engagement. This is what my co-presenters and I did at a one-day leadership program for St. Jude Children’s Research Hospital last week. This exceptional pediatric research and treatment center recognizes that it needs to keep learning and that the intra/interpersonal aspects of leadership are as important as the mechanics of managing hospital departments and labs.  

I facilitated a workshop on the leader’s role in ensuring the success of employee learning and development programs.  Brené Brown gave a keynote address about how everyone's sense of vulnerability and shame can be a barrier to leading. Greg McKeown had St. Jude managers 
thinking about how they can make the people around them smarter, more motivated, and more successful. Jim Ferrell talked about minimizing the self-deception we all do as both individuals and organizations. Rich Brandt emphasized the importance of leaders building trust and engagement. And Carl Cohen described the interpersonal dynamics of leading biomedical research teams effectively. The day provided a tremendous learning opportunity for St. Jude’s managers to become more effective leaders. 

 

College Completion Matters

If companies care about having high performing managers, they should become involved in supporting high quality K-12 and post-secondary institutions. They should care deeply about government policies and legislation that affect education for all students. Success in the workplace is related directly to success in college and success in college is related directly to success in K-12 schools. Managers who cannot read and write at college level  or don’t understand the math needed in automated, computer-driven, 21^st century companies will not be successful and, worse, will be a detriment to their organizations. Managers today need the kind of critical thinking and creative problem solving that one can learn in good educational institutions. Businesses need schools and colleges to help more people complete a post-secondary education with the basic knowledge and skills for the modern workplace.

The research supports this emphasis on completion. Lou Glazer, President of Michigan Future, Inc., reports a high correlation between the percentage of college graduates in a region and the vitality of the economy in that region. Speaking of Michigan, he writes:

Human capital is the asset that matters most to knowledge-based enterprises. Michigan’s fundamental economic challenge is that we rank 34th in the proportion of adults with a four-year degree. States without concentrations of talent will have great difficulty retaining or attracting knowledge-based enterprises and are unlikely to be the place where new knowledge-based enterprises are created. 

In a more recent blog post, Glazer writes:

…all the evidence is that the premium for college attainment is increasing. The gap in pay between college educated adults and those without has been growing for decades. The Bureau of Labor Statistics estimates that life time earnings of those with a four year degree is a million dollars more than for those with a high school degree.

And job growth is coming in those industries where college educated workers are most concentrated. From 1990 to 2007 job growth in what we call high education sectors (predominantly health care; education; finance and insurance; information; and professional and technical services) was twice that in the rest of the economy (primarily manufacturing, hospitality, transportation, construction, retail and temporary services). And during the Great Recession those trends accelerated. Of the 8 million lost jobs, 7.6 million came in the low education attainment sectors.

President Obama has made college graduation a high priority of his administration because of the evidence that connects education to jobs. This week Vice President Biden announced an initiative to reward states and schools that are doing something significant to increase their graduation rates. The administration has set a goal of 8 million additional college graduates by 2020.

The College Board has set a goal of 55 % of the 25 to 34 age group achieving a post-secondary degree by 2025. They write:

The United States ranks fourth out of 36 nations in terms of postsecondary attainment for citizens

ages 55 to 64 years old. The United States is fourth behind the Russian Federation, Israel and Canada in the percentage of citizens with postsecondary degrees.  However, among 25- to 34-year-olds, the United States falls to 12th in degree attainment. For this key demographic group, Canada, Korea, the Russian Federation, Japan, New Zealand, Ireland, Norway, Israel, France, Belgium and Australia have managed to leap ahead of the United States, while Denmark and Sweden are close to parity with the United States.

One can quibble with the notion of a causal relationship between a post-secondary education (one-year certificate, two-year associates degree, or four-year bachelors degree) and an increase in jobs and income. It is clear, however, that there is a significant relationship and, given this, it seems to be in the best interests of all of our institutions (business, nonprofits, government) to encourage and support post-secondary education for all students.

 

Google's Search for Good Managers

Managers have a critical role to play in the learning and development of the people who report to them. In fact, that relationship is more critical than anything the HR or Training departments can do to improve performance. This is born out in Google's internal study of good management.

In this self-study, Google identified eight things that “good” managers should do. These imperatives are listed here in order of importance:

1. Be a good coach
2. Empower your team and don’t micromanage
3. Express interest in team member’s success and personal well-being
4. Don’t be a sissy [I don’t know what this means.]; Be productive and results-oriented
5. Be a good communicator and listen to your team
6. Help your employees with career development
7. Have a clear vision and strategy for the team
8. Have key technical skills so you can help advise the team

Adam Bryant, in an article he wrote about this study for the New York Times, points out that while there is nothing new in this list, Google managers pay attention to these behaviors because they are based on Google data. Another important aspect of this internal research is that having technical skills, while important, is at the bottom of the list which might be surprising to some given the technical nature of the business. Bryant writes:

technical expertise — the ability, say, to write computer code in your sleep — ranked dead last among Google’s big eight. What employees valued most were even-keeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers.

Apparently, managers are successful in Google, not because of their technical expertise, although that’s important, but because of what they do to help team members learn and develop and achieve success. In the 5As Framework, we call this relationship: “alliance”. The alliance of manager with team member is a critical factor in employee learning and performance improvement.

 

Temporary or Full-Time? Is That the Right Question?

Companies need a flexible workforce, more than ever. They need to add workers quickly to meet unanticipated changes in marketplace demands, they need to grow without spending too much on labor, and they need to respond to normal, cyclical staffing fluctuations. One response to all of these challenges is to bring in temporary workers and another response is to find more flexibility in regular, full-time employees. Ed Frauenheim presents the case for the latter in an article he wrote for Workforce.com. He writes:

Turning to temporary workers is typical during economic recoveries, but some workplace experts are raising questions about the move to a “just-in-time” labor model. Among the concerns are: lack of commitment to the employer, steep wage markups for some temporary jobs, uncertain qualifications of contingent workers and the risk of misclassifying workers as independent contractors, a problem the Obama administration has been targeting.

However, companies need both full-time and temporary workers. Many companies, as they dig out of the recession or manage second and third stage growth or try to manage the vagaries of markets, need the flexibility provided by a combination of full-time and temporary employees.

To use temporary workers effectively, companies need to integrated them into the worklife of the business. Temporary employees can be committed and engaged in their short-term placements if they are hired with that in mind.

The 5As Framework is a useful lens through which to examine the inclusion of temporary employees in a company. According to the Framework, company leaders should ask themselves these five questions:

1. Do temporary employees understand the alignment between the jobs they are being asked to do and the strategic goals of the company?
2. Are expectations for performance clear to temporary employees and is everyone anticipating that they will be successful?
3. Are managers having regular and frequent conversations with their temporary employees about performance goals and progress toward those goals?
4. Are temporary employees being given the same training that any full-time person in the same job would have and are they given the opportunity to immediately apply those newly learned skills on the job?
5. Are measures of progress and performance being used to give temporary employees useful feedback for the purpose of improving performance?

If a company can answer “yes” to each of these questions, then it is very likely that their temporary employees will be committed and engaged and will contribute substantially to the success of the business. 

 

Retaining High-Impact Employees

As we crawl out of the recession, high performing employees will be in greater demand than ever (See blog post: The Coming Turnover Storm.). What are you doing to keep them? Kelly Goldsmith, professor of marketing at Northwestern University’s Kellogg School of Management, and Marshall Goldsmith, executive coach and author, offer excellent advice for retaining these valued employees. They contend that companies need to do essentially six things to keep their talent: 1) show respect for them; 2) create a work environment in which they can thrive; 3) provide ongoing training and education to them; 4) develop a coaching relationship with them; 5) provide continual feedback to them; and 6) involve them in decision-making.

They make the case that developing these “high-impact” employees is strategically important to a company. They write:

Developing people is a strategic process that adds value to both the employees and the bottom line of the organization. Highly committed, highly competent people create financial rewards for the organization; organizations that develop their people and provide opportunities for growth are sought-after by high-impact performers. Great leaders know this simple formula. They understand it and strive to create an environment that supports it. And the result is success!

The tendency of executives is to assume that employees are motivated by money and that if they are paid well, they will stay with a company. Money is a motivator but it is not the only motivator and often it is not the strongest factor in retention. The opportunity to develop one’s skills and abilities, to continue to learn, and to feel respected and valued, are stronger drivers of retention for many high performing employees.

And this is not only true for high performers; all employees are happier and more productive when they feel respected, are developing their abilities, can contribute to the success of the organization, and are involved in making important decisions. The Goldsmiths' recommendations for retaining high-impact employees are also the characteristics of a high performance organization. 

 

Employee Engagement and the Bottom-Line

Does employee engagement make a difference in the performance of companies?  The evidence from a number of studies that correlate findings from employee surveys with financial indicators of company performance suggests that the answer is “yes”.  And everything I know about high performing employees tells me that engagement and performance are related. But a high correlation doesn’t mean that this is true in every case.  I want to know why some low-engagement companies are highly profitable and produce high shareholder return and why some high-engagement companies are not profitable and do not achieve an increase in share value. What is it about the work environment in some companies that even when employees experience what Towers Watson defines as  “…a combination of effective and caring leadership, appealing development opportunities, and a feeling of empowerment that comes with the ability to control one’s work situation”, they are still not successful? And why is it that in other companies, where leaders are uncaring and distant, development opportunities are absent, and employees have little control over their work situations, financial success is achieved?

Living close to their corporate offices, I hear about the fate of Borders Group Inc almost on a daily basis. This once successful giant in the retail book business, with still very loyal employees and customers, is now on the brink of bankruptcy. Employee engagement has been high in that company since it was founded by Tom and Louis Borders 40 years ago, but that has not been enough to save the company.

It’s possible that for companies like Borders evidence of employee engagement was collected at a time when the company was riding a wave of success generated by past practices and it would be just a matter of time before low employee engagement would begin to affect productivity. It’s also very likely that the link between employee engagement and financial performance of a company is not causal. I have addressed the fallacy of the correlation-causation assumption, previously. The relationship of employee engagement to performance is explained by considering other intervening variables. For example, a company that has several niche products and no competition, will, for a limited period of time, be successful in spite of itself. Conversely, a company that has strong employee engagement, but no market for its product and services, will not be successful over time.

Clearly, employee engagement is a key factor in bottom-line success. However, we make a mistake when we assume that employee engagement increases profitability and share value. Many factors contribute to organization performance (e.g., leadership, product/service quality, sales and marketing, financing, economic environment). All of these factors should be considered when attempting to explain or predict long-term success.