Let me begin by stating that I’m not a fan of the annual performance review. For most business leaders, managers and employees it’s an incredibly stressful and painful experience that does little foster improved productivity or employee engagement. According to Mercer’s 2013 Global Performance Management Survey, roughly 1 in 3 organizations around the world say that improving managers’ ability to have candid dialogue with employees has the greatest impact on the overall performance of an organization. Mercer’s analysis revealed that the two components of manager skills that matter the most are linking performance to career development and setting SMART goals. Smart goals are specific, measurable, ambitious but attainable, relevant and time bound.

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Research continues to show that when it comes to predicting success in a role, emotional intelligence is far more important than IQ. That's especially true for leadership and customer facing roles. Decades of research now point to emotional intelligence, not IQ, as the critical factor that sets star performers apart from the rest of the pack.

TalentSmart tested emotional intelligence alongside 33 other important workplace skills, and found that emotional intelligence is the strongest predictor of performance, explaining a full 58% of success in all types of jobs. Naturally, people with a high degree of emotional intelligence make more money—an average of $29,000 more per year than people with a low degree of emotional intelligence. The link between emotional intelligence and earnings is so direct that every point increase in emotional intelligence adds $1,300 to an annual salary.

W. Edwards Deming, the father of continuous improvement, noted back in the mid 1980's that when you think of all the under use, misuse and abuse of talent, the United States may be the most under developed nation in the world. In the intervening years organizations have spent billions of dollars on talent and leadership development and with little to show for their investment. The underlying issue is a focus on the short term and it's here that HR could be having the biggest organizational impact. It begs the question about getting to the board room table.

Deming's seven deadly diseases of management are just as pertinent today as they were when he cautioned North American organizations that they needed to alter the course of business management. Here is the list that Deming felt was contributing to the failure rate of businesses:
  1. Lack of constancy of purpose
    Deming described this as short term thinking. Organizations need to understand why they're in business. Is it to create and sustain a market for the future for their products or services or just to have jobs? With little or no planning for the future and a lack of long term definition and goals the loss of market and jobs is inevitable.

  2. Emphasis on short term profits
    It's devastating to long term planning. For the plan to stay in business through the improvement of quality of product and service the two cannot co-exist. When management is rated on their quarterly contribution to profit the natural reaction is to sacrifice the long term growth of the company.

    There's a better way to protect investment and that is with plans that will keep the company in business and which will provide jobs and more jobs. Unemployment, in Deming's eyes is simply a sign of bad management.

  3. Evaluation of performance, merit or annual review
    Pay for performance or merit can't be done on the short range. If the term of reference is 10 to 20 years then you can more accurately determine the individual contribution. The effects of the annual appraisal system are devastating to an organization. The merit system encourages short term performance and all but eliminates teamwork. If getting the maximum individual merit increase is the focus, the impact on collaboration and teamwork is destructive (you don't get ahead by being equal) and further feeds short term thinking. It annihilates long term planning.

    People work in fear that they won't contribute enough to the company. It's an arbitrary system that can be demoralizing to the employees...at all levels. This one element does more to damage employee engagement than anything else. Monthly 1:1 meetings with all employees, that are focused the contributions the employee has made to implementing the organizational strategy as part of a team should be the standard. Tell them what they did well over the course of the past month and how that has helped the company to continue to improve and grow.

  4. Mobility of management
    The annual rating of performance encourages the mobility of management. If somebody doesn't get the increase they expected they start to look elsewhere. We know from the behavioral data we have at hand from the McQuaig behavioral assessment that most managers are hard-wired to be willing to accept the risk of trying something new if what they're currently doing isn't working out for them they way they expect.

    The turnover in leadership ensures that the organizational thinking remains in the short term. Leaders need the market experience to help them make decisions that contribute to the success of the strategic plan. The mobility of management only serves to exacerbate the issues of performance and employee engagement. HR's talent acquisition and development efforts should be focused on helping leaders at all levels retain and capitalize on the great talent they've got to work with.

    This leads to the lack of roots in the company, a lack of knowledge of the company and no understanding of the problems the company is faced with.

  5. Management by use of only visible figures
    Deming asked the question about the multiplying effect of a happy customer. How much business does a happy customer create for an organization. The answer isn't quantifiable yet it's still incredibly important. What about the multiplying effect of an unhappy customer?

    These concepts are critical for both transformation for sustainability.

  6. Placing blame on the workforce
    If as Deming believed, the system created by management is the cause of 85% of the unintended consequences, why do we consistently place blame on the workforce. Jim Robbins (former President & CEO of Cox Communications) summed it up best. 

    “We spend four months of the year on the budget process, but we hardly spend any time talking about our talent, our strengths and how to leverage them, our talent needs and how to build them. Everyone is held accountable for their budget, but no one is held accountable for the strength of their talent pool. Isn’t it the talent we have in each unit that drives our results? Aren’t we missing something?"

  7. Relying on quality inspection rather than improving product (or service) quality
    Talk about putting the cart before the horse! HR has the responsibility from an organizational development perspective to make sure we get this right. Do this and you win your seat at the board room table.

I am happy to say that I am from the generation that remembers the 3 R’s from my days in elementary school. Developing proficiency in Reading, wRiting, and aRithmetic continues to serve me well, just as my teachers said it would. Although I may have argued the point at the time, there is no question that developing an aptitude in these three key areas set me up for success in life. I’d say that the educational successes that I’ve had that are very strongly correlated to ongoing career success and so I’m very happy that I was in school in an age during which the students were held accountable, passing and failing were available options to my teachers, and those in positions of power realized how important success in these key areas would be later in life.

My good friend Bob Lank from CEO Global Network shared his three pillars of personal success in a 60 Seconds on Leadership video I posted last year and that got me thinking about what drives success from a leadership perspective. In case you didn’t get a chance to view the video, Bob’s three pillars are:
  • Successful people know themselves (and more importantly the impact they have on others)
  • They have clarity of purpose (not necessarily for all time but certainly for the foreseeable future)
  • They are willing to do whatever it takes to succeed (they aren’t in the habit of folding up their tent at the first sign of adversity)

I read a great article on the weekend by Nicholas Bray entitled The Psychopath in the C-Suite. The article referred to a personality called SOB, for Seductive Operational Bully. The article asserted that unburdened by the pangs of conscience that moderate most people’s interactions with others, such people qualify for the label of “psychopath lite”. Outwardly normal, apparently successful and charming, their inner lack of empathy, shame, guilt, or remorse, has serious interpersonal repercussions, and can destroy organizations. “Ironically,” the author observes, “many of the qualities that indicate mental problems in other contexts may appear appropriate in senior executive positions.” That is particularly the case, he says, in “organisations that appreciate impression management, corporate gamesmanship, risk taking, coolness under pressure, domination, competitiveness, and assertiveness.” SOBs have no sense of conscience or of loyalty to their colleagues or their organisation. They often do long-term damage to both through their deceitful, abusive, and sometimes fraudulent behaviour. Because of the way they operate, however, they are often “hidden in plain sight”.

I read a cynical article in Forbes this week with the title "The Employee Engagement Hoax". I have provided the hyperlink to the article if you'd like to read it. The focus of the article is the notion of employee "engagement with the mission" and makes the point that rather than conducting annual engagement surveys, leaders at every level of the organization should be focused on actually engaging with their direct reports.

Global research published in 2009 by Towers Watson, which analyzed 40 companies over three years, showed that organizations with a highly engaged workforce had a superior financial performance (a 5.75 percent difference in operating margins and a 3.44 percent difference in net profit margins) than did low-engagement workplaces. It's clear that engagement is good for the bottom line and yet far too many organizations fail to put in the appropriate time, effort and energy into improving engagement on a daily basis.

In most organizations the front line leader (aka the "hiring manager") are the main point of contact for 75 to 80 percent of the people that make up the organization. The individual contributors within an organization look to their direct supervisor as the link between them and the organization's strategic plan. The problem is that once they're in this front line leadership role many are left to their own devices. They either sink or swim but the impact on the people that report to them can have serious implications to the performance of the organization. Just check out the employee engagement results in most organizations.

Here are 5 reasons that you should be investing more time, effort and money into developing the leadership capabilities of your organization:

I read an article last week that was titled "You Can't Learn To Swim By Reading About It" that got me thinking about how little time organizations and individual leaders invest in practicing the skills associated with coaching for performance. Perhaps as Amanda Knight suggested in her comment to the blog I published last week "the challenge many face is committing to the time and discipline that is needed, especially in 'now' focused, 'get 'er done' environments". 

I think most are familiar with the 10,000 hour theory that has been applied to world class athletes. Maybe it's the thought that committing that much time becoming great at coaching is too daunting a task that's holding back leaders and organizations from developing the requisite skills to coach effectively. The good news is that after I read that article last week I did a little research on learning how to swim. I now understand that I can make significant improvements in my swimming stroke in just 6 practice sessions. The key is deliberate practice.

There's a definite link between behavior and the ability to take a strategic approach. That being said, individuals and organizations can develop the capacity to think strategically. A recent large scale, global study evaluated the leadership practices and effectiveness of 60,000 managers and executives in 162 countries and 28 industries. 

The study found that found that a strategic approach to leadership was, on average, 10 times more important to the perception of effectiveness than other behaviors studied. It was twice as important as communication (the second most important behavior) and almost 50 times more important than hands-on tactical behaviors. (This doesn't mean that tactical behaviors aren't important, but they don't differentiate the highly effective leaders from everyone else.)

I had an interesting exchange with a local sign supplier a couple of weeks ago that reinforced just how much of a career derailer a lack of impulse control is. I'm sure that you've experienced it at some point during your career. The ultimate is when someone hits the reply to all button and send on a totally toxic email that ends up going places it never should have gotten to. If anything it seems like the problem is becoming more prevalent as we continue to embrace social media.

In the work I do with my leadership development clients using the EQ-i 2.0 emotional intelligence assessment we often talk about the four most common leadership derailers. Number one on that list is Impulse Control along with Stress Tolerance, Problem Solving and Independence. Because of the high expectations that are placed on leaders, it is important to strive towards exceptional performance in these areas in order to prevent moments where you may actually avoid your leadership responsibilities.