Focusing on both successful outcomes and successful behaviours is the key to building sustainable high performance in business.
Caveat emptor – buyer beware. It really is true that you get what you pay for. This is absolutely true when you consider the things we focus on – and incentivise – in the workplace. Consider the following examples:
• Jordan Belfort – the ‘Wolf of Wall street’ only focused on outcomes (making money), which encouraged behaviours which ended with him in prison.
• Companies set their salesforce a goal, and once they achieve it, they start ‘banking’ sales for the next quarter.
• The business puts out a behavioural edict to ‘manage costs’ – and misses business opportunities because it becomes more important to ‘watch the penny’ that capitalise on opportunities to deliver business results.
In these examples, if we focus only upon ‘outcomes’ we may get exactly what we pay for – often at an enormous expense to the business, its culture and even to limit performance.
For example, I have seen cases where the incentive goals for individuals have caused over a billion dollars’ worth of value destruction in a business. Whilst the individual was tasked with delivering 4 key work packages to the board in a 12 month period, they were only able to achieve this by sabotaging other projects, minimising the quality of what was in each work package (it was all about delivery!) and driving low value, easily achieved projects in preference to higher value (more difficult) opportunities. Their ‘goal’ was achieved (and bonus paid), but the long term success of the organisation was damaged, including the culture through the way this individual behaved.
On the other hand, if we only focus on (or incentivise) behaviours, then often people will not know the target that the business needs to achieve, and will ‘act’ in ways which interfere with success. The behaviour might achieve a specific goal (cutting costs to enhance margins), however, this defines a specific way to achieve a goal, when there may be other, equally successful ways of achieving the goal (for example, sell more high margin products!). This behavioural focus on one ‘way’ can rigidify organisations and set critical precedents within the business. In this example, there will be a times where cost cutting will stop achievement and performance, rather than enhance it.
Unfortunately these circumstances are all too common in business. By taking either of these polar approaches, companies can either sabotage short term success, or damage long term and sustained performance. Simply put, there are problems with taking either a purely outcome focused, or a purely behavioural focused, approach to performance.
Consider your organisation: what sort of focus on performance do you take? What is it costing you?
If you want to maximise performance and success then it is wise to take a middle ground – integrate the best of both approaches to get both short term as well as long term success.
There are 5 critical things you can do bridge the gap:
1. Define both the target outcome and the most likely behaviours that will deliver it
Setting the ‘target’ clearly for employees is critical. What is the organisation really trying to achieve? By letting people know what you are trying to achieve (and also, why it is important for the organisation to achieve it) allows its people to align efforts to help achieve these things.
Defining the key/most likely behaviours that will create these outcomes is also important. If we want the sales team to ‘find new business’, ‘take accounts from the opposition’, or ‘build new opportunities in current customers’ to reach a sales target – we are defining the behaviours that we want them to use (rather than simply setting specific outcomes goals). Each of these can have significant in-market consequences, so defining the behaviour set we want them to employ shapes the approach and its impacts.
Defining both the target, as well as the expected behavioural path to achieve it, provides a critical balance. It tells them the WHAT as well as the HOW. Without the WHAT, they behave without direction. Without the HOW, they often select inappropriate behaviours that can damage the organisation whilst chasing the goal.
2. Build a link between the two. Coach individuals on the behaviours, manage them on the performance goal.
As individuals understand how ‘preferred’ behaviours can deliver the desired outcome, they develop confidence that the behaviours that are asked of them are valued and make sense. When the link between the desired behaviours and demanded outcomes is incongruous, then uncertainty is created which ensures defensive and stress-based responses in employees.
We can use coaching to help individuals develop, select and implement successfully the behaviours that help them achieve their outcomes. It adds value when we use it as a means of adding and enhancing skills that make the goal achievement more likely, or more efficient and effective.
On the other hand, we use management approaches to monitor performance against the goal. Both are critical, and need to work in close proximity for maximum benefit – knowing ‘what’ someone has performed allows the ‘how’ to be reinforced, amplified or modified as required. Utilising management without coaching, or coaching without management, is far less effective than using them together.
3. Leave room for innovation
Innovation often occurs in processes when people have a goal, and have to find new ways to achieve it. This process innovation can be incredibly important to personal and organisational development. By allowing individuals to select behaviours that they think will serve the goal from outside those defined (ie, not being constrained to “you must do it this way”), then you have left space for people to experiment and innovate. Over-managing people around behaviours limits innovation. Using coaching methodologies to help them identify and apply the most appropriate behaviour in a circumstance to reach the outcome encourages innovation, learning and development. The aim is to ensure that the HOW is defined enough to help people perform, but still leave the possibility for other approaches which bring enhancements and innovation.
4. Leave room for over-performance
When we set a single outcome as the goal, often we limit the ability for individuals to over-perform. For sales teams, setting a ‘hard-stop’ goal will encourage them to ‘bank’ sales into the following time period. As goals and incentives are set, define the ‘target’, but also be clear of upside potential from this (even be open to unexpected outcomes that can be achieved on the way through) and encourage continuous pursuit to allow over-performance of targets. If this is reflected in the possible performance outcomes, and included in incentive calculations, organisations can allow over-performance (even encourage it), rather than limit it.
Further, goal-achievement theory suggests that if someone thinks a goal is too large, it is not worth investing effort in attempting to achieve it at all. Be aware that ‘perfectionism’ (pass/fail) often emerges in employees, and by managing the idea of ‘target’, upside potential and pass/fail thinking, we can keep employees working towards continuous achievement regardless how far in front or behind the goal they are.
5. Use your standards and values as boundaries
Standards and values should be used as guidelines and boundaries for behaviours. They should define clearly what constitutes the boundary between acceptable and unacceptable behaviours. In the absence of direct behavioural management, or where innovation is required by individuals to better achieve the goal, then the values and standards of the organisation are critical. They can be used as a ‘filter’ by individuals to define if a behaviour would be acceptable or not in pursuit of the goal.
Often employees are left in ambiguous situations and are asked to keep striving for the goal. How do they define which behaviours are acceptable or not? By ensuring the employee is clear on the standards and values of the organisation, it allows the individual to have confidence that the behaviour they select ‘fits’ with what is acceptable for that organisation, industry and circumstance. This is critical in avoiding the ‘Wolf of Wall Street’ mistake.
As you employ these 5 frames, the best of both worlds can be achieved. Having a combined outcome and behavioural focus creates the possibility of over-performance, innovation, achievement and establishes quality cultural norms.
If you had to choose, which would you prioritise? – which comes first, the chicken or the egg? Or in this case, the goal people are trying to achieve, or the behaviours that are needed to make it happen? Whilst they are distinct elements of performance, research (1) has shown that focus on behaviours more often leads to outcomes that we want, whereas focus only on the goal does not suggest the behaviours which help make that goal achievable. If you had to choose only one, longer term success is delivered by focusing on behaviours (ie, through a coaching approach). However, why limit yourself? It would seem the ultimate approach is to integrate and co-ordinate goal and behavioural focus.
By taking an integrated approach, you really can drive high performance in the short and long term and deliver sustained success, innovation and maximise performance outcomes for the business and its employees.
(1). Piercey, N.F, Cravens, D.W., Morgan, N.A. (1998) ” Salesforce performance and behaviour-based management processes in business-to-business sales organisations”. Eur.J. Marketing; (32), 1/2, pp 79-100