Roadmap to success
The 17 most important performance management decisions you need to make as a leadership team to build a high-growth organisation. Understand what they are, make them, and your business will thrive.
If you’re awesome, you’ll succeed. If you succeed, you’ll grow. As you grow, the scale will change everything and, then, you won’t be awesome anymore — unless you change a lot of what made you awesome in the first place. This is known as the scale up paradox. In a nutshell, what got you here, won’t get you there! The ability to recognise this and change yourself and your business is what separates great businesses from brands that have faded into obscurity.
Knowing what to change, when to change and how to change is the very essence of scaling up.
Take as an example the way we manage performance. A start-up can run everything on ‘check-ins’. Through frequent check-ins you can zero in on who’s doing what, by when and how. You can keep on top of how things are going and whether you need a course correction. The check-in system is awesome. Until it’s not.
Because you can’t run everything on check-ins when there are 30 people around. The ‘check-in’ system basically means that you are the system. You, the founders, keep everything together. This means you’re the bottleneck. Your personal bandwidth is the ultimate ceiling on your growth. And that is bad news for your health — and your business.
If you’re awesome, and you succeed, and grow, it won’t be long until you can’t sleep because of the many loose threads in your brain: Tasks you need to assign headspace to, projects and people you’re not ‘on top of’, discussions to be had that you can’t get to.
So, to get some sleep, you’ll be forced to take delegation to another level. This is not simply a question of giving away tasks or projects; it means giving away responsibility for entire parts of the business. That’s scary. But if you have great people, it’s also liberating.
Now you’re sleeping again. For a while. Because if your people are awesome, you’ll succeed, and you’ll grow, and pretty soon the balls will be dropping again. You’ll realise that what you assumed people were doing, they’re not doing, just because they assumed they should be doing other things. And you’ll long for the days of the ‘check-in’ system when you could be on top of everything through enough ‘check-ins’. But there’s no going back now. You’re too big. You simply can’t check-in with everyone when you’re at or beyond the 30-person mark.
Maybe you’re having a conversation with someone at that point, and they tell you about OKR: Objectives and Key Results. Now there’s a system you can hang your keys on! A rhythm to align on key priorities and targets every two or four weeks (or every month or quarter, if you’re a bit more mature).
Liberation! Suddenly you can be on top of everything without the check-in overwhelm. It’s a thing of beauty, really. Until it’s not.
Because if you’re awesome, and you succeed, and you grow, the day will come when those balls will once again drop. And it won’t be because the senior team aren’t doing what you agreed when you set your quarterly OKRs. It will be because the business is too complex now for OKRs. OKRs still rely on a lot of manual alignment through collaboration and regular ‘check-ins’ at the operating level. Even simpler than that, the balls are dropping because, suddenly, there are a whole lot of new people issues you have never had to deal with before at this level:
- Accountability vacuums: A rising tendency for important things to fall into ‘no man’s land’ with nobody accountable for them
- Major differences in contribution: A rising number of people in cruise mode while the rest of the team do all the work
- Performance politics: Lots of high performers are unhappy because people aren’t being treated fairly. Slackers are getting good reviews and rewards just because their managers are lenient; high performers, on the other hand, are getting the same as them because their team has higher standards
- Compensation politics: People aren’t satisfied that bonuses and increase decisions are being made fairly
- High Performance Culture slide: All of this is causing relational friction and culture issues that are impacting performance.
So, right now, there’s way too much going on for OKRs and ‘check-ins’ to work. Things need more alignment and coordination than you’re going to get through your team interactions. You need a new way of aligning the different parts of the business without falling into ‘check-in overwhelm’.
You need a performance architecture with more processes and systems that maintain alignment across teams. Big words. Corporate words, which we know entrepreneurs tend to dislike. But let’s understand them.
Basically what they mean is that, around about this time, performance management needs a major upgrade. Why? And how should you do performance management? Isn’t it an awful relic of industrial-age corporate management, which is why so many top employers are moving to something new?
True enough. The dilemma is that a lot of the new age buzz about liberating talent to thrive without backward-looking performance reviews don’t work in most contexts; most often, it will break things even more than a frustrating, antiquated performance management system would.
The reality is that performance management is much more complex than an annual review and, furthermore, is definitely not a ‘one-size fits all’ approach.
If you’re scaling up and keen to build a scalable performance management system that works in your context (and at the same time reinforces your greatest culture assets), here are 17 of the most important performance management decisions you will need to make as a leadership team.
Performance management intent: What is the main goal of our performance management system? Accountability for performance, coaching for development and improved performance, or both? Harvard Business Review says this is a 70-year old debate. Don’t assume your other leaders see this the same way you do.
Individual appraisals: Do we believe that focusing on individual appraisals would result in better — or worse — business performance? Does it adversely affect team work and a ‘looking beyond my scorecard’ mentality?
Standardisation: Given that various parts of the business are so different, should we be doing the same thing across the business? How do we do performance management differently (if we even should) in areas as different as engineering, sales and customer service?
Target setting processes: Should targets be set from the top down, bottom up, or some combination of the two?
Nature of targets: Should performance targets be activity targets, behaviour targets, intermediate outcome targets (closest to ultimate outcome, that are fully within control) or ultimate outcome targets (even if not within our control)?
Bonuses: Should we link rewards to personal performance ratings? Some say that you should just pay really well and bake everything into a fixed bonus, or into basic compensation, and fire the non-performers. Which works best?
Bonus pool formula: Which proportion of an individual’s bonus should be determined by either individual contribution versus the performance of their team or division, or the business as a whole?
Long-term incentives: What percentage of variable incentive remuneration (VIR) should be long term, and which should be deferred to future years/long term (LTIR)?
Increases: How should performance ratings affect salary increases?
Formal or informal feedback: What is the right balance between formal appraisal and informal continuous feedback?
Feedback sources: Are there objective measures? If not, who gives input to the appraisal? If there are multiple parties, how are their inputs weighted? Is a line manager’s feedback more important than multiple, non-line individuals or ‘bosses’?
Performance appraisal scale: How do we summarise individual performance assessments?
Appraisal frequency: How often do we appraise performance and give feedback? Would this be per assignment or based on time, such as weekly, monthly, quarterly, bi-annually or annually?
Bonuses versus career investment and opportunity: How do we decide which individuals to prioritise for investment in growth and promotions? How do we balance bonuses versus investment in learning, development and promotions?
Dealing with high performance that doesn’t produce results: What do we do when people perform well, but don’t deliver the business results due to issues outside their control?
Performance management roles: Who does what in the performance management process? What belongs to HR? What belongs to line managers?
Performance management software: When do we move from Excel (or similar) to software products that streamline this process? What are the best packages for our business? (Small Improvements and Engagedly are our top recommendations).
Walter Penfold, MD Everlytic
- Fire faster. Bad performers are toxic for the culture. Use the three-month probation period brutally. The culture impact of firing fast is much superior to that of firing slow.
- Attune to sentiment. Many poor performers are great at upward management. They can look like performers to you, but people around them know the truth. Stay attuned to, and respond to grumblings.
- Give immediate, direct feedback on any performance issues. This should never wait for a formal performance review. We do a formal 360-review once a year.
- Keep it super simple to start — we definitely over-complicated it.
- Centre on weekly one-on-one meetings. Then performance management becomes the way you work, not a chat between strangers once a quarter.
Stuart Townsend, Edge Growth
Be realistic. Our training budgets are not realistic enough to enable people to build the competencies we need them to have to deliver the outcomes we expect.
Brad Magrath, Co-founder, Zoona
- Invest in growing your managers. We over-estimated the ability of young, inexperienced managers to have honest candid constructive conversations. If they suck at having good performance management discussions, the whole system breaks down.
- Non-performers weren’t scored as non-performers, leading to ugly train smashes down the line.
- Bad managers give good ratings to bad performers.
- Invest in creating role clarity. Performance management didn’t work well initially because we lacked role clarity and agreed metrics.
- Focus on behaviours, not just outputs.
- Ensure managers are deliberate around context of feedback: Is it coaching, is it performance, is it brainstorming? Be clear on why the conversation is happening so the message is not mixed.
- Get huge buy in from the beginning — we didn’t do enough of this. Then people don’t actually do appraisals well and the whole system breaks down again.
- What you measure is what you get — A-players like the idea of being performance measured objectively. Make sure the metrics are totally objective and have integrity.
The ability to recognise that what got you here won’t get you there is the first step towards building a high-impact, significant business.
How To Survive Exponential Change In Your Business
How to get out of the habit of thinking small, and start thinking in giant leaps for radical – and profitable – change.
I recently went to a meet and greet session at a company that turns over R13 billion a year. As I was introduced to other executives, I was referred to as ‘the guy who is at the pinnacle of podcasting in South Africa’. This kind of feedback is truly humbling, but after hearing that, the only question I had on my mind was: “But for how long is anyone or any brand at the top of any market?”
The Challenge of Change
Change is no longer happening in a linear fashion; it’s occurring exponentially. We love linear thinking, because we have been conditioned to think in small steps (1, 2, 3, 4, 5, 6) but we totally suck at exponential thinking (1, 2, 4, 16, 32, 1 024). To a greater and greater extent this is the world we are heading into.
Almost inevitably, markets that used to be relatively predictable are winding up in an entirely new paradigm and some of the world’s largest and most reputable companies have been caught unaware. The main culprit? The exponential growth surprise factor.
For example, in 2012, Toys R Us was a $12 billion company with a retail footprint comprising 1 600 stores. In September 2017, they filed for chapter 11 bankruptcy… only five years later. The message is simple: Innovate or die.
But more importantly, there is a new challenge facing all entrepreneurs today: How can you prepare yourself and help your business survive in an exponential business world?
Here’s a four-step process that can help you get started.
1. Look out for the Warning Signs
In my experience, the warning signs of disaster are present in every industry one to three years before disaster strikes. Ironically, many businesses are simply not paying attention to the warning signs in their market — or even worse, do not know what warning signs to look out for.
Because all industries and businesses are subject to different warning signs, a simple, yet highly effective way to know when your business is in the throes of a critical warning sign is when something within your industry doesn’t make sense.
When a linear industry is on the verge of disruption it generally manifests into something that doesn’t make sense for the incumbents in that industry.
In 2008, when blockchain technology and the Bitcoin first manifested itself, it didn’t make sense to many in financial services. Fast forward to today and there are over 1 000 cryptocurrencies that you can actively trade and the promise of the decentralisation of all industries — not just the financial services industry — is very real.
So, if something new enters your industry and it doesn’t make sense to you it’s time to apply step number three.
2. Ask Why
If you ask a group of incredibly smart people to solve a very difficult problem and they can’t seem to solve it, you may find that they don’t lack collective intelligence, but perspective on the problem itself.
Whenever this eventuality occurs the best thing to do is ask “why” repeatedly until you find the perspective that you need to make new decisions in your business. It’s one of most powerful yet completely undervalued questions that any business leader can ask.
Almost all success in business comes down to execution. Toys R Us didn’t act. When all is said and done, they simply did not believe in the Internet and they paid the highest price. In an exponential world, the ability to not just act but to act quickly is priceless.
4. Move forward
No industry is immune. Let’s take podcasting for example. Our data shows that the addressable market for podcasts is already 16 million people; 50% of all podcast consumption growth over the last five years has happened in the last 12 months; and media consumption is shifting faster than we think into the on-demand space.
To address this exponential shift in media consumption, the Matt Brown Show is evolving from a podcast into a fully-fledged new media company. So, my question to you is simple: How is your business preparing itself for the future? EM
IN YOUR TOOLKIT
Get some perspective
While decades of researchers have struggled to understand why even the best companies almost inevitably fail, Clayton Christensen shows how most companies miss out on new waves of innovation. His answer is surprising and almost paradoxic: It is actually the same practices that lead the business to be successful in the first place that eventually can also result in its eventual demise. This breakthrough insight has made The Innovator’s Dilemma a must-read for managers, CEOs, innovators, and entrepreneurs alike.
Drawing from Matt Brown’s article, start implementing quarterly meetings that review the biggest challenges the company is facing, and start asking the question ‘why’ of even the most basic tenets that are being taken for granted.
The idea is to find a new perspective of the same problem.
Too Big For Your Boots?
How to manage the complexities of a rapidly expanding business.
It may come as a surprise to many, but too much success too soon can result in a company’s failure. That’s often because the company out-runs its ability to sustain and control that success, and a decline follows.
Say, for instance, that an organisation reaches increasingly higher sales targets, but its infrastructure doesn’t scale at the same rate. Inconsistencies and weaknesses begin to appear in its management systems. Quality suffers, and, eventually, the positive trend plateaus and tips downwards.
The answer? Don’t misjudge the impact that business and management can have on realising a sustainable growth strategy. The systems you have in place today may not work when addressing new challenges – or, they may make it next to impossible for you to meet them.
If your organisation is on a growth path, consider these six elements:
1. The right talent
Develop a management system that measures accountability against specific standards and ensures that the quality of your products and services doesn’t waver. As service quality often depends on human capital, you’ll need the right mix of people at every level.
Give non-management employees the autonomy to contribute positively, and recognise them for it. They’ll reward you with good outcomes and ensure that the foundation of your growth is that much sturdier, while developing a robust working environment.
Identify the people in your organisation whose roles will be most affected by your expansion, and enable them to take initiative outside of their standard work requirements. This way, they’re more likely to get involved and help you to create new cross-organisational systems that address tasks in parallel.
2. Controlling quality
It’s easy to lose track of quality when your business is growing speedily, so give the task of maintaining quality to a loyal management team. Assign them the responsibility for overseeing everything from product development to internal systems and manufacturing.
It’s also important for you to remember that service-based organisations face quality concerns as they grow, and that finding the right talent (see Element #1 above) can be as limiting as a blockage in a production line.
3. Processes that scale
Make sure that your processes and projects are executed in the same way every time. Don’t let your systems become un-scalable; establish which ones are most likely to come under strain as the company expands.
4. Manage cashflow
Numbers never lie. When your company is growing, beware of the danger of spending more than you can afford. More oversight or adjustments may be necessary to increase effectiveness, quality, and sales.
When determining if you’re going to front-load your capital investment, be confident that cash is coming into your account as a result of the investment. Remember that cash profits and accounting profit are very different. Cash profits are your bread and butter.
If you aren’t positioned to finance your own expansion and you require outside funding, carefully consider the pros and cons of getting into debt, as well as the length of the loan and interest rate.
5. Finding investors
Conduct detailed research into potential investors, as each will have sector or industry interests, investment mandates, and value preferences. Pinpoint these, assimilate with them, and make sense of them before engaging.
Then, make the effort to thoroughly evaluate the potential investor. Do this by first determining where your interests are aligned and then uncovering:
- The source of the investors’ capital
- Their investment track records
- The returns that they usually aim for
- Their traditional risk profiles
- Their investment mandates.
6. Communicating culture
Spend as much time determining, sharing, and entrenching your company’s current and growing culture as you do addressing your growth strategy.
With each new stage of growth, commit time and resources into making sure that the cultures of different departments don’t implode when put together – impacting on customers, important employees, or worse.
Make your employees aware of what the future will hold, how it is likely to affect them, and what the bigger picture looks like.
No matter the size of your business or what your growth plans are, expansion can expose you to a host of risks. These may be existing problems that worsen, or new ones that are uncovered for the first time. Either way, it’s crucial that you identify them, prepare for them, and make plans to protect yourself in the face of growth.
Driving Your Business Growth Towards More Customers
Designed to help its customers get the most from their businesses through the right telematics solution, New WEBFLEET can help you reach your customers quicker, get more done, improve efficiencies, save costs and boost your revenues.
Europe’s highly regulated operating environment has made telematics ubiquitous in business. On the one hand, this means industries across the spectrum have become safer, more efficient and highly productive across the EU. On the other, it’s much harder to stand out from the crowd when everyone follows the same best practice standards.
“We don’t have those same stringent regulations in place,” says Justin Manson, Sales Director, Africa at TomTom Telematics. “Our clients have realised what a huge competitive advantage this actually offers them though.
“Locally, everyone understands the role that telematics plays in tracking what your drivers are doing right and wrong, and use it as a tool for encouraging good driving practices, but there’s so much more to this solution, and we’re making it our mission to help business owners really use it to their benefit.
“When deployed across the organisation to its full capabilities, a telematics system can radically improve productivity and workflow. Done correctly, a business can save up to 10% on its bottom line, and redeploy that cash into the company’s growth, thanks to drivers reaching customers quicker and getting more done. The right data also increases productivity and ensures better turnaround times.”
Thomas Schmidt, MD of TomTom Telematics, loves visiting South Africa for this very reason. “Because so many business owners aren’t using telematics to their full extent, there’s such a huge opportunity for us to assist businesses in their growth here,” he says. “We deliver a high-value stack of products that can change the way companies operate, and most importantly help them save money and make money. The challenge for us is educating our customers so that they understand what our solutions offer, and the incredible impact they can have on a business. We consistently improve these solutions based on customer feedback as well, making them very much from customers for customers.
“Anyone can buy a map for less than R100. Why invest in such expensive devices? The answer is because we’ve developed solutions that change lives. With the right data — and access to that data — you increase safety, simplify your business, drive efficiencies, increase your output and customer service, and ensure you are always productive and reliable — across the organisation. And that impact can be measured, and given a real ROI value.
“Imagine the impression companies that operate at that level make on their industries. They stand out from their competitors. There is so much room for growth in South Africa as we deploy these solutions.”
As an organisation, TomTom Telematics is focused on continuous growth and innovation as well, constantly learning from market conditions, its customers and industry needs to improve its product offerings.
The result is the launch of New WEBFLEET in February 2018. “We’ve increased the value we offer our customers,” says Thomas. “We’ve collated data from hundreds of thousands of customers around the world who gave us their feedback through surveys, and New WEBFLEET is a window into easy-to-use, smart fleet management that is a game changer for companies.”
“TomTom Telematics is in the business of helping businesses,” agrees Justin. “Our goal is help our customers master their challenges. The right data at your fingertips will help you change the way you operate. That’s our goal. How much cash is being left on the table in an organisation because of inefficiencies?”
Introducing New Webfleet
The smartest way to manage your vehicles and mobile workforce
TomTom Telematics’ state of the art Software-as-a-Service (SaaS) fleet management solution, with best-in-class user interface, is inspired by two decades of working together with customers to achieve more for better fleet management. New WEBFLEET is everything you need to manage your vehicles in the cloud, in real time. It allows you to monitor reports and dashboards, manage orders/workﬂow, and improve driving behaviour, safety and service, helping you save fuel and reduce costs.
Best-in-class user interface
- A future-proof platform with a completely renewed interface, based on the latest HTML5 technology and driven by continuous innovation.
- Simple and clean interface, with minimised clicks for faster working.
- Intuitive functionality, means it is more accessible for greater impact across your business.
- User rights management and state-of-the-art data handing ensures the highest level of data privacy and data security.
- Fast access to the right information.
Know where your vehicles are and where they have been. Different map options such as Google, Google Street View or satellite map are enriched with traffic information, giving you a more detailed view on what’s happening on the roads. Toggle between different types of information on the map such as traffic, addresses and areas and create specific views, so you only see the information you need.
New WEBFLEET’s dashboard gives an overview of performance at a glance. Up to 27 KPIs can be used to track the performance of vehicles, individuals, benchmark teams or give a simple overview. This helps you to track real-time performance against your pre-defined KPIs.
New WEBFLEET gives you instant access to the information that matters, meaning you can spot trends over time and use real-time information to make smarter and more informed decisions. You can instantly download or schedule reports to help you stay on top of everything — from fuel efficiency and legal compliance to quality of service.
Manage on the move
New WEBFLEET is optimised so you can manage your fleet on any device by entering WEBFLEET through a web browser or by downloading the WEBFLEET Mobile app on your smartphone.
Send routes direct to drivers
- Plan accurate routes in New WEBFLEET by adjusting multiple variables such as location, time of departure/arrival, traffic and vehicle type.
- Get a choice of alternative routes, as well as suggested fastest route with traffic.
- Customise your route by simply adding new waypoints, or dragging and dropping existing waypoints on a route. Then choose from guided or forced route* options.
- Send planned routes directly to a TomTom PRO driver terminal to keep your drivers on the right track.
Personalised Map views*
- Create your own saved map view to reach information you need fast.
- Switch between vehicle groups or areas, without needing to adjust the map filters and zoom levels. n
Many ways to customise WEBFLEET to suit individual requirements from personalised views to adding information to make what you see more informative on one page.
Plan a route the way you want it
Use multiple variables (including waypoints) to give fastest or most efficient routes.
Across different device types, allowing you to always stay on top of business.
Simple, clean and easy to administer
Toggle between views to get the right information to focus on the task in hand. Get the right information to the right people at the right time, keep data secure and in the right hands.
Send routes to driver terminals
In real time, ensure drivers follow or avoid specific routes.
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