Clients have recently been talking a lot about the challenge of matching individual high performance with overall organisational under-performance.  Its a common problem: performance distribution curves are often skewed to the right, with the bulk of people being graded as ‘good’, ‘excellent’, or some variation on these themes – yet at the same time, the overall results are good enough.

There are several roots to this problem, and any or all of them may apply at the same time.

1 – goals not demanding enough, or not linked to strategic objectives

2 – managers grading people highly because it is easier than having a difficult conversation

3  -leaders failing to build an organisational culture that reflects the competitive postioning of the organisation

We have talked about the first two issues many times on this blog – perhaps it is worth exploring the third issue.    For example: what happens when an organisation that creates value through very high service levels starts cutting costs and sending implicit messages to its staff that cost efficiency is more important than service?  Customers can be quickly lost before the new budget customers arrive.

Or conversely, a business driven by consistently lowering costs decides it wants to compete through better products rather than being the cheapest – very quickly costs can spiral out of control, long before the new products bring in profits.

In both situations, managers face huge challenge delivering a change in culture while maintaining business performance.

The same applies in the public sector:  for example in future, some of our NHS hospitals will focus on being research led, delivering the very latest in clincal expertise, while others will move to specialising in a small range of services that they can deliver very efficiently.  Such change will need a huge shift in management culture, employee proposition and, crucially performance measures.

Whether public or private the demands of such thinking require a refreshed approach to how we manage performance – we call it Performance Leadership. Its about articulating not just the strategy, but how that strategy will affect the way managers manage, the criteria for promotion, the direction of development and the deployment of talent.  You will be hearing a lot more about Performance Leadership from us in the coming months.