Leadership & Continuous Improvement: How to Create Performance Chemistry
Are you continuously improving, or sliding backward?
What makes one organization successful in driving high performance, and another stutter and stall?
For organizations committed to performance excellence, this is a critical question to answer.
This was the case with a recent client that consisted of several business units.
The client was lamenting the fact that they were having to replace a business unit CEO because, in part, the incumbent was unable to effectively execute a Continuous Improvement agenda and instill a quality mindset organizationally.
According to the client, this lack of continuous improvement in leadership caused the business unit to lose market share to competitors.
With all the hope and optimism that comes with the potential of new beginnings, this client looked forward to the next CEO. They turned to us for direction on identifying the right candidate – someone capable of successfully driving continuous improvement.
With no room for error, this was a critically important decision and the client wanted to be confident in their approach to the selection process.
In short, they wanted a way to “know ‘em when they see ‘em.”
Our experience from working with many companies, several who are part of the Fortune 500, and our own research with close to 100 companies around the world, including several considered high performers within their respective industries, has shown that one of the key ingredients to achieving high performance is what we refer to as a company’s “performance chemistry.”
What is “Performance Chemistry”?
Performance chemistry is a term we like to use for those organizations that manage the following key elements extremely well:
Key Elements That Make Up Performance Chemistry
- Feedback Loops: They utilize feedback loops throughout the enterprise. Examples include Customer Satisfaction Surveys; Employee Engagement Scores; Continuous Improvement processes; 360-degree Performance Appraisals, etc.
- Focus on Cash Flows: They have a laser focus on managing those factors driving cash flow, including accounts receivable, inventory, accounts payable, capital expenditures, and debt service. In short, they fully comprehend that whether you earned a profit (or created a loss) is not the same as knowing what happened to your cash.
- Organic Growth: Regardless of their acquisition strategy, they strive to increase their overall customer base, increase output per customer and/or new sales. These factors are standard agenda items when key executive meet and they are key drivers of short and long term incentive plans.
- Know & Manage Talent: They have identified their top talent and assessed them against a validated competency model in an effort to take them from being good to being great. In addition, they have identified their weaker talent and are developing those that matter and letting go those that don’t.
Continuous improvement is one critical component of performance chemistry that is driven by culture, workforce and leadership. To this point, we recognize that simple “leadership” is one thing but the right type of leadership for creating an organizational mindset of continuous improvement is quite another.
The Right Behaviors
To help our client, we outlined 5 simple yet powerful behaviors that in our experience successful leaders demonstrate themselves and instill in those they lead in order to execute a mindset of continuous improvement.
As you review these, allow yourself the time to rate yourself on each behavior using the simple 1 (low) to 5 (high) scale:
“Performance Chemistry” Behaviors for Continuous Improvement:
- They are the type of leader who always looks for ways to improve the quality of their work
- They seek opportunities to improve general work processes, methods and systems
- They are willing to alter current processes and methods when appropriate
- They encourage others to apply the discipline of continuous improvement
- They are personally committed to improving the overall quality, efficiency and effectiveness of their own work, and the work of their group or unit
Well, how did they/you score? Hopefully more 4’s & 5’s than 2’s!
Whatever the case, it is important to know that the core principle of continuous improvement (or CI as it is more commonly referred) is the principle of self-reflection and that self-reflection requires frequent feedback.
In CI, feedback on the outputs of each stage in the process is critical. Armed with this feedback adjustments are made to improve the process. Without feedback, there is no improvement.
Leaders who embrace a mindset of continuous improvement embrace this principal of self-reflection.
In short, they seek out feedback about their leadership behavior as a way to improve…continuously.
Sometimes this feedback is obtained by the leader through reflective self-appraisal.
More often this is done through the use of self-descriptive surveys or by simply asking key stakeholders this question: “Going forward, over the next 60 days what can I and my group do to help you be successful?”
But more powerfully, feedback on a leader is obtained directly from those key stakeholders who have seen the leader demonstrate behaviors over a sustained period. (Using a 360 Performance Appraisal is the recommended tool for this.) In short, for this client who is looking to select a new CEO who has a continuous improvement mindset, determining how much of a “feedback junkie” they are will be a significant variable in selecting for success.
Selecting In and Selecting Out
Based on these behaviors, we generated a series of questions for the client that can be used in the selection interview, reference-checking process and in a 360 performance appraisal to help determine which leaders should move forward in the selection process (selected in) and which may be respectfully determined not to advance (selected out).
Vetted Questions to Demonstrating a Continuous Improvement Mindset:
NOTE: (To make these questions more effective, require details of the situation, actions by the leader, and the resulting outcomes)
- Please provide several examples from your recent work experience that because of your leadership, improved a process or procedure. What specific steps did you take? Why did you take those in that sequence? What worked well? In reflection, what could have been done differently?
- In the past, have you developed or helped develop work processes, process measurement procedures or performance metrics? Explain the situation(s) and your specific involvement. How was success measured? How would you improve these results if you could go back and have the ability for a “do-over?”
- What specific training, education or experience do you have in the areas of Process Involvement, Continuous Improvement and Quality?
- What specific feedback process do you employ to determine how well you are doing as a leader? (look for use of 360 feedback reports, self-descriptive surveys; and/or use of an executive coach)
- In what specific ways did you encourage others to apply the discipline of CI?What records do you use to reinforce this? What consequences did you employ?
Is that all?
Clearly, knowing the 5 key behaviors that lead to continuous improvement and the related selection protocol form a strong foundation for selecting and developing leaders that have a continuous improvement mindset.
But are they all that is required?
Unfortunately, it’s not that simple.
You still need to find great supporting people in your organization, develop them, and give them the resources to be their best. But when we look at the most successful examples of high performance, the organizations that have a strong “performance chemistry” are the kind of leadership that stands out.