Smarter Hybrid – Getting the HR team lined up

FranLake101

Over the last week or so I’ve been thinking about HR (or People) teams and their role in creating smarter hybrid working.

The pandemic accelerated existing trends – digitisation, customer behaviour and new ways of working.   While the first two continue, ways of working are being pulled back towards old approaches – highlighted by Microsoft’s research around productivity paranoia.

Why is this happening?  Some is leadership biases, some is down to mistrust and history, but some is a failure from HR.    I’ve been in many HR events with HR leaders who’ve made no real progress on creating better ways of working.   Just last week I heard an HRD explain that to be fair to all employees, no-one was allowed to work in a hybrid way.  I was horrified, but I’d heard others take similar positions.  Making people have equally bad working environments doesn’t seem aligned CIPD code of Ethics and Conduct, which expects People Professionals to have “a positive and active impact on working lives”. 

HR teams who are investing in better ways of working are reaping the benefits for their people and their organisations, but the majority seem stuck in x-days-in-the-office.  In the rest of this post I’m going to share some of the barriers for HR, and what could be done about them.

What’s stopping us, and what can we do?

1. Stop, Collaborate and Listen…

HR can be addicted to action.  We fix problems, handle crises, deal with issues.  Those issues keep on coming, accentuated by the pandemic and its aftermath – e.g. suppressed turnover led to great resignation; pent-up dissatisfaction led to quiet quitting; slow wage and career progress feeds IR issues and cost of living crisis.   

What to do about it?  I’d encourage HR Leadership Teams to take stock on how the world has changed and is changing.  Take a day or two offsite to really think broadly.  Keep the agenda light – don’t try to squeeze future of work into a 45-minute item between pay grading and lunch!  Read around the themes and issues, and explore some of the big questions – How is our workforce changing?  What do people want?  Who gets what they want and who doesn’t?  What is the role of HR? Flush out the barriers you’re seeing and hearing – e.g. two-tier workforce, lack of connection, distrust of homeworking – and see how you can rethink them.  Don’t try to solve, just agree your philosophy and the problems to solve.

I know it is tough to slow down enough to even consider this.  If it would help, I can give you a Christmas reading list for your team, just drop me a message.  I’ll also happily help you shape what an offsite could look like.  

2.  From split accountability to creating an owner

I’m guessing you didn’t have someone accountable for optimising Monday to Friday, nine to five in the office? There’s probably no obvious owner for optimising work.  HR structures tend to be split up along functional lines, with each HRLT member and team owning a slice of the strategy.  There’s no-one owning cross-cutting themes.  

Agree one HRLT member to take the lead.  They need to corral people and create momentum.  Select them based on curiosity, skills for creative problem solving and engaging others.  Be clear they are first among equals on this – their team-mates need to stay involved.  Get other HRLT members to support them with bright, enthusiastic people so that the whole team has a stake.  

3.  From safety in numbers to following the science

HR loves a benchmark, and loves a survey – reward, role size, engagement, diversity, learning and even functional maturity.  Not very helpful in innovating – benchmarks and surveys encourage people to stay in the herd.  Colleague surveys are great for testing ideas, but not great for generating them – there’s a great quote from Henry Ford that says if he’d given people what they wanted, he’d have designed a faster horse!

If you’ve got a little team together, get them to research thoroughly.  In shaping A Life More Virgin for Virgin Money (still the most progressive approach to hybrid I’ve seen) the team and I conducted research from psychological safety to nutrition and from meeting practices to the perfect nap.  We listened to colleagues and business leaders at VM and beyond.  We engaged with business schools, economists, sociologists, psychologists, and palaeontologists*.  We tried to synthesise this together to shape what could be done.  It can be overwhelming to get moving, so again – please reach out if you’d like me to share more.

(*ok, we didn’t talk to any palaeontologists).

4.  From expertise and experience to thinking like a disruptor

HR creates deep, narrow experts.  They build years of experience in the same area, and solve problems based on their expertise – e.g. policy professionals start with employment law, learning professionals start with behaviour.  They build new solutions based on this experience and based on evolving historic practice.  

In contrast, disruption is looking for things that the specialists miss.  It’s often about breaking things down into smaller units to look for opportunity.  AirBnB is a great example – instead of looking at hotels, they looked at guests.  People need a room and a bed, so anywhere that can provide that can be guest accommodation.  

If we apply this to work, then it opens different questions.  In a 24/7 world, why is the working week Monday to Friday 9-5?  Why do we deal in days?  Why meet in the office?  Why 9 to 5?  Encourage your team to look very differently at the opportunities of work, and be clear on the desired outcomes – e.g. healthy, motivated people, working together to deliver outstanding performance.

5. From “do everything” to make one thing awesome

HR as a function is unusual.  It’s often quite small but covers everything from business processes (payroll) through law and regulations (policy), financial matters (reward), technology (people systems) and strategy.  HR plans can be really diffuse, leaving the function spread too thinly to make step change.  

There’s probably nothing in the HR plan that could have the same scale of impact as shaping new ways of working.  Getting that right drives more productivity, more engagement, more inclusion and belonging, more attraction and more retention.  

Narrow your plan for next year right down.  Make new ways of working the number one goal for the team.  Determine he role for each part of the team and get their best people on it.  Pause other projects or do the minimum to keep them ticking over.  It could be tough – if you’ve got a siloed function, deep experts and a classic performance approach then people will fear under-delivering, maybe see their value as eroded, or not have the skills for innovation.   Make it ok to try and mess things up and use it as an opportunity to build skill.

6. From grand reveals to agile delivery

Quite often we treat HR products like we’re building ships – we want a grand launch, and see the thing sail off.  However, things are too ambiguous and flexible for that.  The future is uncertain, and people don’t adopt HR practices because we want them to – like any product there’s an adoption curve. 

Adopt a test-and-learn approach for new ways of working.  In launching a Life More Virgin we had five phases, testing and learning in every part of the business.  We were eight months in before a formal launch and policies.  Even then, we knew there was more work such as onboarding, measurement, management, culture.  Breaking the project down creates wins, generates proof points and the opportunity to learn and refine.

Eyes on the Prize

It’s tough out there.  It’s so easy for HR teams to feel really embattled.  Really going after ways of working and smarter hybrid is a massive benefit for the team, and delivers right across the HR agenda:  

  • 1.  Attract more candidates, by not excluding people.
  • 2.  Retaining talent, as work can flex around their life.
  • 3.  Better engagement, as people have a voice and choice.
  • 4.  More inclusion and belonging, as the proposition is adaptable to individual needs.
  • 5.  Better line-management through clearer practices.
  • 6.  Improved productivity, by focusing on where, when and how work is delivered.
  • 7.  Improved wellbeing, reduced burnout, by working smarter.
  • 8.  Stronger employer and corporate brand, with reputation as a good employer.

It’s a good prize to go for, and it is a prize that needs HR to step forward. Business leaders and colleagues expect HR to create new ways of working and solve problems. That’s only going to happen with the right investment of time and energy.  As ever, I’d love to hear how you’re wrestling with this. Some of my solutions here are dependent on HR leadership, but there are other routes, so reach out if you’re interested. And of course, if I can help you and your team think about some of these challenges, or help you get kick-started I’d be delighted to – please reach out.

Smarter Hybrid – why it is tough for senior leaders

FranLake101

A couple of weeks ago I posted some thoughts about what smarter hybrid could look like.  I want to build on that by looking at some of the barriers and opportunities ahead of us.  

I’m going to start with the challenges for senior leaders.   We often hear statements like “all of this needs to start with leaders”, “leaders need to role model this”, “culture starts at the top”, or the more toxic “a fish rots from its head”.  In writing this I’m trying to avoid ranting about how wrong I think these are (I’ve hit the delete key an awful lot in typing this paragraph).  Instead, I want to concentrate on the landscape for leaders, set out the forces that make it hard for them to engage in new ways of working.  By understanding this, we can start to change that landscape.  

The prize of smarter hybrid

As a quick reminder, there is a big prize – smarter hybrid delivers higher organisational productivity, stronger culture and happier and healthier individuals.  

Tweaking where, when and how we work can drive 10-15% performance gain just by managing meetings and distractions.   Building psychological safety can increase productivity by 50% (Accenture).  Gartner research demonstrates remote working can support stronger culture.  The PrOPEL Hub of nine UK Business Schools have demonstrated productivity benefits of better working practice and the CIPD Good Work Survey has identified that hybrid working correlates with better job quality.

The challenges for leaders

The challenges below won’t apply to all leaders, but you’re likely to find examples across your top two layers of the organisation.  And if you’ve got leaders that don’t think any of these apply to them, it might be worth exploring the zone of delusion…

1.  Head space

The demands on leaders are huge.  There are challenges including inflation, recession, industrial relations, political uncertainty, supply chain disruption, digitisation, changing customer behaviour.  These are all disrupting established ways of running a business and are accentuated with new challenges such as covid (personal and work impact), net zero and new ways of working.  

These create chronic stress, which reduces imagination and the ability to solve problems.  (Dr Wendy Suzuki).  New challenges feel like a threat, triggering the “fight or flight” response (Harvard).  Leaders can be drawn to simplistic solutions to kick problems down the road (hence why 3-day-a-week hybrid is appealing).

2.  More economics than psychology

Chartered accountancy, MBA and consultancy are proven routes to leadership.  In past talent roles I tracked this data to identify good leadership candidates – it is a great basis for understanding the drivers of business success, shapes how leaders solve problems, gives confidence to investors and other stakeholders.  

However, they don’t really focus on how to get humans to perform better.  I looked at the ACCA syllabus, some MBA curricula – even now, there’s little connecting psychology and managing people with better productivity and performance.

3. Poor data

In a world where leaders are data driven, people data is often infrequent, low quality, not adaptable or simply answering the wrong questions.  

As a quick example:  Western European engagement is at 72% (Culture Amp).  Organisations measure it once or twice a year.  Targets in business plans and bonus schemes will compare to the norm, and success based on benchmarking.   All of this even though 1 in 4 people are not engaged, with consequent cultural, performance and turnover issues (how can we be surprised by quiet quitting and the great resignation?)

For other people data, it is often focused on what is easily measured rather than what aids performance. There is more focus on reducing absence than reducing distractions, despite the latter offering 10x the productivity gain (my calculations, based on data from UCI).

4. “When I were a lad…”

We are all influenced by our experiences.  Senior leaders started their careers between the late eighties and early noughties. They built careers in an environment which was office-based, hierarchical, long-hours, more focused on fitting in than welcoming diversity.  If you couldn’t put the hours in, you were lightweight.  Working remotely or flexing start times?  Part-timer.  

That is broadly a senior leaders frame of reference for career success.  They’ve not got the experience of completely virtual teams that might be found in tech, and they’re unlikely to have engaged with a new employer through primarily digital means.  In contrast – all new workers from 2020 join the workforce with experience of remote work. 

5.  The system of work

The system of work is largely designed for face-to-face, full-time work.  The Outlook calendar based on Monday to Friday 9-5, management by observation and floorwalking, structuring employment around Full Time Equivalents, learning in classrooms, brainstorming around a whiteboard, watercooler conversations, meeting around a table all push people to the office environment.  Even video conference facilities are typically a meeting room table with chairs facing each other, and a screen at the end of the table.

This creates a series of defaults, and all can provide barriers to new approaches to work.

6. Omniscience

Put all of this together and it starts to get tough.  Leaders don’t have the capacity, frame of reference or insight to solve these problems.  However, they’ve also grown with the expectation that leaders solve problems.   There is a sort of expectation of omniscience.  

So, when presented with everything we’ve described above, a solution of “three days in the office and two at home” starts to feel very appealing – it feels like a neat solution, even if it is ill-fitting for pretty much every employee.

But wait, we can do better…

Despite these forces of inertia, the opportunity for smarter hybrid is huge, so how to help leaders with these challenges?

I’d suggest four things:

1.  Engage them in the challenge – leaders will know that certain trends have massively been accelerated by covid, including digitisation and changing customer behaviour.  They might not have thought the same about work, but flexible working, remote working, focus on wellbeing, focus on equity were all emerging pre-covid and have massively accelerated. Emphasise that those companies grasping the changed reality are benefiting with talent attraction, productivity, and reputation.

2. Frame the problem – move from a set of barriers to a set of questions to work through.   E.g. How do we deal with performance paranoia (microsoft)?  How do we mitigate the risks of burnout (BBC)?  How broadly do we want to attract talent?  How do we build culture?  How are we equitable when some roles are more flexible than others?  How do we onboard and build careers?  Ask leaders to share their problems and dilemmas and build a hopper of issues to solve.  

3. Shape an approach – frame this as a series of sprints of experiments.  Tackle different issues in different areas.  As a company, set your ambition to refine ways of working, and ask for colleagues to participate.  Set this in the context of your purpose, values or culture – i.e. what kind of company do you aim to be?   Involving colleagues creates ownership, taps into their creativity, strengthens alignment, and also buys time to work through issues.

4. Focus on line managers – more than ever, good line managers are critical.  They’re critical to alignment, engagement, management of work, building culture.  In addition to any previous priorities, they have to invest more in wellbeing and in managing ways of working.   Invest any discretionary capacity in helping this group to manage their people well.  

This isn’t exhaustive by any means – after all, it is a set of challenges to work through.  Next time I’ll try and share why I think it is tough for HR.  Leaders and HR are critical stakeholders in creating some momentum.  After that, I’ll try and cover more on the business case, how hybrid can support inclusion and belonging and then get into specific challenges.  

As ever, I’d love to hear your thoughts, reflections and experience. If you’d like to discuss, give me a yell. And please do reach out if you’re wrestling with some of these challenges.

Smarter Hybrid Working – it’s more than “three days in the office”

FranLake101

Intro

Around a year ago I posted on LinkedIn about Virgin Money’s new ways of working.  Since then, the work has been profiled by Gartner, and referenced in this month’s Harvard Business Review.   I really expected to see a great wave of new working practices as organisations designed better ways of working.  Sadly, that hasn’t happened.

Instead, I see a lot of hybrid models of “x days in the office”.  I don’t see a focus on performance, simply a compromise between flexibility and control.  Without that focus on performance, it is a bit messy.  Some conclude that hybrid work is “the worst of both worlds”. (Economist), and others that budget pressures might reduce flexible working practices (Management Today).  

This binary, good or bad approach isn’t constructive.  Of course, there are challenges with hybrid working – we’re learning new approaches. We need to treat this as a series of experiment -test, learn, refine.   By doing this we can design smarter hybrid working, improving wellbeing, engagement, performance and productivity.  Over the next few weeks I’m going to try and share some thinking, starting with some high level principles and then getting into some of the details.  

As ever, I’d love to get into conversation about this.  Please comment, and please reach out if you’d like to chat about what this could look like for your business.

Elevating the goals of hybrid

Some hybrid approaches are simply about adjusting policy and fitting in with the crowd.  It’s not a purposeful or strategic decision. We need to aim higher, and deliver on three goals:

1. Higher Productivity – the organisational lens

Office work is fairly wasteful, to the point where it inspired the 4-day week movement.  Equally, there are plenty of shortcomings in flexible working practice.  However, it is entirely possible to design for more productivity through better working practice, managing distractions, better meeting management.  

2. Greater Engagement – the collective human lens 

Corporate performance is driven by engagement and by culture.  We work together in the interest of our organisation.  A hybrid environment means engagement and culture are different, more local, and require more active intervention.  

3. Better Wellbeing – the individual human lens

Wellbeing is the fuel for performance.  If there’s no wellbeing, then (1) and (2) don’t happen.  We should be designing work to reduce stress and burnout, and to maximise the chance of our employees being able to work at their best.  Even if that includes, as Dan Pink advocates, an afternoon nap.  

Design Principles for Smarter Hybrid

To deliver on those goals, I’d suggest hybrid design needs to start with three principles:

1.  We employ trustworthy, responsible and self-motivated adults

Given the efforts of recruitment, management, and engagement this should be obvious.  However, it’s clear that many people don’t start from a position of trust.  The BBC reported on Productivity paranioa last month.  This month an interview with a leader in HBR asks “are you concerned that remote workers will shirk?”.  I’ve run sessions with Finance Directors who’ve been unclear how to make their people work remotely.  

If you can start from this principle being true, then it creates a virtuous cycle.  If you demonstrate trust in your people and treat them as adults then you can have open conversations about their responsibility to deliver their work, support the team and the organisation succeed.  It shifts the dynamic from me to we.

2.  Choice within a framework

Hybrid working can’t be a free-for-all.  There needs to be some framework within which you give people as much choice as possible.  Be clear on your boundaries, and clear on why you’ve got them.  Let me illustrate by comparing two options:

(a)  You must be in the office two days a week. You can choose which days.

(b) You must be in on Tuesdays between 10 and 3, for team meetings and planning sessions.  

(a) gives zero guarantee about meeting team-mates, and no purpose to being in the office.  (b) is more fixed in certain respects but uses time in a very purposeful ways supporting teamwork, direction and connection.   

The critical point is to have rules for a reason – getting back to treating your people as self-motivated adults, you need to avoid “because I said so”.  Aim to give as much clarity, and offer as much freedom as possible.

3. Good managers make good teams

If you’re trusting your people, and you’re empowering within a framework, then the manager becomes even more critical.  They are the linchpin in getting teams aligned and working well.  This strengthens managers (the single greatest influence on engagement) (Gallup) and strengthens team psychological safety (one of the greatest drivers of performance) (Accenture).

This is likely to be a point of failure though – it’s likely your managers are underskilled for doing this.  Agreeing and managing hybrid is a new skill, and they were probably underinvested in anyway (see great research from Jack  Wiley).  Manager standards are patchy in most organisations – my team analysed 700 managers, and found satisfaction with manager ranged from 1005 down to 17% (i.e. in some teams 1 in 6 people thought the manager was competent!).  

If you want hybrid to work, managers need help.  They need the skills and practices to make this work.  That doesn’t need grand management development courses, but it definitely needs some support. 

Let’s get real – is it possible?

It is entirely possible to create smarter hybrid work.  I’ve done it. I’ve linked to some of the information about the approach we introduced at VM above.  I can share more if you’re interested – just let me know, but for now let me give a quick summary of “A Life More Virgin”.

We shaped our approach to work on 4 critical elements.  The first two create the framework, allowing for empowerment and individual tailoring:

  1. personas set the group boundaries – 5 simple groups of roles based on the level of flexibility.
  2. teams agreed their rhythms – how, where and when they’d meet.
  3. stage – individuals considered work requirements based on work and life stage (e.g. new to work or employer, change in role, caring responsibilities).
  4. life – allowing people to tailor work to their situations, e.g. creating space for Friday prayers, spending time in the office because home was unsuitable etc.

The approach was deployed across the business over 8 months, rolled out area by area.  In each function managers received three briefing sessions, they were supported in agreeing team rhythms with their team. Individuals were provided with the work-happy app to help them identify what mattered to them in work, and how to optimise this.

Is it perfect?  Of course not.  However, it is a start and gives everyone something to build on.  It’s now followed with ongoing work to tweak and improve work.

What next?

I really hope this has whet the appetite and stimulated some thought.  In the next few weeks I’ll dive into some of the challenges.  I’m roughly thinking of covering:

  • Leadership – the opportunities and challenges for senior leaders.
  • HR – the conflicting pressures and demands on the people function.
  • Managers – the criticality of managers, and how to help them.
  • Recruitment and onboarding – “new starters can’t learn the ropes”.

I’ll also aim to address some of the challenges and barriers that I hear most frequently:

  • Learning and career development – “how can I learn from experienced colleagues”, “how can I build a career with no visibility?”
  • Culture, inclusion and engagement – “remote workers aren’t connected”.
  • Performance and productivity – “how do I know my people are working”.

Do let me know if you’ve got a pet subject you’d like me to cover, and as ever give me a yell if I can help you shape brilliant work for your organisation.

Our Performance – transforming performance and culture at Virgin Money and CYBG

FranLake101

I’ve recently shared the case against classic performance management, and why it is time to change.  Now I want to share an example of a better way – during my time at CYBG and then Virgin Money we transformed our performance practice, and along with it the culture and performance of our people.  This is that story.

I’ll talk about how we started, the philosophy, the design, how we introduced it and how we sustained it.  This is going to be headline stuff – please do reach out to me on francis@greenjuniper.co.uk if you’d like to discuss more about what it could look like for you.

Before we dive in, let me share three key things:

  1. It’s made a massive difference:
  • Managers who follow this approach have 30% more colleague engagement.
  • Sustained success – five years of implementation and refinement.
  • Cultural impact – It started the cultural journey that helped CYBG acquire Virgin Money, even referred to in the deal prospectus: “[Virgin Money] will continue to build on CYBGs innovative approach to performance, with a focus on team rather than individual contributions.”  That’s the only time I’m aware of PM contributing to a corporate merger!
  • Wellbeing – we were normalising conversations about wellbeing two years pre-pandemic.
  • Future of Work ready – it underpins Virgin Money’s approach to work – A Life More Virgin.
  1. It’s an approach with a team ethos, created with a team effort:

This was a team effort including our CPO and LT, our project team, my brilliant OD team and wider HR, and our partners at Positive Group, Uncountable and Clear Review.  Most importantly, managers and colleagues across the group breathed life into the approach.

  1. I’m a wholehearted advocate:

Since 2017 I talked to dozens of companies, spoken at CIPD annual conference and recorded interviews with Clear Review.  The success of this approach is one of the main reasons I set up Green Juniper as I left Virgin Money – I want more people and companies to enjoy better, more rewarding and more successful work.

Our Starting Point and Philosophy

CYBG (Clydesdale and Yorkshire Bank) was created by IPO from National Australia Group in early 2016.  The shift being a subsidiary to a newly independent bank in a tough market meant new demands for our people, the need to shift performance and transform culture.  Kate as our CPO prioritised building a cutting-edge performance practice, and that’s where the team and I came in.  

We started with a raft of external research including insight into psychology and neuroscience from the Positive Group, understanding intrinsic motivation through work such as Dan Pink’s Drive, and external scanning into all the pioneers of new performance – Adobe, consultancy houses and similar.

We looked hard at our context, org design and operations – processes, capability, structure of the business.  We thought about how people adapt and sustain change – including tipping point, nudge theory, product adoption curves and how to start a movement (remember Lessons From a Dancing Guy?).

We pulled all of this into our core philosophy:

  1. Performance must support and drive strategy and culture
  2. We want a one-team ethos, grounded in positive psychology
  3. This is about maximising performance, not controlling it.
  4. Treat wellbeing as the fuel for performance
  5. Reward allocation as downstream decisions

Our Design:

The philosophy led to our design which has a quarterly flow, with 5 key elements:

Team goals – aligning to strategy

No-one succeeds on their own.  Companies organise people into teams to deliver work.  The best performing teams have common goals, influence over their work and direction.

This led us to move from individual scorecards to team goals.  Every quarter teams come together with their manager to review and refresh goals.  They’ll have around 8 goals, with each one aligned to one strategic goal for the business.  

The approach strengthens team collaboration, gives voice to team members, increases ownership, clear prioritisation and organisational alignment.

Personal goals – learning and improving

Teams get better when team members get better.  We wanted to create an environment where people focused on increasing their contribution to the team.

We did this by asking every colleague to set two personal improvement goals each quarter.  This replaced the annual development plan.  Each goal was tagged against one of our values, supporting culture.

The limited number of short-term goals creates focus and encourages immediate action.  It’s grounded in the idea of marginal gains – If each goal aims for 0.5% improvement in performance, then that’s 4%+ per year.  

Feedback – the fuel for improving performance

We took the view that you can’t improve if you don’t learn.  You can’t learn if you don’t get feedback, and you’re not helping the team if you don’t give feedback.

Feedback often has a bad rep, with a lot of focus on what’s wrong.  It can also be very poorly timed.  We set out to transform this, making feedback feel like a gift.  To do this, we wanted lots of regular, positive, helpful feedback.  We asked people to share feedback through Clear Review, sharing one thing they liked (a thumbs up), and one suggestion to make it even better (a lightbulb).  We also asked people to tag the value that it related to.  

This approach is important – it places the onus on the giver of feedback to think harder about our culture, and about what to do to improve.  It gives much more regular praise to colleagues, priming them to be open to improvement.   It doesn’t replace difficult conversations or verbal feedback, but starts to build an environment where positive, helpful feedback is the norm. 

Check-ins – the performance pitstop

In 2017 a lot of continuous performance approaches had no regular requirements at all.  Our view was that there was always a need to pause, check-in and go again.  We created quarterly check-in, with a specific flow. I think of them as a pit-stop – pull over, refuel, refresh, go again.

The flow started by confirming the colleague was on track (removing threat).  It then moved to discuss wellbeing (the fuel for performance).  Those two points set the ground for the rest of the conversation – discussing feedback, progress against personal goals, contribution to team goals, and setting new personal goals.

The approach was grounded in positive psychology and focused on maintaining progress.

Viewpoints – creating evidence-based performance

We didn’t want to major on process and form filling, so managers had to answer just a few key questions after each check-in round:

  1. Is colleague performance on or off-track?
  2. How fast is the colleague improving?  (achievement of personal goals)
  3. Was there a wellbeing conversation?
  4. Has the colleague received a good mix of feedback?

We combined this data with all the data coming out of the system – around 250k data points per quarter.  We could mine that data to target interventions – e.g., managers who needed help, teams who were struggling with feedback or on setting goals.  This meant we were always helping to incrementally improve (in line with the philosophy).

Pay and Bonus – breaking the link

I’m not going to major on this, but recognise it is a tough hurdle for many people, if PM is basically about reward allocation.  However, with our philosophy we took the view that OP should be about performance, and financial reward was secondary.  We had to stick with a philosophy concentrating on intrinsic over extrinsic motivation.

This meant that pay awards were determined by position against market, and everyone who was on track over the year would be the same bonus percentage as their peers.  The stance was – we’re one team, we win together.

Launching the Approach

I’m biased, but I do think the design we implemented is the smartest approach to performance I’ve seen.  However, what makes it work is the engagement and the embedding.  

It’s critical to realise that people are well and truly stuck in the rut of classic PM, sometimes over decades.  Transforming it requires changing individual and collective beliefs and behaviours, often starting from a point of low engagement and low trust.

We set about on a multi-prong approach to engage people, including:

  • Making the scale of change clear – whenever we presented, our first slide was a bulldozer.
  • Inspiring examples – given our timing we used imagery from 2016 Olympics like Hannah Cockcroft sprinting to gold, or the GB hockey team huddling and resetting goals.
  • Human examples – we used Couch to 5K and Scottish Slimmers to show how we can all benefit from incremental gains.  
  • We created organisational stories – three of our LT members ran the London marathon and we used it as an example of relative performance, improvement, personal goals.
  • We found stories that others could own and share – one of our LT members illustrated personal goals with Roger Federer perfecting a new shot every off season.
  • I’d listen to and talk with teams, and we’d work out how to make the approach fit for their context.  This wasn’t once and done – I spent time with our commercial banking team every quarter for the first year, hearing their successes and challenges and refining the approach together.
  • We recognised HR was critical, and it was just as tough for them.  The changes disrupted reward, policy, wellbeing, learning, case management, change management and others.
  • When we came to training, we focused on behaviour, not the system – if you want to change behaviour, train behaviour.  If you want to have less process, train less process!  Our friends at Uncountable did this by taking our people through experiential training that was like a Mission Impossible – Apprentice – Crystal Maze mash-up in a Premier Inn.  

Embedding the approach

Sustaining is tough.  We know that some people get it right, and some don’t.  Teams change with turnover and organisational change.  Peaks and troughs of work shift priorities.  Sometimes we assume that people will all adopt new processes, but in practice it is much more like a product adoption curve.

With that in mind, we set about creating a movement.

  • Wherever there was good practice we celebrated and amplified it – we had senior leaders who were the role models for feedback, banking area managers who’d got great practice, and our Commercial Banking team nailed the spirit of team goals.
  • We used the data to spot good practice and identify those who needed help.  We weren’t punitive though – if we could see an area just hadn’t got it nailed, we’d offer help – how to generate more feedback, have better goals, improve practice.  We simply made it clear that high performing teams did this, and low performing teams didn’t.  Which did they want to be?
  • This also meant reprioritising within HR – what data we provided to HRBPs, how we sustained quarterly activity, how we tackled areas that serially didn’t do a good job.

And what about success?

Earlier this year, members of my former team shared some brilliant data with me.  They cross-referenced five simple practices in our performance with data from the engagement survey.  

There was a direct correlation between performance practice and colleague sentiment.  That included engagement, understanding organisational strategy, advocacy of the company’s products, stretching performance and satisfaction with line management.  

What emerged was that managers who did none of the five scored 50% on the above measures.  Managers who did all five scored 80%.  To get a sense of the performance difference this creates I picture a hockey or football match, where one team has five players who are motivated, know their positions and the team tactics, and the other has eight.  We all know which team will win every single time.

What next?

One of the most common barriers I hear is along the lines of “our organisation isn’t ready for this” or “our managers aren’t good enough”.  Let me assure you – when we started, we weren’t “ready”.  However, taking the long-term view, making a start, and continuing to improve was transformational.  You never complete a journey you don’t start!

I’m passionate about this because I know it works.  It makes work better for people and people better at work.  A big part of the Virgin ethos is creating great colleague experience, and that’s why we shared with so widely.  We also know that context is everything – what we did won’t fit other organisations.  Both of those beliefs remain true now I’m running my own business.  It is absolutely possible to create a positive culture and high-performing organisation.  Elements I’ve described above will work, but it’s got to be tailored to you.  If you’d like to make a start on transforming your performance and culture, please reach out, either via LinkedIn or to francis@greenjuniper.co.uk .  Wherever you’re starting from, I’d love to help!

Why classic performance management doesn’t…err…manage performance

FranLake101

Performance management should be awesome.  It gives the opportunity to reach every colleague, create alignment, strengthen culture, raise performance, and maximise the return on our greatest asset. 

Sadly, classic PM has lost sight of this.   According to Gallup: “[it costs] as much as $2.4 million to $35 million a year in lost working hours for an organization of 10,000 employees to take part in performance evaluations – with very little to show for it”.  PM has largely been distilled down to a process that feeds pay and bonus, rather than managing performance.  It is grounded in the belief that money is the primary motivator, neglecting all the other drivers of human performance. (CIPD).

In this blog I’m going to try to set out the case against the classic PM approach of cascaded goals, annual appraisals, roundtable assessment, performance distribution and bonus awards.  Next week I’ll share a bit of a case study on how we transformed this at CYBG and then Virgin Money, and what learned over five years of practice.  Green Juniper can work with you to review your current practices and shape much more effective performance practice – please reach out if you’d like to discuss.

So, let’s look at the failings of PM:

  1. It undermines culture.

Companies set out target culture, values and behaviours that will lead to superior performance.  Those tend to include more empowerment, collaboration, reduced hierarchy, more adaptability, more transparency, and more room for initiative. 

PM pulls against this kind of culture.  It is hierarchical (goal cascade).  It is inflexible (annual goals).  It discourages collaboration (individual goals).  It increases risk of failure (performance ranking).  It is opaque (round-table rating).  Organisations can do fantastic work to drive culture, but with classic PM it is like driving with the handbrake on.

  1. It doesn’t measure organisational performance.

Executive teams look at reams of data on all aspects of the performance of the company.  When it comes to looking at the performance of people (their greatest asset, and likely their greatest cost), they get very little quality data.  Often the only actual performance data that the executive team will see is the final performance distribution at year-end.  They can see the performance round has been completed, but not whether goals have been delivered or performance improved. Even that data isn’t helpful – the curve is the same each year, effectively saying that performance is the same despite all the performance management, learning, career development, communication, goal-setting, coaching, townhall sessions and engagement surveys over the course of the year.

  1. It does not sustain alignment

In the absence of performance data, executives rely on inputs – getting an aligned set of goals through the organisation.  Well aligned organisations generally perform better but achieving and sustaining alignment is tough (HBR).  

The problem is goal setting is slow – cascade can take 8 weeks (15% of the year!).  It’s unwieldy, so not revisited or reviewed.  This means alignment isn’t refreshed through the year as there are external events, strategy refresh, changes to plan etc.  The business spends 8 weeks getting aligned and then 44 weeks drifting apart.  The consequence is that goals reviewed at year-end often don’t relate to the actual work delivered.

  1. It weakens teams

We organise people and work into teams as we believe that leads to better performance.  High performing teams typically have common set of tasks and objectives, a clear direction, ways of working, psychological safety (rework).

In classic PM team members are given their own tasks, with no sight of their team mates.  It puts team members in competition for finite reward.  The rating system does not encourage colleagues to help team-mates who are struggling, or support colleagues who are prospering.  At the extreme, this intra-team competition contributed to Microsoft’s “lost decade”.

  1. It undermines good management

Good managers are critical for building high performing teams – reinforced by Google’s project oxygen.  A good manager creates alignment, develops team members individually and collectively, deals with issues, creates a positive environment.

While organisations may invest in developing managers, setting expectations and so on, the performance management process undermines all of this.

A great manager who raises the performance of their team members, who tackles under-performance and who builds a strong team ethos is making their job harder at year-end.  They’ll have more high-performers and fewer weaker performers, making it hard to “hit the curve”.  When they go into roundtable discussions, they’re a hassle for their team-mates and their own manager, because they make it harder to distribute ratings.  In contrast a mediocre manager who isn’t raising performance and doesn’t move under-performers on is a “good corporate citizen”, helping to meet the performance expectations, and critically making their boss’s life easier.

The subliminal message from PM to managers is to always have a weak team member and don’t have too many strong ones!

  1. It is discriminatory

One of the biggest issues with performance management is that it is discriminatory.  There is a belief that it is objective, and that roundtable exercises act as a safeguard, but that just isn’t true.  The approach of appraisals and roundtable discussions plays in to so many cognitive biases such as recency, affinity, proximity – basically people who we like, who are like us, and who are close to us, are more likely to get better ratings. (Engage for Success).  That would be one explanation why the gender pay gap and ethnicity pay gap are so intractable – decades of rating and decisions have slowly built up.

What next?

Traditional performance management has been around a long time, and some people have been very successful through it.  However, overall the approach does not support modern organisations, doesn’t drive individual or team performance.  There are much, much better ways out there. 

Next week I’ll aim to share the kind of practice I’ve put in place previously, and how it has worked.  If you’d like to discuss what could work for your organisation, then please reach out.

Why right now it’s time to transform performance management

FranLake101

Sometimes, tools or practices that have served us well become obsolete.  Remember how cool CDs were?  The Blackberry?  Blockbuster? One-hour photo printing?  The world moves on, and failure to adapt is a slow death.  That’s where we are with performance management.  It’s long been overtaken by better practice, but many organisations are still stuck with it. 

In this note I want to argue that if you’ve not moved away from classic annual performance management, the time to do it is right now, for these reasons:

  1. Organisations have changed rapidly in the last two years
  2. People, work and society have changed even faster
  3. The PM deal of good performance for improving pay is dead in the water
  4. Year-end 2022 could be the perfect storm

As a bit of background, I’ve been fortunate enough to take people on the journey to continuous performance management twice – we transformed performance at CYBG in 2017 and expanded that to Virgin Money in 2018/19.  I know how tough it is to deal with resistance and inertia, I’ve seen what does and doesn’t work and found ways to progress.  In the last five years we learned, analysed, experimented, and refined practice.  My arguments here are grounded in science, good practice and lived experience.  I care about this, because I know it is possible for PM to drive performance and give colleagues better working lives. 

Over the course of the week I’ll share a couple of pieces on the case against performance management, what a better approach can look like, and how to get started.  For now, let’s look at why it’s more important than ever to change:

  1. Organisations have changed

The level of ambiguity now is greater than ever – in the UK we’ve seen systemic shock after systemic shock – Brexit, Covid, war in Ukraine, 4 Prime Ministers in 6 years.  Organisations must be far more adaptable, able to evolve goals and strategy rapidly.  Operations, structures and role demands have to change as a result of faster digitisation (McKinsey) the move from bricks and mortar stores (PWC),  supply chain and inflationary cost pressures (BDO).  

Organisations are adapting – more agile methodologies, investment in upskilling and reskilling, new tech, revisiting communication and organisational values (emphasising adaptability and innovation).  However, it is striking that performance management (which should be driving performance of the whole workforce) often doesn’t feature in these discussions – reflecting that classic PM doesn’t support organisational need.

2. Our people have changed, and so has the way they work

Through Covid we spent so much time coping that we didn’t really take stock of all the change going on around us.  HR had to focus on safety, health, and managing operational resources. There wasn’t the headspace to see the workforce transform.  

It has transformed though – half a million over 50s left the workforce through Covid (ONS), and close to 3 million people have started work from school or university.   That’s more than ten per cent of the workforce who are new, but also less visible and less connected to organisations in the remote/hybrid world – as evidenced by the “quiet quitting” phenomenon emerging on TikTok.  

More fundamental is that life has changed for every one of us.  The relationship with work has been challenged by furlough, redundancy, and role changes.  Home is now a place of work, and 38% of UK workers are still hybrid (ONS).  Around 2m people have long Covid (ONS), and 10% of the population are experiencing persistent mental health challenges (BMJ).   Where we work, when we work, how we work and our ability to function have all been impacted.  All of these impacts disproportionately impact protected minorities, with performance systems carrying real risk of systemic discrimination (Personnel Today).  

High Performance depends on a whole host of factors – wellbeing, location, connectivity, relationships, personality, experience, nature of role, quality of management.  Classic PM tends to simply focus on the process, rewarding those who’ve delivered the most, likely to be the people with the most advantages.   

3. The mental deal is dead in the water

The performance deal for colleagues goes along these lines: “I agree performance and development goals.  If I work hard, deliver on goals, build skills and experience, then my salary and career progresses”.  Pay frameworks support this – new starters begin at the bottom of a pay range and progress towards a market rate.  

However, it doesn’t work.  Collectively, real median income rose by less than 1% between 2007 and 2021 (economicshelp.org).  Individually, it can easily take 20+ years to reach market rate for a role.  

Classic PM works on the basis that this deal remains in place, but people just aren’t buying it anymore.  The exit of over 50s, the great resignation, historic high levels of vacancies (1.3m March to May this year), “quiet quitting” and the volume of industrial action all demonstrate dissatisfaction.  This reflects the very real financial pressure people are under, but it also reflects that people don’t believe companies are keeping their promises around performance and reward.

4. Year-end 2022, the perfect storm?

There’s a lot of dissatisfaction, and it is going to get worse – industrial relations are wobbly; pressure is on companies to drive performance;  pressure is on colleagues to pay the bills.  Inflation is double digit, and energy costs in October will rise by about £800 (even after Liz Truss’ magic).  Someone earning median fulltime salary for the UK will need a pay increase around 4% to cover those costs alone.  In May, annual pay growth was 4% with inflation at 9% (The Guardian).

How does this relate to the performance year-end?

Colleagues need a good pay rise.  Their route to that is a good performance rating.   This year, more than ever people will be pushing for a high performance rating.  Let’s assume 50-60% of colleagues argue they’ve performed strongly – that’s not going to match the corporate distribution curve. 

The organisational view is likely to focus on retaining and rewarding their good performers – more pressure to “hit the curve”.  Every manager in every round-table discussion is going to turn up with acute pressure from their team for high ratings, and they’ll have to calibrate with a more varied workforce and less visibility than ever.

It leaves managers in an invidious position – through Covid they’ve built stronger relationships, stronger teams, and now they’ll have to tell many colleagues “We don’t think you’re as good as you do”.  That’s going to disengage people, diminish trust and increase cynicism.  And managers aren’t well set to handle this –   Over 60% are experiencing some degree of burn-out, impacting their ability to perform well (HRDirector.com).

Even if the exercise was perfect, the outcomes will still be damaging.  The gap between pay deals and inflation means even the top performers will be worse off in real terms.  Some will conclude they need to move to be properly rewarded (and there were 1.3m vacancies in the UK last quarter).  Others will stay, just more cynical and more toxic – diminishing performance (see this month’s HBR).  

This year-end will amplify the failings of performance management.  It exposes the contradictions in working practice.  There will be transparent impacts – retention, grievances, sickness.  The more pernicious impacts are long-term – lower engagement, trust, wellbeing and psychological safety.  And lower psych safety can lead to 37% higher turnover, 33% lower productivity, 36% lower collaboration (Accenture).   Following a classic-year end process could easily mean you spend thousands of hours of work to make your people perform worse.

So, what to do?

There’s no simple solution.  The economic position is brutal.  While organisations can’t tackle the economic position, they can definitely take actions that strengthen engagement, trust and performance.  

There are three things I’d recommend now:

  1. Commit to transforming your performance approach.  Tell your people what you’re going to do, tell them why, get them involved.  Be open about the context, the challenges right now and acknowledge that the current process doesn’t work. 
  2. Listen to people about their experiences of performance and appraisals.  You’ll hear horror stories, but it is cathartic, and it gets people engaged in creating something better.  Use this to inform your design approach, and test ideas with people as you do.
  3. Treat this as a break point for reward distribution – e.g., consider flat awards this year, to give you time to shape a reward strategy fit for the future.

Moving to a new performance approach isn’t about refining a process.  It’s about changing beliefs and behaviours, to drive better performance.  It is a win-win change though – raising organisational performance, strengthening culture, creating more agility, helping managers and giving colleagues better working lives.  The key is to get started, and I’d be delighted to help you with this – so if you’re interested in making work better, please reach out!

Why organisations are a bit like old engines…

FranLake101

Our organisations are a lot like engines. Engines have many, many components that all have to interact to make the engine work. In companies there are thousands of individuals who are all interacting in order to make the company succeed.

Internal combustion engines aren’t that efficient. They lose energy through heat, vibration and noise. And I think we can all recognise that in organisations – whether that’s inefficient processes, under-performance, low engagement, absence and so on.

Old school management would try to manage everyone like it’s an engine – standardised performance, shift patterns and so on.  Some operations still do that.  Strangely enough those kind of management practices lead to higher absence, higher turnover, higher error rates and so on. 

And the reason for that is because people aren’t like motor parts (you don’t need to be spark plug to realise that.  boom boom).  While every part in an engine is standard, factory produced, built to fit its role, the same just isn’t true of people.  Every single colleague is effectively hand-made by different craftspeople. They’ve got an uncertain history, they’re often put into roles they’re not made for, they’ve got an uncertain lifespan, and unpredictable performance.

To get the best out of this organisations need some real thought about how these parts can work together, how they are maintained, how they interact and how they are upgraded.

That’s where managers and leaders come in really isn’t it? Only managers are often as well equipped for this as I am for working in an F1 garage. For a lot of managers their answer is either: put a load of oil on it (money), whack it with a spanner (discipline, performance), or chuck the part out and get a new one (hiring).

Good people practice can significantly reduce the wasted energy in an organisation. Better managers can get their teams working well together, good organisational processes can reduce wasted effort, continuous learning and improvement can raise the performance of individuals and teams, and more attention to hiring and careers can sustain performance for much, much longer.  A little investment in the quality of management and the skills of managers can go a long, long way.  Like a well-maintained vintage car…

 

 

 

 

 

 

The Story of Green Juniper

FranLake101

Green Juniper is a new enterprise (as at June ’22). It’s founded by Francis Lake (me), working with friendly associates. So what’s in a name?

There are, as so often, three reasons… each one reflects an aspect of how I want the company to work.

First … Juniper Green is where I live and where I work. It’s where I feel at home, where I get inspiration, where I’m with my family. It’s the start-point for every adventure and the place I return to. My aim is that Green Juniper is about combining work and life, not treating them as separate, so it fits well. It’s a name that’s going to keep me rooted in the purpose of the business.

Second, I like the concept of innovation from the periphery, the idea that looking at things from a different perspective brings new insight. Some years ago a professor from the Glasgow School of Art talked about a centre they’d built in Nairn for innovation, with the idea that being on the edge of the North Sea looking South to the rest of the UK gave a different perspective on things. I’ve tried to apply that, and Juniper Green reflects it – it is a village, but in the city. In some respects it’s very rural, while in others it is very urban. I’ve tried to capture the idea of that different angle in flipping the name around.

And the third reason, is a pragmatic one. There are already websites and companies registered as Juniper Green, and I don’t want to be confused for a gin, an American band from the noughties or a Norwegian prog band. Whenever I work, there’s always that grounding in the practical, what works, what achieves the right effect, and what is cost effective.

So that is it – Green Juniper. A different lens, combining the important things in work and life, with a good dose of pragmatism. But no prog rock.

Juniper Green Gin – not Green Juniper
Juniper Green – not Green Juniper
Junipher Greene – not Green Juniper