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 firstname.lastname@example.org 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:
- It’s made a massive difference:
- 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.
- 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:
- Performance must support and drive strategy and culture
- We want a one-team ethos, grounded in positive psychology
- This is about maximising performance, not controlling it.
- Treat wellbeing as the fuel for performance
- Reward allocation as downstream decisions
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:
- Is colleague performance on or off-track?
- How fast is the colleague improving? (achievement of personal goals)
- Was there a wellbeing conversation?
- 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:
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.
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 email@example.com . Wherever you’re starting from, I’d love to help!