LEADING IN A LOW PERFORMANCE CULTURE

EPISODE #239 TRANSCRIPT

What does a low performance culture look like?

I quite often talk about how you'd know if you had a high performing team, but I don't think I've ever really addressed the concept of a low performance culture, other than to say that they're awful to work in.

It's not always easy to recognize a low performance culture, for a few reasons. One is that sometimes it's like ‘boiling frog’ syndrome. If you drop a frog in boiling water, it'll jump out immediately because the contrast in temperature is such a shock. But if you put a frog in water at room temperature and then gradually increase the heat, the frog won't move. The gradual increase isn't recognized until it's too late.

If you come into a role from outside an organization, you’re the frog going into the boiling water. It's obvious almost immediately what the issues are, and they create a shock to the system.

But over time, you become desensitized. I call this the process of being corrupted. Whenever I brought new leaders into a company, I'd be sure to capture their thoughts before they were corrupted.

Desensitization happens rather quickly, probably just a matter of months, and no one is immune to it. I certainly wasn't.

An example from my CS Energy days

I was hiring plant managers from other industries, in roles at all levels from the frontline leaders through to the plant general managers.

My observation was that (in Australia at least) the oil and gas industry seemed to be a little further advanced when it came to process safety and operating discipline than the energy sector. So, if we hired a leader from oil and gas, I'd stay pretty close to them in those first few months, even if they were several layers below me. Before they were corrupted, I'd tap into their candid views of where the opportunities for improvement actually were.

I remember one leader we hired from a large oil company who was at superintendent level, so a direct report to the general manager of that facility. I met with him on a site tour I was doing just a few weeks after he started, and I asked him what he was seeing so far. I watched the color drain from his face, as he told me how worried he was about some of the core processes, and the overall safety risk profile of his team.

This was incredibly instructive for me to hear his views, as the frog who just landed in the boiling water, about the culture of that plant compared to his previous role in a different company. But when I spoke to that same individual only a few months on and asked him, "Hey, Harry, how's things?" He said, "Yeah, pretty good, Marty. I understand the local issues now and I'm pretty comfortable with how everything's going."

He had been corrupted. So always trust your first instinct, listen to your gut, and don't accept on face value the existing view of the world--the seemingly plausible explanations for why something is the way it is. Always challenge the status quo.

recognizing and accepting the truth

It’s pretty difficult to recognize and accept the truth about your culture. Some sectors are more prone to low performance than others. I'm not going to mention specific examples, but you know who you are!

Sometimes, it's simply a case of the market dynamics you operate in. For example, regulated monopoly businesses are, by their very nature, lower in performance than commercially competitive businesses. I've worked extensively in and around both types, and I can tell you it's just true. If there's no competition, you never have to flex your competitive muscle.

Without a really strong, driven leadership team at the top, you'll naturally have less pressure to perform… and monopolies rarely attract that type of leadership. But, regardless of your sector, industry, location, or organization, I want to give you a criteria so that you can self-assess your current situation, and work out if you’re actually leading in a low performance culture.

10 indicators that you are leading in a low performance culture

1. Performance measures are hard to verify

Have a look at the things your company or team chooses to measure. Do they speak to quantifiable value or just activity? Low performance cultures have woolly, vague, ambiguous targets.

2. An over-indexing of process rather than results

Are the conversations you’re having in the organization about process and procedures? Or are they about outcomes, results and value? This is a sure indicator of a low performance culture. Processes are critical, for sure, but only as a means to an end. It's not the end in itself. Be aware of the common fallacy of process for process’s sake.

3. Problems are solved by committees rather than accountable individuals

Whenever something important needs to be done, a committee is formed. This is a sure-fire way to build an all-care-no-responsibility-culture. And in terms of performance, it's vastly inferior to a single point accountability culture.

4. Low performance cultures lack energy

It used to be a lot easier to make an assessment of this before we had work from home. Now, I'm not an advocate of measuring inputs (like hours worked), but you can tell a hell of a lot about a team by observing the interactions in a group setting. Back in the days when you could actually see your team working, you could tell something about its performance from the energy levels and the sense of urgency of the individuals. This actually has a strong correlation with performance as long as the leader is strong enough to make sure that everyone's working only on the highest value things.

5. There's lots of positive affirmation for people about their performance, regardless of the reality of the situation

In low performance cultures, leaders frequently communicate to their people how well they're doing, even when it's not true. The logic here seems to be that if you tell your people they're awesome, they're more likely to believe it and act like it. Many people accept this on face value, but almost everyone knows deep down that it's not true. This drives a culture of cynicism, not performance.

6. There's no link between performance and consequences

A culture where there are no consequences for lack of performance is, by definition, a low performance culture. And yes, as leaders, we need to be inclusive and supportive of our people. We need to motivate them with the carrot rather than the stick. But if you want to avoid a low performance culture, it's really important that people feel the weight of consequences for the choices they make. If you don't protect the minimum acceptable standard for performance, the whole team slides towards the lowest common denominator. In fact, one of the main reasons I've produced this episode is the huge volume of questions we get from leaders asking what they can do if the organization's culture doesn't support rigorous performance management of individuals.

7. There is strong resistance to change

People who've been in the company for some time fiercely defend the status quo. Change is seen as negative and threatening. These are knowing organizations rather than learning organizations, and any attempts to innovate or improve are resisted fiercely. But ironically, there's often a strong verbal dialogue about being innovative and progressive, which masks this reality.

8. There's strong resistance to comparison

If I had my time over in a couple of companies I worked for, the very first thing I'd do would be to look at some really serious external benchmarks. How does our performance compare to others in our industry? If you're serious about productivity and performance, you don't fear comparison to others, you welcome it and you use it to fuel your drive for improvement. Every benchmark I've ever used has shown that improved performance is possible, and it's been a catalyst for seeking out and capturing that improvement.

9. Low staff turnover

Now, you might think that low staff turnover is a good thing, but it's not. You should aspire to a healthy level of turnover. Low performance organizations pride themselves on low turnover, but all this demonstrates is a level of comfort, consistency, and stagnation. Don't forget, there are two types of turnover: desirable turnover and undesirable turnover. Desirable turnover is when underperformers leave because they don't want to meet the required standard--they just want to cruise along. If you aren't seeing these people leave, it's most likely you are working in a low performance culture.

10. Politics at the top, overshadows performance below

Every organization, regardless of size, has politics. But what do you see being rewarded at the highest levels? Do the people who deliver results get promoted? Are they the ones who hold favor with the CEO or is it the upwards managers, the political manipulators, and the yes-people who make their way to the top?

If you’re brutally honest when you assess these 10 indicators, you'll get a much better perspective to support your sense of whether or not you are living in a low performance culture.

Why is it so hard to change a low performance culture?

The biggest problem is the Emperor’s New Clothes. Everyone knows the truth, but no one is prepared to face it or speak about it. The very thing that defines a low performance culture is the thing that protects it from efforts to change, particularly the avoidance of any sort of external comparison. This is accompanied by mass rationalization.

Leaders in a low performance culture do all sorts of things to convince themselves and their people that they're actually performing well. One sign you'll often see is that they apply for lots of awards. Now, to be honest, I don't really believe in awards for business. With all deference to those of you who've won awards in the past, the upside of an awards process is the recognition and celebration of excellence.

But the downside is that awards aren't necessarily won by the highest performing people and teams. They're won by those with the best applications, who talk a good game when they're interviewed. Awards are often more about perception than reality.

For example, in a previous corporate executive role, one of the functions I had in my portfolio was procurement. My initial assessment was that the performance of that team was incredibly inefficient. It was grossly overstaffed. It was process- and compliance-driven, rather than value-driven, and it lacked the commercial astuteness that you'd ideally like to see in a procurement function. Hey, a bunch of good people, right? But your classic low performance culture.

Yet only a few months into my role, I was asked to attend a function to celebrate an industry award they'd won for procurement excellence. Whoa!

‘white blood cell’ syndrome

The other thing I'd like to mention about the degree of difficulty in changing a low performance culture is what I call ‘white blood cell’ syndrome.

Think of your organization as a living organism. White blood cells protect the human body from infection. When an unrecognized organism is introduced into the body, the white blood cells swarm around it and eliminate it, thereby protecting the body and stopping the spread of infection. White blood cells perform a critical function.

Imagine though, what happens when you come into an organization that needs to be changed, but it doesn't know that it does. The leaders will resist any attempts to improve performance. We even coined an expression for these people. We call them SQDs (status quo defenders). The SQDs would vigorously fight against anyone who wanted to change the way things were. They were the white blood cells that swarmed to kill the unrecognized organism (that's you!). You’re the leader who wants to make positive change to improve performance, and the white blood cells want to stop you from doing it because that's not what they recognize.

Changing a low performance culture can be an incredibly difficult and drawn-out process, which is why you need to start at the point where your leverage is greatest.

Tips for improving team and individual performance

If you find yourself in low performance culture, the very first thing you need to do is to test the organization's appetite for change.

This can only come through having explicit conversations about this with your boss. When you see the things that you could improve, think carefully about what the change would look like and seek your boss's endorsement.

Although your boss doesn't necessarily need to champion the change himself, he at least needs to be neutral. He needs to agree to not get in your way when you're trying to implement the change, and he's got to be prepared to give you at least some protection if the noise rises above your level in the organization and becomes an issue above. If you have any doubts about your boss's commitment to the change, then I'd advise you to think really carefully about whether or not you should set out on the quest in the first place.

I made this mistake more than once. I figured that the improvement would be welcome once it was done, and people could see the results. I totally underestimated the power of the white blood cells. If you don't have any confidence in your own safety, then you'll have found what I call ‘a constraint of your role’.

Every role has constraints. There are things you can and can't do. There are constraints in resourcing… there are policy constraints. And we expect that. But if your main constraint is the willingness of your upline leadership to support positive change, you're going to need to tread carefully.

With any constraint, you've got a really simple question you need to ask yourself: “Can I live with this constraint?” The answer is binary: it's either yes or no.

If the answer is yes, you need to accept the constraint and move on. You just do everything you possibly can within that constraint to lead your people the best you possibly can.

If the answer is no, and you decide you can't live with that constraint, you have to vote with your feet.

Now, as much as I hate to say it, if you're a fan of this podcast, it's more likely that you won't be happy in an environment of low performance, where you’d simply have to accept this as a fundamental constraint. But of course, this is an individual choice that we all have to make.

Let's say you decide to tough it out. Of all the problems you face in a low performance culture (and we looked at 10 pretty decent indicators earlier), where would you start?

1. Try to bring some perspective.

You need evidence of why the performance isn't good, and that should probably be your first port of call. If you can get others to see the potential for improvement when they haven't necessarily been aware of it before you open the door just to crack, to having them accept that some change may be useful, if not essential.

2. Anything you can do to demonstrate the gap between the current state and an improved future state is going to enable you to further test the organization's appetite for change.

If you can't clear this hurdle, and you’re a leader who wants to drive high performance, you're going to be in a world of hurt. It's a pretty sure sign that your constraints will be incredibly difficult, if not impossible to overcome (so, see point one).

3. Test the water by dipping your toe in.

Pick a sacred cow and see if anyone stops you from slaughtering it. No matter what your boss tells you, you won't really find out until you reach the crunch point whether or not you're actually going to get support for change.

I remember one particularly difficult negotiation I had in a previous life. I asked for support from above and I was assured that I would have it. All the messaging I received from above was that we needed to push hard to capture maximum value in this negotiation. But when the political heat came for us to roll over, the powers that be succumbed to the pressure. I learned from this experience and I told my boss straight up that I wouldn't be putting my people in that position again. If I couldn't rely on them for air cover, I wasn't going to expose my best people to potentially harmful situations.

4. Put your individual performance management processes to the test.

I produced an episode years ago on this. It was Ep.56: Dealing With Change Resistance. In this episode, I talked about the need to send a message to the organization that you are actually serious about change, and that not changing is not an option. So, I use the colorful expression: “you'll need to shoot a hostage”.

I've had many leaders say to me, “we don't have the ability to remove people who behave or perform poorly”. Well, in my view, that's a cultural barrier established by your senior leadership rather than a hard constraint. There's absolutely no physical reason that you can't remove the worst of your people, no matter where you work.

The acid test for this is what would it actually take to get agreement from above? Would it take fraud? Theft? Extreme sexual misconduct? There's going to be a line somewhere where you can get rid of a person. So where is that line?

This just comes down to the policy of the senior leaders. If they make a blanket policy for full employment, then you're going to be in a spot of bother. I hold a pretty strong view that you don't want to be leading in that sort of environment if you value your leadership brand in any way, shape or form.

Don’t believe your own bullsh!t

You may be living in a low performance culture, and you don't even realize it. And that's not necessarily your fault. The first instinct of leaders in a low performance culture is to deny the basic fact of their existence, and claim that they have a high performing team. So don't make the common mistake of believing your own bullsh!t. Go back and use the 10-point test to assess your culture, and be realistic about what you're dealing with.

Even in a highly constrained environment. I've seen great leaders rise to the top and make meaningful change. But tread carefully--the white blood cells are way deadlier than you might think. 

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• Ep #2: Building a High Performance Team - Listen Here

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