It turns out that “familiarity breeds contempt” may be true on an organizational level just as much as on a personal one. In an article for Harvard Business Review, Lindsay McGregor and Neel Doshi share their research that indicates an adherence to strategy—measured as “tactical performance”—can actually hurt business performance, unless it is balanced out by a crucial second factor.
Process Gone Astray
Everyone knows that a business should not develop processes just for the sake of having processes. They should be designed meticulously and specifically to enable business strategy. However, as the authors have determined, even processes aligned with strategy will not inherently improve business performance. Rather, this tactical performance must be balanced with “adaptive performance”—the ability to deviate from strategy for better results.
An effective example is given from 2007 at a big cellphone manufacturer, where manufacturing processes were optimized and measured to the nth degree and observed by managers for adherence. When, in an experiment, production lines were allowed to work outside of the view of managers, employee productivity increased in those pockets between 10 and 15 percent. Why? Because employees were allowed to introduce their own identified improvements to the process, and they did not feel the pressure to adhere to formally approved methods.
Thus, the need to encourage tactical and adaptive performance in tandem in business becomes evident. It is important to have established “best practices,” but they should be treated more as “good practices” and open to refinement or on-the-fly adaptation. The authors discuss a long example regarding a call center at a bank’s consumer loans business as further evidence of the success that can be had from linking these principles.
They then go on to discuss three steps you can take to implement adaptive performance effectively:
- Identify where you need tactical and adaptive performance. Tactical performance is for issues of scale and consistency. It should minimize the amount of thought and energy spent on mundane activities, so that more thought and energy can be spent on activities of adaptive performance.
- Implement metrics without myopia.
- Set learning goals rather than productivity goals for low-performers, to encourage them to find methods to improve their productivity in an empowering way.
And about implementing metrics without myopia, the authors say this:
A question we frequently receive is “Does your research suggest we shouldn’t give our people performance metrics?” Quite the contrary. People need to see information on their performance to self-correct. However, when you “weaponize” the data — linking it to high-stakes bonuses, promotions, and firing decisions — your people’s adaptive performance will crumble. Instead, use the data to set learning goals. Start to measure the effectiveness of the conditions that affect adaptive performance, from how you motivate people to how you build your organization’s structures, performance review systems, and planning processes.
You can view the original article here: https://hbr.org/2017/10/there-are-two-types-of-performance-but-most-organizations-only-focus-on-one