An Enterprise’s Performance Potential

By: Douglas Garner

As Peter Drucker once observed, “People determine the performance capacity of an organization. No organization can do better than the people it has.”

I have found through my over 30 years in human resources management that people are extremely complex and employees are even worse.

For example, take the complexities of the human brain and then try to coax it to perform a certain task. You can’t do it without expending a tremendous amount of energy yourself in the coaxing. On the other hand, if that brain is “prewired” to want to do that task, then the amount of energy required from you (to coax) drops dramatically.

So how do you determine if that complex human brain is “prewired” to do the work you need done, in the place you need it done and with the other complex human brains it must do it with?

The answer is that, much like a piece of machinery has performance specifications, people have inherent traits and characteristics that can be measured and will predict their performance given certain operating conditions. People need to be in the right position, in the right company working with the right boss to be superior performers. Or as Jim Collins said in his book Good to Great, the great companies have the right people on their bus in the right seats.

When people are calibrated for the company culture, their boss and their position, there is reduced waste in their employment and they could be considered working for free because they pay for themselves, requiring very little effort to manage. When a hiring manager assesses for inherent talents and, uses the right interviewing techniques, they can determine the motivation and competencies of a candidate. They can select someone who will, by our research, produce anywhere from 25% to 150% more outputs than an applicant who meets your minimum qualifications.

In fact, one way to determine whether to keep a current employee (if you are considering ‘right sizing’) is to calculate the explicit value of their contribution to your bottom line. If you cannot clearly delineate an explicit contribution to your profits from this person, in this job, then this person should be allowed to leave. In fact, odds are based on our experience, that there is a large percentage of your employees you could let go without any significant negative impact on your company’s performance.  In fact, we have had more than one occasion where other employees ‘stepped up their game’ because management eliminated somebody who everyone said (to themselves) was not worth the resources they were withholding from more productive employees.

Also, when other employees saw management taking action to ‘weed out’ low producers, they saw their own assignments as being ‘expendable’, especially if management spoke openly about the need to ‘raise the bar’.  A culture that is built to expect superior performance will get it.  Managers just need objective tools to assess and measure performance.

A colleague of ours, Dr. John Marshall, has worked for over 40 years developing tools to measure these inherent traits of superior performers.  He has found in most organizations the largest waste of resources is training and coaching people who don’t have the potential to perform (inherent talent) or the motivation to put out the effort needed (habits of thought and behavior).  Superior Performance requires both talent and effort.

A business owner wastes resources attempting to encourage someone who is talented but doesn’t put out effort (what John calls a “Talent Trap”) when they should be focusing on those individuals who demonstrate the desire to be successful through effort and acquired talent. Obviously, you want both the people who are talented and put out effort AND the people who may not be as talented but also put out the effort. (The “Talent Eagles” and the “Effort Eagles”)

You can measure a person’s inherent potential for 3 traits which have been found to be predictive of both performance (results) and retention (cost of maintenance).  When you profile the superior performers in a company and contrast them with the profiles of the low producing and/or average performers, you can create a template for assessing both, incumbents (for coaching to success) and applicants for hire (prewired for success in your company).

An organization’s performance capacity, therefore, can be calibrated by measuring the inherent talent of its people. We call it a “Human Capital Balance Sheet” and much like investing in your capital equipment, by investing in the right people with the right profiles, you can increase the productivity and the results of your company through your Human Capital assets.  After all, the New Economy will require new ways of selecting and managing all of our assets, even our human assets.  Investors can now calculate a company’s leadership team as an asset or liability.  These teams, more than anybody else, drive the performance capacity of their enterprises.

At Smart Work, we get people and “getting people” means we know how to help business owners and investors calibrate the alignment of their executives and professional staffs to their businesses.  For more information about lowering your risk of keeping or hiring “Talent Traps” contact us.


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