Do Your Performance Management Practices Inspire Innovation?

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“If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” ~Antoine De Saint Exupery

Innovation takes creativity, and creative people need room to think and grow if businesses are going to engage the power of their creative thought.  As leaders, our focus needs to be on inspiring innovation in our employees and removing roadblocks so that they can do their best work.  Management is not equivalent to leadership yet why do leaders insist on “managing” their people, their teams?

A recent article in Forbes magazine, “The Terrible Management Technique That Cost Microsoft Its Creativity”, highlighted a performance ranking technique that I am all too familiar with.  This technique states that in every team, every business and even the whole company, employees need to be ranked across an evenly distributed bell curve with some low performers, some high performers and the rest average.  Huh?  As an innovation leader, wouldn’t I want a team of high performers?  This practice would in fact discourage the high performers from joining my team where they are more likely to be ranked average, instead encouraging them to join an average team where they can shine.

Unfortunately, this practice is a mastermind of HR, attempting to manage a large pool of employees.  Ick – there’s that manage word again!  HBR’s article, “Why HR Still Isn’t a Strategic Partner” suggests a solution to this – every policy HR puts in place needs to be filtered by whether it creates flow, whether it enables the business to better serve the customer.  If the answer is, “no”, then the policy is not good for the business.  Clearly the performance ranking process only makes it harder for the business to serve the customer.

But if ranking isn’t the answer, how do leaders build and inspire a high performing innovation team?

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Based on my experience in high tech leadership, these are my recommendations:

  1. Build a pool of potential employees instead of hiring from requisitions.  As a manager when I needed a new employee, I needed it tomorrow.  Part of this was the nature of a startup but another part was that in this new era of lean employment, requisitions were fleeting so if you didn’t hire quickly you risked having your requisition pulled.  And unfortunately, every time I went to hire we started with a requisition and waited for candidates to apply, which means I only had access to the people that saw my ad this month.  Instead, your HR should be amassing a pool of potential candidates based on their match for your company and industry.  And hiring managers should be able to skim the best skill fit from that pool.  It’s okay that these people don’t have niche skills as it is better to hire for a business fit than a skill fit as I highlight in my blog post, “7 Steps to an Innovative Team.”
  2. Reward your leaders for helping others grow.  HR should also partner with leaders in the business to understand the employee’s strengths and aspirations.  Current employees are a great pool to draw from when new positions become available, and HR should have intimate insight into where these employees can shine.  Leaders, rather than hoarding their employees for their business need, should be helping them contribute their full potential for the greater good of the company as a whole.
  3. Explore social business and influence as a way of measuring an employee’s contribution to the business.  In FastCo’s recent article, “Measuring An Employee’s Worth? Consider Influence”, Boyd suggests an alternative performance management technique that is more attuned to 21st century business, measuring the response by peers and customers to endeavors led by an employee.  Some opponents of this method might argue that introverts who are quietly working heads-down won’t receive a high performance mark. I would argue that those introverts have more to contribute, if leaders develop the right team culture. Read my blog post, “Building a Diverse Thought Leadership Culture” on how to engage these employees fully.

The collective brainpower of a leader’s creative team is the biggest competitive advantage in the business’s arsenal yet we are wasting that precious resource in our management practices.  How will you transform your business culture to harness this power?