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Creating High Performance Business Cultures Through Strategic Selection, Development and Retention of Top Talent.
Downsizing or Laying Off Employees Strategically
2009 promises to be a year that will separate the strong from the weak. Those businesses that have put "a little away for a rainy day" or have streamlined their workforce should be able to weather the storm and, perhaps, pick up market share from their not so well prepared competition.
There is a large segment of corporations that are facing the reality that they must make significant adjustments in the structure of their workforce in order to survive. Whether you call it downsizing, right-sizing, smart-sizing or just plain laying people off, the reality is that thorough planning and thoughtfully implementation of the plan is imperative.
There is no debating that downsizing is extremely difficult. Perhaps it is because of this difficulty that so many companies put off the inevitable until it is nearly too late. Also, this difficulty is evident by the mixed results that even top-notch executives achieve once the dust finally settles.
If a staff reduction is on your horizon, there are principles and tools that can inject some science into what easily and frequently becomes an emotional, political and economic blood bath.
Performance and Retention
If the goal of downsizing is to improve business results and enable a business to not just survive, but also to thrive in challenging economic conditions and competitive industries, then it seems that the number one criteria for selecting or de-selecting ought to be performance. And, because remaining employees will undoubtedly be asked to "do more with less," strategic executives ought to give significant consideration to the retention question "How likely is this person going to stay with us through the rough times that lie ahead?"
Extensive research over a 25 year period has shown that the most powerful predictors of top performance can be narrowed down to two character traits: talent and effort.
The same research has shown that while there are many other traits that factor into the performance equation, the most relevant as they pertain to predicting performance and retention would include: Ability to self-manage, motivation, independence potential, comfort with conflict, emotional quotient, investigative style and people orientation. For the purposes of this article, focus will be given only to talent and effort.
We have found that a good way to illustrate the relationship between talent and effort is to create a four quadrant grid as follows:
The vertical axis we label "Talent" while the upper horizontal axis is labeled "Effort." The upper left of the vertical, talent axis is labeled "good' while the lower end of the axis is labeled "low.' On the horizontal, the left is labeled "good or consistent' while the right is "poor or inconsistent.
In this model, you can see that the upper left-hand quadrant is illustrative of those individuals that not only possess good talent but they also put forth good, consistent effort. In order to simplify our descriptions, let's call these individuals "Golden Eagles."
The lower left hand quadrant is characteristics of individuals that may not possess the best or most natural talent, but they put forth significant and consistent effort therefore will tend to be good producers albeit not top producers. Let's label these as "Effort Eagles."
Moving to the right side of the grid, we have, in the upper right had quadrant the individuals that have lots of talent but only put forth limited effort or perhaps inconsistent effort. They have shown "bursts of brilliance" but then quickly and consistently slip back into low effort and/or mediocre performance. Let's label these individuals "Talent Trap."
Why call them "talent trap?"
Because their immense potential is easy to see and they have "teased" us with bursts of brilliance in the past so it is very easy to slip into the trap of dedicating a disproportionate share of our time and management resources to "motivate" them to perform.
This is largely wasted resource because while we can "coax" them (using various means and strategies) into spurts of effort, ultimately, their effort is inconsistent because we all know that the best and most consistent motivation to excel must come from within.
And finally, in the lower right hand quadrant we have the "Miracle Trap." This quadrant is characterized by individuals that don't possess necessary talents to perform at high levels in your organization but also do not put forth consistent or satisfactory effort.
These are the people Hollywood movies are made of…because, as nice, concerned people, we believe that through some herculean effort, somehow we'll be able to "turn this ship around." Maybe, maybe not. Usually not.
Two Ways to Create a High Performance Culture
There are many corollary leadership and managerial lessons and applications that can be learned from this grid. However, executives are well advised to focus their energies on two primary areas as they pertain to the human resources that ultimately drive all business results:
1. Energy and resources invested into "high effort' people will always yield a higher, more consistent return than the same resources invested in "low effort' employees; and,
2. Select new (or de-select) people that fit (or don't fit) into your companies effort profile (i.e what talent and effort profile do your current top performers possess. Quantify this mix and you now have a powerful selection benchmark).
Once again, the Parado's 80/20 principle applies and extensive research supports that high performance cultures invest 80% of their resources and time into high effort people.
When low effort people see the attention and resources being focused on those that are consistently putting forth good effort, then they will tend to move to the left quadrants (high effort) or self-select out of the culture.
Unfortunately, the inverse of this phenomenon describes low performance cultures which will continue to struggle, if they survive.
Politics and personal relationships aside, the primary challenge remains that executives and managers are still left to make judgment calls based primarily on chemistry which is just a fancy way of saying "gut feel." The ability to predict performance becomes paramount; without this ability, the decisions will remain mostly subjective using "gut feel" as the primary decision point.
The importance in moving, at least part of the decision from the gut to the head is articulated by John Marshall, PhD:
"Chemistry is that you like someone or feel good about them. That sits in your heart or stomach…it's a gut feel. Intuition sits in our head. You know why you like them. Science can start to articulate from a quantitative sense why you like somebody, not just that you like them."
Use of a validated psychometric assessment that accurately measures critical characteristics that predict performance can help you get a handle on the talent side of high performance.
While utilizing a structured review of past performance results will give you a clearer picture of each individuals "effort history and habits."
The good news and bad news with assessment tools is that, while many purport to be "validated" and "predictive," there are precious few that accurately measure character traits that will predict performance and retention in a specific culture.
Executives must utilize a system that enables them to predict performance; otherwise if the system simply assesses nice people that don't perform well or don't stay with your company then you're creating more of a country club, not a profitable, competitive business.
Conclusion
When faced with the daunting task of downsizing your organization, zeroing in on the character traits of talent and effort will provide a substantially improved chance of making accurate de-selection decisions.
Remember, that talents can either be inherent or learned; but either way, a candidate's effort history is a critical indicator of the likelihood of future performance and their willingness to apply the self-directed effort to acquire the new skills essential to their success within the restructured environment.
About Zero Turnover Human Resources: For more information on how to implement processes described above and utilize proprietary predictive assessment tools, please visit our website at www.zeroturnoverHR.com or call us at 972-562-5444.
There is a large segment of corporations that are facing the reality that they must make significant adjustments in the structure of their workforce in order to survive. Whether you call it downsizing, right-sizing, smart-sizing or just plain laying people off, the reality is that thorough planning and thoughtfully implementation of the plan is imperative.
There is no debating that downsizing is extremely difficult. Perhaps it is because of this difficulty that so many companies put off the inevitable until it is nearly too late. Also, this difficulty is evident by the mixed results that even top-notch executives achieve once the dust finally settles.
If a staff reduction is on your horizon, there are principles and tools that can inject some science into what easily and frequently becomes an emotional, political and economic blood bath.
Performance and Retention
If the goal of downsizing is to improve business results and enable a business to not just survive, but also to thrive in challenging economic conditions and competitive industries, then it seems that the number one criteria for selecting or de-selecting ought to be performance. And, because remaining employees will undoubtedly be asked to "do more with less," strategic executives ought to give significant consideration to the retention question "How likely is this person going to stay with us through the rough times that lie ahead?"
Extensive research over a 25 year period has shown that the most powerful predictors of top performance can be narrowed down to two character traits: talent and effort.
The same research has shown that while there are many other traits that factor into the performance equation, the most relevant as they pertain to predicting performance and retention would include: Ability to self-manage, motivation, independence potential, comfort with conflict, emotional quotient, investigative style and people orientation. For the purposes of this article, focus will be given only to talent and effort.
We have found that a good way to illustrate the relationship between talent and effort is to create a four quadrant grid as follows:
The vertical axis we label "Talent" while the upper horizontal axis is labeled "Effort." The upper left of the vertical, talent axis is labeled "good' while the lower end of the axis is labeled "low.' On the horizontal, the left is labeled "good or consistent' while the right is "poor or inconsistent.
In this model, you can see that the upper left-hand quadrant is illustrative of those individuals that not only possess good talent but they also put forth good, consistent effort. In order to simplify our descriptions, let's call these individuals "Golden Eagles."
The lower left hand quadrant is characteristics of individuals that may not possess the best or most natural talent, but they put forth significant and consistent effort therefore will tend to be good producers albeit not top producers. Let's label these as "Effort Eagles."
Moving to the right side of the grid, we have, in the upper right had quadrant the individuals that have lots of talent but only put forth limited effort or perhaps inconsistent effort. They have shown "bursts of brilliance" but then quickly and consistently slip back into low effort and/or mediocre performance. Let's label these individuals "Talent Trap."
Why call them "talent trap?"
Because their immense potential is easy to see and they have "teased" us with bursts of brilliance in the past so it is very easy to slip into the trap of dedicating a disproportionate share of our time and management resources to "motivate" them to perform.
This is largely wasted resource because while we can "coax" them (using various means and strategies) into spurts of effort, ultimately, their effort is inconsistent because we all know that the best and most consistent motivation to excel must come from within.
And finally, in the lower right hand quadrant we have the "Miracle Trap." This quadrant is characterized by individuals that don't possess necessary talents to perform at high levels in your organization but also do not put forth consistent or satisfactory effort.
These are the people Hollywood movies are made of…because, as nice, concerned people, we believe that through some herculean effort, somehow we'll be able to "turn this ship around." Maybe, maybe not. Usually not.
Two Ways to Create a High Performance Culture
There are many corollary leadership and managerial lessons and applications that can be learned from this grid. However, executives are well advised to focus their energies on two primary areas as they pertain to the human resources that ultimately drive all business results:
1. Energy and resources invested into "high effort' people will always yield a higher, more consistent return than the same resources invested in "low effort' employees; and,
2. Select new (or de-select) people that fit (or don't fit) into your companies effort profile (i.e what talent and effort profile do your current top performers possess. Quantify this mix and you now have a powerful selection benchmark).
Once again, the Parado's 80/20 principle applies and extensive research supports that high performance cultures invest 80% of their resources and time into high effort people.
When low effort people see the attention and resources being focused on those that are consistently putting forth good effort, then they will tend to move to the left quadrants (high effort) or self-select out of the culture.
Unfortunately, the inverse of this phenomenon describes low performance cultures which will continue to struggle, if they survive.
Politics and personal relationships aside, the primary challenge remains that executives and managers are still left to make judgment calls based primarily on chemistry which is just a fancy way of saying "gut feel." The ability to predict performance becomes paramount; without this ability, the decisions will remain mostly subjective using "gut feel" as the primary decision point.
The importance in moving, at least part of the decision from the gut to the head is articulated by John Marshall, PhD:
"Chemistry is that you like someone or feel good about them. That sits in your heart or stomach…it's a gut feel. Intuition sits in our head. You know why you like them. Science can start to articulate from a quantitative sense why you like somebody, not just that you like them."
Use of a validated psychometric assessment that accurately measures critical characteristics that predict performance can help you get a handle on the talent side of high performance.
While utilizing a structured review of past performance results will give you a clearer picture of each individuals "effort history and habits."
The good news and bad news with assessment tools is that, while many purport to be "validated" and "predictive," there are precious few that accurately measure character traits that will predict performance and retention in a specific culture.
Executives must utilize a system that enables them to predict performance; otherwise if the system simply assesses nice people that don't perform well or don't stay with your company then you're creating more of a country club, not a profitable, competitive business.
Conclusion
When faced with the daunting task of downsizing your organization, zeroing in on the character traits of talent and effort will provide a substantially improved chance of making accurate de-selection decisions.
Remember, that talents can either be inherent or learned; but either way, a candidate's effort history is a critical indicator of the likelihood of future performance and their willingness to apply the self-directed effort to acquire the new skills essential to their success within the restructured environment.
About Zero Turnover Human Resources: For more information on how to implement processes described above and utilize proprietary predictive assessment tools, please visit our website at www.zeroturnoverHR.com or call us at 972-562-5444.
