22/09/10

By David Smith

High Performance Is About People

Many CEOs I speak to are concerned about re-engaging with their workforce post the ravages of recession. Some have had serious cost cutting to perform, some people have been on reduced compensation packages, and some have seen substantial redundancies taking place, leaving those remaining suffering from what has euphemistically become known as 'survivor syndrome'. The challenge is to get people back to a point of trust in the leadership, and outperforming their competition.

In some cases, CEOs have actually weathered the storm of recession reasonably well, either by being in the right place at the right time, or by judicious decision making. Nevertheless, they also want to find ways to connect with the discretionary effort of their people, in order to win in a highly competitive and challenging environment.

Technology and innovation are vital components of business success, but neither can produce long term sustainable competitive advantage. Ultimately, everything is replicable over time, with the exception of your culture, and the unique set of people you employ in your business. Therefore, a high performance culture can produce sustained competitive advantage which is not replicable over time, and must be one of the objectives of the smart CEO. I find the best people leading businesses today, are spending some of their agenda focussed on this vital issue.

Unfortunately, I find there is much 'clap trap' talked about engagement, despite its obvious importance. Whenever a subject becomes topical, and engagement is certainly topical, there are always those who move in with 'theories' for sale. My term for this is 'fad surfing'. That is, people put forward a few populist theories, businesses try them, they don't work, and everyone moves on to the next wave. That for me is the bane of consultants and trends. I'm much more interested in 'stuff that works'. Tried and tested, financially substantiated material is what impresses me. Not the latest 'flash' theory from those who have little or no evidence. There is much currently being written about staff welfare programmes to enhance engagement. Simply being 'good to people' and providing the right office/work environment isn't what strong engagement is about. I have been into many trendy offices, offering drinks on free vend, or bowls of fresh fruit as if that will magically produce the right blend of atmosphere to output.

It seems to me that some people are of the view that a few 'sessions of aromatherapy' are some substitute for good leadership and a trustworthy management team. The real truth is that nothing engages people more than authenticity. Telling it like it is, setting out the challenge, and being 'in the game' with people at the front line. Engagement is not about the latest management fad at all, but about real solid basics.

Engagement is the vital bedrock of high performance. You can increase performance in the short term by a culture of pressure and fear. That is certainly true. Sadly, some managers take early signs of success under this sort of regime as a blueprint for life. Unfortunately, that type of culture does not yield sustainable performance in the medium to long term. Nor will that type of culture be brand enhancing, and the best people will avoid joining you. Word gets around about what it's like to work in your culture, both bad or good. Ultimately, bad culture is a house of cards that comes crashing down, and the subsequent turnover of key people and expertise will damage the business.

The type of culture and engagement I have been involved in growing in my career, is that which produced a high performance culture through the pride of the people in the business. People had a real sense of ownership, and felt part of the business. Indeed, it was their business, and they protected it fiercely as a consequence. If you can get beyond intellectual arguments, into the heart and soul of your people, then you will tap into a rich vein of performance which will outstrip the competition.

My experience as People Director of the Asda supermarket business, was one where I saw the business emerge from near bankruptcy and low morale, to becoming a world class performance organisation - and it also became one of the very best places to work in the UK (in the Sunday Times Survey/in the Financial Times Survey and Fortune Europe). If you think about it, it was highly improbable that such a large organisation (most Best Places to Work tend often to be smaller scale), which paid the vast majority of its employees little more than Minimum Wage (no financial motivation there), and where the people were largely performing routine and repetitive work (no intrinsic motivation from the job roles) could ever have its employees voting themselves best place to work in the UK.

I have a very strong view on how that was achieved in the case study of Asda, during a period of 'gut wrenching' change, in a tough economic climate, where the competition were constantly trying to put you out of business. The initiatives we took to engage the people and build performance were both simple and practical, involving good common sense leadership. None of the basics around engaging people are exactly 'rocket science', but common sense is often 'rare sense' in the real world. I have developed 7 Principles of Building a High Performance Culture, and these resonate wherever I speak, both across business sectors, business size, and country boundaries.

Many CEOs I speak with are influenced only by data, and to a large extent, that is exactly where I feel they should be. "Show me the results", is what I hear from them. They are not influenced by theory, but by results. I had the opportunity to put the engagement scores of every one of 360+ retail stores and their individual P&L results, into a large computerised analysis by the Gallup organisation. I was looking for the concrete evidence of what I already intuitively knew to be true. They found there was a strong positive correlation between high morale and strong P&L results in the Asda data. They also found the 'sweet spot', whereby, if engagement could be driven above a certain score in a particular unit, then the unit would outperform its P&L. This is the evidence that CEOs are looking for, and it has been proven so many times by Harvard Business School analysis of case study companies. My experience is in 'living through' my own case study, over more than a decade of results, not a flash in the pan, but producing long term sustainable performance.

If you want to hear more of the story, as in the 'how to', then take the challenge to find out more! I wish you well as you seek to build your respective businesses and gain high performance.

David Smith is an Author, International Business speaker, and consults widely on matters of High Performance and Engagement. He has 35 years of Corporate experience, the latter 15 years gained in Asda, as Executive Board Director for People, Information Technology and Loss Prevention. David is a powerful speaker, with a storytelling style, and is as much at home talking to 1000s in a large auditorium Keynote, or chatting with the members of a Company Board in a private session. He is practical, down to earth and forthright.

David was previously also a Commissioner for the EOC, a Vice President of the CIPD (where he holds the highest professional rank of Companion of his Chartered Institute) and he is currently on the Board of the Institute for Employment Studies.

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