Pierre Naterme, Accenture’s CEO, revealed key insights for leaders seeking to maximize employee innovation and energy in his interview with Lillian Cunningham from the Washington Post.
While propelling his organization to be more agile and customer-centric, Naterme is thoroughly impressed with Accenture’s new generation of talent. He seeks to motivate their team members to go beyond the status quo using in-process feedback rather have them wait for annual review discussions. Though he believes performance management is important and that organizations need to effectively evaluate and compensate, he’s convinced their long-standing performance management system has to go.
The traditional methods Accenture used (and probably promoted to clients) took “… too much effort”, didn’t fit their modern workforce, and delivered no performance lift. Even worse, as evaluation criterion multiplied (up to 10-20), the system confused and frustrated staff.
1. Provide individualized, real-time feedback and abandon “90%” of their past method
2. Simplify the strategic agenda
3. Push everyone to leave the status quo behind
Five Implications Behind These Goals
Individual Performance Feedback
- If managers are no longer supposed to compare employees to each other, an objective, role-specific standard composed of sample/contributing activities will be required for leaders to use to gauge employees’ performance. Most organizations have not developed these objective, activity sets.
- Giving employees feedback while work progresses means the objective, activity sets need to include behaviors (reflecting what contribution looks like) and not only countable activities. Managers must also be accountable for conducting periodic, in-process coaching vs. accumulating feedback for annual reviews.
Status Quo No Longer Acceptable
- Countable KPI’s are gathered for well-established activities (things that have been done before – reflecting the status quo). Finding new and better ways, however, requires people to brainstorm, evaluate, and experiment – all crucial, but not really ‘measureable’ activities. The objective activity sets need to include observable innovation activities, and not just whatever is readily countable.
Streamlined Strategic Agenda
- “’If you have 30 programs, you have no vision, Mr. CEO …’ Tell me five things you want to do …” Old-style strategy and performance management equated complexity with sophistication but created a frustrating, almost ‘no-win,’ environment for managers and staff. It takes courage and vision to simplify priorities for clarity and agility. [See Rule of Five]
New Workforce Demands New Approach
- “If you put this new generation in the box of the performance management we’ve used the last 30 years, you lose them.” A new, ‘everything-should-be-personalized’ generation expects to be evaluated for their own, observable contribution rather than in comparison to a peer in the same role (but different situation) or in relation to a company-wide financial metric.
Agility from Clarity
It is encouraging to me to see a large, respected organization moving to a similar, streamlined, activity-based approach where the strategy is understandable and where individuals are evaluated based on their own performance (against an objective set of sample, strategic activities).
This enlightened approach will allow Accenture’s leadership to motivate high-value contributors, push past the status quo, and quickly adjust to and exploit emerging industry trends – helping to realize Naterme’s vision of a more agile and focused Accenture.
The original Washington Post article is reprinted here.
Excellent article, very relevant to a project I’m doing at the moment about ditching the appraisal, but what next in sustainable performance management!
Where are leading-edge organizations going next in performance management? To bring not just measureable activities but also observable collaborative and customer-service behaviors into the expectation set for all employees. Creating accountability for a baseline level of expected action. In Healthcare, for example, hand washing is an action that has done more to prevent harm than any other in recent memory but the actual act of hand washing is not measurable – but observable. By including the behavior in employees’ expected set of daily action – the impact has been both significant and rewarding for care providers. Bringing accountability to observable behaviors is the best way to advance a work culture toward new levels of performance and engagement.
I summarized what these top companies have done to replace the annual performance review and its results below:
The key is transforming the annual cycle into a much more continuous one which is achieved through 3 steps:
1. Ongoing, real-time feedback
2. More short-term, dynamic goal setting
3. Frequent 1 on 1 conversations between line managers and their employees
Hope this helps. Let me know if you have any questions.