Set performance indicators
Galipeau had to first find the behaviors and actions that would move the business forward.
“In all businesses, at the end of the day, there’s how the market does,” she says. “You see that after the fact, but even that is very descriptive, but it’s not terribly prescriptive — if you want to be prescriptive about your performance, you have to say, ‘All right, this and this and this gives me that and that and that, and therefore, I’m going to measure how we’re doing on those three areas.’”
She says they should be easy to measure, easy to drive, transparent, visible and timely. One way to identify those is to look at differences in your performers.
“You look at the difference between the highly successful and highly unsuccessful,” she says. “… You can’t just look at the operational input of the very successful and say, ‘They’re successful because of these.’ You have to actually look at what operational inputs differentiate the highly successful from those that are less successful.”
Galipeau divided employees into quartiles based on performance.
“It’s really capturing what were the differentiators between the top group and the bottom group, because that’s where you see the differentiators,” she says.
In doing this, they identified three success indicators and three outputs that separated the top 25 percent from the bottom 25 percent.
“You have to take a fairly long look at the data and make sure you’re really contracting the extreme in performance before you come to that conclusion,” Galipeau says. “If you’re looking at the top group, the middle group, the submiddle group and the bottom group, you’re just not going to come to that conclusion. … You can’t dissect the struggles and hope to find the recipe for success. I think you can only compare and contrast and find the things that differentiate.”
At the same time, you have to be careful not to lump all successes as leading indicators.
“Just make sure you’re in facts, and make sure you’re always comparing and not only describing a group that succeeds,” she says. “Very often we get caught up in, ‘Gee, this person is doing very well, and they’re doing this, therefore, they’re doing well because they’re doing this.’ That leads to anecdotal leadership, which I think is very dangerous and probably is not doing justice, and sometimes you end up with a series of behaviors that happened to work for an individual but aren’t necessarily organizational success factors.”
For example, you can’t just say that a salesperson does a good job because he or she has X appointments in a week. Instead, you have to look at a ratio of how many appointments did it take to close a certain amount of deals. If one successful person had five appointments and another successful person had three, but then an unsuccessful person had one, that tells you something.
“It took a certain number, there was no question about that, so the people who did more didn’t necessarily do well, but you didn’t do well if you didn’t do at least this number,” she says.
Therefore, you may conclude that three is the magic number to set as a performance indicator.
“If the goal is to achieve sustainable results, you have to measure outputs and inputs and making sure that the ‘more is better’ is not the message, and enough is enough, and now we’re going to look at the content of those activities,” she says.
If you drive the more-is-better mentality, you’ll be hurting your organization.
“If you only look at that, the message that you’re driving has nothing to do with effectiveness,” Galipeau says. “You’re encouraging just activity and not results. Many organizations have done that because it’s easy to measure.”
Once you have clear performance indicators, you can also measure employees.
“You have to have metrics,” she says. “I want to take your blood pressure before you have your first heart attack, so I think we have to make sure that we’re engaging in wellness and not fixing the sick. I think you have to pick metrics you can measure in a timely way.”
Galipeau measures employees weekly, and then stack-ranks them against each other and the overall standard on a monthly basis. Once she found these KPIs and started measuring people, she noticed a difference in the organization.
“The top half did much, much better, and the bottom half didn’t move, which is not surprising,” she says. “The people in that third quartile, you did see some movement up into the second quartile. The people at the very bottom either quickly got themselves out of the situation or realized, ‘I’m not a bad person, but this isn’t the role for me.’”
