THE FUTURE OF PERFORMANCE MANAGEMENT
“Organisations fail catastrophically or by degrees. Either way, the reason for failure is down to people’s behaviour,” a corporate recovery expert tells me.
If behaviour is fundamental to business outcomes - successes as well as failures - then why is it rarely mentioned in HR-related discourse? Curious, given the level of current debate about changes to performance management systems. Internationally reputed corporations lead the way, supported by the well-known management consultancies. Which sets a tone that perhaps makes the rest of us feel we should also embrace? In 2015, Deloitte reported that just 1 out of 8 of US companies surveyed was not actively considering adapting its performance management processes.
Increasing competition, multi-generational workforces, customer centricity, technology and collaborative working are among the reasons typically cited as being drivers for change to performance management systems. Annual appraisals and forced rankings are giving ground to real-time processes - often enabled by mobile technology. Individual accountability is out of favour to shared accountability - or even no accountability at all. Evaluation of past performance is being replaced by performance coaching and on-going development.
But the discussion about performance management and changes to processes are not recent things. They’ve been going on for at least as long as I have been working, and that’s 30 years. And I suspect they’ll continue for a long time to come.
Why? Mainly, I suggest it’s because we’re not focusing on fundamentals. If we were, then the discussion would be far less about what the processes look like and would be a lot more about the importance of behaviour to the success and sustainability of the organisation. And far less too about external forces - most of which we can't control anyway. External factors are easier to talk about. Behaviour-centric dialogues can be difficult and therefore the preference of many managers is to avoid having them.
For any business process to work it needs a set of behaviours congruent with the desired outcome, which are repeated competently, confidently, consistently and continuously.
Every conversation in the organisation has the potential to be about performance, and therefore can be geared to encouraging behaviours aligned to the achievement of organisation goals and customer fulfilment. Not having performance conversations is a form of behaviour in itself. And one likely to contribute to organisation failure. If not catastrophically, then at least by degrees.
This article originally appeared in WilsonHCG’s CHRO and HR Director Global Network newsletter. Visit http://info.wilsonhcg.com
THE SUCCESSFUL LIFE SCIENCES LEADER: NEW THINKING IN A RAPIDLY CHANGING ENVIRONMENT
There’s no doubt the leader’s job is becoming increasingly difficult in today’s environment. We’re experiencing unprecedented levels of change – societal, political, economic and technological – and at a faster rate than ever.
Long gone are the days of predictability. Today, there are fewer reference points available for leaders to identify and with which to navigate the way forward for their organisations. Meanwhile, established models of leadership are becoming increasingly irrelevant, as are traditional leadership development programmes taught in lectures and classrooms.
How is the Life Sciences sector adapting? What defines great leadership within the worlds of drugs, diagnostics, therapeutics, devices and healthcare provision? What is demanded of leaders to ensure that the life sciences sector continues to thrive and fulfil its potential to contribute to physical, mental and economic health? And where are the great leaders? Are their skills innate or are they developed? Or both? These are the kinds of questions that I explored with senior leaders from a range of organisations representing different industries within the life sciences sector.
A helpful shorthand to express collective view of the people interviewed is to borrow from the title of Marshall Goldsmith’s book, “What got us here won’t get us there”. I’m suggesting that those in positions of authority can no longer base current decisions on examples of wisdom and certainty that were successful for them in the past. Also, that leading from the front at all times and expecting to have all the answers may be an increasingly misguided approach to leadership. As the CEO of a start-up biotech said, “Things are changing so much that we need novel approaches on how to deal with emergent technologies, economies, products and services. We operate in an era in which we can no longer provide proven theories to generate answers to current challenges. We can only provide means and techniques to find good questions to ask.” What I believe they are telling me is that leaders are adding sense-making to their roles as skilled technocrats. What this means is that successful organisation leaders need to become comfortable in admitting they don’t have all the answers. This acknowledgement should eventually bring about even higher levels of trust and credibility in the eyes of the leaders’ followers. Successful organisational leaders encourage leadership at all levels, where leadership is the individual’s capacity to get things done effectively and with efficacy. Leadership then, is not solely attached to hierarchy. It’s about behaviours, and getting business results through those behaviours.
For the organisation leader, building trust and credibility is dependent on their ability to act with humility. A starting point for this process the leader’s willingness to engage in a high level of self-awareness and awareness of others. Why? Because it helps the organisation leader understand the limits of their skills, knowledge and competence, and how other people’s skills, knowledge and competence might complement their own. And this can lead to becoming comfortable in letting go of the need to control. Which in turn helps the leader get more comfortable in dealing with the unknown. The successful organisation leader will encourage openness, freedom of thought and process within self-regulating working groups. To make humility and self-awareness work for the leader, they must display the courage to operate in this dynamic state of change. “As a leader, my job is to hire the right people, challenge them and let them take calculated risks,” says the Regional General Manager of a large international medical devices company.
These attributes are not sufficient in themselves to guarantee success, but they are necessary components. The successful organisation leader demonstrates the willingness to fail fast to learn fast. Additionally, aggressiveness and competitiveness in the pursuit of excellence are other important behaviours. They are necessary traits to be able to kill projects early, to ensure that the organisation remains agile and keeps focused on activities that are more likely to produce successful business outcomes. For the people working on those projects, they can move quickly onto another project with the understanding that the failure is not a career ending event but is both a learning and growth opportunity. The CEO of a fast-growing therapeutics business sums up this style of leadership by saying that, “CEOs must be able to prioritise and to over-communicate from the top about the business, its direction, its priorities and its progress. They should know when to start and stop activities.”
Determination and entrepreneurialism work best when wrapped within all-pervasive purpose and principles. Leadership behaviour that’s consistent and brings life to this is much more likely to engender trust and followership among others. “Leaders should embody the principles of the organisation and be seen to be principled themselves,” says the Regional GM. The CEO of an international devices company adds, “Business is complex. There are many competing agendas. There is a reliance on the division of labour and on core competencies. But what really constitutes an A-player is authenticity; someone who holds true to the company’s values as well as their own, and can be depended upon to always act accordingly.”
DEVELOP INTERNALLY vs HIRE EXTERNALLY
Where are the people with these behavioural traits and where will they come from in the future? Part of the answer seems to depend on whether the organisation is large or small. “A manager’s job is to make things simple for their customers and their people. That’s what they’re paid to do. The lack of investment in growing and developing others may often be a result of managers making life easy and simple for themselves. But, that’s selfish, and not always good for the organisation. A leader’s job is to grow talent and develop people.” says the Regional GM. But, as the CEO of an international medical devices company argues, “Development is more synonymous with the sophisticated propositions offered by the larger companies. The acquisition of talent recognises that it’s difficult to take someone from the inside and grow them.” This is echoed by the CEO of the therapeutics company, “Biotech is a risky environment and requires seasoned leaders and managers. Skills can be developed but they need to be based on what’s innate or has been developed so far.” As the HR Director of another international medical devices company says, "Development requires a lot of good behavioural analysis. It’s also heavily dependent on real commitment from the top.”
In summary, the definition of effective leadership is changing, and this change is widely acknowledged within the life sciences sector. It’s changing to the premise that an organisational leader ensures that leadership happens within the business at all levels and in all aspects. To do that successfully depends on self-awareness and awareness of others. What’s also clear is that we’re still in an era in which acquiring talented leaders from other businesses is seen to be safer and more straightforward than developing people internally. Whether acquired or developed, rigorous and robust means of assessment of behavioural traits are critical. In reply to the question of whether leadership skills are innate or developed, it’s clear that trial and error is a vital process, meaning that there is no substitute for actual experience.
Author; Jim Kennedy. Published by The RSA Group, a leading executive search firm in global Life Sciences. Visit www.theRSAgroup.com
LIFE SCIENCES LEADERSHIP IN FLUX: HOW CEO'S ARE ADAPTING TO A CHANGING ENVIRONMENT
Leadership and talent agendas in the life sciences are adapting to major external influences on the life sciences sector – economic, political, technological and social. In this current climate, a leader has to ensure that every part of an organisation is well led. A modern and holistic CEO needs to be more of a programme and project person, than a subject matter expert. As such, she or he has to possess an array of core behavioural traits to be an effective leader.
ENTREPRENEURALISM AND EXECUTION
When searching for the right person to fill a life sciences leadership role, there are certain qualities to look for. “Talent needs to be adaptable. Talented individuals need to be able to respond to changing needs, to understand and navigate their landscape”, said the CEO of a multinational medical devices company. “I look for entrepreneurialism, structure to their thinking and execution, as well as their responsiveness to external change.” The CEO of a biotech company agrees, adding “I look for drive, hunger, the preparedness to take ownership and to be accountable. Doers get stuff done. They recognise the importance of relationships – getting things done with and through others.” He goes on, “Talent will be increasingly defined by the ability to persuade and influence, being able to sell and to identify who the customer is.”
Knowing the customer is paramount. “The market is changing away from the individual purchaser towards multiple stakeholders and that raises communications challenges. It means changing how the value proposition of a product is articulated and ensuring that it’s understood all the way upstream to Research & Development,” says the Regional GM of a medical products supplier. “Innovation is about creating value through change and continuous improvement, a combination of process and outcomes. Innovation also needs to be ethical, affordable and have the right patient benefits,” he says.
THE CUSTOMER IS CHANGING
Increasingly, professional procurement specialists are more prominently involved in buying decisions, and the customer is becoming arguably more interested in the value proposition than the scientific proposition. Correspondingly, communication skills and social style are becoming key considerations when assessing the profiles of executives dealing directly with the customer. Their communications skills must include the ability to combine science with commerciality but also to make the proposition as simple as possible. As the VP Global Marketing of a medical products company puts it, “Sales is becoming much more an extension of marketing, given the need for tailored messaging to prospective customers. Sales excellence is now defined by the quality of external relationship management as well as between sales and marketing inside the organisation. More emphasis is being put on sales targeting and customer knowledge.” “There’s a growing need for more consultative selling,” says the CEO of another medical supplies company, “and for more expertise around health economics.” The HR Director of an international pharma company agrees, adding, “Health economic experts sometimes lack an understanding of the market place. They can’t always answer the “so what?" questions posed of the value propositions presented to potential buyers. The people who are articulating value must therefore understand the proposition - and be able to demonstrate it.”
COMMERCIAL TALENT, SCIENTIFIC EXPERTISE
Drawing on insight and comments from senior leaders regarding skills essential for success within their organisation, it is possible to compose a preliminary list of desirable talents to look for. These include innovation, internal collaboration, knowing the customer, EQ, IQ, self awareness, communications - internally as well as with the customer - and accountability, while pure technical skills take a back seat. Significantly, increasing numbers of companies are looking for ‘hybrids’ instead of the specialists of the past. These may be people with MDs as well as MBAs or those with medical affairs expertise who have also worked in clinical development. There are many permutations, but the driver is frequently the combination of internal expert knowledge with commercial talent as people work at the intersection of science and technology.
WE NEED SKILLS FOR THE WHOLE VALUE CHAIN
It’s clear these skills need to be present at all stages of the value chain, from R&D through to the sales person. Also, we can see that the value proposition is much more important than the functional organisation or job structure of the company selling its products or services into the healthcare system. The need for extensive psychometric tools, when evaluating a CEO candidate, and when the CEO is shaping the executive team, is becoming increasingly important. It is not just about functional capabilities – it is now about asking, probing, listening, sensing and being truly committed.
This article identifies many of the skills and behaviours that organisations need in an unpredictable and fast-changing environment. It must be considered what organisations are doing to acquire and develop these skills, and create the environments in which they can flourish. When it comes to the search for new executive talent, it is imperative that our due diligence and sophisticated approach to the assessment of both the hard and soft skills aligns with that of companies' ambitions across the Life Sciences sector.
Author; Jim Kennedy. Published by The RSA Group, a leading executive search firm in global Life Sciences. Visit www.theRSAgroup.com