The Performance Pyramid

3 Principles for Peerless Profits™

The scramble for growth in today’s tougher economy has, for many companies, simply turned into a battle for survival. Businesses find their markets shrinking as buyers conserve cash, reduce debt, and simply do without in order to better prepare for an uncertain future or, in too many cases, postpone expenditures while they seek employment. Not insignificantly, one of the greatest markets in the history of mankind, the baby-boomers, is now beyond their peak spending years – and we feel their withdrawal.

With the depressed state of both domestic and global economies challenging virtually every business’s growth objectives, simply focusing on doing better than the competition no longer ensures success. A huge difference exists between getting a larger piece of a growing market and getting a larger piece of a shrinking market. The point is that, in shrinking markets, outperforming the competition may simply result in a revenue stream that is declining at a slower pace than your competitors. That’s hardly a growth scenario.

Regardless of macro-economic events, however, there are always those who manage to capitalize on the environment, whatever it is, in ways that others miss. For example, we have a client in the southwest whose fortunes tend to reflect the housing industry. After decades of sustaining market share in the 12%-13% range, they suddenly doubled it to 25%+ moving from #5 to #2 in their market. Amazingly, they did it in while the housing market was cratering, and, did it in 14 months. Most importantly, it wasn’t a flash in the pan. Eighteen months later they continued to sustain this new level of performance. So what changed? Three things!

Over the millennia mystical powers have been attributed to the number three, and those powers are epitomized in one of the world’s most durable architectural structures – the pyramid. In keeping with this “power of the pyramid” motif, seemingly magical business results have been attained through a concerted focus on the integration and execution of the three cornerstone principles that comprise our Performance Pyramid.™ (Figure 1)

A telecommunications company moves from missing customer service objectives to exceeding them – with 30% fewer people.

A manufacturing company drives more business today with 96 sales representatives than previously with 180 – and saves $500,000+ in annual training costs.

A small tele-messaging business goes from turnover of 1 to 2 people per month to 1 to 2 people per year – and not by holding onto their poorer performers longer but by drastically reducing the number of them.

The power of the pyramid!

The Performance Pyramid

Figure 1.

At the top of the pyramid is the much touted, but less well executed, setting of a clear direction for the organization. This requires not only defining the organization in terms of its mission/vision/values and differentiated value-proposition but, at least as importantly, converting those concepts into reality through an executable plan (refer to our Strategic Performance Line of Sight™). This means understanding, agreeing on and committing to such fundamental issues as:

  • Where do we want the business to go?
  • How will we get it there? By when?
  • What are the show-stoppers?
  • Who will do what and what do they need to do it?
  • How will we incent and measure success?
  • How will we know when we are moving off course? Early warning system?

At the base of the pyramid on the right side we support our crystallized direction (vision) by having the right people in the right place, doing the right thing at the right time.

  • Do our people have the right combination of Expertise, Traits and Character? (refer to our Competency Trio™)
  • What competencies do we need?
  • Are we organized for optimum effectiveness and efficiency?
  • Are we organized for growth?
  • Do we have the right training programs in place so our people know what to do and when?
  • Are they enlightened enough to make the right decisions and take the right action when the unexpected occurs?

Having the right people is essential, but it is not sufficient. We must now elicit maximum discretionary effort from them. The application of discretionary effort by a talented workforce is the ultimate competitive differentiator. The left side of our pyramid’s base represents a high performance work environment that is aligned to our vision by the systems and processes along the pyramid’s left side. Even the most talented people can only deliver real value when the work environment (culture and values) elicits maximum discretionary effort from each person. The extent to which an organization is successful here is a direct reflection of the performance of its leadership and requires answers to such questions as:

  • Is the leadership team doing the right things to leverage the talent of the people so we are more effective than our primary competition?
  • Do we have a high-trust environment marked by open, candid communication?
  • Do we have the free-flow of information necessary to be more agile than our competition and to rapidly, respond to customer demands/needs and unforeseen circumstances?
  • Do our people get a sense of self-satisfaction that causes them to want to come to work every day so they can move the organization forward?

Finally, we ask: Do we have the right systems and processes to leverage these 3 principles of success? Referring again to the pyramid in figure 1, you will notice that the corners of the pyramid are connected by “right systems, technologies, processes”. These connectors are important as they align the people and the environment to each other and then align both to the organization’s stated direction/mission/vision. But these connectors can’t provide a level of effectiveness greater than that of the elements they connect.

Unfortunately, we frequently see organizations striving to improve their results by focusing on improving the connectors. They spend money on new systems that attempt to exploit new technology only to learn that having great connectors is of little value if what is being connected is of little value. Before systems and processes, it’s always about the people, and before that, it’s always about the leadership – always.

This leads us to two questions that effective executive leadership must answer:

  • First: thinking strategically, do you believe that delivering the principles depicted at the three corners of the pyramid are the primary duties of executive leadership and that success in delivering these three things will determine success in meeting or exceeding the charter given it by the Board?
  • Second question is: given that the answer to the first question is “yes”, then are you willing to work to identify the issues and make the necessary changes to effectively deliver these three elements of success?

If the answer is yes, then you will likely be interested in our

  • Strategic Performance Line of Sight™ to guide you in defining a clear direction
  • 7 Steps to High Performance Staffing™ to guide you to the right people in the right place
  • Leadership Performance Accelerator™ to create the work environment and deliver a high-trust, high performance culture that will elicit maximum discretionary effort from your talented people.

For more information on our high-impact concepts and performance models check out the other “books” on this website or call me at 214-484-2010 to discuss your thoughts, questions and comments. I’d like to hear from you. Bernie O’Donnell, Lead Consultant & CEO