You’ve made it to the final instalment of the business leadership series. Your business model is sound, the vision is set, and the operation is running – but how do you keep your people motivated and ready to do their best work, day after day, month after month, year after year?
It’s not easy and it’s not an exact science, but I’ve learned some useful ways to ensure equity while continuing to increase the performance and strength of your organization as a whole. Motivating the team is about performance management, rewards and recognition. That includes equity reviews, giving thorough feedback that is clear and objective, understanding your people and what they’re good at, and being as fair as possible across the board.
Always focus on people’s goals and make sure they are as clear and quantifiable as possible. This helps to create an equitable, structured organization and can help you avoid common challenges. For example:
- If someone’s goals are vague or not defined at all, but they are getting rated highly by their manager, I would challenge the manager on that rating.
- If an employee is not achieving their goals but their manager is saying that they’re a star performer, you’ll need to explain that to me.
- On the other hand, if you have a person who is overachieving against their goals but they are getting a rating in the middle, that also doesn’t match up.
When rating performance, it’s important to provide actionable and objective feedback and give thoughtful feedback on strengths and development needs.
Across your entire team, you want to work toward a reasonable distribution of ratings, for example 30-60-10 (high/medium/low performers). While not a perfect system, watching the distribution of ratings across a large population can tell you a lot not only about how the team is performing as a whole, but how your managers are performing in assessing their talent.
Another useful approach, that can be a very controversial topic, is called force ranking. It’s the process of looking at people who do similar jobs and ranking them – not rating but ranking them top to bottom. I’ve used that technique in different environments for the sole purpose of making sure managers are really thinking through the performance of all their employees in an objective way. When managers are required to rank their team members, top to bottom with no ties, they have to really spend quality time thinking through each employee’s true performance, so they can properly convey why they ranked the team the way they did. It helps to give perspective in terms of who is their best talent, what their challenges are, and how and why they are that way.
Not everybody likes the approach, but it can be an invaluable tool as a leader to challenge your managers to dig deep into the performance of their people.
Ideally, you want to reward your best performers in a big way. Everybody thinks differently about this but no matter what, if you’ve got a number of people on your team and everyone performs at a different level you need to be able to distinguish between them in terms of compensation rewards. If you can’t, issues can take root quickly, with both productivity and culture. If you give everyone the same raise, your best people say, “Why am I working so hard? We all got the same.” Your lowest performers will say, “This is great, I don’t have to do anything,” and continue to coast.
Over time, the best people leave, and you spiral downward until you are left with your lowest performers—who are getting compensated higher than they should be. To make your organization as strong as possible, you want the best of the best. To keep them happy and attract more top performers, you need to reward them and make them feel great. Unfortunately, this often has to be done at the expense of others who are not star performers. It’s a harsh reality when you are leading a business. Distinguishing performance is so important to me because it has a tangible, lasting impact on the organization’s success and it is one of the most difficult but essential parts of leading.
One of the other ways I assess performance is through talent reviews. I use a nine-block grid to plot people in terms of both performance and potential. There’s usually a lot of people in the middle, who exhibit good performance and have good potential. If you look at the example below, you’ll see the green stars are the best people, who are performing really well and possess high potential. They are people who are looking to be the successor to other leaders in the company. Low performers without much potential are the ones you need to talk about.
Then there are individuals who are question marks – there may be the unusual situation of a top performer with low potential – this is rare, and usually is a technical expert at the end of their career who is really good at what they do but is not going to do anything else. You need to figure out who will come up behind them. There could also be a low performer with high potential. You see something special in them, but the performance is not yet keeping up. This employee deserves more coaching to get the best out of them. Once you plot your team and see how they look as a whole, you can determine how to provide your stars with more opportunities, how to get the most out of your large block of good employees, and how to deal with those without enough potential to improve to the level necessary.
The other piece of the puzzle in terms of motivating your team is succession planning. This process helps ensure you have a viable progression of leaders to support your business over the long-term. On a regular basis, you need to think about your organization and consider the leaders and key individual contributors within each function – who might be ready to succeed their manager right now, who might be ready within a couple of years, or who might be 3-5 years away from leading but who you need to pay attention to right now.
It’s a good exercise to periodically review the talent in and around your organization to determine which individuals to focus attention on, give new assignments to, etc. If you see someone who is 3-5 years away from being a higher-level leader, you need to give them opportunities and see how they perform in different environments. Figure out the next set of leaders and give them the right opportunities to further build their skills. That way, they can move from being a year or two away to being ready now. Typically, I do an exercise like this annually, but the frequency can be different depending on the teams.
If you’ve gone through our entire Business Leadership series, hopefully you’re feeling more confident and equipped to run a healthy and successful organization. To summarize the process: To lead a business you need to Understand the Business Model and Assess its Current State in order to properly Create a Vision while making sure you Balance your Constituents. Then you must Understand the Levers of the business so you can Run the Operation and Motivate the Team.
There will always be challenges, nuances, and changes, and every business journey is different – but these steps can be invaluable in ensuring that insurance companies and businesses of all kinds continue to operate effectively, produce superior results, and succeed in the long run. Get more tools for a successful insurance career by subscribing to the blog.