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The Missing Link Between Failure and Growth

by Evan Sinar, Ph.D., and Rich Wellins, Ph.D.

The missing link between failure and growthPerformance management is in the midst of a decade-long identity crisis – well-recognized as foundational to talent management, yet facing stiff headwinds for creating cultures of rabid competition, nonexistent accountability, and crushed motivation. One clear point of agreement between over 25,000 leaders and 2,500 HR professionals from the data gathered in the Global Leadership Forecast 2018: most performance management simply isn’t working. Only 26 percent of HR professionals see their company’s performance management systems as highly effective, as do only 35 percent of leaders. These systems, which should be core drivers of talent realignment toward digital transformation, are instead too often toothless and despised.

In this blog, we’ll review the research and rationale for performance management recast as a leader’s key to recharging after failure, and show how rating-free, development-centric, and frequent discussions offer the best chance for rehabilitating performance management’s tarnished brand.

Can Performance Management be Salvaged?

Though most performance management systems are underperforming against HR and leader expectations, recent research points the way to a smoother path forward, for the rare organizations who walk it. Our study across a globally-representative sample of 2488 companies shows that leader performance discussions are much more effective when three factors are solidly in place:

Performance management

Straightforward? Maybe. But in this case, common sense rarely equates to common practice – only 1 in 3 companies are doing all three by consistently offering leaders at all levels transparent, development focused, and continual discussions.

The Role of Performance Discussions in Converting Failure to Forward Progress

For many successful leaders, failure – as a step along the way to awareness, learning, and ultimately personal improvement – isn’t just an option, it’s a crucial accelerator. Despite the vital contributions that authentic, eye-opening performance discussions can make to fail-forward leadership, these systems and conversations are often neglected in an oversimplified “failure now=success later” equation. To grow through failure, leaders need full, timely, and unvarnished awareness not only that they failed, but how and why.

The power of performance discussions that pair an inspirational yet challenging manager with a leader still stinging from a recent failure can’t be overstated. Understanding – and more importantly, personally owning – failure requires an objective perspective: something nearly all of us excel at avoiding or rationalizing ourselves away from. Post-mortem performance discussions with a manager after failing at a key project or presentation also drives a leader to introspect on the reason for failure, not all of which are equal in their benefits for long-term growth.

What’s the Role of Ratings?

For all the leadership benefits of continual, growth-oriented performance discussion, they don’t come without a price for time and preparation. Managers can’t be expected to carry the same administrative load they’ve always carried for traditional performance management, while also layering on development conversations. They need to recover the necessary time to have these conversations with the right cadence and focus. Our research shows that leader engagement is highest when their manager holds performance discussions with them at least quarterly and ideally weekly. Leader engagement is also maximized when at least 75 percent of conversation time is devoted to leader development.

What’s the solution? We recommend dropping performance ratings and repurposing that time to double-down on development instead. Companies who’ve dropped ratings are still rare (only 1 in 5), yet those who’ve done so have higher leader quality now and a stronger future leader bench (the next-generation of leaders ready to step into critical roles). They also outperform their peers on gender diversity in leadership, with a higher proportion of women leaders as high potentials and as senior leaders. Ratings can perpetuate long-term patterns of bias. They’re also too often a crutch for leaders unwilling or unable (because of a lack of leadership motivation or coaching skill) to have the tough conversations about performance – particularly about teachable failures.

By replacing ratings with development discussions and shoring up managers’ coaching skills to have these conversations adeptly, companies can reestablish the role of performance management in creating long-term leader readiness. This form of performance management is experience management–and failure reinforcement. It’s unlikely that a leader will reap the long-term returns of failure without it.

Learn more about how DDI can help you develop your leaders.

Evan Sinar, Ph.D. is the Chief Scientist and Vice President of the Center for Analytics and Behavioral Research (CABER). Evan is the lead researcher for the Global Leadership Forecast 2018 and is a frequent author and presenter on leadership assessment and development, HR analytics, data visualization, and workplace technology.

Rich Wellins, Ph.D. is a senior research associate for DDI and a co-author of the Global Leadership Forecast 2018.

Posted: 30 May, 2018,
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