There has been a lot of talk lately around an impending bubble. Just last month, Goldman Sachs warned that the last time stocks were this expensive was during the 1997-2000 downturn.
Whether the fear of a bubble is founded or not, the recent discussions serve as a strong reminder that now, more than any time in the last decade and a half, companies need to put safeguards in place to at least lessen the impact should markets turn sour.
As I am COO and president of a Silicon Valley-based software company, many people find it odd when I tell them that company culture is the best place to develop these safeguards.
The companies today that are growing fastest and are best-suited to withstand a downturn all share one thing in common. And no, it’s not the unstructured vacation policies or high-stakes ping-pong tournaments popularized by hip startups.
The most resilient companies all have corporate cultures that are fundamentally anchored in performance. Performance-driven organizations are empowering everyone in their organization with access to information traditionally available to only a select few gatekeepers.
The result is a far more scalable, transparent and goal-oriented culture that pervades all areas of the business, including product development, marketing, customer support and human resources. It is this foundation in a culture of performance that anchors great companies and makes them less volatile to the whims of the market.
Here are three common attributes that companies with performance-driven cultures embrace:
Everyone is engaged in the core processes of enterprise performance management
A major barrier to implementing a performance-driven culture is outdated information. Performance data needs to be timely for it to be effective. Under the command-and-control model, the time required to review, approve and update financial information used to track a company’s performance is analogous to competing in the Indy 500 with a horse and buggy.
When building a culture of performance, the technical capacity for multiple users to collaborate in the core analytic processes of enterprise performance management is key. This is because engaging more stakeholders in these processes in real time involves exponentially less time to dissect and debate the data, resulting in far more relevant and actionable information.
When applications natively have collaboration capabilities built in, users can swiftly make edits and eliminate confusion over ownership and version control. These seemingly mundane problems continue to plague companies today, because legacy systems are ill-equipped to solve them.
Hostess Brands provided its sales team with technology to measure performance on a daily basis, equipping them with a 360-degree view of their progress and increasing employee engagement. According to Robert Molina, vice president, financial planning and analysis, Hostess Brands, “We knew that our extremely tight time frame necessitated speed and flexibility in our analytics platform that was beyond what legacy systems could deliver.”
Buy-in from all levels of the organization, and an understanding of how individual roles contribute to the end goal
Once in place, objectives and target goals need to be communicated to and embraced by all levels of the company, not just line-of-business leads. Team leaders at performance-driven companies outline how their groups can most effectively contribute to success, and ensure that all levels are bought-in to the idea.
Communication should also be tied to action, and objectives should cascade through the organization so each individual feels they are equipped to perform duties that contribute to the company’s performance. If the goals are top-down and not embraced at every level, then it becomes a dictatorship of performance, not a culture of performance.
Brown University took this approach, and saw tremendous improvements in productivity and employee engagement. According to Susan Howitt, associate vice president of budget and planning at Brown, “By giving people the tools they need to influence change, we have created a value-add environment, where everyone is encouraged to engage, and can feel a sense of ownership. Time is no longer spent managing static spreadsheets. Instead, team members across the organization are empowered to interact with data, suggest improvements and initiate change.”
A vital component of this is communication. All employees, from interns to the C-suite, will buy in much faster when benefits to individuals and the organization are clearly stated. Part of providing context for the employee base is ensuring that the strategy aligns with well-defined roles for individuals and teams, along with knowledge of the stakes involved. If they don’t know the stakes, getting buy-in will be tough. And there is a fine line between context and control — when planning and process are valued more than getting results, it can be next to impossible to promote action within an organization.
When they are bought-in, employees feel more engaged and empowered to achieve their goals, resulting in greater productivity for the business.
Goals and metrics that accurately measure performance
This final attribute seems like a no-brainer, yet many businesses do not have a repeatable system in place for consistently and accurately measuring performance across their various functional areas. The core goals of most organizations — including sales, operational efficiency and customer loyalty — are interrelated, and should be realistic, achievable and measurable.
Performance-driven companies review internal transaction systems and identify relevant data they can leverage to help measure success. There is a wealth of data available to help a company assess how it is performing, including profitability, market share, customer retention rates and employee turnover.
It’s important to note that performance data comes from both inside and outside the firewall. By combining internal data on sales, growth and customers with external data from social media and competitor websites, companies gain a contextual picture of performance from which to continually innovate on and improve.
In a nutshell, a culture of performance requires your people to have the right data, at the right time; it’s about rallying the entire company around a common set of goals and success metrics. While the concept is simple, it is much easier said than done.
Change of this magnitude will not happen overnight, but companies can begin to lay the groundwork for this shift by replicating the success of organizations that have pioneered and led the way. By doing so, they will be better prepared for the future — whatever it may hold.
What are you doing to foster a culture of performance at your company?
Phil Wilmington is president and COO of Tidemark, the only mobile-first, enterprise performance management solution that provides cross-functional analytics and forecasting across an organization. He most recently served as president and chief executive officer of OutlookSoft; before that, he served as co-president of PeopleSoft. Reach him @TidemarkEPM.