See the three measurement levers one CEO used to build a performance culture without a culture program — and what to try in your own team this week.
If your performance culture isn’t very strong, if people just aren’t into measuring and improving, you might think your organisation isn’t ready yet for developing better KPIs.
But the opposite is true: your organisation needs better KPIs, right now. That’s because a performance culture follows — it doesn’t lead.
Harald Matzke found this out by accident. As CEO and co-founder of cubus, a German IT company, he already knew strategy without execution goes nowhere. But his development team hated being measured. His sales and services teams were gaming their KPIs. And when he looked at why, through fresh eyes, he found the real problem sitting underneath it all:
“I will explain to you why our vision and mission statements are so weasely that people don’t really understand what we really mean.”
That was a measurement problem Harald was describing, not a culture problem. And his measurement problem was producing exactly the culture you’d expect it to.
Culture is an outcome, not an input
In their article in HBR’s April 2016 edition, Culture Is Not the Culprit, Jay W. Lorsch and Emily McTague point out that fixing the culture is rarely the right solution to organisational performance problems. The leaders who succeed don’t wait for a performance culture to enable measurement. They use measurement, at least in part, to enable a performance culture.
Culture is an outcome of, not an input to, organisational performance. The way performance measurement and performance improvement is practised has a direct impact on the culture that emerges. We go deeper into why this is true, and what the research shows, in this article and its accompanying webcast.
Here, I want to show you what it looked like in practice — because Harald didn’t fix cubus’s culture. He changed three things about how the company measured performance. And the culture followed.
The three levers Harald pulled (and how you can use them too)
Lever 1: Clarity.
Can every team in your organisation describe, in one sentence, what success looks like for them, and how it connects to the strategy?
Before, cubus teams interpreted strategy differently, defaulted to activity, and measured what was easy to count rather than what mattered. Harald gathered his management team the day after his first PuMP workshop and rewrote the “weasely” vision and mission into language everyone could understand. Then every team mapped their own results to the strategic direction.
This week: ask each of your teams to write, in one sentence, what success looks like at their level. If they can’t, that’s where to start.
Lever 2: Ownership.
Do your teams actively use their KPIs to learn and improve, or manage the numbers to look good?
Before, cubus had individual KPI-linked bonuses that were, under the surface, destroying trust — consultants over-charging clients, salespeople padding pipelines. Harald replaced the individual bonus system with a team bonus system and let teams design their own KPIs.
This week: look at what your current measures actually reward. If they reward looking good over telling the truth, that’s a measurement design problem, not a people problem, and no amount of coaching will fix it.
Lever 3: Autonomy.
Do your managers spend their time coaching and enabling, or directing and checking?
Once cubus teams owned their results and their measures, Harald and co-founder Thomas removed the management layer entirely. Thirty-five people, five self-managed teams, no boss. The expert in each domain made the decisions and owned the results.
The point here is not that the management layers were removed. The point is that each team had so much clarity about what mattered, and so much ownership over the information and decisions to contribute to what mattered, that they could self-manage. And this means that managers can shift into coaching and supporting teams, instead of pushing them to get things done.
This week: notice where your managers actually spend their time. If it’s mostly checking and directing, that’s a sign the first two levers haven’t done their work yet.
The three measurement levers work together. Strength in one doesn’t compensate for weakness in another. And yes, it’s a journey rather than event, but the value comes alive through the journey.
What became possible
None of this was a culture program. There was no values workshop, no mindset-shift campaign announced to the business. Harald changed how results were defined, how measurement was used, and who owned it. The culture followed, because the real reason why people were coming to work became tangibly clear to them.
cubus became a company of self-managed teams. Harald has since sold the business, and now works as a licensed PuMP Affiliate, helping other leaders pull the same three levers he did.
If you want to hear directly from Harald himself, you can listen to Harald’s full story →
Where does your organisation sit on these three levers?
You can quickly rate your organisation on the same three levers Harald used to transform cubus, and decide which one you should pull first.