Leadership in Action - Performance Management Software

From 1991–1993, IBM lost more than 15 billon dollars. Lou Geistner was hired as CEO to turn things around. By carefully making sure the right people were in the right positions and installing a team-oriented compensation system, Geistner eliminated silo thinking and expanded cross functional cooperation. He returned IBM’s focus to its cultural roots: ardent customer service and discipline. Promotions and performance management shifted the culture focus from entitlement to achievement. Geistner once remarked, “I have come to see in my time at IBM that culture is not just one aspect of the game, it “IS” the game.” By the early 2000’s IBM had shed 14 billion dollars in inefficiencies and become the world’s largest and most influential information technology company. 

How do you know if your managers are creating value or destroying it? James Collins said it best in How the Mighty Fall, “People do not have jobs, they have responsibilities.” Performance based job descriptions define measurable leadership responsibilities. Establishing specific leadership measures encourage managers to do more than act as coordinators. They must get the best out of their people. Accurately defining and measuring leadership provides an incentive to excel at every level throughout the organization. 

There are several ways to measure leadership effectiveness. One way to establish leadership effectiveness is to measure employee responsiveness:

• How long does it take for employees to take action (Agility)?
• How well do employees perform in activities that drive strategic objectives (KPI’s)?
• What percentage of employees go beyond just meeting job requirements, e.g., exceeding customer expectations or suggesting better ways of doing things (Discretionary Effort)?
• How many ideas from employees are initiated and implemented? (Innovation)?
• How many employees can directly link their daily activities with mission or strategy (Strategic Alignment)?
• Ensuring the performance range between top performers and poor performers does not exceed 10% year after year.