Why It Is So Hard to Make REAL Changes: Transforming Performance Management, Part 2

NUGGET : Boss-Subordinate thinking, a top down view of work flows, and faulty assumptions about control are three big barriers to breakthroughs in performance management.

My last post argued that it’s time to stop patching the old performance management forms and systems. It’s time to design something new — something far more powerful for business and energizing for everyone. Yet, we keep cycling through the same approach with different forms and terminology. In this and the next article, I want to focus on WHY it is hard to change. Then, in the 4th article, I’ll suggest some alternatives.

Boss-subordinate thinking. It’s the job of people in formal leadership roles to be sure that there are effective strategies, organization designs, and resourcing decisions. But too often people in these roles act – and are expected by others to act – more like parents than people with different work portfolios and roles. This affects how goals evolve, how problems are solved, how feedback happens and who is expected to give it. The “boss” is often in the drivers seat, doing most of the thinking and talking about the work that will be done and has been done.

The boss-subordinate relationship as THE key relationship for getting work done is less relevant today. People are doing more work on cross-functional teams and projects that are not part of their organization silo. Increasingly they are working with customers and others in supply networks that are not part of the organization whose name is on their paychecks. The “boss” is often not involved in this increasingly more networked work.

Top-down view of how work flows. This relates to the first point. Think about the language and practices associated with performance management. We talk about “cascading goals” and MBO’s (management by objectives) that move down, layer by layer and in smaller bits through the chain of command. Of course, some work can be broken apart and cascade. But important strategic and networked work doesn’t easily fit into boxes and flows that were designed for functional efficiencies rather than messy and innovative multi-functional solutions.

Even when strategic initiatives are managed as intact programs, they have a hard time competing for attention because the rewards also flow vertically. Given a choice between what someone up the chain wants and what the supply chain/customer wants, the tilt frequently goes to the vertical: that’s where the people who make pay, career, and other recognition decisions live. This helps explain why there is such a low success rate for strategic and horizontally flowing initiatives. Performance management practices – with their strong vertical orientation — are partly to blame.

Faulty view of control. Think of who controls things, and how control occurs. Who decides the strategy that guides work? The quick answer is, “the executives.” But, at the end of the day, it’s what gets done – and that is the product of everybody’s many, many little decisions and tradeoffs that happen under the strategic radar and for reasons that may not look like what executives envision.

How to control? Traditional methods rely a lot on technology, forms, procedures, job boundaries, supervision, ratings, and rankings. But overemphasizing these trains people to be risk averse and approval oriented – to play to the system. It allows people to avoid accountability and tough conversations. A client once told me that his first “performance review” sailed into his cubicle in the form of a paper airplane: his manager just didn’t want to talk. Today’s fast moving and interconnected performance environment requires conversations and collaboration. This, in turn, requires good communication and self-management skills – more than many have or are willing to use.

Next, I’ll look at three more reasons why traditional ways of managing/leading, while fraught with problems, are so resilient, even though we desperately need something new.

Power traps
Defaulting to HR
Traditional performance management does add some value

Then in Part 4 I’ll suggest some ways forward.

NUGGET : Boss-Subordinate thinking, a top down view of work flows, and faulty assumptions about control are three big barriers to breakthroughs in performance management.

I’d love your thoughts – in the comment section below, or to me personally at pat@patmclagan.com
Also, I invite you to please share this article with others in your network.

It’s Time for Something New: Transforming Performance Management, Part 1

NUGGET : Performance Management is broken and can’t be fixed with a new appraisal form. It’s time to rethink and innovate based on the needs of today’s Changing World of Work.

Show me how performance management actually works in an organization and, without an employee survey, I will tell you what the real values and relationships are.

Leaders everywhere are pronouncing the “right” values – socially acceptable things like: collaboration, customer-focus, agility, accountability, empowerment, innovation, learning.

The hyped values invite people to unleash energy. But the old back-end (driven by pay, appraisal, and ratings) approach to performance management often has more negative than positive effects. Even though you may say it is really goal- or development focused, managers often see performance management as a way to justify pay and promotion decisions. People involved know this and have developed ways to play the game.

The way performance management actually works is often like this: people work with their managers to set goals in order to ensure a common evaluation reference so that they have a basis for evaluations, pay raises, bonuses and promotions. In addition to this “back end” orientation, formal performance management has become a way to make sure that supervisors and managers really do what they are paid to do: to lead and manage. When performance management doesn’t seem to help leaders to manage better (i.e., there are too many “above average” ratings), then organizations resort to forced rankings, normal distributions, and clumping of the top 10% (for big bonuses) and the bottom 10% (for remedial programs or removal). I’m always surprised that we don’t see these desperate measures for what they are: an admission that managers are failing in their roles and that there is a culture of low trust and win-lose. This is certainly not in harmony with the new values!

The situation with appraisal-oriented performance management has been dire for decades, but organizations continue to patch the broken system by periodically changing the appraisal forms. W Edwards Deming was so frustrated with PM’s negative impact on quality that he wanted it eliminated entirely. I do not agree with throwing out personal feedback mechanisms. But I do believe that a new approach and assumptions are sorely needed to reposition performance management as a strategy implementation and culture-enhancing vehicle. It’s time to STOP doing incremental change to this archaic process. Stop changing the forms and instead develop a way of aligning people that really reflects the values in the first paragraph of this blog.

I will offer specific suggestions on this theme in upcoming blogs. Please do comment or send me an email (pat@patmclagan.com) to launch a conversation, ask a question, or offer a thought.. I’ll respond, interact, and possibly deal with your thought in one of the upcoming pieces.. Please do share these thoughts with others. We have similar goals: to create high performance and high engagement in today’s changing world of work.

NUGGET : Performance Management is broken and can’t be fixed with a new appraisal form. It’s time to rethink and innovate based on the needs of today’s Changing World of Work.

If You Want Water to Boil, Turn up the Heat!

NUGGET : Make sure your investment in change is robust enough to achieve your change goal.

In the last post, I talked about one of two major mistakes that condemn changes to the trash heap of failed projects: failing to say NO to a proposed change that won’t add value. The second mistake is both big and common: failing to allocate enough resources for success. Think about this: a group decides to pursue a new strategy or launch a big change. The change is complex and will change roles and relationships and require a period of learning, experimenting, even trial and error. But the resources allocated to the change process are minimal or (and this is very common) people are told, “Do this AND your job, too… and stay within the current budgets.”

There are many big changes afoot around organizations today. The biggest require significant shifts in culture, mindsets, accountability, and power relationships. Think of what is happening as global supply chains put pressure on functional silos and command/control hierarchies. Think of what is happening to organizations and their people as they adjust to the VUCA (velocity, uncertainty, complexity, ambiguity) environment that technology and globalization are underwriting.

I’ve been involved in many change projects during the last decades. I put them into three broad categories – each requiring resources and attention beyond the day-to-day running of the business.


Some of the changes (I’ll call them C1 changes) are relatively simple to complete and leave roles intact. But they may require training and additional communication about the rationale for the change. Training and communication may be enough to help people get over the change hump of adopting a new word processing program, for example. But, even though C1 is a simple change, it still requires time, attention, and additional resources.

C2 changes are a bit more complicated and require a greater change management investment. C2 changes rattle the status quo and change relationships. They are changes that are complex but have been implemented elsewhere. There is usually a relatively clear vision of the end game and because something similar exists, uncertainty — while present — is reduced. Examples of a C2 change include the implementation of a new enterprise management system, the opening of an office in a new country, or an organization restructuring that results in downsizing. These require changes of many kinds. These in turn can’t occur unless the management puts skin in the game, spending personal time supporting the changes and funding a good-sized implementation program and a change management budget beyond business as usual.

C3 changes, the most difficult, involve more complex changes that rattle the status quo and require significant innovation in uncertainty. These are changes like those in big South African businesses as apartheid ended, or in manufacturing, banking, telecom, and some branches of government during major context shifts, or in global businesses today that are cobbling together complex networks of suppliers and customers and looking for ways to keep them both aligned and responsive. C3 changes involve experimentation and require significant investments: time, money, people working as change teams.

C3 changes are the equivalent of a state change in physics – a change from solid to liquid, or liquid to gas. Think about what you do when you want to boil water – to change its state from liquid to gas. You turn the heat up to 9 or 10 on the stove – a significant investment of energy. If you only turn it to 1 or 2, all you get is tepid water and slow evaporation that doesn’t power anything. The energy investment has to match the problem you are trying to solve.

As you are thinking about your change investments, be sure to realize that it takes significantly more resources to achieve C2 than C1, and yet more for C3. If you are not willing to put the time, energy, and resources into a change project or goal that it requires, it is probably better not to start.

NUGGET : Make sure your investment in change is robust enough to achieve your change goal.

Please click below to leave a comment, or write to me at : pat@patmclagan.com
Check out my new book, The Shadow Side of Power: Lessons for Leaders.

Just say “NO!”

NUGGET : Say “NO” to changes that will not add value


We often hear a scary statistic about change: 40, 50, 60, 70% of all changes in organizations are viewed as failures. They don’t achieve desired goals, they fall apart or are abandoned before they are complete, they overrun costs by orders of magnitude, etc.
These failure statistics come from questionnaires administered by various consulting firms, so I don’t really know what the truth is. I do believe, however, that we can do a lot better – that immense amounts of energy, money, and other resources are wasted on changes that have gone awry or are poorly implemented.

After participating for over four decades in many big changes across industry sectors and around public institutions, I can say with certainty that two major mistakes are big culprits in change failures.

The first may surprise you, even though it is pretty obvious: many changes should not be implemented at all: they may replace something, but they don’t add enough value to justify the disruption and investment. I have seen – and I’m sure you have – programs, systems and solutions brought in that merely caused turmoil, resistance, and even dislocation. Maybe the changes were somebody’s attempt to just do something new, to make a mark – the new administration’s or the new boss’s way to shine. Maybe the organization was sold on some fad (“the best companies do this!”) or lured into a simplistic solution for a troubling and complex issue. Even if the impotent change does eventually replace an old way, if it doesn’t improve things, the experience will inoculate the organization to resist future changes with more gusto.

The new but unnecessary program will just make it more difficult to justify important and needed changes in the future. Inoculated people will just say, “Here we go again!” Whatever the reason, a change that doesn’t add value or solve a problem will fail. Say, “No!” Shut it down before it draws off important resources and discredits the validity of change as a vital human and organizational dynamic.

The second mistake is a big and common one: not putting enough resources into the change process. I’ll be writing about it in the next blog!

NUGGET : Say “NO” to changes that will not add value

Before you go, please comment on this blog in the space below, or send me an email: pat@patmclagan.com
I’ll respond! Also, check out my new book, The Shadow Side of Power: Lessons for Leaders.

“Everyone a Leader?” Yes…. And NO!

NUGGET : Let’s stop pretending that everyone is a leader in the same way. When there are leadership failures the buck must ultimately stop at the feet of people with institutional power, for they wear the decision mantle and authority of the larger organization or institution.

Everyone IS a leader when he or she brings something new to the table, but everyone is NOT an institutional manager/leader. Institutional leaders have power beyond their personal role – to make decisions and channel resources for the institution or a part of it. The “everybody a leader” rhetoric, while positive in many ways, takes formal leaders off the hook for this additional power and responsibility.

Designated leaders are like the nervous system in the body. They have a responsibility to connect and integrate, to align, direct and intervene for the whole.


This does not mean that other sub-systems in the organization (for example, the financial or the sales or the research systems) don’t think and integrate – or that individual people don’t make decisions or take courageous actions. Nor does it mean that the leader must use autocratic methods to accomplish these ends. It does mean that success requires competent formal leaders who can wisely perform the leadership/management function. Everyone is NOT a leader in this sense.

Furthermore, because of this additional FORMAL authority, institutional leaders have an additional responsibility. Their power position can hook the people around them. People may be reluctant to tell the truth or admit failures – and they may resist the leader’s direction. Thus formal leaders require a lot of awareness and some skills in detecting and using power dynamics.

Leaders who have institutional authority are, therefore, leaders like everyone else, but they also hold the power of a leadership role. They must lead both from their personal power and from the power of their role.

NUGGET : Let’s stop pretending that everyone is a leader in the same way. When there are leadership failures the buck must ultimately stop at the feet of people with institutional power, for they wear the decision mantle and authority of the larger organization or institution.

Please click below to leave a comment, and check out The Shadow Side of Power: Lessons for Leaders

Idealism and Leading Change

NUGGET : Idealism is critical fuel for change and an important force for leaders to recognize and support – especially when it meets the often refiner’s fire of challenge from the status quo.


I hear the media commenting in critical tones, that President Obama is finally setting a more “realistic” agenda, tempering his vision and accepting what he cannot change. But without intending to make any point about the CONTENT of the political climate in the US, I can’t pass up a teaching point about large system change: people who lead significant change can only do so with an initially radical agenda. Idealism is critical fuel for change – even though the full cycle of change may take years or even decades.

Every major social and organizational change starts outside the mainstream.

It challenges and rankles the status quo.  In its early stages, most people may call the change idealistic, naïve, even subversive or dangerous. Think about the earliest stirrings of the civil rights movement in the US (even before the Abolishionists) or the still smoldering popular movements in the Middle East. Look at the evolution of social security, personal computers, and closer to home for me and my home country in the 80’s and 90’s, the end of apartheid. Think of the changes happening now around many organizations as they transition from pyramid/top down ways of operating to horizontal supply chains and networks.

The course of change is a grand battle between the status quo and the new. In that battle, a new idea emerges, is continually tested, often temporarily defeated, and sometimes rises again in stronger or more refined forms. Sometimes the new idea proves to be a bad one or doesn’t really solve an important problem, and is sent to the graveyard of failed experiments. But the important point is this: every big change needs idealistic, visionary, passionately committed proponents. Their idealism and passion may seem, or even be, naïve. After all, “nobody who really knows physics would ever suggest such a radical idea as a flying machine.”

I’d like to end this thought piece with Steve Jobs’ quote about the role of idealism. I will have more to say about this in future blogs where we look at how large system change really progresses over time – and sometimes it DOES take time – more than the 24 hour news cycle, a president’s term of office, or even a lifetime:

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules, and they have no respect for the status-quo. You can quote them, disagree with them, glorify, or vilify them. But the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the ones who are crazy enough to think they can change the world, are the ones who do.
Steve Jobs

Mandela Lesson 3: Inclusiveness – For Leadership, for Life

NUGGET : In times of change and complexity it is natural to retreat to an us/them stance. But, as Mandela’s life shows us, it’s often the opposite we need: a more inclusive view of people and ideas.

In times of change, we are tempted to draw hard boundaries to protect what is “me” (the individual) or “us” (my group) from what is “the other(s).” Given today’s pace of change and complexity, and how we are thrown together in a global melting pot, it is easy to see why there is so much “us/them” conflict. And because it is so juicy for the media, it gets amplified and takes on battle proportions, whether in one-one relationships (People Magazine), government (Republicans and Democrats in the US Congress), society (Middle East), in business (marketing vs. engineering) or in business vs. society (Wall Street vs. Main Street). Global communications and technology, and the economic imperative to cooperate are pressuring us to soften we/they boundaries, however, and to broaden the playing field for relationships and ideas. And that’s a good thing, for we all affect each other’s ability to survive and thrive as we continue to shape a new era of profound connection.


Opening up to differences is not easy, though, even in more stable times. This may be one reason for our fascination with Nelson Mandela. Somehow, he managed to both hold ground for his values and his race, while also being open to new ideas and magnanimous with people who created and enforced apartheid. Everybody knows about his putting on the Springbok rugby jersey before he presented South Africa’s new world champions with their trophy in 1995. The Springboks and rugby teams in general were considered “white” teams – teams of the oppressor, so Mandela in a Springbok shirt was a sign of a new order.

His respect for people who were different was not the only form of inclusion that Mandela modeled. One lesser-known fact is his openness to intellectual challenge – to new ideas. Here’s one of many examples: In the early 90’s, this communist sympathizer went to Europe and was exposed to a broad array of economic ideas. After many conversations and debates with world economic leaders about the best way forward for South Africa, Mandela became an advocate for a more free market approach. He rose above ideology, looked objectively at the realities of the evolving and globalizing economic and social milieu, explored options, and changed his mind.

Even though many of us would have empathized with a more retribution-oriented Mandela, his inclusive actions raise an important existential question: why is it so difficult to move beyond demonizing “others” to not only accept people who are different from us, but also to step into their shoes and world? This is a question to ask whenever we meet and feel resistant to or even hostile towards ideas and people who are different from us, in daily life, in the workplace, in the world at large.

An inclusive approach to diversity is not a trivial phenomenon in these turbulent times. Many forces are throwing us together into a global and local melting pot. We can try to create enclaves of the “just like us” people and ideas in society or in our workplaces. This kind of self-imposed isolation can create temporary security and it also may help clarify and evolve deeper values. But blind, reactive, and defensive isolation, demonization of others, and hostility often just put a temporary lid on the boiling pot of change — delaying the inevitable and increasing the chances of a more violent upheaval in the future.

The automatic response to a confusion of voices and ideas is often to “batten down the hatches.” We need to be more open and courageous than that. There are many times, of course, when we must take a stand. But most of us are pretty good at that. Where we need to stretch and grow is toward more openness and appreciation for diversity. Mandela’s larger than life presence is a call to action on that account.

In times of change and complexity it is natural to retreat to an us/them stance. But, as Mandela’s life shows us, it’s often the opposite we need: a more inclusive view of people and ideas.

For more on this topic, see the third circle in The Shadow Side of Power: Lessons for Leaders

Mandela: A Study in the Responsible Use of Power. Lesson Two: Be a Bifocal Leader

NUGGET : Great leaders have bi-focal sight: they simultaneously focus on today and the longer term future.


As we say goodbye to Mandela, I’m thinking about some of the lesser known insights from that amazing time of transformation. So to continue on the “lessons” theme launched in the last posting (Use of Power, Lesson One: Awareness), I’d like to highlight an amazing and courageous decision that Mandela and his cohorts on Robben Island made early in their incarceration.

To set the stage, recall that Mandela was imprisoned in 1964 and was not released until February 11, 1990. The new South African Constitution was not ratified until 1996, with the first nationwide democratic elections in 1994.

During the early days of the ANC, Mandela and several other founding ANC leaders looked far into the future that became a reality in 1994. They knew the “New South Africa” would need competent black leaders. Yet, under the Bantu education system, township kids could not, by law, study math and science. It was an educational wasteland for over 70% of the population.

The ANC’s early leaders, including Govan Mbeki , the imprisoned father of Thabo Mbeki (the national president who followed Mandela) decided to send several next generation leaders to school overseas. This was not always popular with the young people who were sent out of the country (including Thabo Mbeki, who wanted to stay in the country and fight for freedom). But the first generation ANC leaders were adamant: there would be a pool of educated and politically savvy young people to lead the country after the end of Apartheid. Similarly, the ANC elders turned their Robben Island prison into an education center for others serving sentences with them.

It required a very long term vision that led to some damaged relationships between fathers and sons and aroused the ire of those who wanted a more militant approach. But Mandela’s and others’ ability to focus on both today and the longer term future is one reason for the relatively peaceful end of apartheid and the launch of South Africa into the global community.

*These lessons are drawn from the just published, The Shadow Side of Power: Lessons for Leaders.

Mandela: A Study in the Responsible Use of Power Lesson One: Awareness

NUGGET : A leadership role carries special responsibilities and powers. The first lesson is to be aware that as a formal leader you speak and act for your group, your institution, your cause. You are no longer just “you,” but are also your role.

In 1983 I was invited to give a series of talks in South Africa. That invitation launched me on a long, intense, and varied relationship with that country, its people, and many public and private institutions, including living there from 1992-1998. South Africa is still my second home, so the death of Nelson Mandela has special personal significance.

In 1983, international sanctions against South Africa were in early stages, the internal national chatter was highly politically charged, Nelson Mandela had been in prison for 20 years and his picture (and that of other ANC leaders) could not, by law, appear in the news.

Yet, there was a great deal of change happening beyond the glare of the news.


I have long planned to focus on some of the change lessons from the South African experience, and will share these in future blogs. For now, however, and over the next few weeks, I want to focus on 7 lessons* about the use of power that Nelson Mandela’s life teaches us.

From the time Nelson Mandela went to trial as a subversive, he became both Madiba the person AND Mandela, a recognized leader of the African National Congress. He took on the mantle of power. How did he use it?

First, he used his power with AWARENESS. Listen to Nelson Mandela’s speeches and statements. It is clear that he was acutely aware that he could influence the thoughts and actions of masses of people. He knew his words and actions carried more weight because of his leadership role. His big decisions were deliberate, not knee jerk. He knew that his small statements and actions would reverberate – that when he spoke he roared, when he walked down a hall he shook the earth, when he looked at something it was like a laser. For example, it took him many years to condone violence – and then only with a focus on things not people.

He approached leadership as a conscious process. Like other great leaders (Gandhi, Martin Luther King, Franklin Roosevelt, Desmond Tutu, Lincoln, and many less prominent leaders you or I could add), he talked about the special powers and responsibilities of the formal leader. For example, “A leader is like a shepherd. He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind.” (from The Long Walk to Freedom: The Autobiography of Nelson Mandela).

Really great leaders reflect, introspect, even ruminate about what it means to have leadership authority. They know the role is different than being a specialist, a technical expert, or just speaking for themselves. They put their leadership standards out there for others to see and think about. This creates a special kind of protection from power abuse: their own words set the criteria that they and we use to evaluate them and their credibility. This obviously takes a lot of courage, for as he often reminded us, “I am no saint.” He knew he would sometimes fall short of his own ideals and standards, but articulated them anyway.

The shadow of awareness is ignorance. Too many people in formal leadership roles still treat their job as a super-sized version of their specialist role. Without awareness of what it means to have leadership authority, a leader inevitably fails to use, or worse, misuses and abuses the power that comes with their position.

A leadership role carries special responsibilities and powers. The first lesson is to be aware that as a formal leader you speak and act for your group, your institution, your cause. You are no longer just “you,” but are also your role.

*These lessons are drawn from the just published, The Shadow Side of Power: Lessons for Leaders.

The Pope: Role, Person, Power

NUGGET : Watch how the pope keeps his humility and human perspective while juggling the perks and pomp of his powerful role. It’s a leadership lesson in progress.


The stunning humble behavior of the new Pope Francis is interesting and media worthy. But now that we are beyond the novelty, I think we will find ourselves challenged to become more aware of what formal authority is and how we relate to it. How similar to and different from the people they lead should institutional leaders be? What are the appropriate perks and accouterments of power for people in this and other leadership roles? Why do some “followers” feel let down when people in power refuse to be “regal” and want to “be just like everybody else (or, in the case of Francis, like the poorest among us)?” On the other hand, why do some followers seem to relish finding and amplifying faults in people with position power?

The role of Pope of the Roman Catholic Church is one of the most positionally powerful on the planet.

The person in that role is the head of a vast hierarchy of cardinals, archbishops, bishops, priests, monks, deacons, nuns. The role is one of spiritual and institutional leadership over 1.2 billion people found on all continents. The voice of that role, when speaking ex cathedra on spiritual matters is considered the infallible voice of God. In other words, it has a lot of formal, institutional authority.

But the role is not the person – a point that becomes acutely clear when we compare the early behavior and choices of Pope Francis with the stereotypical behavior and choices of many popes in the past. He pays his own hotel bill. He wears a wooden not a gold cross. He sometimes rides the bus rather than the papal limo. He wears cheap shoes not the expensive red leathers. He jokes around with people around him, regardless of their social class. He carries his own bags.

No matter how humble and how desirous Pope Francis is of being “just like us,” his role requires something else from him. Jorge Mario Bergoglio, the person, seems to want to be one of the poor of his constituency. But Francis the Pope is the head of a vast institutional enterprise and the target of whatever projections and expectations of power that he and all of us attribute to that position. In spite of our romanticized views of the power equalization of the Web or the Arab Spring, this pope can no longer simply be Jorge Mario Bergoglio of Argentina. By virtue of his disproportionate power, he has disproportionate responsibility as a steward of a vast empire. We expect him to use it with awareness and wisdom. As Pope, he is NOT simply himself.

So far, Jorge Mario Bergoglio seems to be doing a good job of dealing with the institutional leadership responsibilities, historical expectations, and power-relationship distortions that come with being Pope Francis. Will he continue to retain his humility and perspective as he moves more fully into his ermined role.

Only time will tell.

Pat Mclagan