7 Steps to Building and Sustaining High Performing Teams

High-Performance Team“Can you walk us through how you would create and sustain a high-performance team?” The question caught me off-guard. I was interviewing for a middle-management role at a pharmaceutical manufacturing site. Since the position was accountable for the site’s supply chain function, I fully expected to be grilled on leadership skills and experience. But the nature and specificity of the interview question threw me off. I stumbled my way through the answer, talking about vision, teamwork and development, but not really addressing the question coherently. Part of my difficulty in giving a crisp answer was that I had never built a team from the ground up. I had only led the one I had inherited. So it wasn’t clear to me, in that moment, how to talk about my experience to address what the interviewer was seeking.

Fortunately, I’m in a much better position to answer that question now, with the benefit of hindsight and more experience. Since that interview episode, I have had the privilege and opportunity to build new teams from scratch. But I have also (to the point that the interviewer was trying to get at) worked with existing groups to mold them into sustainable, high-performing teams. Side by side with my own experiences, I also watched exceptional leaders in large and small organizations unleash the potential of their people. And here’s what I learned.

Begin with the goal in mind

In the ultimate analysis, leadership is simply a set of beliefs, behaviors and actions that help an organization achieve its desired purpose. Whether you inherit a team, or have to build one from the ground up, it’s important to have a clear sense of the purpose of the team in the context of what the organization intends to achieve. Take the time to articulate the mission in your own mind. As you will see next, everything flows from this.

Find the right people

On the face of it, this step looks simple enough: we start by defining roles in terms of the competencies needed to meet our organizational goals, and then we find the right people to fit those roles. It’s no different from recruiting for team sports, except that in football or baseball, the positions are well-defined from long history. It can be a little trickier in a business environment where the skill sets needed may change often, but the principles are similar. You still need the right mix of people who can be pitchers, hitters, short stops and outfielders, who can play well with each other, and have each others’ backs. Equally, the future potential of the individuals and the team needs as much consideration as past experience and track record.

In fact, what often defines good leaders is the subjective judgement and intuition that they bring to this critical step. The key is to make the call as well as possible in the given circumstances, and be fully prepared to change the composition of the team if things don’t work out as planned.

Create a shared sense of purpose

This is a fundamental part of the leadership imperative. For the team to work in alignment with the organization’s purpose, the members need to be vested in it. Imagine that you’re trying to get the team to embark upon a journey with you. To make a compelling case, you need to coherently explain why the journey is necessary (the burning platform), what’s in it for everyone (the value proposition), what it will look like when you get to the destination (the vision of the future), give a sense of how you can collectively make that happen (the strategy),  and be clear about what everyone should expect from each other (the mutual commitment). That sounds like a lot, but if someone wanted you to tag along with them, wouldn’t you want to know the answers before signing up? The visual image I have of this step is Sean Penn in the movie Milk, standing in front of his constituents with a megaphone in his hand, saying, “My name is Harvey Milk, and I’m here to recruit you.” Except that you have to say a lot more than that, with credibility, passion, and authenticity.

Empower the team

If you have heard more about the empowerment buzzword than you can take, you’re not alone. So let me say this differently, to avoid any baggage that may come along with that term. If you have the right team, and they are clear about their shared purpose, your job as a leader is to give them the resources and the tools they need, and a clear line of sight from their individual goals to organizational objectives. Good teams need coaches and enablers, not micro-managers. Invest people with a sense of ownership, hold them accountable, and help them achieve their full potential. At the same time, don’t forget you’re part of the team too, so do whatever you can to help the team succeed — as a coach, mentor, role model, and blocker-and-tackler-in-chief.

Make feedback an inherent part of the process

There’s a simple reason why feedback is so important. Nothing ever goes exactly according to plan, even if you have a great team and the right set of resources. While some members of the team are hacking through the jungle with their machetes, others have to shimmy up the trees and see what’s coming up ahead. The scouts have to be on the lookout for danger, while the rearguard has to secure the path. A safe and successful journey is all about continuously getting feedback from the environment, processing it, and adjusting course accordingly. It works much the same in organizations. Don’t wait for annual performance reviews or project milestones – that’s like waiting till journey’s end – instead, provide guidance and course correction on an on-going basis. Appreciate good performance, but also  show that poor performance and toxic behaviors are not tolerated. And just as importantly, collect feedback fearlessly and enthusiastically. You too need guidance and course correction  – from your supervisors, peers, direct reports, customers, and suppliers – to become a better leader.

Invest in talent development

Let’s go back to a key word in the title of this article for a moment: sustaining. Your job as a leader doesn’t stop once you have a high-performing team that works collaboratively in the pursuit of a common purpose. You cannot declare success unless what you have helped create can live and thrive on its own. That means investing in the development of the entire team — the people you lead, as well as yourself. Talent development is a broad enough topic that one could devote an entire series of posts to just that. Here’s the Cliff Notes version: first, development needs to be owned by the colleague, with support from supervisors, mentors and HR (not the other way around). It’s up to each one of us to figure out what our development goals are, what experiences, knowledge and resources we need to get there, and a realistic set of expectations about where it’s going to take us. Second, we should think about development in terms of the two orthogonal axes of performance and potential, in order to monitor and guide the development process. If we don’t make a clear distinction between performance and potential, it’s very difficult to identify, develop, and retain talent. And third, succession planning should be an essential component of the development activity. The guiding principle for all of this is to make individual, team, and organizational performance sustainable.

Don’t be afraid to let go

I have seen many successful leaders do a fabulous job of the first six steps, but stumble at this last one. Having picked the right people, motivated them, and helped develop their capabilities, I can understand a strong desire to hold on to what you feel you have created and nourished with care. Letting go is never easy. But if you’re sincere about development, both you and your team members need to be thinking about what’s next. Remember, your role as a leader is to help fulfill the organization’s purpose. And what the organization may critically need at a particular point in time may be precisely that rising star that you have nurtured. What’s more, when that person moves on to the next stage in their development, that in turn creates an opportunity for someone else to spread their wings.

Sometimes, however, letting go may involve losing a high-performer to the outside world. This can be even tougher to handle. You may feel like someone else, maybe even your competitor, is “unfairly” benefiting from your investment in the colleague’s development. But think of the alternative: if you don’t invest in people’s development, not only do they have less of a reason to stay, but while they are with you, they are less than what they could be.

So, in hindsight, this is how I should have answered the question I was asked in my interview many years ago. To create and sustain a high-performance team:

  1. Begin with the goal in mind
  2. Find the right people
  3. Create a shared sense of purpose
  4. Empower the team
  5. Make feedback an inherent part of the process
  6. Invest in development
  7. Don’t be afraid to let go

Taken together, these  7 steps provide a logical, actionable path to creating and sustaining high-performance teams. This is not just based on my own experience as a manager over 20 some years in large and small companies. More than anything, it’s a distillation of what I have internalized and learned from the great leaders I have had the privilege to work for and observe during my many years in the workplace. So I know from their teachings and my own experiences that this 7 step approach works in practice. You just need the right mindset, and the leader’s commitment to do whatever is necessary to help the organization fulfill its purpose.

Supply Chain Metrics That Matter

supply chain metrics
 

Photo credit: Celtrino.com

 

I’ll start with an admission – although I’ve spent the majority of my career as a supply chain professional, I’ve never been formally trained in the field. Like many others in the industry, I’ve had my share of on-the-job training and continuing education (APICS, for instance), but my formal schooling was in chemical engineering. So I came to the supply chain field as somewhat of an outsider – which may not have been such a bad thing. For example, my chemical engineering background helped me think about supply chains in terms of inputs and outputs, and dependent and independent variables. Perhaps because of this outsider’s perspective, I’ve never been shy about challenging the status quo, or pushing back against conventional wisdom. And one aspect of the conventional wisdom in supply chain management that has always bothered me is the framework of metrics that we use to measure, operate and improve supply chains.

I know what you’re probably thinking  – aren’t supply chain metrics pretty well established by now? Haven’t we beaten this topic to death over the last several decades talking about KPIs and balanced score cards, and adding increasing sophistication to the measurement of forecast accuracy, service level and cost? Yes, this is indeed true – over the years, much work has been done on metrics in order to define, measure, analyze, improve and control supply chains. Frameworks like SCOR have been introduced to provide a formal basis for modeling and quantifying supply chains. Armies of management consultants have come up with ways to integrate supply chain metrics into the balanced score cards that are used to run companies. Processes like Sales & Operations Planning have been designed to align supply chain performance with financial, operational and commercial performance. I have no disagreement with any of this – on the contrary, each of these developments has been beneficial in moving the field forward, and making supply chain management essential to the success of businesses of all kinds. My more fundamental, nagging issue is this: are we critically looking at the metrics we use, and asking ourselves (1) if they are the right ones for our business, and (2) if they are driving the right behaviors? And I suspect the answer to those two questions is “No,” in many cases.

Let’s go back to basics for a moment. The need for metrics is underpinned by something Lord Kelvin is purported to have said, “If you cannot measure it, you cannot improve it.” I’m paraphrasing what he said, of course, but while his basic message is simple enough, it doesn’t really tell us a whole lot about what to measure. We all know that there are measurements that unambiguously point to how we can improve things, but there are also a host of others that either offer no clue to what actions should be taken, or provide information well after the time to act has passed. And then there are others that are purely diagnostic in nature, that tell us something about the health of the system, but are not relevant to improvement, necessarily.

This is where the notion of leading, lagging and diagnostic indicators comes in, and the best way to explain it is through some examples. Let’s say we are trying to measure a student’s academic performance.  Grade point average is an obvious and important metric, but it bears noting that GPA is an output measurement, or lagging indicator. It’s a dependent variable, not one that we can directly manipulate to improve outcomes. So if we want to improve a student’s GPA, what should we measure and work on? It could be time spent in class, or in doing assignments, but more fundamentally, we need some way to measure how well the student understands the material (one could argue that this was the original intent of grades and GPA). One way to do that would be through assessments done as and when the material is being taught. When a chapter in the textbook, or a segment of the course syllabus is completed, the student takes an assessment, and the scores on the assessment provide a measure of how well the student understands the material. This metric in turn could drive improvement on the student’s path to the final grade on the subject. So a metric that measures understanding of the material is a leading indicator — an independent variable, an input that can be manipulated to drive better outcomes. Next, there are diagnostic measures – metrics that measure the health of a system, or provide a baseline for the system as a whole. For example, if a student is preparing to take the SATs, he or she might take a diagnostic practice test at the start of the process to establish a baseline and identify problem areas that require particular attention during the preparations.

Now that we have done the groundwork to understand the different types of metrics and what they are good for, where does this take us? Should we focus on leading indicators for our supply chains? Lagging indicators? Diagnostic measures? Not surprisingly, the answer is that we need all three. Output measurements are critical for any system – to understand performance, we need to measure what the system delivers. So, for a supply chain, we need lagging indicators that capture the reliability, responsiveness, cost effectiveness, efficiency and flexibility with which goods are delivered to the satisfaction of the paying customer. Many of the familiar supply chain metrics that we know and love fall into this category: forecast accuracy, perfect order, lead time, inventory turns, cost-to-serve, and return on assets. And how do we drive improvement in these output measures? As we have discussed before, we need leading indicators that we can influence before delivery happens. What metrics could help us do that? Basically those that measure how well we source, make and move products in readiness for delivery. Are suppliers delivering raw materials on time? Is capacity available to make the product when needed? Are work centers able to complete production as scheduled? The metrics that can answer these questions include actual vs target supplier lead times, plant availability, schedule adherence, and actual vs takt time. The last of these, takt time, is a metric borrowed from the world of Lean Six Sigma – it is the rate at which product needs to be manufactured in order to meet customer demand. The third and last element of the metric framework is diagnostic measurement. Again, I find myself strongly influenced by the Lean Six Sigma approach to process improvement – and from this perspective, cycle time is a particularly compelling measurement for understanding the health of a supply chain.

Now that we have our leading, lagging and diagnostic indicators, what remains is to put them together for a particular supply chain and business. Remember, we cannot drive the right behaviors and get improvement if we don’t have metrics that make sense for the business. For example, forecast accuracy at the mix level may not make sense for some products. It may be better to direct those resources towards a just-in-time operation that replenishes components to a reorder point, and assembles to order based on known (not forecasted) customer demand. Similarly, many fast-moving consumer goods operations are moving to a delivery metric based on “sell-through” rather than “sell-in” (meaning that delivery is considered complete not when the product is shipped to the retailer, but only when the product is sold off the retailer’s shelf – which is what ultimately matters).

So, there you have it – not a new set of metrics, or a new type of balanced scorecard, but rather an attitude of critical appraisal towards what is measured and why. In summary, then, here are the three main points I’m trying to make –

  1. View every metric with healthy skepticism. Focus on the ones that make sense for your supply chain and your business.
  2. Ask yourself what the metric is for, whether it’s a leading, lagging or diagnostic indicator, and what behavior it’s intended to drive.
  3. And then critically examine whether the chosen metrics in each of those three categories are meaningful in the context of making the business successful.

Because we shouldn’t forget that there is a dangerous flip side to Lord Kelvin’s maxim – if you measure the wrong thing, you won’t improve what really matters!

© Tharuvai Ramesh