Promoting individual performance vs. the overall firm

Sep 23, 2002

If there’s one issue that I see a lot of good A/E/P and environmental firms grappling with right now, it’s how to balance the need for high-performing individuals vs. having a cohesive team that works well together. This is no simple matter. There are so many opposing forces to deal with. On the one hand, the firm needs high-performing people. I had a client who once called these people “difference-makers,” and I like that term. It’s not hard to spot a difference-maker. These people get stuff done that others can’t. They make a difference. Who can honestly say you don’t want more of these people? Whether it’s to head up a division, an office, or a department, or sell a big job, we can all see a slot we’d like to have a difference-maker occupying. But difference-makers are never easy to hire. Most aren’t out looking for a job. And some difference-makers can wreak havoc on the organization. Some difference-makers pit their groups against the other groups. Some difference-makers motivate their people by complaining about the parent company or another group or another person, and use that as their unifying cause. Some difference-makers can never be satisfied in terms of their pay, benefits, titles, perks, or whatever. And sometimes these difference-makers get so distraught over a perceived lack of recognition or rewards that they move on to another firm or start their own. Some of these people who leave and start their own company or operation within another company end up being quite successful (though not always!). Most firm owners would agree that building a company and getting complicated projects done requires cooperation between individuals and work groups. And most owners would agree that if you want a company that can weather all economic storms you need to have some diversification in your portfolio of clients, services, and geography. Finally, most owners of larger firms would agree that to be consistently profitable it will be necessary to have the systems and processes that facilitate moving work around inside the company. All of these things require teamwork. But getting teamwork is not quite that simple, either. What if you work 60 hours every week and your team member barely shows up for 40? What if your team member turns out sloppy work? What if your team member always loses money on every job he takes on? If you are the high producer and surrounded by turkeys how does that make you feel? Not very good! For a new firm with one or a couple different owners, this issue is usually not much of a problem. Management ideology is what it is and that’s that. But for most other firms that have been around a while, it is an issue. And because so few of these companies ever have a full and open discussion on this issue, it usually remains unresolved. The result is that emphasis from company performance to individual performance often changes from year to year based on what’s happening with the business or who is in the top job. Along with that changing emphasis comes changes in accounting, organization structure, reward schemes, who gets to be an owner and who doesn’t, and more. My belief is that a more teamwork-oriented management approach will lead to longer-term success. I like tying everyone to the overall company’s performance and am generally leery of compensation plans that pit one person or one work group against another. On the other hand, I am also a big believer that to have such a system requires one to relentlessly clean out dead wood, i.e., people who just aren’t cutting it. Most of us know who those people are. We don’t need a lot of new data to tell us what our guts already can. If you clean out the non-performers, then there isn’t as much bickering when it comes time to dole out the rewards. Keep a lot of your duds in the name of protecting the family and you hurt the family. On the other hand, go overboard in rewarding one person or group in a family when everyone is contributing and that can backfire, too. Here’s what I think. Top management needs to fulfill its responsibility by doing what it takes to have a high-performing firm. The barriers for individuals to getting in and staying on the team need to be high. And everyone then needs to be taken care of…well taken care of. Originally published 9/23/02

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