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We spend a lot of time trying to hire the right people.
Then we hire them and assume the hard part is over.
But recruitment is really just the beginning of performance management.
A good hire, poorly managed, can underperform. Someone who may not have looked exceptional on paper, but is well led and supported, can produce excellent results.
The person matters. Of course they do.
But what happens after we hire them matters just as much.
And I think this is where a lot of founder-led businesses get into trouble.
We don’t necessarily manage people badly. We just don’t really manage them at all.
Expectations aren’t clear. Feedback happens when something finally becomes frustrating enough to talk about. Great performance isn’t meaningfully different from average performance. Poor performance goes on longer than it should.
People aren’t being managed.
Performance Management Starts With the Right Diagnosis
When someone isn’t performing, our natural reaction is usually to focus on the person.
Why aren’t they getting it?
Why do I have to keep telling them?
Why can’t they just do the job?
But performance management gets a lot easier when we stop treating every performance issue like it’s the same problem.
Because it isn’t.
We’ve been working around what we call the Five Keys of Human Performance. The idea is pretty simple: when someone is performing below the required standard, one or more of five things is usually missing.
The five are:
- Alignment
- Priorities
- Performance standards
- Capability and confidence
- Consequences and reward
The important part isn’t memorizing the five.
It’s figuring out which one is actually broken.
Because if we diagnose the wrong problem, we’re going to give the wrong response.
Performance Management Key #1: Alignment
The first question is whether the person actually understands what we’re trying to accomplish and how they fit into it.
And I don’t mean whether we’ve shown them the strategy.
That’s different.
Could they sit down, without looking at a document, and explain what the business is trying to accomplish over the next two years?
Could they explain how their role contributes to it?
More importantly, do they actually believe in it?
This matters because we can’t possibly tell someone what to do in every situation. Eventually they’re going to have to make decisions without us.
If they’re aligned, they have a framework for making those decisions.
If they aren’t, they’re going to use their own.
Key #2: Are They Working on the Right Things?
This one sounds almost too obvious.
Priorities asks whether the person is actually working on the right things.
We can have a capable person working extremely hard and still get disappointing results if their effort is pointed in the wrong direction.
Being busy isn’t the same thing as performing.
That’s why performance management can’t just measure activity. We have to know whether someone’s time and attention are actually going toward the work that matters.
Performance Management Key #3: Do They Know What Good Looks Like?
This may be one of the biggest problems in founder-led companies.
The performance standard lives in our head.
We’ve done the job. We’ve seen great people do it. We know what excellent work looks like almost instinctively.
Then someone new comes in and we’re frustrated that they don’t see what we see.
But why would they?
If the standard isn’t written and agreed upon, they’re forced to figure it out based on our reactions.
They do something. We respond. They adjust.
That’s a terrible way to build consistency.
The standard should define what doing the job well actually means. It should be written down, agreed upon and revisited annually.
Otherwise accountability gets weird because we’re holding someone accountable to a standard we’ve never actually given them.
Key #4: Capability and Confidence
Sometimes someone knows exactly what they’re supposed to do and still can’t do it.
Now we have a different problem.
Do they have the skills?
The tools?
The information?
The confidence to actually act?
This is where I think performance management can become unfair pretty quickly. We apply pressure when what someone actually needs is development.
If the problem is training, train them.
If they’re missing the right tools, give them the tools.
If they need clearer direction, that’s on management.
And if they have the ability but don’t have the confidence yet, more pressure may actually make the situation worse.
The question I like here is simple:
What do they need, that they don’t currently have, to perform at the required standard?
That answer tells us a lot.
Key #5: Does Performance Actually Matter?
This is probably the uncomfortable one.
What actually happens when someone performs exceptionally well?
And what happens when someone consistently underperforms?
In some companies, the answer to both questions is basically the same thing.
Nothing.
Same salary. Same opportunities. Same management attention.
Which means we’ve accidentally built a system where excellent performance and adequate performance produce essentially the same experience.
Then we wonder why people eventually drift toward adequate.
If we want performance management to work, consequences and rewards have to be clear and credible.
Excellent performance should produce a noticeably better outcome.
Underperformance should create a timely and proportionate consequence.
Otherwise our words say performance matters while our system tells everyone it really doesn’t.
The Five Keys Change the Conversation
I think this framework matters because it forces us to diagnose before we react.
Someone isn’t performing.
Okay.
Are they aligned?
Are they working on the right priorities?
Do they know the standard?
Do they have the capability and confidence?
Are there real consequences and rewards attached to performance?
Now we’re having a completely different conversation.
And sometimes the uncomfortable answer is going to be that the employee isn’t the problem.
We are.
We’ve hired someone into a system with unclear priorities, undocumented standards, inconsistent feedback, inadequate support and no meaningful difference between great performance and mediocre performance.
Then we call it a people problem.
That’s why the Five Keys and performance management are going to be a major focus of our upcoming book. We’re digging much deeper into how we actually build companies where people can perform without everything having to run through the founder.
If you’d like to get on the waiting list for the book, comment on this post or send me a message and I’ll make sure you’re on it.
Because eventually, if we’re serious about building something bigger than ourselves, we have to stop asking whether we hired good people.
We have to ask whether we’ve built a company where good people can actually be good.
Justin D Maxwell provides family office and investment bank services to the lower midmarket to founders who want 8 or 9 figure net worths. You can learn more here: www.justindmaxwell.com or take our free assessment here: https://fielding.global/articles/diagnostic.html