Performance is a problem in America today – let me tell you why.
Do you have kids? If you do—heck, even if you don’t—you’ve probably noticed the ubiquity of “participation awards.” These are the trophies and ribbons handed out to children who play sports, take part in academic contests, or perform in music competitions, just for showing up. These days, it’s not just top performers who get recognized; it’s every darned kid on the team.
We get it. It’s important to foster a kid’s self-esteem. There’s just one problem: In the real world, participating isn’t cause for a celebration. Indeed, in the real world, participating—showing up—is the very least you can do. If you want to be successful in life or in work, if you want to win, you must do more than participate—much more. You must perform. And not just some of the time, but all of the time.
To quote legendary football coach Vince Lombardi, “Winning is not a sometime thing; it’s an all the time thing. You don’t win once in a while; you don’t do things right once in a while; you do them right all the time. Winning is a habit.” (And unfortunately, as Lombardi goes on to point out, “So is losing.”)
In the world of work, achieving high levels of performance in order to win is more important than ever. Why? Lots of reasons. Here are just a few:
- Globalization: Nowadays, you’re not just competing with organizations in your region or even in your country. You’re competing with companies all over the world—most notably developing nations, where resources are often plentiful and labor is cheap. And if the recent past is any indication, then it’s reasonable to assume that the economies of developing nations—such as Brazil, Russia, India, China, and South Africa, often referred to as BRICS—will only continue to expand. Take China for example. In 2006, just 20 Chinese companies made the Fortune Global 500, which ranks corporations worldwide. By 2016, that number grew to 106, including three of the top four. (In contrast, the number of American companies has fallen, from 197 in 2006 to 134 in 2016.)
- Demanding shareholders: It used to be that shareholders expected results on an annual basis. Now, they think quarterly. Companies that can execute at the speed of a Bugatti will enjoy a significant advantage over ones that operate at the speed of a buggy.
- Advances in technology: Changes in the technological landscape have driven an ever-faster business cycle—one in which only the highest-performing companies and employees can keep up.
- Disruption: Today’s businesses are disrupting yesterday’s businesses, and tomorrow’s will disrupt today’s. Indeed, radical innovation is the force that sustains long-term economic growth, even as it destroys the economic value of established enterprises. This cycle of “creative destruction,” a term coined in 1942 by Austrian economist Joseph Schumpeter, explains the rapid rise of companies like Apple, Facebook, Airbnb, Uber, and thousands of other knowledge-based businesses—as well as the precipitous plunge of companies like Kodak, Blockbuster, and Yellow Cab.
Oddly, even as business has become more competitive, requiring higher and higher levels of performance, it seems as if the culture has shifted from one that emphasizes performance to one focused on mere participation—not just for kids, but for adults, too. For proof, look no further than the tendency of most companies to distribute the same minimal raise to all employees each year, whether they deserve it or not. (“Trophies for everybody!”)
That’s not the only example of this troubling trend toward mediocrity, however. Here’s another one: Companies spend billions of dollars on applicant-tracking and talent-management systems. And yet:
- The nation’s turnover rate has remained virtually unchanged.
- Millions of jobs go unfilled each month (while millions more remain unemployed).
- When employees under-perform, companies worry more about engaging them than about hiring the right people in the first place.
Somehow, these poor hiring outcomes—which in turn drive poor performance throughout the organization—are deemed acceptable! (“Congratulations everybody! Thanks for playing!”)
It’s up to you to break this cycle. If your organization is going to compete—no, if it’s going to survive—you must demand performance. And that means hiring the very best, particularly at the executive level. Doing anything less will cost you.