Performance Leadership

Continued

For the social dimension, the question is, where does business performance really come from? How do we make sure that the value we add is not subtracted from somewhere else? If our profits are someone else’s losses, we have an unsustainable business model. Lastly, at first glance, a discussion about the spiritual dimension of an organization may seem far-fetched, but not if we translate that to organizational values. Every organization has core values, attracts certain people, and has a certain culture. This is what the organization stands for, which has a huge impact on the bottom line. This is the performance leadership framework: looking at organizations in all of these dimensions.

Profit: Are you talking about management culture and behavior, or more than that?

Buytendijk: On one level, I’m talking about the people within the organization and how they’re behaving toward each other. This can be manifested between employees, and between employees and managers. And then one level up, I examine how you can drive organizational behavior toward stakeholders and the outside world.

Profit: How do your ideas differ from traditional theories?

Buytendijk: Typically, there are three important objectives when making the business case for performance management. One is external reporting or internal reporting—there needs to be accountability. The second is improved decision-making. Performance management has done pretty well for the last 20 years in figuring out all kinds of ways to improve decision-making on a strategic level, on a technical level, and on an operational level. But a third key objective of performance management has been virtually neglected, and that is how you actually drive people’s behaviors. That’s what I’m looking at.

The difference between my thinking and traditional thinking is in how I define “organization.” Traditionally, an organization is defined as a group of people trying to work together to establish a common goal. But if you look at people involved in an organization, they actually have very different goals. The customers of an organization want a good product for a reasonable price. Employees want to be able to pay the mortgage. Shareholders want maximum return. Suppliers want to earn as much money as possible from the organization because they have their own stakeholders. The public—the neighborhood an organization is in—wants the company to behave responsibly.

I define an organization as a unique collaboration of stakeholders who, through that organization, reach goals and objectives that none of them could have reached by themselves. The cover of my book features four rowers in a boat. Each has his own position in the boat, his own motivation, and his own strengths. Yet they are all working in concert, and in alignment, to win the race. This is something none of them could have achieved alone. The image of the rowers in the boat is a perfect metaphor for an organization. Once you look at it that way, you start focusing more on behavior and leadership than on procedure and management, and that’s where you start seeing an elevation in performance.

Profit: How is performance leadership relevant to organizations trying to weather the financial crisis?

Buytendijk: Even in today’s climate, it goes beyond financial crisis points. Political, economic, social, and technological trends are all making the shift from performance management to performance leadership an imperative. From a political point of view, regulatory pressure continues to increase. The only way to deal with this increased pressure is to be authentic and responsible. Compliance—doing the right thing and being a transparent organization—comes from within an organization. From an economic point of view, margins are decreasing, competition is heating up, and organizations need to increase focus and alignment. There is no choice but to improve performance, and that happens through leadership, not management.

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