Fast growing businesses have unique performance management training needs
Recent research from the World Economic Forum has found that one of the greatest impediments to scaling a fast-growth company is talent management. In their study of nearly 200 hypergrowth companies the Forum found that 55% of these companies were struggling with talent challenges.
Part of the challenge for fast-growth firms is that their talent challenges change so rapidly and dramatically between growth phases. Their needs vary widely from the start-up through scaling phases where they develop markets and into later growth phases where the talent challenges may change once again.
At the same time, they must achieve a balance between ensuring that staff are achieving at a very high success rate, whilst also avoiding burnout which will simply lead to demotivation and ultimately high turnover with a loss of the very talent on which they are dependent.
This clearly illustrates the need for unique performance management training courses for fast-growth companies. These organizations need to be more nimble than slower growth companies, and have the ability to turn on a dime, pivoting their strategic direction as new feedback comes in from the external environment and as the organization learns.
Fast-growth companies need to be able to identify which objectives are no longer fit for purpose and make them redundant, replacing them with objectives that are more relevant to the new strategic direction. In order to do so, and keep employees aligned with the new organization’s strategy, companies need to have a mechanism in place that will harmonize employee objectives with the organizations.
Faced with rapidly changing environments, a mix of backgrounds and skillsets plays an important role in problem-solving, managing multiple stakeholders, and adapting to new challenges. Talent assets are needed to support the phase or purpose of the company. Without flexible and adaptable talent, management must enable investment and divestment strategies to maintain the talent fit.
Building the right “Performance Culture” is a highly effective way to steer the fast growth company through the minefield of changed strategies, new objectives and talent alignment. In order to instil a culture of performance in the organization there is a necessity to educate staff about the culture. A formal performance management training program will provide a sound basis for this.
According to Michael Kelly, Director at the Institute for Performance Management (certifiedperformance.org), “Performance management training courses that cover the entire spectrum from Government to Fortune 500 all the way through to fast-growth smaller companies are trying to do too much. Fast-growth companies have unique requirements when it comes to managing the performance and culture of their staff. Tools and methodologies that work for large established organizations may simply hamper the progress of companies that are undergoing a phase of rapid growth.”
A simple example of this can be seen in the different approaches to the performance management cycle for established versus rapidly growing companies. The cycle is a structured process of employee review and development. While many established companies may still rely solely on the end of year performance appraisal as a single “big bang” approach of the traditional method of managing individuals’ performance, this is now largely recognized as not matching best practice, especially when it comes to managing fast-growth companies.
The performance management cycle for fast growing companies is outlined above. In this model, an individual’s goals have flexibility and may be adapted throughout the period based on changing market conditions or business strategy. Although there is still a formal process, the process and objectives are highly adaptable. There is significant use of informal “check-ins” between supervisor and employee to make sure that both parties are aligned at all times. These check-ins address questions around whether the environment or strategy has changed enough to warrant adaptations, and if the goals are still relevant. This may be overkill for more established organizations, but it is imperative for supporting the successful growth and adaptation of fast-growing companies.
Every company can benefit from performance management training in some form. However, it is important to also consider the development stage and dynamics of each company and match the type of training to that company. With all the best intentions, bringing the tools and methodologies used by established companies to fast-growing organizations may do more harm than good.