Managing Based on Input

One of the simplest ways to evaluate someone’s performance is by tracking the hours they work. I often relied on this approach early in my career because it was straightforward to measure and manage. My usual advice was to "work more."

However, this method introduced several issues. Firstly, it did not hold the team accountable for actual results. Secondly, it led to burnout. Lastly, we failed to address problems to work more intelligently, opting instead for sheer effort to get things done.

Managing Based on Output

Ultimately, for a business to thrive, it must be profitable. The contributions of the team need to surpass their salary expenses. Time spent on tasks doesn't inherently create value for customers. The illusion of busyness can mislead us into thinking we are generating value.

As I shifted to measuring my team's performance based on output, it fostered accountability but hindered us from achieving our full potential. For about a year, I praised a team member for being a top salesperson, as he consistently exceeded his monthly targets. I became blinded by his apparent success until I finally sat in on one of his sales calls. To my dismay, I discovered he wasn't as skilled as I thought; he failed to connect with clients, didn’t upsell effectively, and merely processed orders. His success was due to his low targets and favorable market conditions, not his sales acumen.

Managing Based on Vision

The most complex approach to management involves articulating a vision for how a role should be fulfilled and then guiding the individual towards that vision.

"I never told Cristiano Ronaldo or Dimitar Berbatov that we expected them to score a minimum of 25 goals a season, or instructed Paul Scholes or Roy Keane that they had to maintain a pass completion rate of at least 80 percent. I never had a particular quota that I expected any player to fulfil, but they all knew I expected nothing but the best from them." — Sir Alex Ferguson

The phrase "nothing but the best" may sound vague, but I'm sure Sir Alex Ferguson could elaborate extensively on what constitutes a great player. Managers need to clarify their vision for each role to avoid relying solely on basic metrics.

"Everything should be made as simple as possible, but not simpler." — Albert Einstein

Defining a Vision for the Role

Articulate your vision for the role by reverse-engineering from your organization’s overarching goals. If your organization aims to achieve X, what level of performance is required from the team to realize that objective?

Consider how much they should train, their attention to detail, their commitment to upselling, and how they support their colleagues. Each role entails various nuances, and effective managers scrutinize these details rather than getting distracted by appealing metrics. They listen to calls, review written content, and test products.

When asked about someone's performance, I consciously avoid defaulting to input and output metrics. If I can't provide a thorough qualitative assessment, I know I haven't adequately managed that individual.

Striking a Balance

While you can’t attend every sales call, it’s essential to balance attention to detail with metric analysis. Generally, you should depend on metrics, but occasionally, you need to observe their work throughout the year.

During the initial phase of employment, closely examine their work daily to ensure they grasp your vision for the role. As consistency develops, you can rely more on metrics, but never completely step back. Regardless of their achievements, consistently check in with them and guide them towards your vision for their role.