Wednesday, May 7, 2008

Business Lessons From Sports: Performance Management is Key to Winning

Businesses and athletic programs are similar in that successful programs win.

Winning, however you define it, is the result of proper execution - players doing what they're supposed to do, when they're supposed to do it. Proper execution is dependent on player performance – in the game.

So, teams and companies that best manage player or employee performance win. They have the right people, in the right jobs, executing the right way.

In sports, results are reported in the standings. In business, results are reported as profits.

It just makes sense.

I must make a worthy observation. Business performance management practices in business are deficient and under-developed compared to those common to sports . . . and it is costing us millions in potential profits.

Business should take a lesson. It will revolutionize results.

I want to address just four glaring differences between the two models. Seeing these will help us, as executives, make some simple but important adjustments in our own practices which will really improve our results. The deficiencies in our business practices should then become clear
  • Goals and performance expectations need clear definition. These are exact and mutually understood in the sporting world, but blurred for employees in most businesses. In sports, everyone knows what winning means, and every player knows how their job contributes to that goal. That is not characteristic of the teams involved in our businesses.

  • Monitoring, encouragement and correction must be immediate, relevant, and continuous. Player performance is monitored and corrected regularly, even immediately, in sports, but is handled only intermittently, monthly, quarterly or even annually for employees in business. Athletes receive immediate feedback and coaching. Good habits are reinforced, and bad habits are broken as soon as possible. Employees may not even know how they are doing.

  • Resources for improvement must be readily available. Player performance correction and coaching for improvement is immediately available for the athlete, but may not even exist for employees. In the sporting world, coaches, trainers and specialists abound. Specific enhancements are developed. In business, correction comes without specific help to develop performance.

  • Regular training and skill development must be central to operations. Ongoing, regular training is commonplace and essential for any and all highly skilled athletes, while businesses falsely assume that well recruited employees don’t need ongoing training. They should already know what to do, and how to do it. Practice is expected for athletes. Employees rarely practice.
Recognizing and correcting these differences and correcting your processes will mean an increase in your employee's performance, and with it, your company's profitability.

Modeling company performance management practices after those of a sports franchise will improve you revenues, reduce your costs, and create competitive advantages. It will take pressure off your management, as your staff adapts and innovates in ways that will create value for your company and your customers.

Don't know where to start? You're not alone. Consider calling a professional, like a PEO. A good PEO should have a full coaching staff, a veritable well-equipped gym, in fact, everything you need so you won't have to hire a bunch of people to make sure you cover your bases. I work a lot with one particular PEO, Administaff. I know, firsthand, they can help you pull this off very easily.

In the words of FedEx’s Fred Smith: You’ll make more money, and have fewer problems.

I think that’s worth a lot.

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