Organizations exist to take actions to produce valuable outcomes, and the concern for performance is fundamental and inescapable for their members and their leaders. They must meet competitive challenges, adjust to changing world markets, integrate needed innovations, and learn to build value with their customers. Even non-profits must face the assessment of their effectiveness from donors and the communities they serve.
As leaders and coaches, we must face the concern for performance in organizations as an opportunity for our leadership and impact. Organizations without the ability to learn and the flexibility to change suffer the consequences of their rigidities. Organizations that only squeeze for more eventually exhaust their people and drain their capacity for productive innovation. And there is a huge waste in organizations from missing skills for effective communication and coordination. These issues are fundamentally issues of human action, coordination, and learning.
If we are to enable teams and organizations to elevate their performance, we must look deeply at what performance really is, and where it comes from. If we have inappropriate interpretations of what outcomes we are looking for, or what actions we need to take, then we can be very good at producing the wrong outcomes or expending huge effort in the wrong actions.
Let’s begin by looking at the way outcomes are usually thought of, using business as an example. The outcome that is desired is usually considered to be obvious: revenue and net revenue. And so organizations work hard on behalf of that outcome. Yet we know that revenue is a side effect of something else. We don’t “make revenue,” we do other things that eventually result in revenue. Just as a sports team doesn’t win by going to the scoreboard to change the score, but by performing well in their sport, business has to know the skills of their game and what actions produce their score.
That seems obvious, but is it so obvious what produces revenue? The common sense in the startup game was to “produce a winning product.” And so there are mature and well-developed processes for product development. Yet only in 2007 was it noticed that startups didn’t “develop their customers” with any level of rigor similar to product development. A whole new discipline of “skills of the game” has been developed for startups by a number authors focused on a rigorous approach to “customer development” in parallel with “product development.”[i] For the sake of our discussion this demonstrates a fundamental shift in what actions are considered appropriate to produce revenue in the case of startups. What shifts would elevate a particular organization’s performance?
What is instructive here is that the elevation of performance doesn’t happen from working harder, better financing, or getting the best talent. It’s from an effective interpretation of both the actions and outcomes of those actions that will lead to the desired side effect. In our perspective, which we refer to as “generative,” this is the move of shifting results and actions by shifting the “observer” that people are, or how they see, how they think, and what distinctions they use for their seeing, thinking and acting. Then whole new possibilities for results and performance show up.
From our generative perspective, all actions and desired results are defined in prior conversations. So we really focus on what kinds of conversations produce the kinds of results we are interested in, and what actions are fundamental to produce desired side effects. What we can say from decades of work with generative conversations is that teamwork, effective communication, management, leadership, innovation, entrepreneurship, and value creation all have an identifiable structure of conversation and a required set of skills to perform these conversations effectively. My co-author Dr. Peter Denning and I go into great depth unpacking the conversations of innovation in our book The Innovator’s Way, for example. These conversational structures are broad enough to open to any type of content, but the structures themselves are non-discretionary. Meaning they are not techniques, but fundamental structures. There are many ways to run, but you have to put one foot in front of the other to be effective, that is not discretionary.
How does this help us understand how to elevate organizational performance? Here are several ways. Results in organizations come from coordination of action, and this happens in a structure called “the conversation for action.” Not so sexy a name, but pretty important in its impact. As a conversation between two people, this conversation requires skills of listening, connection, articulation, and levels of commitment and care in order to work. These are observable and learnable skills. The structure of the conversation allows us to see when healthy conversations aren’t happening, and these wind up being a waste of energy and engagement. Just like a physician knows what a healthy body should be doing, an effective leader should know what healthy action conversations should be happening, and can intervene to improve the coordination of action. This results in elevation of performance.
Other ways to elevate organizational performance are innovation conversations, designing winning games instead of just working harder, conversations that deal with chaotic situations, and even focusing on the impact of how moods and emotions are affecting performance. The new field of positive psychology has shown a direct correlation between the types of conversations and emotional tones that teams employ and their capacity to achieve performance objectives. Embodied learning approaches produce new perspectives and skills and do it faster than traditional conceptual learning frameworks. And developing leadership skills that evoke the commitment and trust of others directly impact organizational performance, and are learnable rather than mysterious skills in the conversational framework that includes not only language but the dimensions of emotional intelligence and embodied interaction skills.
To focus on the conversations of teams, there are a number of essential conversations that affect team performance. Here’s a sample: the coordination of actions skills mentioned before, which are based on making clear agreements and managing their fulfillment with commitment-based management conversations; the skills of building and recovering trust; establishing shared standards on the team; managing moods that affect performance, and generating authentic ambition; building plans out of promises rather than tasks; making sure that there is commitment to the authorities of the roles on the team and the people that hold them. The point is that these conversations are essential, they are “non-discretionary,” and they are learnable as skills.
With a generative framework, which means that we are dealing with what can be observed, executed, and learned that produces the desired outcomes, we can produce organizational cultures that work powerfully with the roots of action and results – human interaction and coordination of action. This is a fundamental frame that is always a part of producing the side effects of revenue, for example, or other organizational results. This is a new observer that opens up new and more effective ways for organizations to elevate their performance.
[i] Including Eric Ries with his book Lean Startup, which followed on Steven Gary Blank’s The Four Steps to the Epiphany, and Ash Maurya’s recent Running Lean.