Bias copyIn this get-things-done world, many well-intentioned business people default to a jump-to-solution approach to problems and challenges. Sometimes they get lucky and a quick solution works. Yet just as often, hair-trigger problem solving can produce the illusion of course correction while it merely wastes resources.

Bias for action is generally a good thing. But it serves us best when the action is strategically focused.

Dr. Patricia Pulliam Phillips is coauthor of Performance Consulting: A Strategic Process to Improve, Measure, and Sustain Organizational Results. I interviewed Dr. Phillips to explore how her approach might help people in most any kind of organization.

Rodger Dean Duncan: An early step in your performance consulting model is the needs hierarchy. What is this and how can it be useful to internal leaders and managers?

Patricia Pulliam Phillips: The needs hierarchy gives logical structure to the process of identifying opportunities for improvement while aligning solutions with those opportunities.

The process begins with a problem that needs to be solved or an opportunity that needs to be pursued. When either a problem or opportunity is identified, the question that needs to be answered is: Is it worth it to pursue this opportunity? The response represents the payoff need for the organization. That is, if we correct the problem or take advantage of the opportunity, there should be a positive ROI when it’s done. This payoff need is the highest level of need for an organization.

The next level is the business need. This includes the specific business measures that must be improved to address the payoff need. Business needs represent definitive indicators that an organization can track or measure. For example, a payoff need might be increase market share. Because there are a variety of ways an organization can achieve this, it’s important to define the specific business measures that need to improve in to increase market share. This business need might include increase sales of new products to existing customers.

The next level of need is the performance need. This defines what individuals must do or how they must perform to improve the business measures. Here you’re looking for the cause of a problem or an action that will take advantage of an opportunity. This gets to the heart of performance consulting because it’s here you will probe for answers to understand why business measures are where they are and how to improve them. In keeping with the above example, if an organization wants to increase sales of new products to existing customers, the first question might be what are sales people doing or not doing that’s preventing them from selling to existing customers. Identifying the performance gap in relation to the business need is critical if a solution is going to pay off.

The next level involves the learning needs. With performance needs in hand, it’s time to consider what it is people must know to perform in ways that improve the business measures. Finally, preference needs define how individuals prefer to get the knowledge, skill, or information they require (learning needs) to perform they way they should, given the business need.

This logic in the needs hierarchy ensures that investments are made with the ultimate end in mind.

Duncan: In examining performance issues, you advocate what you call a Should-Is-Cause logic. Can you provide an example of how (and why) that works?

Phillips: For each level of need, we identify what the situation should be in comparison to what it is, then try to discern the cause of the gap.

For example, if the organization wants to increase market share, the first step is to determine what it should be compared to what it currently is. You might compare targeted margins to specific sales representatives to determine what they do to achieve their current performance. Then determine the cause of the gaps between what market share should be and current performance—specifically, what the sales force needs to do to increase that market share compared to what they are currently doing. You would consider factors such as those external to the organization (e.g. market conditions); internal to the organizations (e.g. clarify expectations); and the capability of the individual (e.g. skills, motivation).

Duncan: Asking good questions is always a key to effective performance consulting. What are your tips on how to do it best?

Phillips: Good information comes from asking the right questions the right way. But what is ‘right’? It depends.

Very specific, focused questions are useful because they target an issue and are easier to analyze than open-ended questions. But to target an issue, you need to know something about the issue. There are many times when the specific measures are unknown, so we have to go with open-ended questions to get clarification.

Open-ended questions allow respondents to tell their story in as much detail as possible. However, good information sometimes gets lost in this openness. Also, qualitative data analysis is a skill and takes time—time many professionals feel they don’t have.

A mixed approach to data collection is often the best. This approach might begin with very open interviews involving a few select individuals to help identify the issues and key measures. Analysis of these interviews inform more specific questions on surveys that can be administered to a larger number of people.

Duncan: In assessing the contributions of star employees, what are some helpful ways to identify value-added actions they may be taking on an unconscious level? How can you use that information in coaching others?

Phillips: First, it’s important to identify the star employees and reflect on why they are the stars. This requires defining the performance measures they have met that cause them to placed in this star category. Then it’s a matter of asking them to describe what they do that sets them apart from other employees. Factors might be actions they take deliberately and actions they take unconsciously. This information can be collected through one-on-one interviews or through focus groups. Focus groups are often effective because respondents can hear what others have to say, which might help them clarify their own actions. Through the analysis of this information, specific actions can then be identified and shared with a coach to help others improve their performance.

Duncan: Before embarking on a performance-enhancement initiative, smart business people want to have confidence in the likely return on investment. What’s your advice on predicting and assessing ROI with such an effort?

Phillips: While many factors can influence the success or failure of an initiative, smart business people think critically through the opportunities, risks, and rewards of investing before they do so.

The process begins with taking stock of the current state with particular key performance indicators. This is done through the needs hierarchy as well as the Should-Is-Cause analysis described earlier. Even if performance is at a satisfactory level, there is opportunity for improvement.

When opportunities for improvement are clearly defined, then the expert involved in the process along with those who understand the key performance indicators collectively estimate how much those measures may change if the initiative or project is implemented. As part of the conversation, those estimating the improvement must consider the factors that could get in the way of the improvement as well as the risks to other measures if improvement occurs. Unintended negative consequences can quickly discount any positive ROI a project brings.

To ensure the forecast is as conservative as possible, an error adjustment is often applied. This error adjustment accounts for the factors that could get in the way of total success. ROI can be projected when the improvement in the particular measures is converted to monetary terms, usually using a pre-determined value, and extrapolated for year or more, then compared to the cost of the project.

Forecasting ROI on performance improvement initiatives is good practice. The key is to remember that a forecast is a forecast, not a promise.

Duncan: What keeps people from using the type of analysis required for good performance consulting?

Phillips: There are several barriers. First is a fear what may come out of the process. Sometimes the analysis reveals things are not working very well. This may reflect unfavorably on those who own the process under review. Fear of outcome data is a common barrier to pursuing projects that include the assessment, measurement, and evaluation of something we believe is important.

A second barrier is the perception that analysis of this type of analysis is too complex and too costly. This is not the case. Good analysis does not have to be expensive. Building it into everyday practice can reduce much of the cost.

A third barrier is lack of knowledge or skill in doing it. Performance consulting is a much-needed skill.

A final barrier is that people sometimes think their own processes are working better than any other potential solution. These process owners are satisfied with the outcomes, when it fact, their process may not be working at all.

This column by Dr. Duncan was also published by Forbes where he is a regular contributor.

Follow on Twitter @DoctorDuncan

Rodger Dean Duncan