the neuroscience of transforming performance and optimizing leadership development

The Neuroscience of Transforming Performance and Optimizing Leadership

Dr. David Rock, Director, NeuroLeadership Institute

Speakers

Dr. David Rock Director, NeuroLeadership Institute@davidrock101

Greg PryorVP, Leadership & Organizational EffectivenessWorkday

About David Rock

• The NeuroLeadership Institute (NLI) helps large global organizations change fixed unconscious mindsets that may hinder their effectiveness in traditional practices like performance management, diversity, learning and change.

• Dr. David Rock coined the term ‘NeuroLeadership’ bringing together neuroscientists and leadership experts to build a new science to develop better leaders and managers.

A NEW LANGUAGE FOR LEADERSHIP

Research • Education • Solutions

THREE PRACTICES

HOW WE PARTNER

WHERE ARE YOU AT WITH PM?

A. Removed ratings

B. Thinking about it

C. On the fence

D. Not on your watch

KILL YOUR RATINGS

COMPANIES THAT HAVE MOVED OVER TIME

2007 2008 2009 2010 2011 2012 2013 2014 2015

1 2 2 38

13

24

41

55+Companies who have removed PM ratings

Mar Apr May Jun Jul Aug Sep Oct Nov DecJan Feb

53-4

2

IMPACT ON ENGAGEMENT

©2015 Eli Lilly and Company | September 8, 2015 Illustrative

Deliver Rating, Pay Adjustment, Bonus

85%

15%

REINVENTED PERFORMANCE MANAGEMENT

THREE RESEARCH FOUNDATIONS

1. Foster a Growth Mindset for continual improvement

2. Minimize Threat to have candid and honest

conversations

3. Facilitate Insight for people to positively embrace

change

Fixed mindset

• We have skills we just can’t get better at

• Effort doesn’t help

• Feedback is dangerous

• Stretch goals are bad

• Other people’s success de-motivates

Growth mindset

• We can get better at most things

• We can change

• Effort is central

• Feedback is helpful

• Stretch goals are good

• Other people’s success inspires

The two mindsets

Prove yourself Improve yourself

Look good Get better

The SCARF® Model

AwayThreat

TowardReward

Status Certainty Autonomy Relatedness Fairness

Rock (2008)

PERFORMANCE MANAGEMENT CONTINUUM

CoachCoaching and developmentFrequent conversationsShared responsibilityEnterprise contributionMinimal paperworkGrowth mindsetManageable threat

Performance Scores No Performance Scores

Forced Ranking

RatingsBased on

quantitative results(i.e. 1-5)

Structured conversations

Guided conversations

From:JudgeCompetitive assessmentAnnual eventTop downIndividual contributionSignificant paperworkFixed mindsetOverwhelming threat

To:Th

e lin

e of

cour

age

TREND OR FAD?

• Fewer than five firms made major changes in 2010

• 52 - 75 large companies have radically altered PM

• 50 - 70% of firms considering major changes

2015 STUDY NO-RATINGS STUDY

Type of company• 77% Public companies • 23% Privately held companies

Size• 50% under 10K employees • 31% between 10k-100K • 19% over 100K employees

Top 3 Sectors • 38% Technology • 19 % Business Services • 17% Consumer goods

Actual performance

21%

Organizational perspective6%

Idiosyncratic rater biases62%

Random measurement error11%

“Ratings were stronger reflections of raters.”Scullen, Mount, & Goff (2000)

THE DATA WAS NEVER ANY GOOD ANYWAY

DELL STUDY

• 50% were surprised by their rating

• 87% negatively surprised

• Correlates to 47,850 employees

• Many surprised were the better performers. They expected‘best’ and got a‘great’or‘great’and got‘good’

• Link to 23% lower engagement than those not surprised

A VERY CHALLENGING TASK…

1. Review a year’s worth of employee effort, behavior, and accomplishments

2. Appropriately consider other factors that should and should not affect the evaluation

3. Boil this all down to one rating that is objective, fair, complete, accurate, and honest

4. Factor into the rating how this person’s accomplishments compare to his/her peers

5. Rate them using the same process, criteria, and standards another supervisor would

THE JOURNEY

• Six to 12 months

• Philosophy: Business case, 3 objectives, mindset shift, branding

• Dialogue: Define ‘quality conversations’ robustly

• Evaluation: Link to your objectives

WHAT WE RECOMMEND

1. Keep doing pay for performance, but simplify it

2. Empower managers to differentiate

3. Focus even more on goal setting

4. Separate compensation from development conversations

5. Rebrand the process

6. Track conversations happening and the gist of them

7. Increase talent reviews

8. Manage true lowest-level performers differently

WHY RETHINK LEADERSHIP DEVELOPMENT?

Digital learning

disruptions

26

Impact of leadership

development continues to slide (I4CP)

Pressure on skills: leaders have less time

to do more

Little change in leadership

development for a long time

Highly inefficient process

Leadership

Development

Transformation

Minimal spend

for years

WHAT WE ARE SEEING IN THE MARKET

A complete rethink around:

1.How to define leadership

2.How to develop leadership skills

3.How to support behavior change

27

COMMON GOALS

1.Simplify, simplify, simplify

2.Immediate use tools

3.Coherence

4.Evidence-based strategies

28

THEORETICAL FOUNDATIONS

29

BIG PICTURE

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Phase 1:

Redefine Leadership

• Crystallize central issues

• Simplify for easy recall

• Ensure biological validity

Phase 2:

Build EssentialDisciplines

• Develop disciplines for each manager level

• Deliver truly scalable behavior change

Phase 3:

‘Just In Time’ Tools

• Digital ecosystem

• Two-minute tools

• Give people what they need

Theoretical foundations: The science of learningCoherence • Layering • AGES • Insight • Social

PHASE 1: REDEFINE LEADERSHIP

The objective:

1. Build a simple, memorable statement of leadership expectations.

2. Ensure it is relevant, sticky, with strong coherence.

3. Create the DNA of everything that comes next.

31


From: To:

Too many leadership concepts One clear set of expectations

Assessment focusDevelopment focus

No common language Common operating system

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Which is more important:

Recall of a simple definitionor

Include everything

33

PHASE 2: BUILD ESSENTIAL DISCIPLINES

Which is more important:

Try to teach people everythingor

Focus on the fundamentals

34

PHASE 3: JUST IN TIME TOOLS

The objective:

1. Give managers what they need, when they need it, the way they need it

2. Clear, fast access to ‘how things are done’ at your company

3. Embed ideal skills in a way everyone can access and champion

35

OFF THE SHELF DIGITAL CHANGE SOLUTIONS

36

Summary models provide a common operating system for people skills.

HOW WE PARTNER

Thank You Join the conversation

@neuroleadership @Workday