When Peter Drucker said, “If you can’t measure it, you can’t improve it.” he was, in essence, advocating a cure for mediocrity through better metrics. Unfortunately, he didn’t specify what should be measured.
While performance and productivity measures are essential for every organization, they aren’t enough to ensure success in a team-based, often virtual, multi-generational, and cross-cultural business world.
Devan was excited about her promotion from leading a single team in the CS organization to Head of Customer Success at a remote-first enterprise software company. Her former CS team consistently outperformed the other teams in the group across customer satisfaction, revenue expansion, and other metrics. More than once, Devan’s manager recognized that her people’s performance enabled the group to “make their numbers for the quarter.” What Devan didn’t fully appreciate until she stepped into her new role was that her former teams’ success covered up chronic mediocrity on other teams in the group.
As Devan dug into the reasons for the differences in results, it quickly became apparent that some serious people issues affected other teams. Ironically, due to her team’s performance, the overall results were good enough for her ex-manager, and he never dealt with the problems. With a new VP raising the bar for the CS group’s performance, Devan knew she didn’t have the luxury of covering mediocrity among the many with overachievement from the few. She also knew that she didn’t have a cure for the growing stress and anxiety she felt while reviewing this coming year’s goals. Devan’s instincts told her the answer was in the difference between team behavior and that there must be a missing metric.
The cost of mediocre team leadership and performance is staggering – billions of dollars a year in higher absenteeism, turnover, lost productivity, and underperformance. In response, most companies measure a myriad of performance factors with great precision. Yet, most fail to measure the most critical predictor of their teams’ success: trust. Unlike performance metrics like unit sales, revenue, or sprints, measuring trust and relationship strength predicts team effectiveness just as your level of fitness predicts your longevity.
The ROI of Trust
Trust has been a topic of leadership and team research for over 60 years. During those decades, academics piled up study after study showing the benefits of trust in leaders. Over the past 30 years, business books and articles have touted the power and virtue of trust. From researchers, organizational psychologists, and business gurus there’s a consistent message that trust is the single most essential element determining an organization’s ability to consistently deliver exceptional results. Trust leads to high-performance because it enables people to work safely, authentically, and be fully engaged. And, it’s the antidote to toxic people and cultures.
In his book Trust Factor: The Science of Creating High-Performance Companies, Professor Paul Zak talks about his research linking neuroscience, trust, and organizations’ performance. Zak provides overwhelming evidence, from both his neuroscience research and dozens of companies with whom he’s worked, of the powerful connection between trust and performance. His research uncovered that people working in high-trust environments were:
- 76% more engaged at work and 50% more productive.
- Enjoyed their jobs 60% more and were 70% more aligned with their companies’ purpose.
- And felt 66% closer to their colleagues, with people showing greater empathy towards their peers and depersonalizing them less often.
When leaders value trust and invest in helping their people create and sustain it, they’re making a small investment that delivers significant returns. Helping people lead with trust across an organization starts with adding a metric demonstrating how effectively each leader builds and sustains trust in their teams.
The Missing Metric
The nature of teamwork has evolved rapidly over the last 25 years. The decline of organizational hierarchy, and the rise of remote, cross-cultural work, has multiplied the challenges of building and leading teams. In the 21st century, exceptional team leaders must be effective in flat, cross-cultural, virtual organizations, requiring a focus on team relationship health and fitness as much as traditional performance and productivity measures.
Networks of teams like Devan’s group are the building blocks of today’s organizations. Developing strong, trusting relationships on and across teams is perhaps the single most significant leverage point for leaders. High-trust teams communicate, collaborate, and innovate better. Trust is an essential element that enables people to take full advantage of diversity, tapping into people’s full potential as they strive together to achieve a goal.
While performance and productivity measures are essential for every organization, they aren’t enough to ensure success in a team-based, often virtual, multi-generational, and cross-cultural business world. Adding a trust metric to scorecards balances the traditional focus on performance management with a measure of leadership quality. For a group like Devan’s, a trust metric will help her develop the actions and nudge behaviors to deliver peak performance. For other organizations, adding the missing metric is an opportunity to save millions of dollars a year in absenteeism, turnover, lost productivity, and under-performance. That’s not a bad return on investment.
Peter Drucker got it right, “If you can’t measure it, you can’t improve it,” and I would add, “it’s what you measure that matters most.”