If you have been an entrepreneur and then enter an organizational work environment then one of the first new things you may encounter is “performance management”. I have recently been intrigued by the lack of performance management in startups, as well as the limited effectiveness of performance management in large organizations.
In considering the differences between the two, It occurred to me that the drivers in each case are fundamentally different. What inspires the staff of a startup is different than what inspires staff in a large organization driven by a performance management program.
The root difference is that startups are driven by the creative process, or simply put, what they are trying to create. In organizations using performance management, people are being driven by how well their existing stuff performs.
I hypothesize that people are driven more by the process of creating than refining.
Of course, refining is part of the success for any new offering, but I am wondering if there is a way to “creatively” refine.
To ground this idea, let's visit the eating habits of my two year old. (A lot of my thinking these days revolves around my two year old). The act of eating for her now is largely a creative process. She is trying out different foods with different flavors, textures, colors, etc. If I put something interesting in front of her, it takes little prodding to get her to try it. Trying it is a creative experience that includes some eating, some spitting out, some rearranging, some mixing, throwing, etc. Entrepreneurial companies are like two year olds experiencing new food.
Now comes the refinement challenge.
For my two year old to mature (which she must do), I need her to start being more consistent in getting the food in her mouth rather than the floor, and to actually eat the food she may not be so thrilled about because it is good for her. This is refinement.
If I were to apply a performance management system to my two year old, I would indicate that if she eats all her food, she can have dessert, or watch a video. I would reward performance. This can work, and I was probably raised this way myself, but I what if we interjected the same creative drive into refinement that worked so effectively to get her trying food in the first place?
What if the outcomes I desire where themselves part of the discovery process. Rather than rewarding her performance, what if there was something to discover at the bottom of each bowl? What if eating the healthy food was part of a fun game? She is still being rewarded, but the reward is self discovery and satisfaction rather than an indirect benefit.
I think that companies that build incentive structures based on creative tension or drive will see better performance and a better work culture.
What do you think, is there any hope for my two year old?