From Individual Performance to Strong Networks: The Future of Performance

Europe is under pressure, Germany is in a permanent state of hyperventilation. The news echoes in unison: times are getting tougher, the economy is stumbling. What can be done? Politicians are calling loudly for “more performance and decency”, while companies believe that New Work is now a case for the recycling yard – and that good old performance management is the new remedy. SAP is even going so far as to reintroduce the dreaded “forced ranking”, while others are outdoing themselves in selling diversity as a temporary trend topic only to abolish it.

But is this the way forward? Do we really need a return to Taylorism, supported by high-tech and coupled with a hefty dose of Protestant work ethic? Do we need to get to work now for the country and the economy? The St. Gallen management model would clearly apply the handbrake here and ask: What kind of performance do we need in a complex, rapidly changing world? And above all: How can we redefine performance when efficiency, sustainability and employee interests are no longer seen as opposites, but as equals?

Co-creation is the key to success

In a BANI world characterized by non-linearity, emergence and abrupt change, two things take center stage: employees who are able to think with and around, who have the courage and patience to continuously search for better solutions – and collective performance. Planning, hierarchy and rules may provide rough guidelines, but they can never capture the speed and dynamics of change in complex systems. Organizational performance today is no longer the sum of individual efforts, but the result of self-organized, trusting teamwork – and that requires more than just coordination. It requires genuine co-creation and the ability to integrate a wide variety of perspectives. This is the only way to deal with the unexpected.

A new approach to strategic personnel management

The true value therefore lies in relational capital: the ability to build networks, overcome silos and elevate relationships to a new quality. This has far-reaching consequences for strategic HR management, but also for organizational development and strategy. Human resources must evolve from a pure controlling instrument into a platform for “resourceful humans” – a dynamic, networked entity that focuses on employees as active shapers. Traditional tools such as bonuses or forced rankings should be put to the test  – and in the vast majority of cases, retired.

Organizational development

Many companies are already successfully experimenting with new models of pay, evaluation and feedback systems that focus on cooperation and collective performance – instead of competition and control. But network management is not just about rethinking the way employees work. It also requires us to rethink the structure and strategy of the organization itself. We need “organizational” structures that enable delegation and participation and are constantly evolving – a continuous learning process. New organizational concepts such as micro-organizations, holacracy and sociocracy are not just buzzwords, but concrete answers to the challenges of the future.

Emergent strategy

Strategic planning also needs to redefine itself: less rigid and predictable, more emergent and open. “Open strategy” is the new buzzword – and with it a growing awareness that growth is no longer the only strategic goal. What is becoming much more important is a substantive orientation that aligns the meaning and purpose of the organization with the constantly changing world.

In times when the future seems uncertain, it is perhaps time to dust off the old performance management and shape the networks of the future. As is so often the case, the answer lies not in “more” or ‘better’, but in “different”.

Glossar:

BANI world – acronym for brittle, anxious, nonlinear and incomprehensible. Describes a world full of uncertainty that requires resilient and networked forms of organization.

Forced ranking – Performance evaluation system that forces employees into a rigid ranking system (e.g. the bottom 10% have to leave).

Open Strategy – Approach that opens strategy development by involving internal and external stakeholders. Breaks with classic top-down planning and focuses on transparency and participation.

Holacracy – A self-organized management system that replaces hierarchies with circular decision-making structures, decision-making protocols and clearly defined roles.

Sociocracy – An organizational form based on consensus decision-making, decision-making circles and double linkage between decision-making levels.

Micro-organizations (Haier model) – An organizational model developed by the Chinese company Haier, which relies on decentralized, autonomous micro-organizations.

New Work – A collective term for modern, meaning-oriented and flexible working models.

Taylorism – Classic, highly standardized work model according to Frederick W. Taylor, which maximizes efficiency through division of labor, strict control and performance measurement.