More than a year ago I did some research on what I ended up defining as “performance friction” (I’ll explain what this is a moment). I found myself re-reading that document in recent weeks and appreciating the sage advice from “younger me” so decided to share most of its content here.

Start with Why

Performance friction is a special case of general friction between the needs of the individual and the needs of the organization

It usually manifests in one of these four use cases:

• Under performance — person not meeting the performance requirements of the roles.
• Skimmer — person is continuously barely meeting expectations. There is high opportunity cost compared to somebody that’s “crushing it” in the role.
• Performance gap — the role grew but the individual didn’t, or the individual grew and the role didn’t. We’d typically try to hire above/below them, but sometimes we won’t be able to afford more than one person in that domain.
• Strategy shift — there is no longer a need for the role the person is currently at.

“[Performance friction] is rarely because the person is incompetent or a bad person. It’s typically the result of a gap of skill (which is either fixable or not) or will (where the person is motivated to do the work).” — Laszlo Bock, Google’s former SVP of People Operations

“This is hard to say because it sounds mean: the people you fire are more important to your culture than the people you hire. It’s a half-truth, as you have to hire people who are outstanding, but it’s an important half-truth because the best way to protect the environment is to recognize where you have erred and course correct.

To do this requires courage and confrontation. You muster both of these by telling yourself it’s what you must do to make the company “safe” for your best people, who should — by the way — be the only people.

It is like a sculpture revealed by what you chip away. Unlike a block of stone, though, you can add and chip iteratively, which means you don’t necessarily have to be Michaelangelo. Most companies know they have to be superb at the adding. What is less talked about is how important it is to become excellent at the chipping.” — Andy Dunn (Bonobos’ CEO)

The steepest price of performance friction is paid by the people indirectly involved — the employee’s peers

When the results were in and tallied, three items correlated best with high performance for a team: “My coworkers are committed to doing quality work,” “The mission of our company inspires me,” and “I have the chance to use my strengths every day.” — Reinventing Performance Management, HBR

“But you’re not thinking about all the other people on your team who have problems with Jeff — Angela and Frank who know Jeff is a problem but every day see you not doing anything about it. I guarantee you, whatever you believe Jeff is costing you, it’s really three to five times that. The non-obvious cost is all the credibility you’re losing as a leader.” — Michael Lopp (Rands)

People rarely take themselves out of the game

“In nearly 20 years of doing business, no one has ever approached me and said they couldn’t do their job. Not once.

No matter how challenging the role, people will be inclined to believe they can get it done. It’s human nature, equal parts ego and optimism. Simply put, we’re programmed to finish what we’ve started. Admitting that we can’t do it is just too hard for most of us, a particularly acute trait among overachievers.

As a result, just like the star pitcher in the late innings of an important game, most individuals are not in a position to objectively evaluate their own performance. That’s where management comes in.

As a manager it’s up to you to identify the potential performance issue and act accordingly. Perhaps that will result in leaving that individual in the role, perhaps not. Regardless, it’s ultimately your responsibility, not theirs. The sooner you hold yourself accountable for that decision, the better for everyone involved.” — Jeff Weiner, LinkedIn CEO

What: Should you Fire?

When we’re considering firing someone, it’s usually a result of one of these three reasons:

1. Cause (ethics, code of conduct) — no brainer…
2. Culture fit (extreme case: brilliant assholes) — not covered in this dicussion
3. Performance ← focus of this discussion

Netflix vs. Virgin

Netflix

“We’re a team, not a family. We’re like a pro sports team, not a kid’s recreational team.

Coaches’ job at every level of Netflix to hire, develop and cut smartly, so we have stars in every position”

The Netflix Keeper Test:

“Which of my people, if they told me they were leaving in two months, for a similar job at a peer company, would I fight to keep at Netflix? — The other people should get a generous severance now, so we can open a slot to try to find a star for that role”

The biggest challenge with the Netflix approach is that it assumes a fixed mindset: the only way to manage performance friction is by separating the individual and the organization, as none are capable of changing in a way that would eliminate the friction in a different way.

Virgin

“My philosophy is very different. I think that you should only fire somebody as an act of last resort. If someone has broken a serious rule and damaged the brand, part company. Otherwise, stop and think.

If someone is messing things up royally, offer them a role that might be more suitable, or a job in another area of the business. You’d be amazed how quickly people change for the better, given the right circumstances, and how willing they are to learn from costly mistakes given a second chance.

I think companies can be like families, that it’s a good approach to business, and that Virgin’s created better corporate families than most. We’ve done it by accepting the fact that we have to think beyond the bottom line. Families forgive each other. Families work around problems. Families require effort, and patience. You have to be prepared to take the rough with the smooth.” — Richard Branson

Google — a middle ground?

“At Google, we regularly identify the bottom-performing 5% or so of our employees. These individuals for the bottom tail of our performance distribution. Note that this happens outside of our normal performance management process. We’re not looking to fire people: we’re finding the people who need help.

We don’t have a reliable measure for performance for every job… so this is a human process, not an algorithmic one… In practice, the bottom tail does end up including those who “need improvement”, but it also captures “skimmers” — people who have been skimming along the lower end of meeting expectations for a long time.

So rather than following the traditional path of making “poor performance” the kiss of death, we decided to take a different approach: our goal is to tell every person in the bottom 5 percent that they are in that group. This is not a fun conversation to have. But it’s made easier by the message we give these people: “you are at the bottom 5% of performers across all of Google. I know that doesn’t feel good. The reason I’m telling you this is that I want to help you grow and get better”

Our interventions here are for the small handful of people who struggle the most. If that doesn’t work, we help the person find another role within Google. For the remaining people, some choose to leave and some we have to fire.” — Laszlo Bock, Google’s former SVP of People Operations

Startup vs. mature company

At a startup:

• Performance “goal posts” in many roles change dynamically
• A year ago, a less experienced person in a certain role was enough, but now the organization really needs a more senior person
• You may need a very different type of person at the same level (think pioneer, settler, town planner, for example)
• You may no longer need a certain role due to a refinement in strategy
• The smaller the org — the less opportunities to move to a different role within the company
• You have less dedicated resources to support a more nurturing performance friction management approach

Be deliberate about your organization’s approach to firing as a tool for managing performance friction

If you’re a startup, you should aim for the area between Google and Netflix (rationale outlined above)

How to best manage performance friction?

Traditional performance friction approaches advocate for either assigning the individual a “performance improvement plan” (PIP) or pushing for expedited termination. The former hardly ever sets up the individual to actually improve their performance and often times comes across as simply laying out the groundworks for an inevitable termination. It also ignores the fact the performance improvement may not be the best path for addressing the friction. The latter violates a core tenant of maintaining trust and parting on good terms by having the termination come as a complete surprise to the individual.

“When you’re making a critical decision, you have to understand how it’s going to be interpreted from all points of view. Not just your point of view and not just the person you’re talking to but the people who aren’t in the room, everybody else. In other words, you have to be able, when making critical decisions, to see the decision through the eyes of the company as a whole.” — Ben Horowitz

Manager POV: avoid fear and guilt, be honest

This is hard!!!

“One thing I don’t like is when I have to make a change in [staffing], when I have to tell somebody I think somebody else can do a better job… It’s pure agony, and I usually postpone it and suck my thumb and do all kinds of other things before I finally carry it out.” — Warren Buffet

“Once you’ve recognized a performance issue with a member of the team, more often than not, the natural inclination is to rationalize it away. This is typically a byproduct of fear: Fear of how difficult it will be to replace the individual, fear of hurting them, fear of how their team will react, etc. That fear will inevitably lead to sub-optimal decisions that have the potential to do far more harm than the fear itself.” — Jeff Weiner, LinkedIn CEO

“That’s exactly the construct that produces guilt — the assumption that [optimizing for the business and optimizing for the people] are at odds. I’ve got 100+ other people working their butts off building this company. I’m optimizing for those people” — JW Player CEO

But doable

“If you develop a reputation with yourself for treating people respectfully in transition, for being direct, for generous severance, and for being proactively helpful in their search for what’s next, you will find firing people isn’t so scary. You then will be more likely to be decisive in borderline cases; if something’s a borderline case, it’s probably not.

You may even (rightfully) come to view a firing as your own atonement for getting the hiring decision wrong. Or maybe that the hire was right three years ago, but isn’t anymore. You can’t keep someone around out of loyalty; your loyalty is to the mission, not to any particular person pursuing that mission. It doesn’t matter how vital they have been historically, it is only your judgment of how important they are going forward that counts. This is a sports team, not a family”. — Andy Dunn

Employee POV: no surprises, maintain dignity

No surprises

“Every employee you or one of your managers fires, needs to have heard the following sentences weeks earlier: “things aren’t working, and this is what you need to do to fix them — or you will be fired”. This last sentence needs to be explicitly stated and repeated in writing. I can’t stress this enough. No euphemisms. Don’t say “part ways” or “move on”, say “you will be fired”.” — the Startup CEO Field Guide

Minimize humiliation

“You can take somebody’s job, you have to take their job, but you don’t have to take their dignity. This is something Bill Campbell taught me… The right thing to do is thank them for their work. Let people know that they’re moving on. You don’t have to explain all their personal details. It’s more important to leave them with their dignity and let them go on to live another day”. — Ben Horowitz

Team/peers POV: communicate well

“If you’re actually letting someone go, then your team’s number one concern is going to be whether everyone is getting fired. You can allay those fears while respecting confidentiality. Develop a communications plan around it. That’s an important part of the healing process.” — Rands

Solution Outline:

I recently finished

The Coaching Habit: Say Less, Ask More & Change the Way You Lead Forever by Michael Bungay Stanier

Overall it was a useful, easy read, and I was already able to apply some of the ideas in the book in real-world situations, which is a pretty big positive. My biggest qualm with the book is choosing to package these insights as a book to begin with.

Really good books use the long-form +100 page format to cover nuanced notions of their key insights, that would have been completely lost had the author used a shorter-form format. Conscious Business and Turn the Ship Around are good examples of taking full advantage of the long form format.

Good books can be summarized in a long-ish HBR article or a 10-page whitepaper while still retaining more than 80% of their value.

The Coaching Habit is a good book, but not a really good one.

The book starts of with good framing of the difference between “giving advice” and “providing coaching”, making a compelling case for the latter. It also astutely acknowledges that transitioning from the former to the latter is a behavior change effort which therefore requires a behavioral approach to change: identifying the triggers that typically lead you down an “advice” route and being deliberate, once a trigger has been identified, to go down the “coaching” route instead.

The book revolves around a core of 7 coaching questions. Each introduced in a separate chapter which concludes with a lightweight scientific summary of why that particular question is so effective. Habit chapters are interleaved with the questions chapters, leading the reader through a reflection exercise identifying the particular trigger that should trigger that particular coaching question rather than the default advice.

1. The Kickstart Question: “What’s on your mind?”

Effectively shifting the focus from the challenge at hand, to the person dealing with the challenge. Can lead for deeper exploration starting off from the projects at hand, to dealing with the people involved with them, to the behavioral patterns of the person being coached.

“So there are three different facets of that we can look at: the project side – any challenges around the actual content. The people side — any issues with the team members/colleagues/clients. And patterns — if there’s a way that you’re getting in your own way, and not showing up in the best possible way. Where should we start?”

2. The AWE Question: “And What Else?”

The first answer someone gives you is hardly ever the best answer. The AWE question allows you to dig deeper, helps you build a pattern of inquiry (rather than default back to “advice mode” after the first question), and it buys you some time to really figure out what’s going on.

3. The Focus Question: “What’s the Real Challenge Here for YOU?”

Focuses on the real challenge rather than the first challenge. Brings the focus back to the person and encourages them to focus on one thing and the effect it has on them.

4. The Foundation Question: “What Do You Want?”

Clarifies (for you and the person you’re coaching) what’s the outcome that they seek. What they are truly asking of you or another person. Reminds the person that you are on their side and care about what they’re hoping to get out of the situation. A more indirect way to get at the answer to that question:

“Suppose that tonight, while you’re sleeping, a miracle happens. When you get up in the morning tomorrow, how will you know that things have suddenly got better?”

5. The Lazy Question: “How Can I Help?”

Encourages the person you’re coaching to make a direct and clear request AND it reminds you that you may not know how to best help and jump into “helping” in an unhelpful way… It’s always worth keeping in mind that a request is just a request. You don’t have to say “yes”. “I’m sorry, I can’t do that”, “I might be able to do that” or “I can’t do that, but here’s what I can do” are all totally acceptable responses (more here).

6. The Strategic Question: “If You’re Saying Yes to This, What are You Saying No To?”

In a world of finite time and resources, every “yes” has an opportunity cost, something that you won’t do as a result. That impact can be best captured looking again at project, people and patters.

Useful questions to ask before saying “yes”:

• “Why are you asking me?”
• “Who else have you asked?”
• “When you say this is urgent, what do you mean?”
• “According to what standard does this needs to be completed? By when?”
• “If I couldn’t do all of this, but could do just a part, what part would you have me do?”
• “What do you want me to take off my plate so I can do this?”

When saying “no”, deliberately create the distinction between what the person is asking you to do and the person. There’s a big difference between “I’m afraid I have to say no to this” and “I’m afraid I have to say no to you”.

7. The Learning Question: “What Was Most Useful to You?”

It assumes the conversation was useful and encourages the person being coached to reflect on the value they got out of the conversation. Ending with the positive reflection on the value leaves a positive recollection of the value they got out of it. It also gives you as a coach valuable feedback on your coaching and allows you to refine your habit. A slight variation of this question can also be used as a conversation starter: “what have you learned since we last met?”.

Metrics, also referred to as Key Performance Indicators (KPIs) in more limited contexts, are a staple of the modern business world.

It’s considered common wisdom and “best practice” that “you can’t manage what you can’t measure”, and therefore that you should measure it. It is also fairly well accepted that the measurement in an of itself contains little insight, and that the insight is generated from comparing the actual measurement, to a forecasted target that was set ahead of time. This is roughly where common wisdom stops, leaving out several critical aspects of using metrics effectively. I’d like to cover two of these aspects today.

1. Targets must be relative and dynamic

The Beyond Budgeting community wrote a lovely whitepaper on this topic, and Niels Pflaeging wrote a more succinct post about this. Here’s the gist:

[I]t is impossible to set a target in advance that represents ‘good performance’. The modern world is complex and dynamic making prediction impossible, and we know that we will never face the same set of circumstances twice. The economy changes, as do our customers and competitors, so we can do no more than hazard a guess at ‘what good looks like’

[A]ny measure of reality will always contain noise: the impact of an unknowable number of random or irrelevant events, which distort and disguise ‘real’ performance (the signal)… [I]f we do not have the ability to measure the level of noise, we have no scientific basis to distinguish between something that is safe to ignore and something that we should be acting upon.

…so most of what passes as performance analysis is the result of comparing a guess with noise!

Worry not. This does not mean that any metric and any measurement is useless. The folks at BB also offer a solution:

The only way that we can assess performance in a truly meaningful way is to compare ourselves to peers that have faced the same set of conditions.

Targets, should therefore be relative: at the business level — compared to external competition; Internally —  compared to other teams/departments if feasible. Here’s a good example from StatOil, defining its shareholder-return target to be “above peer average” and its return-on-capital target to be “in the top-3 of peer group”.

2. Metrics should be paired

“If you give a manager a numerical target, he’ll make it even if he has to destroy the company in the process.” -W. Edwards Deming

Leaving the “gaming the system” challenge for a different post, on a less malicious level, a key challenge with metrics is their reductionist nature. Over-orienting behavior towards a view that looks at the world through a single number is unlikely to lead to a positive outcome. Here as well, “not measuring” is not the only solution. And you don’t have to go full-on “balanced scorecard” either. Keith Rabois offers a simple idea that’s more lightweight to implement:

One important concept is pairing indicators. Which is, if you measure one thing and only one thing, the company tends []to optimize to that. And often at the expense of something that is important… It’s really easy to give the risk team the objective and say, we want to lower our fraud rate. It sounds great. Until they start treating every user in this audience as a suspect because they want to lower the fraud rate. So they require each of you to call them up on the phone and give them more supplemental information and fax in things. Then you have the lowest fraud rate in the world, you also have the lowest level of customer satisfaction score.

What you want to measure at the same rate as your fraud rate, is your false positive rate. That forces the team to actually innovate. Similarly, you can give recruiters [volume] metrics around hiring. And guess what? You will have a lot of people come in for interviews. But if you are not tracking the quality of interviewers, you may be very unhappy about the quality of people you are hiring and giving interviews to. So you always want to create the opposite and measure both. And the people responsible for that team need to be measured on both.

AoC Toolbox: Becoming Friendly with Uncertainty by Jordan Harbinger

One of the downsides of a super-short commute, and choosing to exercise without a pair of earphones, is that podcasts are not part of my daily routine. By they are certainly part of my vacation routine, usually on the long drives to/from my vacation destinations.

I’m not sure how I first came across The Art of Charm podcast, but deciding to withhold judgement on the dubious branding was a wise decision, since it’s a great resources for psychology and personal growth nerds like myself.

Recently, Jordan and team did a great piece about uncertainty.

They started by providing a great definition for what uncertainty is:

Uncertainty is a function of the availability of information — how much we want vs. how much is available to us. A gap in information creates uncertainty and makes it harder for us to understand and control the world around us. The less control we feel, the more stability we crave, and the fewer new experiences and stimuli we seek out. [Furthermore,] Uncertainty has an informational aspect (the data gap leading to uncertainty) and a subjective experience (how it feels on a gut level to be uncertain).

They then shared an interesting study, suggesting that uncertainty is neither good or bad, but rather uncertainty acts as an emotional amplifier: good events feel better, while bad events feel worse.

Which led them to a novel insight:

Because not only is uncertainty a fundamental constant in life, it’s actually one of the most helpful and productive environments available to us. After years of studying this stuff, I’m convinced that it’s not uncertainty we need to move beyond, but our aversion to it. That’s what most self-help approaches don’t understand — that by trying to avoid uncertainty, we’re only increasing it, and missing out on a huge opportunity.

Once we stop turning uncertainty into the enemy, we can begin to look at it, understand it, even start to enjoy it. And rather than fleeing from it, we can actually invite it in, and use it to our advantage.

This insight suggests a practical technique for dealing with situations in which we are emotionally overwhelmed by uncertainty:

What the brain doesn’t care about is whether that information is true, useful, or even important at this moment. The brain is simply wired to consume data in any form. When it knows that there’s more data out there, it throws itself into a cognitive panic.

The information gap is real, but that doesn’t mean it’s important. The fact is, we live in a world that never gives us enough information, and we operate (very well, in fact) despite it.

…

So once you catch your brain obsessing over the information gap, ask yourself these two questions.

Can I actually get this information?

Do I actually need to know this information right now?

You’ll be amazed how often your brain will hunger for information it can’t obtain, to answer questions it doesn’t need to ask.

With that perspective, you’re free — free to stop obsessing, and free to start focusing only on the information that can actually serve you right now.

On a deeper level, the team also suggests a powerful mindset shift — testing and eventually changing a deeper belief/assumption that uncertainly exists to throw you off your stable progression through life. And instead choosing to trust that uncertainty exists to serve you:

Even for those of us who are naturally anxious about change, knowing that change will ultimately fuel our growth makes it easier to take in stride. Trusting that uncertainty is designed not just to throw you, but to make you a better person, is an essential step in embracing it.

Over time, that trust will turn into excitement. After a few cycles of uncertainty leading to personal growth, new challenges will carry a hidden promise: a new problem, a new set of skills, and a new identity waiting for you on the other side.