Page 65 - Performance Leadership

54 • Part I A Review of Performance Management

is a trustworthy and reliable family-oriented person around 35 years old,
modern, quite fit and healthy, cheerful and pleasant to be around.
He/she is respected in the community and is looked upon as a role
model. He/she is international, travels a lot, and keeps up with the
world and new innovations. Furthermore, Siminn is trendy, exciting,
and cares about other people.” Iceland Telecom uses Siminn to put a
face on their values and to portray the organization as a person.
However, our approach to performance management is still very
mechanistic. We try to command and control; we impose rules and reg-
ulations, external as well as internal. We align people with a common
goal; we provide them with targets that we expect them to meet, instead
of allowing them to be inventive and resourceful. The assets on the bal-
ance sheet include capital, raw materials, produced goods, and the val-
uation of the machinery and buildings. But the general ledger doesn’t
detail the human capital, other than the goodwill to valuate an
acquired company or salary costs. As it is with managing a machine,
we set up systems of control, when in reality we should set up a system
of encouragement, improvement, and innovation.

The Four Dimensions of Performance Leadership
The performance management methodologies that I described in ear-
lier chapters provide feedback on how you are doing, but they don’t
provide much guidance for why you are doing what you are doing or
what you should be doing. So how do you know you have the right strat-
egy, let alone the best strategy?
Strategic questions on which strategies to pursue tend to be quite dif-
ficult. Performance improvements can be reached in multiple ways.
Should costs be saved by outsourcing to another country? Or, should
it be done by innovating processes so productivity becomes higher?
Should the organization focus on product innovation that leads to cus-
tomer demand? Or, should it be done by listening carefully to require-
ments and offering what customers ask for today? The answers to these
choices do not lie within the performance indicators, but within an
organization’s character, values, culture, or mission.
Current performance management methodologies do not provide
the right encouragement. They are instruments of the mind, not of