Reward Real Results, Improve Performance Daily

On page 30 of a brilliant book on the American Revolution called, American Creation, by Joseph Ellis, George Washington is quoted as saying at the beginning of the revolution, "I am now embarked on a tempestuous ocean…I can answer but for three things, a firm belief in the justice of our Cause - close attention to the prosecution of it - and the strictest integrity - If these cannot supply the places of Ability & Experience, the Cause will suffer & more than probably my character along with it, as reputation derives its principal support from success."

To paraphrase Washington, "Results matter, not activities." If he had tried hard, but lost the war to England, he would not have gone down as a great leader. In the end, a great performance is defined by the results of that performance, not by the effort poured into it. One way to ruin performance over the long term is to reward a non-result as though something has actually been accomplished. When people start to think they deserve a reward for activities rather than accomplishments, they no longer need to worry about improving performance. All they need to do to "earn" a reward is to stay busy.

Rewarding Non-Results on a National Basis

According to U.S. National Debt Clock, the current U.S. national debt is $9,191,666,255,490.13. We have a population of 304,134,009 people. To pay off this debt would require every man, woman, and child to pay $30,222.42. The national debt is increasing at a rate of $1.43 Billion per day.

Having read that, I would think that getting busy toward paying down that debt would be a good idea. Instead, and theoretically toward ultimately paying down that debt, there is now talk about a $185 Billion tax rebate to spur the economy. So instead of paying down the debt, the idea is to increase the debt by $185 Billion in order to put more money back into the pockets of consumers who can then spend that money to get the economy going again.

In other words, for having accomplished nothing, consumers will be rewarded by receiving a rebate check in the mail to spur on more spending. How exactly is this going to spur any one to focus on improving performance that would actually stimulate the economy? Let's say this idea actually works and it does spur on consumer spending. Then in four years when the economy slows down again, won't consumers expect yet another reward for a non-result?

Imagine the United States is actually an individual person and the national debt represents the number of pounds the person is overweight. In this analogy, this person would be about 50 pounds overweight and gaining a half a pound each week of the year. Then imagine this person comes up with an idea. "If I treat myself to a five-pound meal, then I will have the energy to go out and work off those 50 pounds." It doesn't work that way. The individual is now 55 pounds overweight, and has no real incentive to work off those pounds because the incentive is given for being overweight, not for getting in shape. That's essentially what we would do if we gave ourselves money that we don't have as a nation in order to try to reduce our debt.

Rewarding Non-Results on an Organizational Basis

There is no better example of rewarding non-results than CEO compensation packages at some major public corporations. A CEO is brought on board to improve the organization's results. Consequently, the individual is offered a mind-numbing amount of money from the board of directors to accept the position as CEO. These compensation packages are so ludicrous that it makes me think the people on the board of directors actually feel they achieved a result by getting the individual to accept the job. Taking a job is not a business result, and should not be rewarded as such. But since the CEO has already been assured a mountain of cash, what is the incentive for him or her to stick around for the long term? And since some board of directors act as though the "result" was hiring someone, they begin to focus on "achieving another result." Next to the interest accruing daily on the national debt, what bigger pile of money is wasted than the ludicrous CEO packages being paid to CEOs who are no longer with the companies that enticed them to come there in the first place?

Imagine saying to a sales force, "On day one, we're going to give all of you your annual bonus. That way you can go out and buy yourself something really nice. And that should give you the energy you need to go out and have a great year in sales." It doesn't work that way. First, the sales person actually achieves a financial result, and then he or she gets the bonus.

Rewarding Non-Results on a Personal Basis

As usual, as I point my finger at other people through this newsletter, I'm really pointing three fingers back at me. The impetus for writing about this topic was my own act of rewarding my own non-results.

I reward myself with, among other things, books. I love books. I love having that small container that may contain some really powerful ideas. And each book is like a Cracker Jack Box. I don't know what surprise it might hold, but I'm enticed to find out what it is.

Over the past three years, I've fallen into the rather bad habit of thinking I deserve a reward for doing an activity. If I flew to another city and put on a seminar and dragged myself through an airport, then I felt I "deserved" a reward. So I would buy myself a book or two or three. I felt "justified" that I had "earned" that reward. Unfortunately, an activity is not a result. Last month I sat down and looked at all the books I have in my house that I have not read. I'm up to something like 70 unread books.

Whoa, Nellie!

70 unread books! I realized I had become addicted to rewarding non-results. Since I had really not accomplished any business result by merely traveling, I was reinforcing in my mind that rewards are for activities, not results. In other words, I didn't really have to achieve anything in order to give myself a reward. Very, very, very bad habit to develop.

Define Real Results

What do you define as "real results"? What results would you have to accomplish in order to be able to say that you actually accomplished something? Is there a top-line or bottom-line number that you need to hit? Is there a certain level of cost reduction that you need to hit? Is there a certain degree of productivity that you need to guide your team to accomplish in order to say you've actually achieved a result?

Making sales calls, meeting with customers, and developing a strategic plan are not results. Hiring new people or firing employees are not results. Results are outcomes, not activities.

Focus on Actually Improving Performance

Of course, results don't get better just by focusing on them. It's the day-to-day performance that drives better results. I'm writing this article a few days before the Super Bowl. I admire Bill Belichick's obsession with improving performance week after week, season after season, even though I very much do not admire that he cheated during the first game. It's the same with Tiger Woods. It's the same with Toyota. They constantly pursue better performance. According to USA Today, one of Belichick's favorite quotes is from George Patton, "Discipline is based on pride in the profession and on meticulous attention to details. Discipline must be a habit so ingrained that it is stronger than the excitement of the battle."

Avoid the Emotional Roller Coaster, and Stay Logical

To paraphrase Patton, "Focus on improving performance regardless of your emotions at the moment." Whether your business results are better than you expected or worse than you expected, stay focused on finding the subtleties that will improve your performance, and your results, in the future. If we get caught up in being overly excited or overly depressed because of our results, then we will miss the opportunity to improve our future performance and future results.

Book Recommendations

Despite the 68 remaining unread books in my house, I did read two brilliant books over the past month.

The first is American Creation: Triumphs and Tragedies at the Founding of the Republic by Joseph Ellis. Ellis is the premier expert in the world on the American Revolution. I think this book is his greatest masterpiece. I think it teaches the reader a great deal about leadership, collaboration, and, in some cases, how a lack of courage caused catastrophic repercussions.

The other is Born Standing Up: A Comic's Life by Steve Martin. This book is pure genius. I loved it. I read it and have listened to the dvds twice. He said he did stand-up comedy for 18 years: 10 years learning, four years refining, and four years in wild success. That's 14 years of extraordinary focus to achieve great results. One quote that drove Martin was an e.e. cummings quote, "Like the burlesque comedian, I am abnormally fond of that precision that creates movement." In other words, he kept working to hone his style and approach to humor until he was one of the best in the world.

Republishing Articles

Each month my e-newsletter gets republished in approximately 20 blogs, on-line publications, and internal publications for businesses, universities, and not-for-profit organizations. If you would like to republish all or part of my monthly articles, please send me an e-mail at dan@thecoughlincompany.com with "Republishing Article" in the subject heading. I will send you the article in a word document. All I ask is that you include my name as the author of the article and a short paragraph at the end of the article about me with a link to my website.

Take care and have a great month!

Dan Coughlin

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