It’s About Time to End the Stone Age of Management

It’s Time to End the Stone Age of ManagementDo you have to fill in performance appraisals once or twice a year in your workplace? Does this form filling process feel meaningful to you? Do the forms have any connection to your daily work?

According to research, man is happiest when he collaborates with other people and pursues meaningful goals. The best way to encourage him for better performance is to give him positive feedback on his actions often enough.

In order to perform better in the ever so tough competition, companies are aiming at being agile and innovative in business, and at the same time they wish their employees would be more active, and responsible, and helpful for their colleagues, and have initiative. Have you ever heard of a company that would not try to get rid of the silos? These goals are really something to stand up for, but too often they are not being lead through the organization.

It’s usually quite hard to put goals into practice if there is no process. I’ve kept asking myself, why performance management practices in companies are based on yearly performance reviews regardless of the set goals and research knowledge. There are various problems with performance reviews:

a) The goals are trickled down from the top-level of the organizational hierarchy
b) The reviews are private and only few can access the information
c) Feedback is usually given only if the employee has not performed well enough

I argue that the only reason these practices are kept alive is tradition; this is the way it has always been and there’s no knowledge of better. However, research shows that this traditional approach to performance management will most likely lead to undesirable behavior: avoiding mistakes, repeating old patterns and doing just the minimum. Of course the traditional approach and negative interference to poor performance can quickly adjust the performance level for better, but this will not bring about lasting change. It doesn’t encourage employees to top performance and it surely does not advance innovativeness.

In our opinion, innovativeness and agility are not the sole privilege of startup companies. It’s mostly a matter of inspiring leadership and management. What I certainly don’t mean with inspiration in this context, is management blogs and videos shared in the corporate intranet, if at the same time employees are filling out performance appraisal forms which don’t have a clear connection to the mood boosting videos published a week before. Corporate culture is formed based on what is being done and what kind of actions the processes promote; not based on what we say we’re going to do.

We at Cloudriven want to make performance management inspiring, engaging and social – who knows, maybe even addictive :). We also want to monitor work progress on a daily and weekly basis, give positive feedback for performance and attach work to a broader context and meaning. Our goal is to help our clients to create sustainable value in their business. Natural byproducts for this are better work and customer satisfaction as well as better financial results.

If you still believe in the traditional way of management, fear not. Inspiration, engagement and social are not synonyms for laziness. Sweat will still be the cologne of accomplishment and success the ladder you cannot climb with your hands in your pockets. We’re not going to demolish the significance of individual performance, yet we’re putting it into a larger frame.

How does that happen? Invite us for a coffee and we can find the solution that best fits your organization’s needs. Be sure to check out our Habit for Performance Management solution as well.

Slush 2014 in Retrospect

Slush 2014 is over and little by little our lives are going back to normal. This was Cloudriven’s first year in Slush: we learned a lot and we will definitely be back next year. Our team had loads of good meetings with potential investors, who really liked our approach to performance management.

But most importantly, the carrot cake we served at out demo booth was delicious and received lots of compliments from the visitors. The cake was hand-baked by our Head of Customer Service. Thank you, Anu!

Antero and the carrot cakes

Antero and the carrots.

The discussions we had about performance management revolved around a variety of topics:

  • How to bring the management rhythm (internal meetings) and both the qualitative and quantitative goals covered in performance appraisals to a weekly level
  • Social features and transparency
  • How to communicate goals clearly
  • Rewards and recognition

If you want to know more about our Habit approach to these topics, don’t hesitate to contact us!

Jukka doing a demo.

Jukka doing a demo.

Cloudriven Challenges Management Conceptions in Slush – “Forget the Stick. There’s a New Carrot in Town”

Most of the Finnish companies are managing performance from the past instead of looking into the future, claims Cloudriven’s CEO Jukka Koskenkanto. He says that companies should react to changes faster and invest more in employee engagement and motivation. Meaningful work and agility are not the sole privilege of growth companies.

Performance management is described in business literature as a process that aims to improve the performance of an organization, group or single employee systematically and purposefully. Traditionally the most important elements of the process have been performance appraisals, development discussions and daily management practices.

“The mere idea of being able to manage performance apart from the employees themselves is absurd. Success is built in our daily actions. In order to succeed, we need motivated and engaged doers, that is the right people, and the right actions”, says Jukka Koskenkanto.

Money and rewards can motivate the employees to a certain point, but the best motivator is the experience of meaningful work. In order for the work to be meaningful, employee has to commit to the values and strategic goals of the organization and understand the relevance of his own work in achieving the organizational goals.

Management model based on annual or semiannual performance reviews reacts too slowly to changes, and it doesn’t encourage and lead employees to take the right actions at the right time. The idea of development discussions is to get and give feedback, but feedback should be received instantly, not after six months. Instant feedback is the only efficient way of developing your actions, and you should also be able to get work-related feedback from your colleagues, not just your manager.

”Companies have focused on digging the past instead of learning from their own actions and adapting their operations accordingly. What should be done, is to lead the future actions, not just state the past mistakes when it’s already too late to change the course”, tells Business Director Antero Törhönen.

Antero and Jukka will be introducing Cloudriven’s new Habit for Performance Management product in Slush on Tuesday 18th November. Habit makes performance management agile and social and part of every employees’ daily work.

”Agility is not the sole privilege of growth companies. Even enterprises should be able react quickly to changes and inspire their employees for better performance. This was the starting point for the development of Habit”, Jukka tells.

Additional information:

Jukka Koskenkanto, CEO, +358 50 560 4607,, @koskenkanto
Antero Törhönen, Business Director, +358 50 528 1678,, @TorhonenA

Why Habits Matter?

Why Habits MatterWhen you wake up in the morning, you don’t usually think too much of what you’re going to do next. You get up, shuffle to the toilet, brush your teeth, crawl to the kitchen, make some coffee, eat breakfast and rush to work. Everything seems to happen by itself; it’s like someone had turned your brains into autopilot.

American business reporter and author Charles Duhigg published his bestseller book The Power of Habit a couple of years ago. The book’s main conclusion is that habits guide both our working lives and our personal lives more than we can even imagine. When our brains turn on a behavior model that has become a habit, we repeat the familiar routines compulsively. Habits are not controlled by conscious decisions, because habit-based behavior has its origin in time when man had to react to deadly threats by instinct. There simply wasn’t time to make decisions.

According to Duhigg, habits follow a simple pattern which he calls the habit loop. The loop consists of three elements: the cue, the routine and the reward. Whenever we’re exposed to the cue, we perform the routine and get the reward. After repeating the habit loop enough times, we start to crave the reward and the routine will become almost like an automatic action. For example, the cue for a smoker could be the need to get out of the office. The loop arises when the smoker starts to link smoking to the reward, 10 minute break outside, automatically. As the smoker starts to crave for fresh air and a break, he picks up his cigarettes and heads out for a smoke just the way he’s done many times before.

It’s extremely challenging to get rid of habits entirely, but you can change them by finding out the cues and rewards. What is the cue that triggers the habit? What is the reward that you’ll get by performing the routine? When you know the cue and the reward, you can try to replace the “bad” routine with another one that gives you the same reward. However, changing habits requires a lot of willpower which doesn’t make it an easy task.

Successful companies know how to use habits to build efficient management and corporate cultures. In his book, Duhigg tells a story about Paul O’Neill, who managed to increase the profits of the American lightweight metal manufacturer Alcoa sky-high in ten years by focusing exclusively on worker safety. When O’Neill was appointed the CEO in 1987, he knew that it would be impossible to give the the employees orders to change. That is why he decided to focus on just one thing: Alcoa was to become the safest workplace in the world.

Watch the video for more examples of habit building.

O’Neill believed that the changes made in safety habits would launch a chain reaction within the company, which would eventually shape the corporate culture and all the other habits towards the desired direction. For Duhigg, these kinds of habits are keystone habits, as they are essential for change. Therefore, in order to be successful, your company has to recognize which habits and behavior models will open the door for change.

The name of our Habit Behavior Engine solution was not chosen by accident. That is to say that you can actually use it to change the habits and behavior models in your organization. We use repetition, reflection and rewards to shape corporate culture towards the desired direction. Don’t be afraid to ask us for more information!

Repetition Is the Mother of Learning

Repetition is the mother of learningWhen we’re putting my teachings into practice at my trainings, many people tend to ask for advice on things I just taught them. This usually makes me wonder, did the learner listen to what I just said, because it should be impossible to forget that fast, right? However, according to Ebbinghaus’s definition of the forgetting curve almost 60 percent of newly learned things are forgotten during the first hour.

If learnings are not repeated or recollected, they will be forgotten. If you repeat the learnings every few days and brush up your skills first one month and then three months after the initial training session, you will memorize the learnings much better. Five repetitions will make sure the learnings stick in your mind. Of course it takes time and money to organize multiple trainings instead of one, but it’s an investment worth making.

Whenever possible I try to use the principles of the 70:20:10 theory in my trainings. I’ve also tried to speak about the significance of repetition to my clients, but it hasn’t always borne fruit. Obviously this feels odd taking into account the forgetting curve: we’re ready to invest in trainings but not in maintaining the obtained level.

Forgetting Curve

Forgetting Curve by Hermann Ebbinghaus

I was extremely satisfied, when I was offered the chance to train a two-day course that had the first training day in May and the second in August. Between the course dates there was plenty of time for independent training (and forgetting). I used the same method in trainings I had in late August and early September.

We used half of the second training day to repeat previously learned things, and based on the experiences the method really works! I got loads of positive feedback and I also noticed the difference in the participants. The pace was just right, there weren’t too many new things the participants would had to adopt, and a lot of time had been reserved for the hands-on training. In a matter of fact, the training was so successful that we talked about having yet another similar training session later this fall.

HRD departments should pay more attention to repetition in enterprise learning. Having multiple training sessions is one solution, but you can also use various digital tools that make it easy to repeat the previously learned. For instance, our Habit coaching and eLearning tool allows you to build a training program that can last for weeks or months. The learner does tasks, studies materials, answers questions and continuously reflects on all the things he has so far learned on the course.

You can try it out yourself! Fill in you e-mail address below and I will give you FREE access to one of my OneNote trainings.

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