How to Transform Performance Management: Insights from Crewmojo's CEO Mark Lewis

Helena 00:00

Well, Mark, thank you so much for speaking to me. Maybe let's start by introducing you and your business crew Mojo.

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Mark 00:08

Thanks, Helena. I'm Mark Lewis, one of the co-founders and the CEO of Crew Mojo. So our organization helps HR people to implement talent processes that their employees love. And when we're talking about talent processes, that's everything from onboarding to one on ones goal setting, coaching towards those goals, performance reviews, feedback, experiences, right the way through to off boarding and helping employees to have a great experience all the way through that journey.

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Helena 00:40

And this is not your first startup, right? So this is not your first foray into business. How did you get into the world of HR and HR tech?

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Mark 00:51

Great question. So I previously founded with a couple of guys in tech and we did things very differently. That was from 2004 through to 2015. And we really focused on the culture of that business and we had this amazing alignment of what employees wanted, what the customers wanted and what the company was looking to achieve. And things just seemed to naturally harm. We were out competing businesses that were significantly bigger than us, more resource than us, and everything just felt in sync and aligned. And when we exited that business, private equity took it under its wing.

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Mark 01:34

We wanted to find out or figure out how we could help other organisations to achieve that type of alignment with their employees and their culture. To make performance something that's a natural outcome of working together really well, rather than something that's forced to.

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Helena 01:50

And performance. Right. This is some kind. It's sometimes a bit of a scary word. It conjures up, I guess, some mixed emotions for

some of us when we talk about performance or performance management. How do you tackle this?

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Mark 02:06

Yeah, I think the mixed emotions around this come from traditional performance, which, let's face it, it's had decades of weight behind it. It's often been seen as purely a mechanism that gets wheeled out when someone's misbehaving in the business. How are we going to engineer them out of it? We'll put them on a performance management plan and we'll set them up for exactly three months. Away we go and we'll get rid of them. But that's significantly changed, really. It's like.

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Mark 02:38

We like to call it performance enablement. It's much more about how do we enable people to be successful in their roles and how do we coach people through a fair process that's setting them up for success, and how do we equip managers to do that process, and how do we equip HR to ensure that process is happening in the most optimal way for their business? I think it's without question something that has been historically feared for good reason, but it has been going through a complete change over the last, really ten to 15 years.

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Helena 03:14

And it has gone through some cycles, right? It's been dead, according to some publications. When was it? A few years ago. Performance management is dead. I forget which publication boldly stated that. What are some of the kind of key trends and iterations that performance management has gone through?

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Mark 03:36

Yeah, it was sort of 2015 when it really got a good smashing, and those headlines were coming out left, right and center. And if we think before that, really the performance review, the end of year review, the annual review, whatever you want to call it, appraisal, that was in the form of a lot of questions. Typically, paper based managers would spend, like, literally a whole couple of weeks, if not more, writing endless reviews about their team members. It was often a checkbox process because it's very much based on the manager's opinion. And I think it reached this boiling point of people going, hang on, what are we wasting our time on this for? There were studies by, I think it was Gartner that found literally hundreds, if not thousands of hours were kind of being wasted on this process of filling out these forms for not much return. So roundabout 2015, I think Deloitte was one of the first to say, we're ditching the reviews.

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Mark 04:34

Dobie was there as well. Numerous IBM, numerous big enterprise organizations said, no more reviews. So that was being replaced by what was aimed at the time to be a quarterly conversation, like a check in, see how you're going. Bit of feedback, four questions, very simple to get along with. Then there was some research a couple of years into that, and it was by Ceb, and they found that having no performance review actually led to a 10% drop in performance. Fascinating. And the reason behind that is people didn't know how they were going.

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Mark 05:12

So, yeah, they were having these quick check ins, but they didn't really have this formalized. This is how you're going. This is where you stand. And in particular, the high performers were not getting the recognition for their work. And then they're going, well, why am I bothering? Let's just do along like everybody else. We'll have these conversations and not worry about too much effort.

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Mark 05:31

Then, on the flip side, actual sort of behind the closed doors reviews were kind of taking place without much transparency, and it just led to a whole sort of silent kickback against not having these reviews. So from 2018, reviews were coming back into vogue. However, they were much more based on data rather than manager opinions. Prior, it was all about just what the manager thought and trying to remember a year's worth of events, whereas now, at that time, it became all about, well, let's take a look at the achievements. What sort of impact has been made? How have you been living the values and the culture? What sort of feedback have we had throughout the period?

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Mark 06:18

And it was really sort of pulling on data from lots of different facets around performance of the employee, and then maybe layering on judgment over the top of all of that data. At that time, we saw a huge focus move into feedback. So there was a lot of feedback culture. Let's create a feedback environment in this organization on the basis that that feedback would be all collated and saved up for the end of the year to go into the review process. Not that they were saving to give the feedback, they were giving it throughout the year and then collecting that data to make good decisions. Then we've seen quarterly goals. So there was a real shift to going to OKRs, and that had a lot of buzz around it.

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Mark 07:07

And a lot of organizations we saw tried to implement OKRs on a quarterly cycle. But because the admin involved in a quarterly cycle was quite significant, especially for those who hadn't done it before, it was almost like taking an annual process saying, ok, let's do this each quarter, and then that would cause too much time away from work. So that kind of trend didn't actually last too long before it went back to more like annual goals and saying, hey, let's just have a check in and see if these goals are relevant on a quarterly basis. I'll install what we want to be doing. And then we've seen through Covid, which was really quite fascinating, and this was much more market driven, but it was a trend towards employees who cannot do any wrong. So there's certainly not going to be any, any ratings. And it was all about how we can do everything we can to attract employees.

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Mark 08:01

Because our competitors attract and retain, because our competitors are putting, we were hearing 20% pay rise offers to try to pinch employees. And that's because the market was flush with cash. There was lots of growth and money available to expand companies. And as a result, any level of telling employees what to do really went down to nil. It was much more around using surveys and engagement surveys to understand what we can give employees? What benefits can we give them? What opportunities can we give them?

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Mark 08:34

And the whole focus was on how do we not tread on any eggshells around our employees? And then the next shift we've seen is coming out the side of COVID The cash available for growth has dried up. The number of layoffs have gone through the roof, especially in tech companies. And there's been a whole shift now towards focus on accountability. There's a lot more comfort even using the term performance management again. Previously, you wouldn't even use those words. The concept now is very much around.

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Mark 09:13

If we've got a certain number of people, how do we make sure we've got the best people, that they're accountable, they're performing their roles, and we're managing that process effectively. That said, we are seeing two key tools which are being used towards that end. So the first is very popular at the moment is talent reviews. That's HR sitting down with their managers and looking at the manager's team and having a discussion really around a nine box grid, placing people into appropriate positions on that nine box grid based on their performance and potential. And then after the team has been placed, looking at, okay, if someone's in a top right box, how do we put them onto a retention plan? Because we don't want to lose them. So what opportunities can we give these super high potential, high performers and the ones in the bottom left and thereabouts?

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Mark 10:10

How do we help them to lift their game or find them another role elsewhere, or help really separate the relationship if there isn't going to be a real change. The second big tool that we're seeing at the moment used in this performance era is skills based development plans. We're really shifting. Okay. Yeah, honestly it's really popular at the moment. So we're seeing and we're seeing them used in different ways. So we're seeing skills at the role level.

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Mark 10:42

So if someone's new in a role then it's helping employees to self assess how they're tracking against the skills required to do that particular role, effectively identifying areas where they might want to upskill or fill a gap where it's been identified collectively between the manager and the team member. So it's all very collaborative and then setting a plan for the next either six months or twelve months as how they're going to uplift skills to be very competent in their particular role but also for those people that are really competent or exceeding it in their current role, what other pathways that they can take from there. So rather than just keep them in their role, we're then saying, okay, let's see. What role do they want to move to next? What's the overlap of skills in that role? Where do they need to upskill to become ready to move into that role? And that's something that is getting more and more steam right now and I believe will continue to do so for the next couple of years at least, with the whole shift from being role based to more skill based organizations, which I think you would know very well.

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Helena 11:51

And of course, I'm like a vested interest in this topic, but, and I have some follow up questions on a few things that you said about trends and where we're going to now, but maybe just to sort of set skills for a moment before I ask my follow up questions. Why skills and why now do you think? I'm always curious to hear the answer to this question.

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Mark 12:13

My belief is that it's around the ability for organizations to adapt to a changing environment. You think at the moment, we have literally had this pendulum swing from retaining employees and fighting off competitors, trying to pinch them through to growing performance. That means talent innately needs to be moved around inside the business as well, because. The employment rates at the moment or the unemployment rate at the moment is low in pretty much every developed country. So if we can't get employees or talent in like this old school way of employing a person to come and do a job might have worked when it was, you know, move 55 boxes from a to b, they can be effective the day they start. Whereas today people come into an organization, they build up skills and knowledge about how that organization works. It takes time to get to a level where they're effective.

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Mark 13:13

To have that talent walk out of the door is more than just their particular role. It's their connection, the network in the business. So to be able to retain them and help them go into a different role or upskill in a different area means they're saving the cost of a replacement person, they're saving the cost of ramping them up and they're also building their corporate knowledge and holding that internal to the organization.

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Helena 13:41

And. Yeah, and I think that's the stuff that's kind of. It's invisible on a p and L. Right. This is something we talk about in the market a lot, is that kind of cost of turnover. And there's the stuff you can prove, like a placement fee or, you know, the cost of relocating someone from, you know, country A to country B. That's all easy to prove.

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Helena 14:03

The intangible part of turnover is the stuff that you said, right. The loss of intellectual property, the burnout of the people that get left behind and somehow have to sort of shoulder that additional workload or loss of customers because they're sick of this being the fifth person that's been looking after their account, for example. So it's one of those kinds of in maybe, I think I'm noticing that people are kind of aware of it, but it's still not a big fat line on a p and L that anyone's beaten over the head for. So there's still an element of visibility about that cost. But I do agree that organisations feel it. And you mentioned retention as well. I think for me, I agree that there's maybe a higher degree of scrutiny over performance, but people still want to retain their great talent.

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Helena 14:49

They just might be a bit more relaxed about losing maybe the not so great talent or the lower performing staff. Now, you mentioned this high performer train, and I actually just wrote a piece on high performers that's coming out soon. I have an interesting theory on high potential or high performance tracks in a couple of companies I've worked for. The companies have done an excellent job of identifying high performers and putting them on these amazing programs, but they've not done the best job of so what. So they have effectively taken these people, told them they were amazing, wrapped a lovely bow on them, not really helped achieve the ambitions of this person's potential, and gifted them to the market. Because if you're telling someone they're amazing and they're not actually, you know, allowing them to achieve their full potential or performance, the inevitable is going to happen. So I've seen quite a

few high performance or high potential programs have the opposite of intended consequence.

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Helena 15:54

Maybe related to this or related to just performance management in general? Who out there is doing something new or novel or just

something that you really admire?

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Mark 16:05

Okay, before I answer that, I'll just say one last thing on that high performance, high potential person track. What we're seeing is some really novel ways of, I guess if you rewind 20 something years ago, it'd be, let's send all of these hypos off on an outward bound camp or something and say, hey, or you're on this leadership course and off site. It's like we're not seeing each other like that. What we're seeing is things like, okay, let's sit down with them and ask them what projects would they like to get involved in? Can we attach them to a mentor that's a couple of steps ahead of them? Can we give. Them a job shadowing thing?

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Mark 16:42

So we're seeing a. Lots more interesting ways. And it's not just. About saying here we're giving you this program. It's about, okay. How

Can we help your career? What are the next steps?

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Mark 16:52

And there's this real focus on actually. Collectively coming up with a plan that they're then going to take that path over the next year, and they're going. To have accountability. Meetings around it. So it becomes. Something a lot more substance than maybe what it was.

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Helena 17:06 

Yeah. A few years ago.

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Mark 17:07

Decades ago. Yeah. Yeah.

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Helena 17:10

I'm actually kind of hearing this appetite as well. I haven't really come across anyone doing it yet. So interested to hear your view on this, like some companies wanting to create almost like an adult grad rotation, and especially for that leadership level where it does pay to have emerging leaders or emerging senior leaders rotate through different areas of the business. I'm always wondering, I'd love to see some examples of companies doing that. So they're deliberately rotating people through different areas of the business to give them that kind of well rounded exposure and that network as well, before they take that leap up into the senior leadership or executive leadership team.

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Mark 17:53

Yeah, I think it's a well known, I guess, graduate approach. I guess. I don't know if I'm seeing it with senior leaders, but I can see why it would be absolutely brilliant from a senior leadership perspective to get that experience across other areas. I think it really helps just at a fundamental level. Yeah, I was going to say at a fundamental human level, you get to have some empathy with the other people you're working with. Even if you're only doing it for a short while. You can understand people's position a lot more at the complexities that every person's dealing with.

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Helena 18:23

So who's doing amazing things? Who are the trendsetters or what trends are you noticing now as we move into the next phase of

performance management, or whatever it will be called in this next iteration?

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Mark 18:36

Yeah. So there's three companies that spring to mind, and I'll give you three different examples. One company called Mental Group. So they are a large consulting firm, I think, mostly based in Melbourne, but they're kind of all over the country, maybe even New Zealand, I'm not sure. Yeah. And so they've gone for a very much like a feedback style approach. And what I mean by that is when they finish, when the team members finish a project, they actively request feedback from their peers and from the customers that they've worked with to deliver that project.

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Mark 19:10

And it's based on a set of, I think they've got roughly like twelve important criteria. And I. The feedback process is really simple. It just asks the person to say, what are the top three things that I've done really well, and tell me why. What are the three things that I could improve the most on? And it's out of them to pick from the same list. And why is it I need to improve on those?

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Mark 19:32

So it's a really simple mechanism for people to actually give the feedback. It's non threatening and it allows them to actually go, okay, here's where I'm doing good and here's the areas that I can improve on. But the reason I say they've done it really well is they've embedded it into their whole performance process. So if you don't have that feedback collected, you're not going to be able to have a conversation with your coach there or your people leader there around your remuneration at the end of the cycle. You must have captured this feedback to be able to have a rem discussion. So they've wrapped it in accountability, which is beautiful. And it's now just become this cultural thing that they do.

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Mark 20:09

And they've focused on just that process rather than overcomplicating it, overburdening people with too much stuff. So the second one I would call out that's doing an amazing job is Starlight Children's foundation. They have a few hundred employees, and the challenge that we see that not for profit, a lot of not for profits have when it comes to performance is a lot of people, they've taken a role in the not for profit with a lesser salary than they can potentially get in corporate, or they might be volunteering their time. And they're kind of doing it because it's something that's important to them. If you try to bring a. Like a powerful or autocratic approach. If you like to perform, you're going to lose those people.

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Mark 20:55

So Starlight have done an exceptional job. They've branded their whole performance process. It is feedback oriented, it's recognition oriented. There are no ratings. So for them, they don't have any ratings whatsoever, but they still have these really positive, constructive conversations when they need to. But it's very much based on a positive psychology environment, and it just works. The levels of adoption that they have in their whole process across the board are better than you would see in most corporates.

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Mark 21:31

The third one I call out is Aldi. And they have done an exceptional job of getting frontline workers. You know, this might be a store assistant who's doing a handful of hours in the, in the organization every week. They've managed to create this performance process that works across all levels of team members. And it's all about being very clear in what the expectations are for the role after, say, 30, 60, 90 days, and then ongoing and automating this really automated. And it's personalized to the role. So they've got all of these different individual performance sort of processes running that are highly targeted for the amount of time that the individual has and for the type of role that they're doing.

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Mark 22:18

So they've achieved something that most organizations say are these team members? It's not possible. Yeah. So it's phenomenal. To draw, I guess, the overall or overarching comment. Each of those three. Businesses have got very different approaches to performance.

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Mark 22:37

And what. They've done really well. They'Ve all avoided the trends, they've all avoided the fads, and they've said, let's design a performance process that works for our business. It aligns with what we're trying to achieve. It works for the type of employees that we've got and the types of organizations we're servicing. And then they're doing that really, really well rather than trying to implement someone else's best practice or the latest fad or the latest trend on LinkedIn. So they all have employee success at heart and they've done a great job of making it work in the right way for their business.

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Helena 23:12

That's really awesome to hear. And you work with these organizations, right? These are really well known to you? Yeah. Okay. And I am going to kind of try and have you make some predictions now and know that this is always hard and uncomfortable because who on earth does know what the future might bring? And hopefully at this age.

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Helena 23:29

Okay. When we look back on this video in like five years.

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Mark 23:32

Yeah. It'd be interesting to replay how right.

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Helena 23:34

Or wrong did we get it. If you were a betting man or if you're willing to make some predictions into the future with everything that's

going on, what predictions would you make for the future of this space?

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Mark 23:48

I think I'll answer that with a double pronged answer. First of all, I believe from a predictive perspective. And then I'll say from an aspirational perspective, different predictives. I think the majority of organizations will follow this pendulum as it swings between employees having the power as it was in Covid, and then it swings. Currently, it's on the swing into employers having the power. So they kind of up the ante. On performance, and then as it swings back, they start to change and adapt to that.

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Mark 24:20

I think that that will continue to happen. I just struggle to see many organizations being able to get away from that reaction to the market from an aspirational perspective. What I would love to see coming to this idea of performance from an image if there was no power, no employee power, no. No employer power. And instead you go, how do we collectively get stuff done? And we make sure we're on this more of an even keel relationship. And it's trying to, the way I liken it is if you're in your family and you're trying to persuade the kids to do something, it's a lot more effective when they feel like they've had a part in that decision.

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Mark 25:02

But you can't use this power to really tell them to do it because they know exactly how to push back. But when you've got this, maybe a better example would be a friendship example. You get stuff done together because you both work out what it is that needs to be achieved and you come together on an even keel. So it's getting stuff done without the use of power or hierarchy. That would be my aspiration, because I see that when organizations and employees strike that balance, they are much happier in terms of the organization performance and much happier in terms of the employee outcomes.

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Helena 25:33

The win-win, the utopia.

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Mark 25:35 Absolutely. Yeah.

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Helena 25:37

And maybe just to wrap up now, this has been a really fascinating and interesting conversation. But just to wrap up, if anyone would like to reach out to you to find out more about Crewmojo, to maybe react with some of their own feedback to what we've talked about. Mark, how can they best reach out to.

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Mark 25:57

Hit me up on either LinkedIn, so just search up Mark Lewis crew mojo, and I'll pop up. Otherwise. I love speaking to people anyway, so

markrewmojo.com is my email and I'm always open to a good conversation.

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Helena 26:11

Fantastic. Well, thank you so much for your time and your energy. Always enjoy these fascinating conversations with you. This is not

our first. I'm sure it won't be our last. And thank you so much for your time. Mark.

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Mark 26:23

Pleasure. Thanks so much for having me on, Helena. I really appreciate it.

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