Nett Output
I have a theory about performance - it can be bought.
I propose there are three ways you can buy performance:
Buy the tools - get the gear (even if you have no idea!) Having the wrong softwares, hardware, cars, machinery, stationary, or offices. Without the right instruments you and your people are limited.
Buy the knowledge - go to school, read books, watch YouTube videos, go to conferences, learn on the job, or recruit intelligent people. Without the know how you are your people are limited.
Buy the labour - work harder, work longer, get more people, use more suppliers/contractors, put in extra effort, practice more than others, or spend more time. Without spending the time and effort you and your people are limited.
All of us can buy performance. Therefore performing better than others is a flimsy way to define our identity. It is circumstantial and the outcome of thousands of decisions as well as hundreds of variables. But, that is not to say we cannot influence our performance and that of our people. On the contrary - we have cascade upon cascade of daily decisions and actions for how we spend our performance tokens.
Whatever your decisions they add up to one metric - your inputs.
On a basic Profit and Loss Statement the inputs are defined by the variable and fixed expenses. The cost of sale, cost of production, marketing spend, rent, printing, utilities, and signage for example. All of us are in charge of a household budget (or partially), and a business unit (the stuff within your job description or remit) with its own unique inputs. The general game of business is for outputs (sales, value, profits) to exceed inputs.
There usually is nuance, but the basic premise runs true in most businesses and roles. If I was to ask you what your ledger of inputs and outputs are for your remit, what would it look like? Are you in the positive (output exceeds input)? Are you in the negative (input exceeds output)? Are you flat (input and output are about the same)?
Nett Output is the term I use for what is left after everything is said an done. All factors are taken into account. It answers the questions - Have we done well? Have we made a difference? Was it worth it?
"By and large, life will give you what you deserve"
- Ray Dalio
What is your answer? (your instinct tends to be accurate if you don't have the data to hand).
The next question is, what can you do to improve this in a sustainable way? This to me, is the right question to be asking. I recently met with a National Sales Manager getting great results but he had an unsettling panic simmering within him. He felt his people were getting complacent and the ground work wasn't currently being put in by the team, which would expose them in the following year and create a severe downturn the year after. He knew he had to do something now to maintain and secure the short term future of his business. This is the mindset of some one wanting results with sustainability. But, what to do?
Where should he spend his Performance Tokens? How much should he spend on tools, knowledge, and labour? You may be facing similar questions. I know I am all the time.
For me, this is the best way I can articulate The Rhythm Effect - the use of ones resources in such a way to leak as little waste as possible and gain the best 'bang for buck' out of our resources (Return On Effort).
To me, this is what leadership is all about. Not only to transactionally get the result, but to"leave the jersey in a better place", to borrow from the famous All Blacks, . The hundreds of programs I have delivered have told me this is what professionals are wrestling with and deeply passionate about pursuing.
Input vs Output is not a new idea. Peter Drucker popularisied it in the mid-nineteenth century, and Scrum again as the contemporary face.
Image Source: scrum .org
The research of Mihaly Csikszentmihalyi, Hungarian-American psychologist and father of Flow has laid the groundwork for us. A 10 year study by Mckinsey cited by another student of Csikszentmihalyi, Steve Kotler (HBR, 2014) tells us we can 5x our productivity.
It is proven. But, what does that mean?
Unfortunately, a lot of this gets lost in translation to our daily team environments. What I have discovered is that your current Nett Outputs can be improved five fold (5x). That is to say, if you are in sales and currently hitting target plus 1%, then by learning and practicing The Rhythm Effect principles you can develop a plus 5% business result with less effort and a better prospect of continuation. The timeline is up to the individual as well as individual variances.
Take your quantifiable outputs (costs) and subtract your quantifiable inputs. Whatever the final number is, the game we are playing is to nudge it to be five times better. This is a realistic performance metric we can work on, and one we can use to build strong momentum and eventual legacy.
There are no guarantees. It depends on where and how you want to spend your Performance Tokens. But, the real game is in effort - how do you leverage this? And that of your people? Viewing the world through Nett Output is a useful lens and sets reasonable and realistic targets. With the right tools and knowledge the effort being applied can create real momentum and help us avoid high-pain-high-stress scenarios as well as burnout or even business closure/redundancy/loss of contract (extinction!)
The good news is, performance can be bought by any of us with what we have. The currency you use (time, money, status, market share, etc) and the longevity of your inputs is completely up to you. No matter our starting point, where we go in the next year and the path of our next ten years starts now.
What are we waiting for?
Banner Image Source: Time
