The Neuroscience of Transforming Performance

and Optimizing Leadership

Dr. David Rock, Director, NeuroLeadership Institute
 Speakers

Dr. David Rock

Director, NeuroLeadership Institute
@davidrock101

Greg Pryor
VP, Leadership & Organizational Effectiveness
Workday
About David Rock

• The NeuroLeadership Institute (NLI) helps large

global organizations change fixed unconscious
mindsets that may hinder their effectiveness in
traditional practices like performance
management, diversity,
learning and change.

• Dr. David Rock coined the term ‘NeuroLeadership’

bringing together neuroscientists and leadership
experts to build a new science to develop better
leaders and managers.
A NEW LANGUAGE FOR LEADERSHIP

Research • Education • Solutions

THREE PRACTICES
HOW WE PARTNER
WHERE ARE YOU AT WITH PM?

A. Removed ratings

B. Thinking about it

C. On the fence

D. Not on your watch

KILL YOUR RATINGS
 COMPANIES THAT HAVE MOVED
OVER TIME
Companies who have removed PM ratings
55+

41

24

13
8
2 2 3
1
2007 2008 2009 2010 2011 2012 2013 2014 2015
IMPACT ON ENGAGEMENT
Deliver Rating, Pay
Adjustment, Bonus
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5
15%
3-4

85%

©2015 Eli Lilly and Company | September 8, 2015 Illustrative

REINVENTED PERFORMANCE
MANAGEMENT
THREE RESEARCH FOUNDATIONS

1. Foster a Growth Mindset for continual improvement

2. Minimize Threat to have candid and honest conversations

3. Facilitate Insight for people to positively embrace change

Fixed mindset
• We have skills we just can’t get better at

• Effort doesn’t help

• Feedback is dangerous

• Stretch goals are bad

• Other people’s success de-motivates

Growth mindset
• We can get better at most things
• We can change
• Effort is central
• Feedback is helpful

• Stretch goals are good

• Other people’s success inspires

The two mindsets

Prove yourself Improve yourself

Look good Get better

The SCARF® Model

Away Toward
Reward
Threat
SStatus
tatus
CCertainty
ertainty
AAutonomy
utonomy
RRelatedness
elatedness
FFairness
airness
Rock (2008)
PERFORMANCE MANAGEMENT CONTINUUM

Performance Scores No Performance Scores

Ratings
Forced Based on Structured Guided
Ranking quantitative results conversations conversations

The line of courage

(i.e. 1-5)

From: To:
Judge Coach
Competitive assessment Coaching and development
Annual event Frequent conversations
Top down Shared responsibility
Individual contribution Enterprise contribution
Significant paperwork Minimal paperwork
Fixed mindset Growth mindset
Overwhelming threat Manageable threat
TREND OR FAD?

• Fewer than five firms made major changes in 2010

• 52 - 75 large companies have radically altered PM

• 50 - 70% of firms considering major changes

2015 STUDY NO-RATINGS STUDY

Type of company
• 77% Public companies       
• 23% Privately held companies       

Size
• 50% under 10K employees       
• 31% between 10k-100K       
• 19% over 100K employees       

Top 3 Sectors          
• 38% Technology               
• 19 % Business Services               
• 17% Consumer goods
THE DATA WAS NEVER ANY GOOD ANYWAY

Random
measureme Actual
nt error performance
11% 21%

Organization
Idiosyncrati al
c rater perspective
biases 6%
62%

“Ratings were stronger reflections of raters.”

Scullen, Mount, & Goff (2000)
DELL STUDY

• 50% were surprised by their rating

• 87% negatively surprised

• Correlates to 47,850 employees

• Many surprised were the better performers. They expected‘best’

and got a‘great’or‘great’and got‘good’

• Link to 23% lower engagement than those not surprised

A VERY CHALLENGING TASK…

1. Review a year’s worth of employee effort, behavior, and accomplishments

2. Appropriately consider other factors that should and should not affect the evaluation

3. Boil this all down to one rating that is objective, fair, complete, accurate, and honest

4. Factor into the rating how this person’s accomplishments compare to his/her peers

5. Rate them using the same process, criteria, and standards another supervisor would
THE JOURNEY

• Six to 12 months

• Philosophy: Business case, 3 objectives, mindset shift, branding

• Dialogue: Define ‘quality conversations’ robustly

• Evaluation: Link to your objectives

WHAT WE RECOMMEND

1. Keep doing pay for performance, but simplify it

2. Empower managers to differentiate
3. Focus even more on goal setting
4. Separate compensation from development conversations
5. Rebrand the process
6. Track conversations happening and the gist of them
7. Increase talent reviews
8. Manage true lowest-level performers differently
WHY RETHINK LEADERSHIP DEVELOPMENT?

Little change in Pressure on

leadership skills: leaders
development for have less time
a long time to do more
Leadership
Impact of
Highly
inefficient
Development leadership
development
process
Transformation continues to
slide (I4CP)

Digital Minimal
learning spend
disruption for years
s

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WHAT WE ARE SEEING IN THE MARKET

A complete rethink around:

1. How to define leadership

2. How to develop leadership skills

3. How to support behavior change

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COMMON GOALS

1. Simplify, simplify, simplify

2. Immediate use tools

3. Coherence

4. Evidence-based strategies

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THEORETICAL FOUNDATIONS

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BIG PICTURE

Phase 1: Phase 2: Phase 3:

Redefine Build Essential ‘Just In Time’
Leadership Disciplines Tools

• Crystallize central issues • Develop disciplines for each • Digital ecosystem

manager level
• Simplify for easy recall • Two-minute tools
• Deliver truly scalable
• Ensure biological validity behavior change • Give people what they need

Theoretical foundations: The science of learning

Coherence • Layering • AGES • Insight • Social

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PHASE 1: REDEFINE LEADERSHIP

The objective:

1. Build a simple, memorable statement of leadership

expectations.

2. Ensure it is relevant, sticky, with strong coherence.

3. Create the DNA of everything that comes next.

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PHASE 1: REDEFINE LEADERSHIP

From: To:

Too many leadership concepts One clear set of expectations

Assessment focus Development focus

No common language Common operating system

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PHASE 1: REDEFINE LEADERSHIP

Which is more important:

Recall of a simple definition

or
Include everything

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PHASE 2: BUILD ESSENTIAL DISCIPLINES

Which is more important:

Try to teach people everything

or
Focus on the fundamentals

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PHASE 3: JUST IN TIME TOOLS

The objective:

1. Give managers what they need, when they need it, the way they need it

2. Clear, fast access to ‘how things are done’ at your company

3. Embed ideal skills in a way everyone can access and champion

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OFF THE SHELF DIGITAL CHANGE SOLUTIONS

Summary models provide a common operating system for people skills.

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HOW WE PARTNER
 Thank You
Join the conversation
@neuroleadership @Workday