Written by Dr Ann Hutchison and John McGill on March 25, 2019.
This article was published in the April Issue of NZ Management Magazine.
How the performance of the top management team is dealt with is critical, because it's absolutely linked with organisational success.
Dr Ann Hutchison, senior lecturer at the University of Auckland, and Strategic Pay are collaborating to present new research around the impact of performance management at executive level. Dr Hutchison is in the process of evaluating the results and what’s coming out so far is really interesting, with an array of wisdom coming from open-minded CEOs across a number of industries and types of business.
The research aims to help all kinds of businesses review their performance management and appraisal procedures, to ensure their top team is working as well as it can be.
A number of CEOs, chairs and senior executives are participating in interviews about their experiences, and what affects their choices and behaviours.
Previous research in this field has really focused on the demographics of top management. There isn’t much out there about how to manage performance at the top, in part because talking to CEOs in a large enough number is difficult to do.
We already know that diversity is one of the biggest indicators for business success. A leadership team of varying ages, with different types of industry experience and social networks, really drives performance. However, no one has given much time to investigating how to best manage such a diverse group of leaders.
Why performance management at the top is important
How the performance of the top management team is dealt with is critical, because it’s absolutely linked with organisational success. Existing research shows that of all the factors affecting a company’s performance, the success of the top leadership team is one of the most predictive.
When we talk about performance of top managers, we’re interested in how they work together and their belief systems, which really affects the strategic choices they make for the business.
These decisions affect the success of the business, and their mental model – how they work together as a team – is also predictive of organisational outcomes like innovation.
At the executive level, everyone brings their own agenda and unique mindset to the table. A finance director will see things very differently to a HR or sales manager, for example. If not properly managed, such different experience and priorities can bring with it a range of issues – such as being unable to agree on the best course of action and work together toward one united goal.
Managing performance at the top involves dealing with these sorts of circumstances, to enable the organisation to continue to meet its overall objectives.
Whether the company’s goals are purely financial or are about meeting the needs of local citizens or other individuals, the top players in an organisation need to pull together and work toward the same aims.
Why more research is needed
Managing at the top presents a unique set of challenges, and yet is critical to the success of the organisation. Knowing what factors influence the ability of a CEO to successfully manage their leaders will help organisations across the world look critically at their own processes.
Performance management at executive level can sometimes feel awkward, or even inappropriate, given that the top management team are so senior and have already proven they know how to do their job well. Equipping CEOs with tools to approach such performance management is vital for ensuring organisational success, and that’s exactly what this research aims to do.
Dr Hutchison and Strategic Pay hope to publish the final results of the study in the next few months. Keep an eye out to ensure you hear more about this important research.