S 1 E5

September 2nd, 2019

EPISODE 5: Killing Ratings and Making Performance Come Alive with GAP’s Rob Ollander-Krane and Dr. Andrea Derler

No one likes to feel like a number. And yet, so many organizations use rigid, ratings-based approaches for tracking employees’ performance. Rob Ollander-Krane, Director of Talent Planning and Performance at Gap Inc., has for years decided to take his teams in a different direction — namely, by killing performance ratings. In this episode, discover how Rob’s bold decision has ushered in a brand-new world of work.

Our host Chris Weller is joined by Rob Ollander-Krane (Director of Talent Planning and Performance at Gap Inc) and Dr. Andrea Derler (Director of Industry Research and NLI).

Episode Transcript

Let’s say I’m your boss, and it’s time for your annual performance review. I call you into my office and over the course of the next half hour, I explain what I think you did right this past year, and what you could have improved on. You don’t say much. Then, I condense all of that information into a single rating, and I set a goal for you of increasing that rating by next year’s review.

Here’s the question: When you walk out of my office, are you excited to get back to work?

The scary part of performance management isn’t just an ineffective review process; it’s how common these practices really are. And it’s why Rob Ollander-Krane, Director of Talent Planning and Performance at Gap Inc., has for years decided to take his teams in a different direction — namely, by killing performance ratings.

I’m Chris Weller, and you’re listening to Your Brain at Work, from the NeuroLeadership Institute.

In today’s episode, I’m joined by Rob Ollander-Krane, Director of Talent Planning and Performance at Gap Inc., and Dr. Andrea Derler, Director of Industry Research at the NeuroLeadership Institute.

Our discussion focuses on the perils of traditional performance management, how to use a growth mindset in the PM process, and what it’s like to live — and work — in a ratings-less world.

Chris: Rob and Andrea, thanks for joining me.

Andrea: Thank you.

Rob: It’s my pleasure.

Chris: Rob, I want to read a quote from an interview that you did in the past. “Well, I’m on a one-man mission to obliterate traditional performance management from the face of the Earth. When you’re ready to do that and you want to talk, I’ll be glad to help you.” How did this one-man mission to obliterate traditional performance management from the face of the Earth start?

Rob: I’ve been in HR for many years and I’ve never enjoyed our year-end process of annual reviews. It always felt like what people were doing was trying to get the best grade and not really try to increase their level of performance. And as I started doing more and more research, I began to understand why this process was so bad and why I hated it so much. I began to realize that this was everybody’s problem.

Rob: We were all putting our employees through something that just didn’t feel good, only because we thought it was the right thing to do and it was the only thing to do. And once I saw the value in my own company and saw how my employees responded to the change, and how other businesses responded when they heard about it, I said, “You know what? This has to be my mission. This has to be my calling. I need to help every company obliterate this terrible traditional performance management process.” I speak at lots of conferences because I’d really love my tombstone to say I helped obliterate traditional performance management from the face of the Earth. It’s just such a bad process and it’s not doing what we think it should be doing.

Chris: Andrea, I know that you’ve done a lot of work around growth mindset, research and also at performance management. What are some of the findings that overlap between growth mindset and performance management?

Andrea: One of the most interesting misunderstandings I came across in the last couple of months as I was speaking to lots of clients and executive teams is around … is does growth mindset stand in contrast to achieving my company goals or even my team’s goals? People think if they want to achieve a growth mindset that we’re going to forget about our goals because the goals feel to be in contrast with what I want to achieve as I’m learning and developing all the time, and so that’s obviously not the case. The other place where growth mindset came in as really helpful was helping managers recognize and evaluate performance more accurately. We know that if managers have a growth mindset, they can see changes in people’s performance and that helps them over time to recognize that somebody is actually getting better at something, and it could also be the opposite, but they can see changes versus people with a fixed mindset have a certain opinion about somebody and will not ever change their opinion or evaluation about somebody leading to less accurate performance reviews. But if we have a growth mindset, we will deal differently with those obstacles in achieving our goals. So I always call growth mindset…an enabler of achieving goals, whether that’s on a collective basis as a company or on the individual basis. So that’s how I would position the autonomy between growth mindset and performance goals.
Chris: Rob, how does that relate to achieving business goals?

Rob: We’re a corporation that makes money. We have shareholders. You can’t ever walk away from driving performance and hitting your financial targets. Yes, you want goals, and you want to drive toward those goals, but the mindset you use needs to be one about learning from your successes and your failures. Not one of saying, “I always have to look really good, because if I make a mistake, I’m going to be fired, or we’re not going to make our goals.”

Andrea: Does it surprise you that people still sometimes think the wrong way about this? It did surprise me, but would you get that question too?

Rob: It doesn’t surprise me at all. We live in a world where the vast majority of employees and managers and leaders in companies only know traditional performance management. And from my perspective, that creates this fixed mindset environment where you can’t make a mistake.

Andrea: Why do you think it is so difficult for some organizations to, for example, go rating less? Where do you see the main obstacle apart from a certain culture that must be placed, but what else do you think it is? Is it lack of control? Is it too much autonomy for people?

Rob: I’ll start by saying that asking whether or not a company should get rid of ratings is actually missing the bigger point about the changes that are going on in this performance management evolution. My feeling about ratings is that when you put a label on someone, you’ve identified them in one place in a particular hierarchy, and sometimes that feels good and sometimes it doesn’t. It’s the forced distribution curve, I think, that really makes it difficult because then you’re pitting your employees against each other to get the better grade.
I don’t want to live in that world. So, I go back to saying that I’m not sure you have to get rid of ratings, but I think any label dries a fixed mindset culture as opposed to a growth mindset culture. And it’s better to get rid of that and allow people to just understand how they’re doing against their goals.

Chris: Rob, I’m curious if you can offer an example of a time recently when you even had to take a dose of that own medicine and realize like, “Oh man, I kind of messed that one up, but I got to fail fast and learn quickly to finally improve and to perform better.”

Rob: When I was in high school, I was an actor, and if you gave me a script and I could study that script and could feel really confident that I knew every line, I could get up and perform and do that performance day after day, after day, after day, after day, and be successful, but ask me to improvise, and I could not do it. I approached that concept of improv with a fixed mindset. I said to myself, “You know what? I just can’t do this,” either because I was uncomfortable doing it or because I didn’t think I had the talent to do it or I didn’t think that doing it would get me anywhere. What I really felt like was I was going to be embarrassed.

And when I look back now, so many years later, and I think what I do for a living, I get up in front of people all the time and present, I train leaders in our company on our curriculum all the time and I would be so much better at doing all of those things if when I was 17, I had said to myself, “You know what? It’s okay to look like a fool.” It’s all about learning. It’s all about getting better. Try it. See how it feels. Make a mistake. Even get laughed at. But realize that what’s happening is that you’re building that muscle, that muscle will help you in the future. I didn’t do that. I never felt comfortable. And to this day, I have never felt comfortable doing improv. So that fixed mindset for me got in the way of my ability to perform. And performing, standing up in front of people and sharing what I believe or teaching is something I’m really passionate about.

Chris: I love that story because it speaks to the social pressure that you probably felt at the time of looking foolish and embarrassing yourself that also carries over to adult life where you feel a different kind of pressure which is, inadequacy and incompetence. I’m wondering where the role of leadership comes to give people the permission and the safety to fail and experiment on their own terms.

Rob: Yeah. It’s all about risk in organizations. And some organizations have a higher tolerance for risk, some have a lower tolerance for risk. Leaders play such a huge role in this, especially I would say your CFO because your tolerance for risk is usually driven by your CFO and maybe your head of legal.

And depending on how far they are willing to let the company stray from success, it creates an environment of risk-taking. And at different times in my career here and in other companies, I’ve worked in organizations that had different levels of risk-taking. Startups have a much higher tolerance for risk-taking than more established companies like the companies that I’ve worked for and it makes the employees, to your point, feel like failure is not an option.

And I really think that creates a world where people don’t want to lose face, people don’t think that they can take a risk, people think they’re going to get yelled at, given feedback that says, “Don’t ever do that again or you’re fired.”

those companies are thinking that you don’t always have to win. You can try something that might actually end up being, in essence, a waste of time from a bottom-line profit perspective but an engager of your employees and a generator of ideas. We know from companies like [IDEO], that sometimes it takes one idea that grows into another idea that becomes a third idea that all of a sudden becomes that next money-maker. So, I wish more companies would do things like that.

Andrea: Yeah, I see risk-taking and growth mindset on a continuum, actually. We talk a lot to financial organizations, for example, where risk-taking means something very different from a marketing company or a creative company or even a retailer. So what I usually hear is that people are afraid to take risks at any level. And what I then try to respond with this, let’s see what level you can tolerate it now… I came across a great organization in Ohio who have gravestones of their products in their front yard, outside of the building, displayed in a manner that are little marble gravestones, these represent products that didn’t go well. They had to bury them in the truest sense of the word. At some point, after a couple of years out there, they didn’t sell them well enough. And so they come together when this happens and celebrate that type of failure. It’s not a failure in some cases. It’s just something that didn’t go so well, but they actually come together physically and celebrate what went wrong. And so this encourages… people to try something new. Be together okay with failing, celebrating that failure because that’s what we learned from this.


Chris: We’ve talked a lot so far about the blind spots of performance management, but I’m curious if you’ve had the power to wave a magic wand and change one thing about PM or the whole thing, what would it be?

Rob: Oh, God. Magic wand, that sounds so enticing. Rob: I think that in order to change performance management I want to change the whole process. Just to say we got rid of ratings, which we did, would not in and of itself have fixed the problem. Just to say we got rid of all the writing year-end reviews in our performance management process – unless someone’s on corrective action – would have changed and fixed everything, no. Even those two things together wouldn’t have changed and fixed everything.

I want people to realize that they should be looking at what drives performance and what drives engagement in their employees and get rid of the administrative stuff that’s actually a waste of time.

Chris: You had mentioned a goal would be to make feedback actually exciting if people can promote their growth mindset to the extent that they take feedback and see it as something that can really help them and make it really fulfilling. In an organizational setting, do you think that’s a feasible goal? And if so, are there steps that you have been taking to make feedback less threatening and actually make it rewarding?

Rob: Yeah. I absolutely think that it’s possible in an organizational setting. one of the things that was so helpful to me when I was doing my research on performance management was the SCARF model, NeuroLeadership Institute’s model on how the brain responds to social interaction. Once I really understood that without even intention, a manager can create a threat response in their employee. Just by being their boss, they create a threat response. I began to think, “Wow. If that’s what’s happening, if that’s the world that were living in, if that’s what’s going on in the brain in every employee, we have to help our managers understand how to lessen that level of threat.” We actually looked at the SCARF model and we said, “What are the ways in which managers give feedback that actually hit on the five domains of the SCARF model?” And it was all of them. It’s no wonder that people don’t change their behavior as a result of the written comments in a performance review. Really, all they want to know is, do they get the better grade or not? We changed our feedback model.

When a manager has some feedback they give, they ask three questions. They’ll say, “Okay. What did you do well?” And then the manager shuts up. And the employee shares all the ways in which they feel that they did a really great job. Of course, the manager can then supplement or add on, or even disagree. But you let the employee empty their cup first and then the manager speaks. And then they go on to our second question which is, “Okay, where did you get stuck?” And the manager shuts up. And the employee shares that. then they get to the third and what I think is actually the most important question of the model which is, “What are you going to do differently next time you’re going to create a plan?” And they shut up. And then let the employee choose their path. my instruction when I’m teaching this model is, say yes, go do that whenever you can. Unless the person picks something that is just totally wrong, totally off based, or something that you’ve seen not worked before then you can say, “You know what? I’ve tried that before. This is what happened when I did that. Are you sure that’s the option you want to pick?”

Rob: But whenever possible, say to the employee, “Great. How can I help you?” And that ends the feedback conversation.

Andrea: I think this is a really important question because it addresses the dynamic between the feedback giver, let’s assume that’s a manager, and the feedback receiver, let’s assume that’s an employee. So, ideally, they would do this conversation in a growth mindset manner versus fixed mindset manner… or example, if the manager would address the employee in a way that would only focus on perfection or only on the failure and would compare the person to their colleagues and the other peers, that would really, first of all, threaten the employee and their emotional being because they would feel threatened by the mere comparison to their colleagues. But also, it would focus them so much on, let’s say, the failure or on the goal that they haven’t achieved yet. In a growth mindset manner, though, the very same conversation with the very same employee can be held in a growth mindset manner whereby the manager would not focus on comparison between people but actually say, “You know, three months ago, six months ago, you haven’t achieved that milestone, now you have achieved that milestone. Now, you haven’t achieved that goal yet, but that’s okay because you have made some progress.” So I would focus on the progress and compare the person with themselves.

Chris: Rob, we’ve talked a lot about the importance of quality conversations at work, making it more human. And you’ve alluded briefly to opportunities in your personal life to use this information and research. I’m curious to hear what recently has been coming up for you outside of work.

Rob: What I’ll say is that the concept of growth mindset really does apply both in an organizational context and personally. What we do when we teach growth mindset in our organization is we bring either like teams together or sometimes people who are just doing the same kind of job or even an open enrollment class. And we start off by explaining what fixed and growth mindset is so people understand the concepts. We show a couple of videos that bring it to life. And then we have them actually do some self-exploration but interestingly enough, the self-exploration starts with the personal side not the organizational side.

We asked each employee to think about a time where either a growth mindset helped them be successful in something they were trying to drive in their own world or a fixed mindset prevented them from being successful. Similar to my story about improv. And I remember one session where we had about 300 store managers together. And after I asked them to self-reflect, I asked for a few people to volunteer to tell us their stories. And I was amazed at the stories that we heard, really heartfelt stories of where a fixed mindset might have prevented them from being successful. We had one parent talk about a child who had some cognitive disabilities and the world around them created a fixed mindset for the family in how they were raising – for this employee, for how she was raising her child.

And now that she reflects back on that moment, she’s so disappointed in herself and in the world around her for not looking at this child of someone who could grow instead of thinking about them as someone who couldn’t grow, that their intelligence was innate and not changeable. She had the whole room in tears and I was blown away by that. The power of this very simple concept to be applied not in an organizational context, but in an individual context, how moving that was for her, eye-opening and what a revelation it was for everybody in the room to realize that changing that mindset could have actually impacted the performance of this child, and the life of this child. And then it also has an organizational context. So, the next question that we ask is, where in your workday does a fixed or growth mindset either help or impede your progress?

I remember, I was working with one team and they didn’t realize I was going to call on them and when I said, “I want someone to share an example of where a fixed mindset it getting in the way of this success of this group,” and it was an intact group of 130 people. They were all on the same function. And no one would raise their hand, so I said, “I’m going to call on somebody. Somebody better raise their hand.” And finally, after waiting like three minutes and no one had raised their hand, I looked to the woman who was sitting right in front of me and I said, “Okay, it’s up to you. What do you got to share?” She said, “Please don’t make me do this. Don’t make me do this.” And I said, “Nope, you got to do it.” And she shared it. And it was the elephant in the room. Everyone sort of gasp, because what she was describing was the issue that was plaguing this team for as long as this woman had been part of the team. And once it was out there and they all heard it, they said, “Oh my god, we need to change this. We could not let this fixed mindset behavior impact our success. What are we going to about it?”

And to me, that’s just revolutionary, that a concept could change business performance and personal performance at the same time.

Chris: Yeah. It goes back to show the power of just one-on-one conversation. You drawing it out of her, the technology needed.

Rob: Yup.

Chris: Yeah. Well, Rob and Andrea. Thank you so much for the thought-provoking conversation today. I appreciate it.

Rob: My pleasure.

Andrea: My pleasure. Thank you.

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