Many businesses out there, no matter what size they are, how long they’ve been trading or what sector they are in, are not achieving the success they could, because their teams are not performing to their full potential. This is no different to what happens in sporting teams. Just look at the England Football team in the Euro 2016 competition, and in fact in many other championships they have played in. There is so much potential out on the field, yet the performance that is delivered is woefully below our expectations.
In business, research has shown the following:
- 13% of staff are ENGAGED – they go above and beyond what is expected;
- 67% of staff are DISENGAGED – they just do the minimum to get by;
- 20% are ACTIVELY DISENGAGED – they impact negatively on productivity and morale in the workplace.
So if you have a team of 10 people, the chances are that only one of them is anywhere near to reaching peak performance!
How is this relevant to YOUR business? Well, let’s look at the net result of an under-performing team. We are not talking about a bad team here, we are just talking about a team performing at 80 – 90% of their full potential. Here’s an example for you to ponder:
If your marketing team generated 10% less leads than they could, your sales team converted 10% less sales than they could, your account managers failed to up-sell 10% of the time and lost 10% more customers than they should, and your operations team were 10% less efficient than they should be, what do you think would be the cumulative impact on your profit?
Well, the fact is that it would be a staggering 40% less that it it could be if the team were performing at 100%; or to look at it another way, if you could improve all your team’s performance by 10%, then you would gain 66% in your profits. And it gets better: if the team are currently performing at 20% below their potential, then you could be looking at more than a 200% potential improvement in profits, if you could maximise performance!
I know, it’s hard to believe, right? Well, to prove it, here’s how those numbers work in practice:
|Potential performance||Actual performance - 10% down||Actual performance - 20% down|
|Number of leads||1,000||900||800|
|Conversion rate %||30%||27%||24%|
|Average £ sale||£1,000||£900||£800|
|Number of transactions per customer||2||1.8||1.6|
|Total sales £||£600,000||£393,660||£245,760|
|Profit margin %||25%||23%||20%|
|Total profit £||£150,000||£90,541||£49,152|
|Loss in profit due to underperformance £||£59,459||£100,848|
|Loss in profit due to underperformance %||39.6%||67.2%|
|Increase in profit possible at full performance %||65.6%||205.1%|
Hopefully now you can see why focusing on getting your team performing to the best of their ability is so important!
So how do you improve your team’s performance?
Firstly, you need to understand what it is that causes a team to under-perform. Well, the main reason is having the wrong people in the team to start with – if your team has no potential, then no amount of work will get them to perform as you want them to. As my old mentor once told me, “Don’t motivate an idiot – they just make more mistakes, quicker!”
The best way to check whether this is the situation in your business is to imagine that you could sack everybody today without notice, and you could guarantee a replacement the very next day. In those circumstances, how many of your existing team would you rehire tomorrow, and how many would you replace? (Think of yourself as a football manager of a club with a new billionaire owner, at the transfer window!)
So now you’ve identified the team members you want to keep and who are an asset to your business. If you really want to get your team performing better, you need to deal with the team members that you chose to replace, and here you have options. You can either invest in training and development to get them up to speed and set them clear performance goals and targets, and monitor those targets, or you can help them to leave the business. (Just remember that you hired them in the first place, so you owe it to them to give them a chance to “step up or step out.”)
Please do make sure you get proper HR advice on the right way to manage staff to leave the business!
Then you just need to replace any team members that have moved on, ensuring that your new employees have the right attitude and will work well with the rest of the team. If you’d like help with this, you can download our guide for getting the right people on board – just click the following link: Team and Recruitment Helpsheet
Once you have a good team in place, you then have to accept that they will be under-performing, you just don’t know to what extent. How do I know this? Because everybody under-performs, most of the time. Even top sports people under-perform, until they achieve their personal best. Leicester City under-performed for years until they won the League. We all do it, every day, in some aspect of our lives – it’s just human nature!
Now you have accepted that your team and even you yourself are constantly under-performing, what do you do to collectively raise your game? Well, that is exactly the answer. You raise the GAME. In sport, the path to success is easy. The goals are clear, the rules are clear, the competition play by the same rules, everything is transparent and how to win is simple to understand. We love playing games and sport because of this. It’s easy to see how we are progressing, and to challenge ourselves to do better.
In business, things are not so straightforward, and I believe that good people under-perform because they are not clear what the game they are playing is. They don’t know what it looks like to score a goal, win a match, or get two hotels on Mayfair! They are doing the best that they can with the knowledge they have and the rules that they’ve been given, but it’s unlikely that they are truly motivated or achieving their full potential.
Earlier, I asked you to do a theoretical exercise with your team based on sacking them all, rehiring the good ones and replacing the bad ones. But what if your team could do the same thing to management? How many of them would rehire their managers and the business owner? If they knew with 100% certainty that they could get a better job tomorrow, how many do you think would stay? But if you could allow them to play a game that they could win, improve at, and was fun, why would they want to go anywhere else? Some may even do more than is expected, and really achieve their full potential!
If you want us to help you Play the GAME of business and help you and your Team get closer to performing at your full potential, then give us a call or come to our upcoming TEAM MASTERY WORKSHOP – just CLICK HERE to book your FREE PLACE!