How did you feel the last time you could prove that your work was better than the next person’s, but found yourself held back by unfair or overly subjective systems, personalities, or practices? Lousy, I bet. A solid differentiation system aims to prevent that demotivating sense from infecting your organization.
What’s a Ranking System Offer?
Differentiation (generically, stack-ranking) highlights results. In so doing, the practice makes it easier to manage talent at every level. An objective ranking system determines how people (or companies) stack up against one another in the same way that a baseball manager compares various hitting and on-base metrics to create a team’s batting order.
A good stack-rank system frees people from arbitrary subjectivity and enables organizational managers to retain top performers. Great ranking systems show management who needs help or development so all employees grow. Consider a three-step process.
3 Steps to Create a Ranking System
- Communicate what matters. As a leader, exhaustively communicate vision, mission, and values. Go beyond talking with only the folks in your top-tier; communicate your expectations to every employee, vendor, and customer. Avoid also the temptation to parade 35,000-foot ideas as holiday and anniversary slogans. Instead, communicate where you’re headed, how you’ll get there, and your core values until you’re sure that your audience is sick of hearing it. Only then will you have a chance of people remembering what makes your company excellent.
- Measure what matters. Namely, measure the level of commitment to your mission, vision, and values received from the people with whom you deal regularly. In the diagram above, you see two simple measures: Quality and Time. If an employee, vendor, or customer demonstrates behavior that consistently provides the level of quality you expect in a timely manner—often exceeding expectations—that’s an A-player. B-players usually hit and occasionally exceed expectations. C-players usually miss and occasionally hit expectations. You can measure who disagrees with your mission, vision, or values, by their behaviors and ask after their intentions. If they’ve found a better way forward, meaning your expectations are unreasonable, then they’re making you better by honorably challenging your assumptions. On the other hand, if someone carries subversive intent, they’re bringing you down.
- Take action that matters. You get what you reward. Measurements that matter allow you to quickly and objectively rank employees, vendors, and customers so you know where to apply pressure. Reward people who close on goals, coach people who just need direction, and penalize those who refuse to change their behaviors to hit goals. Swiftly penalize subversion unless you want more of it. Once you know the action, execute decisively.
Rewarding A-players and penalizing people who refuse to improve, for instance, engages the employees who want to improve and hit the goal. Ranking allows you to mitigate the damage done by those who take you away from the goal, which is not always a binary choice.
Ranking invites misunderstanding; let everyone in on your system early. If anyone perceives that your system is unfair, they’ll disengage, and it’s usually the most creative talent who notice unfairness first. The key is to rank people as objectively as possible, and your best players will often be the ones who suggest system tweaks that the top-tier management missed. Give your entire team a high degree of responsibility for creating and improving your ranking system. Once your system is running, it should work like sports statistics to tell anyone on your team who is performing and who needs coaching.
Why would anyone not want that information? I can tell you from my experience that people with inflated egos and those who are just plain lazy do not want an objective ranking system. They know they can’t hide! We find no good reason to remain purposefully ignorant about who is performing at what level.