Performance Levels Six Levels Model - (Bernardez)

Performance assessment in a nutshell: finding where we are and where we should be

As part of the beginning of a conversation about performance improvement or performance technology, we may want to invite all performers to apply Tool 1 to assess their individual and organizational performance levels, providing examples of their current level of performance.

This tool also helps collect customers’ feedback about an individual or organization’s performance in a simple and fast manner.

Tool 1: Performance level assessment – Individual and organizational

Performance Levels	Examples
	Our organization	Myself
Level 1 “Do something”	Deliver no matter time, quality, or cost	Just show up, put “time” Stay late
Level 2 “Do it right”	Standardize Get the lowest cost	Follow procedures every time
Level 3 “Do the right thing”	Make customers happy, fanatic	Listen, and explore clients’ experience
Level 4 “Do the right thing right”	Win-win efficiencies with clients – Customer experience	Use FAQ, Tweet, and Facebook to gather client feedback
Level 5 “Do the right thing over and over”	Co-create new products with clients' Blog	Client Wiki for new product development (“Open value proposition architecture”)
Level 6 “Revise success formulas”	Ask what customers, and markets will we serve in the future Develop a vision derived from Ideal Vision	“Why not” – Explore new formulas

Low performance ranges between levels 1 and 2, competitive performance between levels 3 and 4 and high performance requires reaching levels 5 and 6

During market downturns and recessions, the Schumpeterian[1] “gales of creative destruction” cull Level 1 and 2 performers from the market, forcing Level 3 and 4 individuals and organizations to raise their game to the realm of high performance.

Faced with a stagnant, Level 1 and 2- performance behemoth like GE was in the early 1980s, Jack Welch introduced a performance evaluation system focused on identifying and culling Level 1 and 2 performers, developing level-3 and 4 “B” performers and cultivating Level 5 and 6 players that transform the aging giant into a dynamic, innovative powerhouse that turned record returns on investment and stock during the next two decades.

Welch instituted a challenging, continuous selection, development evaluation and compensation program to inform people of their performance level and company standards. Welch saw individual and organizational performance development as his most critical role as CEO

“My job is to really deal with the extremes of the vitality chart. Principally, the top 10, bottom 10. Kiss them, love them, promote them, reward them, because one great performer’s worth five mediocre ones.”[2]

Welch applied the same approach to trim and strengthen GE’s business portfolio, classifying GE’s sprawling and overextended assets   according to its potential performance, focusing only in those industries where the company could lead and leaving those industries were GE could only be a secondary player–a typical Level 5 and 6 approach-

In 1993, looking at his work in retrospect, Welch summarized his approach in very clear terms:

“My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too. “[3]

Modeling Singapore after top-performing, developed countries and city-states, statesman Lee Kwan Yew set Level 5 and 6 performance standards for the entire country that brought a 640 square miles nation of 3 million people from Third World’s less than $ 1,000 per capita income in 1965 to First World’s $ 30,000 when Lee retired in 2000.

Lee’s words in defining a vision for Singapore are a good example of a roadmap to raise social performance from Level 1 to Level 6 standards:

“After pondering these problems and the limited options available, I concluded an island city-state in Southeast Asia could not be ordinary if it was to survive. We had to make extraordinary efforts to become tightly knit, rugged, and adaptable people who could do things better and cheaper than our neighbors because they wanted to bypass us and render obsolete our role as the entrepot and middleman for the trade of the region. We had to be different.[4]

By using a six-level performance framework –instead of a “one-size-fits-all”, generic approach-, individuals and organizations can develop a precise roadmap and standards to raise their performance to the top and stay there, reinventing themselves to survive and thrive in challenging times and deliver sustainable value to clients and stakeholders.

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[1] Austrian economist Joseph Schumpeter described the cycles of boom and bust that characterize –and renew- capitalistic economies as “the gales of creative destruction” (Schumpeter, 1939, 2005)

[2]  (Slater, 2000, p. 175)

[3] (Welch, Tichy, & Sherman, 1993)

[4]  (Lee, 2000, p. 7)