The vast majority of leaders do not understand the crucial concept of performance.

They understand results, strategy and execution, yet all too often find themselves in exalted positions of power without having been exposed to the rudiments behind the single critical factor that, in the end, will decide the outcome of these three key business actions – human performance.

Let’s take the issue of results. Most leaders in the corporate arena understand their importance and how they are created and – not to put too fine a point on it - are usually obsessed with them. The evidence for this preoccupation is clear: results are measured, results are reported on, they’re factored into everyone’s objectives, celebrated when they are good and dragged through the dirt when they fail to meet targets.

The reason behind this preoccupation stems from how that leader is taught. Business schools have a tendency to put the focus on results to improve performance, instead of the other way round. Hitting targets (be they personal or organisational), including market share, operating profit, customer acquisition and cost reduction, are cited from the outset as the definition of good performance. It’s a fundamental thinking error and belief that, with no little irony, actually leads to under-performance and is producing generations of confused, target-driven executives who mistakenly believe good results and high performance are one and the same.

Human performance is the single biggest differentiator when it comes to the delivery of results and achieving a competitive edge. While systems, processes, technology and other tools may provide a temporary advantage, longer term and consistent success is not a direct product of having better tools or processes than the competition – often there is little to choose between the nature and efficacy of these. Contrary to popular belief at the highest levels, neither is talent a key factor here – there is nothing more common in business than unfulfilled or wasted talent. What does make the difference, however, is the passion, discipline and intensity with which those tools are deployed and utilised.

While the idea of human performance as the key differentiator is broadly accepted and paid due lip service by many business schools and professors, the practical reality is missing from the prospectus, leaving graduates to skip off up the career ladder under the misapprehension that performance management and coaching is part of the ‘soft stuff’ and something to be delegated to the HR team. This is as grave an error as delegating the delivery of results entirely to finance just because that’s where they’re reported.

The effect of this lack of grass roots education and understanding is highly significant for leaders, the teams they lead, their employees and the motivational climate they create. It’s also deeply significant for shareholder value. If you don’t understand what performance is, how can you begin to measure it?

Leaders who fail to understand their own personal performance – how the technical and tactical components need to combine with the physical, mental, emotional and contextual – waste time and energy and will not extract the most out of themselves or their colleagues. Instead they ignore it entirely or rely on pure instinct that in many cases, is simply not good enough.

As a result, the business suffers poor performance and has to invest valuable shareholders’ cash in external performance coaching experts to compensate for this innate shortfall. We don’t outsource other core business functions such as sales or finance to third parties – we build, nurture and galvanise from the inside - so why throw performance out like it’s a bolt-on, third rate appendage?

Business leaders readily articulate how important motivation is for the delivery of results, yet despite a wealth of available research and data relating to motivational methodology they remain blissfully unaware of its execution. It is astounding that given its globally acknowledged importance, this gap in top tier education is tolerated and allowed to perpetuate along the legacy line.

The impact is clear in sub-optimal levels of engagement, in a failure to create an environment that maximises discretionary effort and in more shareholders’ cash being invested in fixing cultures that shouldn’t be broken in the first place.

Human performance lies at the heart of business success and while business schools and current leaders lay claim to understanding this, they are letting themselves and the next generation of rising stars down by failing to implement solid performance theory and coaching techniques within their educational and training programmes. If Britain is to bridge the performance gap, it’s nothing short of elementary.

Keith Hatter is chief executive of K2 Performance Systems.

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