THE NEED HIERARCHY

The first element in the mental model for performance consulting is the Need Hierarchy. This hierarchy includes four types of needs that must be defined and aligned (see Figure 2.1):

Business needs

Performance needs

Organizational capability needs

Individual capability needs

Business Needs

Business needs are the highest-order need; all other needs emanate from them. The term business need is typically used in for-profit organizations. In a not-for-profit organization, the term is frequently replaced with organization or operational need. A governmental organization may use the term agency need. Regardless of what it is called, this need must be achieved. Not doing so, over a period of time, threatens the viability of the organization.

Business goals and results are usually measured quantifiably. Growing market share is an example of a business need; it can be measured in terms of the percentage of market share, the number of new customers, and the revenue needed. Other examples of business needs are to increase customer satisfaction, increase operational efficiency, retain talent, decrease operational costs, and increase profit. In a not-for-profit organization, examples may be to raise enrollment, improve member satisfaction, and grow contribution to reserves. In a governmental organization, examples may be to increase citizen satisfaction with services provided, to lower cycle time, or to reduce rework. All of these needs can be measured numerically.

Let’s return to the situation within information technology described at the beginning of this chapter and determine what, if any, business need was identified. The director indicated a business goal was to manage operating expenses within budget. Currently, the director’s operating expenses are exceeding budget by 6 percent. How does that 6 percent translate into dollars? Is this the only business goal concerning the director? For example, the director mentioned that the current situation is resulting in “user dissatisfaction.” What is the goal for user satisfaction? What are the actual results compared with the goal? Is this goal one to also focus on? This is the type of information you seek when discussing business needs with a client.

Performance Needs

Performance needs describe on-the-job accomplishments and behaviors required of individuals who are performing within a specific job and who contribute to the achievement of business goals. Performance needs identify what individuals must do more, better, or differently in order to achieve the business goals. Performance needs are described in behavioral terms. The optimal source for this information are star performers—those individuals who are obtaining exceptional results. In our technology case, by interviewing star project managers, we learn that they are consistently following a documented project management process. These individuals also obtain specific requirements in conversations with the users for the application to be developed. In identifying performance needs, we could also determine what typical project managers are doing compared with what the stars are doing. This information helps identify performance gaps. A gap naturally leads to the question “What are the causes for the performance gaps?”

Organizational Capability Needs

Organizational capability needs refer to the infrastructure of the organization, including work processes, information systems, and incentives. The intent is for this infrastructure to support and enable practices required of the workgroup to achieve business goals. Organizational capability factors can be tangible or intangible. Intangible factors are those that, while unseen in a physical sense, are known to be true. Examples are norms, incentives, clarity of expectations, and amount of authority. Other organizational capability factors are tangible, such as the availability of vehicles, computers, and adequate space. In the situation where the project managers were having problems bringing projects in on time and within budget, organizational capability factors to be investigated could be the presence of necessary technology and equipment as well as the evidence of a proven process for forming project teams.

Any organizational factor can operate as either a barrier or an enabler. The factor will be an enabler if it encourages desired on-the-job behavior and accomplishments. The same factor can be a barrier if it discourages desired behavior and accomplishments. For example, if coaching is done effectively, it is an enabler to performance; if absent, it is a barrier.

Individual Capability Needs

Individual capability needs refer to the skills, knowledge, and attributes that employees must have if they are to perform as needed. Skills and knowledge are typically needs that can be developed. Attributes, however, are best obtained through the selection process because developmental time could be protracted and even unsuccessful. An example of an attribute for a sales representative is resilience. This is the ability to bounce back from the disappointment of losing a sale, evidencing enthusiasm and energy with new prospective buyers despite that disappointment. This is a difficult characteristic to develop through a learning intervention—better that it be assessed at the time of hire.

In our project management example, if teams are formed based strictly on availability of someone, the team may lack the necessary technical competence to get the project done within the agreed-on parameters. To what degree are project team members not performing because they feel they are inadequately compensated? This may be a question to consider. An incentive solution will only have sustained results if it is addressing a root cause of the problem.

We are introducing you to the four needs using terms that work for us. We know, however, that multiple words and phrases can refer to these same four needs. Table 2.1 provides some of the more common alternatives that you may prefer. Regardless of the term you use, it is important is to realize that your job as a performance consultant is to partner with clients to define and align these four needs.