You've finally found it…
Whether you are in growth, turnaround, or exit mode — your objective is to create sustainable increase in profitability. That means optimal performance from EVERY member of your team.
BUT, according to Gallup's most recent annual research, engagement among US workers is holding steady at a scant 31%. This means that seven out of ten people are either "checked out" or actively hostile toward their employers. Seven out of ten.
The truth is, ALL business owners and managers are at various levels of STUCK.
At this level, it's not so much about DOING things but
about GETTING THINGS DONE through other people.
There's just so much to consider when you need to get things done through people who have a mind of their own.
But you don't have to stay stuck. We have a 7 Step process to help you master this performance improvement stuff on a company-wide level…
And by "stuff" we mean…
The Process
It's the same process every successful company ultimately evolves. In fact, it's at the heart of every successful sports team. We have applied this process in every type of company imaginable — consumer products, consumer services, aerospace, health care, business services, and more.
THE Performance Improvement Plan (THE PIP) is a systematic process for getting EVERY member of your team working in alignment, inspired to hold themselves accountable to performing at their best to achieve your business vision.
This process works for small and enterprise level businesses. It works for mom-and-pop shops and billion dollar retailers. It works whether you sell services or widgets.
This process works because it incorporates but goes beyond strategy… can work with but does not require software… works within but can unify disparate corporate cultures…
… it is a systematic process that:
- creates alignment for maximum efficiency and productivity
- drives accountability to the budgets and performance metrics of your business strategy
- inspires engagement and therefore the best performance from every member of your team
THE PIP is a systematic, 7 step process for consistently increasing productivity for maximum sustainable increase in profitability and business valuation.
Before We Begin: The Three Most Important Words to Success
Before we walk through the 7 steps, let me share a simple three-word sentence that is the secret to success in any endeavor. Whether business or personal, these are the three most important words to success in any undertaking. You should think of them before you say or do anything. They are the foundation for everything that follows. They are, simply:
Read carefully. This is the stuff they don't teach in business school.
If you don't know what the goal is, how will you achieve it? Moreover, in a business setting, if you are not clear on your goals, your employees can't possibly achieve them. Identification of the goal is essential to the execution of any strategy to achieve it. Once identified, you can develop any number of strategies to achieve a goal — but it all starts with knowing "What's the Goal?"
Thus, it is essentially common sense (though not common practice) that the formula for success in any endeavor is:
- Clear and Quantifiable GOALS
- A Comprehensive STRATEGY to Achieve the Goals
- Systematic EXECUTION of the Strategy
The value of any strategy, without regard to how brilliant or well-conceived, is a function of the effectiveness of its execution. And all business strategies must be executed through people. Thus, success is simply not as easy as 1-2-3.
Thus, not only is it essential to clarify and quantify your goals as well as to develop a comprehensive strategy to achieve them, but it is critical to execute through an engaged team working in alignment toward a common goal.
7 SIMPLE STEPS
In everything you do, start with "What's the Goal?" — yes. But let's take it a step deeper — having a clear goal is critical to success in achieving it. But knowing WHY? you have set the goal gives you PURPOSE. And purpose is what separates the companies that push through obstacles from the ones that fold when things get hard.
It's not enough to know, for instance, that your goal is to increase revenue. You need to ask yourself WHY? Which of these companies is most likely to achieve its growth goal?
- A company growing because the owner needs to cover personal debt
- A company growing because the owner is like someone who has made a New Year's resolution to lose 20 pounds — it's a nice idea, but without a compelling WHY it fades by February. Compare that to a bride who must fit into her wedding dress — she has a date, a dress, and a reason that makes failure unthinkable.
When you ask WHY, you don't only have a goal. You have a purpose. And as Simon Sinek puts it best:
People don't buy WHAT you do…
They buy WHY you do it. They buy your promise to them.
When your WHY is out of alignment with your customers' WHY, sales decrease.
When your WHY is out of alignment with your vendors' WHY, quality diminishes.
When your WHY is out of alignment with your employees' WHY, execution declines.
Getting clear on your WHY is fundamental to the success of your business. This is your MISSION. It is the reason your company exists.
Your success is built upon:
- MISSION (WHY) — the reason your company exists
- VISION (WHAT) — where your mission will take you
- STRATEGY (HOW) — the plan to get there
(And yes, VALUES are critical as well — but we cover that in another context.)
From 58% to 83%+ On-Time Delivery
We've worked extensively with numerous companies in the aerospace industry. There are three primary ways you can compete as an aerospace contractor: Quality, On-Time Delivery, and Price. You can only pick two.
One client had averaged on-time delivery for only 58% of all orders in the previous three years. Listening to the interaction between salespeople and customers revealed that price was the primary focus of the sales message — despite management having chosen quality and on-time delivery as their competitive differentiators.
After working through the WHY process with the entire team, the rallying cry became "On Time Quality without Compromise" — which every employee was required to memorize and exemplify. No more excuses. No exceptions.
The result:
- Employees ON TIME to work
- 83%+ and growing ON TIME delivery
- Sales team shifted focus from price to value — higher profitability
- The culture shifted structurally: clean workstations, focus on machine maintenance
(they build components for space ships)
In every endeavor, business or personal, start with "What's the Goal?" If you don't know what the goal is, how will you achieve it? How can you rally your team around it?
Here, it is important to ensure that your GOALS are quantifiable — expressed in specific numbers in terms of revenue ($), units sold (#), or market share (%) AND timeframe. In this way you will be able to give each member of your team numeric goals.
If your GOAL is to be "an industry leader" — that is a lofty aspiration. But it is not a goal that can be used to align your resources or drive strategy until you translate it into a quantifiable objective.
Better But Not Perfect
"We will achieve $[X] in revenue with a [Y]% profit margin by [date] by being the recognized leader in [specific niche]."
The more granular the goal, the more quantifiable. The more quantifiable the goals, the better able performance can be numerically measured; thus enabling each employee to see how their performance impacts the ultimate achievement of the VISION.
Everyone within your organization has a specific contribution to make to your success. If they are to work efficiently, they must be aligned — not only philosophically but operationally — with your strategy.
According to Gallup's most recent annual research, engagement among US workers is holding steady at a scant 31%. This means that seven out of ten people are either "checked out" or actively hostile toward their employers. Seven out of ten.
(Gallup 2024–2025)
If on average 69% of your team is disengaged — checked out or actively working against you — your company is operating at a fraction of its full potential. What is that costing you?
There are basically two ways most managers try to motivate people:
- Carrot — the coddling
- Stick — the threatening
Neither of them is effective long term. If you are using the stick approach, you need to be present. The moment you let up, that employee will revert. If you are using the carrot approach, you may be creating a situation in which you only get the performance you're already paying for through a salary by offering the bribe of a bonus.
By these definitions, you don't want to motivate your employees. You want to learn to inspire them.
The difference: motivation is an external force imposed upon a person. Inspiration is an internal force you cultivate within a person. The magic of the overall system is to inspire people to hold themselves accountable — not to hold them accountable through constant monitoring.
If you want to start increasing productivity today, increase employee engagement. If you want to increase engagement, give your employees a sense of accomplishment. Give them clear goals and an objective standard by which to measure their performance. An engaged workforce is a productive workforce.
EVERY company benefits from developing a strategy before taking action. When companies operate without a strategy, they run like a rudderless ship — going in circles or constantly putting out fires that a good plan would have prevented.
How many companies do you know where they pride themselves on their ability to overcome problems? How about not encountering the problems in the first place? That takes planning. That takes a strategy.
Consider football. On game day, in any given situation, only one person speaks in the huddle — the quarterback. And when he gets in the huddle, all he says are three things: Formation. Play. Count. With just three instructions, all eleven people immediately know their assignment and what to do if the defense makes adjustments at the last moment.
Does your management team know what to do in any given situation? Can you just go on vacation for a couple of weeks without your phone or laptop?
Compensation to employees is the largest line item on most income statements. In and of itself, profit is not derived by developing the greatest products or services. Profitability is a function of creating an aligned and engaged team that efficiently designs, refines, produces, markets, sells and supports those products and services for maximum sustainable profitability.
You can have the greatest product or service in the world. You can have a brilliant business strategy. But even the most brilliant strategy, unless effectively executed, is worthless. It is the efficiency of execution that determines the degree of profitability. And all business strategies must be executed through people.
Picture this: the quarterback calls a pass play. He takes the snap, scans the field, and sees his receiver wide open. Just as he steps into the throw for an easy touchdown, he gets creamed — because the guard missed his block.
You won't see the owner of the team come down from the box and storm onto the field to scream at the guard who missed his block. You won't see the coach run off the sideline to scream at the guard who missed his block. And nine times out of ten, you won't see the quarterback scream at the guard who missed his block. Why?
Because everyone in that huddle knows who blew their assignment. Everyone was focused on the same goal. Everyone knew the strategy. That guard knows he let everyone down — and he knows everyone else knows. He will hold himself accountable.
The clarity of the goal and the strategy, along with the transparency of responsibility, creates an environment of accountability — one in which each individual holds themselves accountable. That is Level 3 Accountability. That is the goal.
You've done the hard part. You have clarified your goals. You have gained the buy-in from your team. Together you've developed a strategy and the appropriate members of your team have accepted responsibility for their respective areas. Now you must develop a means of monitoring performance.
It is essential that you develop a consistent, objective, and transparent performance monitoring system — a systematic approach that creates Level 3 Accountability:
- Consistent — not only in the information monitored, but the time intervals for monitoring as well
- Objective — performance is measured in quantifiable terms
- Transparent — everyone knows how everyone else is performing and how it impacts the overall goal
Much like the scoreboard in a sporting event enables everyone to know the status of the game at any given moment, your system must ensure that the goals of the company are no longer abstract. It must accurately depict the status of the company in achieving its goals — in real time.
The final element of an optimal performance monitoring system is adding the time element. Every company of every size in every industry has three resources in common:
Of the three, the most precious is time. People can be hired, trained, and developed. Money can be borrowed, raised, or earned. The only resource you cannot manufacture, borrow, store, or acquire is time.
Adding a time element to your performance monitoring system is absolutely crucial. Every goal, every task, every function must have a time element ascribed to it. And the system itself must be conducted on a regularly scheduled basis at time intervals that allow for timely course correction — because not every goal will be achieved on time.
Time truly is money. Build consideration of time into every aspect of your operation.
The Result of All Seven Steps Working Together
THE PIP is, in fact, a systematic process for creating sustainable increase in profitability.
Just as a performance improvement plan is usually employed when the performance of an individual employee requires improvement, THE PIP will systematically improve the performance of your company as a whole. And, just as a performance improvement plan is put in place to reverse an undesirable trend, THE PIP is a permanent solution to low productivity, low morale, diminishing profits, lower cash flow, and most, if not all, low performance indicators.
But don't simply take my word for it. Download THE PIP Checklist and determine for yourself the positive impact that THE Performance Improvement Plan can have on improving productivity in your company — today!
This article was first written in 2013. The seven steps have not changed. What has changed is the enforcement architecture underneath them — built from forty years of applying this system inside every type of company imaginable, and now enhanced by AI. The checklist is WHAT you can do to optimize the operation of your company. The book, PIP IT!, is HOW you can implement the checklist. And if you want it done for you, the operating system is an option as well.
