Out with Annual Reviews and in with Real Time, Smarter Feedback

“Performance appraisals wouldn’t be the least popular practice in business, as they’re widely believed to be, if something weren’t fundamentally wrong with them.”
-Harvard Business Review

In the past decade, there has been a rapid increase in the number of corporations throwing out the traditional annual employee review process and looking for something new. Companies from all over the world are ditching their outdated systems and replacing them with frequent, informal check-ins between managers and employees. At Scoutahead, our platform is designed to facilitate and improve upon this type of real time feedback where it matters most.

With a system that has been used for over a century, why are so many companies now looking for a new way to conduct performance reviews?

To start, corporations must invest heavily in the time it takes to complete reviews, which includes the mountains of paperwork they generate. Traditional reviews have also been criticized for restricting creativity, innovation, and not promoting a collaborative team-focused environment. Not to mention the supervisors and subordinates disdain for the appraisal process.

The Harvard Business Review piece, “The Performance Management Revolution,” gathered the following business imperatives that are leading companies to abandon performance appraisals:

  • In order to better their talent management efforts, companies have begun to put more of a focus on staff development. Firms are putting more employees in charge of their own growth, which is fueled by frequent, rich feedback from supervisors.
  • Business strategies are more focused on innovation, and future needs are continuously changing. Businesses no longer have clear annual cycles, projects have become short-term, and goals tend to change frequently, making annual assessments of work outdated and

In short, the traditional performance appraisal no longer make sense for the majority of businesses. HR information systems have started to adapt by moving annual appraisals online but they haven’t been designed to accommodate continuous feedback that positively engages their employees. Scoutahead fills that gap by providing a platform that facilitates employee participation in determining their own evaluation criteria and also enables them to solicit continuous feedback from their colleagues prior to their formal review. In this way, Scoutahead provides a next-generation platform that allows employees to take charge of their own growth, real-time.

To learn more, follow Scoutahead on Twitter.

Chicago: The Great American Startup Town No One Talks About

Source: Flickr

Source: Flickr

If New York City is the finance capital…

And San Francisco is teeming with tech talent…

While Los Angeles is known as the hub of Hollywood…

What does that make Chicago?

We’re a city that’s outgrown our traditional transportation identity.

Sure, we’re still a critical nexus connecting the East Coast to the West, Connecticut to California; but as a serial entrepreneur who calls the Windy City home, I’ve seen for myself and would argue to anyone … we’re also so much more.

Consider the following:

There’s a reason why increasing numbers of startups – including my own – are making the strategic choice to call Chicago home.

Namely, a healthy, diverse ecosystem of business, big and small, that supports one another other.

Larger institutions invest in the agility, creative thinking, and potential of their smaller counterparts as a way to give them an edge over entrenched industry players. Because from banking to Boeing, IT to fashion, we all need upstarts to push the envelope and push ourselves.

One illustrative example. Scrappy Chicago apparel startup Trunk Club took on fashion powerhouses by being more convenient, more customer-service centric for savvy and reluctant shoppers alike. They paired personal stylists with individuals, and delivered clothing optimized for every consumer’s shape, style, and budget size.

Their success was meteoric – and continues today after being bought by Nordstrom for a formidable $350m sale.

But it’s not only symbiotic relationships that make Chicago’s business landscape so great – it’s our sheer diversity. Where as other cities can cling to one sector, Chicago defies the mold and brings numerous differentiated industries huddled together in one place.

Among the Fortune 500 companies headquartered in the greater Chicago area: United Airlines, Allstate Insurance, McDonald’s, Exelon, Motorola, Kraft Foods, Sears, Walgreens- from healthcare to technology, I could go on, and on.

Here’s what I can say from personal experience: what makes Chicago a great place to live and work is that this is a city that brings people, professionals, and businesses – from all walks of life – together.

What makes us different, makes us complementary, makes us stronger.

Chicago has an energy that all it’s own, one that you can’t easily summarize or quickly stereotype.

It’s the startup town no one is talking about, but probably should.

The Limits of Traditional Talent Management

Why More and More Companies are Ditching the “Old” and Ushering in the “New”

You don’t have to flip far through the Business pages these days to find yet another report of a Fortune 500 Company dumping its outdated performance assessment structure.

Take the example of Goldman Sachs. Apparently no employee likes to be reduced to a number – not even those who trade in them.

Goldman, like dozens of forward-thinking companies in every sector, of every size, is scrapping traditional, top-down quantitative performance systems in favor of egalitarian qualitative performance evaluations.

Here’s why the Goldman decision matters for you and your business.

First, quantitative structures ignore naturally occurring biases and human subjectivity. On a scale from 1 to 5, a certain manager’s ‘three’ may be another manager’s ‘four.’ And unfortunately, it’s all too often the employees themselves left scratching their heads to figure out what really means what, and what that really means for them … really.

Qualitative structures acknowledge the stabilizing framework of aggregated results, but go deeper by prompting for much needed constructive explanation.

What is it, exactly, that makes Tom’s presentation skills so resonant and Tina’s client management so masterly? And how can they apply the learned dexterity from one aspect of their job to become more efficient, more effective, in all that they do?

People learn from personalized, individualized reviews – not numerical equivalencies.

Second, top-down performance systems follow organizational hierarchies. Executives reviewing VPs, VPs reviewing directors, directors reviewing associates, and associates –well, you get the idea.

The problem? Finding solutions to your most pressing business problems doesn’t usually work that way. As any crowd-funded success story will illustrate, good ideas often bubble from the bottom, up.

Successful leaders understand that their job isn’t to claim a monopoly on all the right answers – but to spot and support them, wherever and whomever they come from. Performance systems that not only allow, but encourage colleagues from different business and departments to offer their words of advice to one another make it easier for leaders to spot, support, and sustain emerging talent. That makes the organization as the whole better, more unified, and stronger.

Third, old-time quantitative systems most often take the form of annual assessments. Think about that for a moment … do you want your employees only to improve once per year?

If you’re like the rest of us, you’d prefer to measure and monitor meaningful continuous improvement. That’s why when everything in our lives, from TV to food delivery, is on-demand, so should be workplace guidance.

Qualitative and open-sourced performance structures allow for employees to intake reviews on a deliverable, a project cycle, a growth term as you define it.

That’s employee development, on your terms.

Freezer Burn. Random Order. Jumbo shrimp. And… Managing Millennials?

Any of the first three could be used to illustrate the definition of an oxymoron – the latter?

Not so fast.

CEOs, business leaders, and HR directors across the country took note this spring when a Pew Research Center report found that Millennials – those aged 18 to 34 in 2015 – officially overtook Baby Boomers as the country’s largest living generation.

For some, it sounded an alarm. There’s been no shortage of articles and analyses looking at this generation’s shortcomings.

But at Scoutahead, we’d say that anxiety is not only shortsighted, but also ill founded.

First, the Millennial-versus- Boomer tipping point should have come to as surprise to no one. As Boomers age and retire from the workforce, immigration is adding more numbers to the Millennial group than any other. In fact, the Millennial population is projected to peak in 2036 at 81.1 million.

Simply put, the sea change has been gradual, not tidal.

Our work places have already been grappling with – and adapting to – the generational differences for some time. From different mindsets to different communication styles, we’ve seen how our shifting employee demographic has altered our own ideas of what the workday should look like.

And if I learned anything as CEO of Chopper Trading – a firm brimming with young talent from schools like MIT and Stanford – and now the founder of a promising Internet startup, it’s this.

Millennials value growth – professional, personal, social – above all else.

Three implications to spotlight.

The more constructive feedback you can give, the better. Annual performance reviews just aren’t enough for employees who can get instantaneous reactions, comments, and advice from the web, social media, and other technology outlets. The millennial appetite for critical and growth-oriented review is insatiable. Regular and consistently delivered professional reviews are a must.

Millennials want a ‘coach,’ not a boss. It’s easy to delegate tasks and departmentalize responsibility. But Millennial employees demand more. They want a personal investment from managers in their day-to- day jobs, career trajectory, and professional opportunities. They’re ready to give their all to their work, but they want a more intimate commitment from their workplace superiors in return. It asks all of us to go above and beyond.

Millennials pride themselves not on meeting – but exceeding – expectations. It’s the logical extension of the often-lobbed accusation that this age group is “never satisfied.” And my for companies, that’s a good thing. I want employees who strive for bigger, better, bolder. I want employees who believe in breaking the status quo. I want employees who don’t see limits, but rather, opportunities. Your business should too.

My Summer Reading Picks

From summer road trips to summer internships, summer barbeques to summer blockbusters, the warmer weather means there’s no shortage of activities to fill our longer days.

You might notice a pattern. A lot of these choices focus on new approaches – new ways of thinking – that counter established facts we often take for granted.

Arianna Huffington tackles the urge for over-productivity and offers a reminder on the benefits of prioritizing self-care when so many business leaders ask for self-sacrifice.  Fiona Hill and Cliff Gaddy break down widespread myths and fallacies about Russian President Vladimir Putin, clarifying the man’s real ambitions and what they mean for the West.  Steve Case pushes possibilities of the technology revolution past anything we may have previously imagined . . .

I hope you find something to your own liking among these picks presented here in no particular order. Tell me, what’s missing from my list that you would recommend? As always, I look forward to your comments and suggestions.

Mr. Putin: Operative in the Kremlin, by Fiona Hill and Clifford Gaddy
The Brookings Institution just completed working group with our Finnish friends   on Russia’s implications for the West. The man at the center of every conversation: Vladimir Putin. This multidimensional portrayal puts Putin’s ambitions and priorities in perspective with his past and purely Russian way of thinking.

The Sleep Revolution, by Arianna Huffington
In an age when work and personal lives are blended together more and more, Huffington makes a compelling case that sleep and self-maintenance have even greater affect on your performance in both worlds.

The Third Wave, by Steve Case
Technology today has the potential to enable entrepreneurs to revolutionize every sector of the economy. What’s to be gained? What’s to be lost? And what does it all mean for you?

Smarter Faster Better, by Charles Duhigg
From the author of the Power of Habit comes a probing – yet applicable – examination of the science of productivity. With an appendix of real-world lessons, Duhigg teaches his readers to manage how they think, instead of trying to control what they think, for meaningful, measurable advantages in navigating daily life.

Are We Smart Enough To Know How Smart Animals Are?  by Frans de Waal
Many of de Waal’s scientific aims simply come to prove what so many pet owners already instinctively understand. Animals have surprisingly rich inner lives and strong intellects.  But just how rich, and exactly how strong, might surprise even you.

The Road to Character, by David Brooks
As a Democrat, I don’t always agree with the New York Times columnist’s politics, but I always appreciate his insightful looks at the values, desires, and machinations that motivate Americans today. Brooks looks at how society does a good job of cultivating the “résumé virtues” (the traits that lead to external success) but not our “eulogy virtues” (the traits that lead to internal peace of mind). Worth reading for anyone reflecting on what it means to live well.

Grit, by Angela Duckworth
This MacArthur Fellow – better known as a recipient of the “Genius Grant” – argues that passion and perseverance are the keys to success over intelligence, happenstance, or luck. Dwelling on her own experience as a pioneering psychologist, in education research, and clinical look at the most successful American CEOs, she unlocks the path to achievement. Her takeaway? Success isn’t a function of ‘genius,’ but of ‘grit.’

Ted Talks, by Chris Anderson
We’ve all heard that more people fear public speaking than death itself. But since taking over TED in the early 2000s, Anderson’s unspooled the secrets of delivering an applause- worthy speech without turning green. For anyone who’s marveled at the presence and poise of a TED speaker, this book is for you.

The Code of the Extraordinary Mind, by Vishen Lakhiani
For the goal-driven, this book packs a powerful punch. By looking at unconventional leaders and non-conformist ways of thinking, Lakhiani will have you asking yourself: “what does it really mean to think on your own terms?”

When Companies Invest in People… Good Things Happen

Last week, I shared an article by leading innovation consultant Brad Power in the Harvard Business Review that spoke to our core belief at Scoutahead™. Simply stated, that successful companies find, make, and take the time to gather valuable information and insight from their own employees. Not just intermittently, but regularly.

The conclusion? Checking in with your people isn’t only good for morale, but good for business bottom lines.

In the HBR piece, “Why John Deere Measures Employee Morale Every Two Weeks,” Power links to a 2015 study conducted by SHRM/Globoforce that makes a credible case that “cultural differentiators” were the keys to “engage, nurture, and attract employees” and that a “best-in-class culture was predicated on recognition and appreciation”.

In short, companies that want to recruit and retain the best people, the people who deliver the best business results, promote an inward and outward culture of respect and recognition.

By tracking the element of motivation, alongside such metrics as development speed and quality, teams have achieved between a four- and eight-fold increase in the amount of product development work they deliver every two weeks (a metric called “velocity”). And, in turn, that means this can significantly reduce the time it takes to bring new products and new features to market”.

– Harvard Business Review

As Scoutahead™ prepares for our official launch this summer, we are counting on this thinking to change the face of employee-engagement. But, we take it a step further.

We believe that employees today have more power than ever to manage their own professional growth – and deserve to do so in an environment they can control. That’s why we’ve built the Scoutahead™ platform with the principles of anonymity, privacy, and confidentiality at the core. Scoutahead™ users are confident that the information they give (and receive) is entirely their own.

It’s truly information you – and only you – can see and use.

Why stop there? We’ve also developed the functionality to be a tool people can use independent of their company and workplace… a technology that makes it easy and fun to engage the community of their choice, whether that is a small group of co-workers, or friends and family.

These, and a host of other features rolling out over the next few months, make Scoutahead™ a never-seen-before informational engine for companies, employees, individuals, and students alike.

As more companies – from the ranks of the Fortune 500 to scrappy start-ups – harness the full power of their own people, I look forward to sharing their stories, transformations, and testimonials here and on Scoutahead™ social media channels. With Scoutahead™, the potential is only limited by your own imagination.

Big things to come . . .

Raj.

Changing the Way We Get Information

In a crowded space of job sites … company rating forums … professional networking tools … online surveys … social sharing … automated annual reviews … and all other digital feedback mechanisms, it seems that every which way you look, there is another ‘latest and greatest’ platform promising “confidential, anonymous, private, and closed network” data for business and daily life.

But what about security?

What about guaranteeing credibility?

What about soliciting information not for information’s own sake, but to gain meaningful insight?

When I founded Chopper Trading in 2002, I knew my company was only going to be as good as my people. That’s why I placed a premium on building a strong and vibrant workforce from the ground up.

I believed that if every employee was encouraged and empowered to solicit credible information from their peers on their own performance, their own deliverables, their own aptitudes, they could then develop in their own careers on their own terms.

This free-flowing exchange of information became the lifeblood of Chopper Trading’s success. The best part? If it worked for us, it can work for you.

Today, we have more opportunity than ever before to use the power of global networking and engagement in real-time, but it’s worthless unless we can assure we’re dealing and receiving authentic, credible intelligence. Simply put, we must do more to ensure the information we’re using is what we need to hear, not what others want us to hear.

It’s a challenge worth taking on. And so, my team and I have committed ourselves to systematically overhauling the mechanics of information sharing. We’re turning your garden variety “feedback, evaluation and opinion seeking” exercises into a legitimate exchange and delivery of the best possible information in a truly private and anonymous environment.

I am excited to introduce you to this new venture – a transformational platform designed to help everyone, everywhere get the right information from the right audiences.

Stay tuned for more information and for our official launch. Big things to come …

For more updates like these, follow Raj Fernando on Twitter and like Raj Fernando on Facebook.

Chopper Trading and the 2014 PAWS Chicago Fur Ball

This year, Chopper Trading once again sponsored PAWS Chicago’s Annual Fur Ball.  PAWS is the city’s largest no-kill humane organization, providing dog and cat adoptions, clinics, education, resources, and animal advocacy. This year’s event featured raffles, live and silent auctions, special guest appearances, and adoptable pets. All attendees were invited to bring their dogs, of course, and some pets even donned their best attire for the occasion!

Chopper Trading has always been proud to support PAWS Chicago. The work PAWS Chicago does to set new standards for the way that homeless animals are treated is incredibly important to the local community.

For updates on Chopper Trading activity, follow Raj Fernando on Twitter.

Photo: PAWS Chicago

 

 

Chopper Trading Intramurals: Soccer Update – Summer 2014

If you follow my blog, then you know that Chopper has an excellent soccer team that plays in the evening on Monday nights.  The games are hosted by the Chicago Sport and Social League, and are played with 11 players from each opposing team.  To recap this past season, Chopper’s 17-person team ended the summer with a clean 2-0 victory at the finals to win the whole division!

As clear as the final victory was, the players tell me it wasn’t always so easy to win with solid margins. The preceding semi-final game was apparently one of the toughest games the team played all year.  They managed to pull through with a 3-2 victory, much to the credit of Chopper’s goalie who blocked three of the five shots from the opposing team.

As with any activity, having a good mascot has been essential to the team’s success.  Since my dog Chopper is the firm’s mascot, it only makes sense that our soccer team have a canine mascot, as well. One of the players always brings her dog, Ollie, to boost morale.

If having a cool dog for a mascot and enjoying the sport were not exciting enough, I hear Chicago’s unpredictable weather also contributed to the excitement of the season.  I recall a story of one game in which a spontaneous thunderstorm erupted out of perfectly clear skies, soaked the players for five minutes, and then evaporated as quickly as it arrived.  That’s lake-effect weather for you!

For updates on Chopper Trading activity, follow Raj Fernando on Twitter.

Chopper Trading’s Chess Team

Chopper Trading employees apply themselves to a diverse array of sports and hobbies in their free time.  One of those hobbies is chess, sanctioned by the Chopper Chess Team, which plays in the East Division of the Chicago Industrial Chess League.  Seven of Chopper’s employees meet once a week to practice and prepare for competitions scattered throughout the fall, winter and spring seasons.

While some activities can be picked up and set down without too much difficulty, chess is not one of them. Since the team’s creation in 2012, it has exhibited the dedication necessary to excel at the game, and the hard work has paid off in a big way.  Every player has demonstrated consistent and marked improvement over time, culminating in a third place team ranking in the East Division this year.

From what I hear, Chopper players have frequently had the pleasure of upsetting higher rated players and teams.  In the 2012-2013 season, Chopper’s team won the league-wide “highest team upset award,” and a Chopper player won the league-wide “highest individual upset award.”

The Chopper Chess Team has improved its final standings every year. In 2014, the players achieved their best record with six wins and three losses resulting in the previously mentioned third place ranking in the East Division. While this technically qualified the Chopper team to participate in the league-wide playoffs for the first time, our players were unfortunately unable to participate due to travel and scheduling conflicts.

Nonetheless, Chopper’s team has led victories over employees from a number of prominent Chicago area businesses and institutions such as Blue Cross Blue Shield, the American Medical Association, Enova Financial, and Northwestern University.

Overall, I think the Chopper Chess Team is highly representative of Chopper employees as a whole: driven, hard-working, and always bent on improving.  I want to congratulate the team on a well-played season, and wish everyone good luck in their competitions this next year.

To learn more about Rajiv Fernando and Chopper Trading activity, follow @rajiv_fernando and @ChopperTrading on Twitter.