I am often asked whether I believe business leaders deliberately get in the way of high performance. The answer to that is an emphatic “no.” Sometimes people are just not good managers—they don’t have the rights skills to foster environments in which people can do their best work. However, a much larger problem is the effect of short-term focus on performance.
Because of market forces such as globalization and commoditization, companies feel they need to focus on the short term. Public companies have the added pressure of keeping shareholders happy. Reducing expenses, cutting staff and living quarter to quarter may drive short-term profits, but it’s killing high performance.
While it’s understandable that companies cut costs to increase profits, our research indicates that they way they are cutting—and how deep they are cutting— is harming their ability to grow profitably. Instead of discussing how to solve the problem with workers, they unilaterally mandate cuts. This often demoralizes high performers and takes away the resources they need to do their best work.