The PIP Formula

May 05, 2022.

When I ask any manager or business owner: “Do you believe you’re getting the full potential out of your staff members?”  The answers is almost always an easy ‘No’.

So when I ask their staff: “Do you honestly believe you’re currently delivering at your full potential in your role?”.  Again most often it’s an easy ‘No’.  So where does the problem lie?

If your staff aren’t delivering at their full potential, it is always your fault as manager or business owner.  Harsh, yes, but still true!  Your #1 Role as their Manager is to ensure they perform as close to their full potential as possible.  An easy way to do this is to understand the PIP formula:

Potential – Interferences = Performance

Yes we’ve all heard the cliché that potential is unlimited.  However potential is nothing if it doesn’t translate into some level of performance, delivery, success, action and so on.  Potential is also difficult to quantify and therefore almost impossible to truly manage.  However if we want to ensure Performance, as per the PIP formula, we can influence the Interferences.  As a manager or business owner you need to get serious about removing interferences and in doing so you will directly affect the formula in a positive way.  Any hurdles, obstacles, difficulties, challenges and the like, that hinder performance, need to be minimised or eradicated.

These may very well be business related but can just as often be of a personal nature – or combination of the two. The only way of knowing what they are will be some good ole fashioned communciation.  Spend time with your staff, ask questions and listen – remember the two ears and one mouth saying.  The more you understand where they are and what perceived or actual realities they face, the more you can do your job and assist by removing these barriers to performance.

Do this in order:

1.    Potential

First sit down with each staff member that reports to you, and have them physically write down what  they believe their full potential in their role as well as within the company may be.  Compare their writen down information with your assumptions and see where the overlap occurs.  Any major deviations can be discussed and then come up with a summarised version of what the two of you have collectively determined as their full potential within their role at the moment. 

2.    Performance:

Now discuss their current and past performance.  Review their KPIs, budgets and hard measures as well as their behavioural performance.  Don’t rely on memory, have the required information at hand and physically make notes.  This opens up the discussion around any shortfall, or surplus, between their potential discussed in Step 1 and their performance.   Any surplus means you need to revisit Step 1 as there is obviously scope for more.  Any shortfall will be as a result of one or multiple factors.  That then leads perfectly into Step 3 below.

3.    Interferences

Together, physically list as many possible interferences as you can.  If the two of you get stuck prompt further possible interferences by classifying them as business or personal related, internal or external, micro or macro etc.  Now have a discussion around what is within the ambit of control, what can be influenced short-term and work a plan around removing them first.  If it’s even necessary, after the easy stuff has been resolved, list a priority list of things that may take longer to fix or would require outside input.  Let them get to work on the easy stuff first, and over time, together work on the areas that would require more time, resources or input.

Remember, if you do nothing else other than maximise performance by assisting your staff to remove interferences, you will have a significantly better performing individual and company.  Use the PIP formula often and enjoy the fruits of your labour.  It works, DO IT!