Evaluating leaders at a startup

Are performance reviews enough to assess leaders at a startup?

Startups frequently assess/evaluate employees during performance reviews. In some startups they happen every quarter. In some, twice a year. And in some, once a year. Irrespective of the frequency, they’re often revolve around OKRs and competencies.

1. OKRs measure what an employee has achieved
2. Functional competencies guage an employee’s expertise in their domain
3. Behavioural competencies assess how an employee behaves

But, should this be same for leaders too? If the performance review for a Marketing Head says that they’ve organised efficient marketing campaigns all throughout the year, does that make them a great marketing leader? Is that enough? Is that enough for the org to call them a great leader? Is that enough for the leader to take feedback and grow?

I don’t think so. I don’t think leaders should be evaluated just on performance reviews alone.

Before going further and answering this, let us understand leaders first.

How are leaders different?

An org is successful if they do the right things the right way. Leaders are the ones who help decide what is the right thing and which is the right way. Leaders help set up a strong vision. Leaders help teams figure out the right approach to reach that vision.

Leaders help define, promote, and govern the right thing to do and the right way to do it

Simply put, leaders are the conduits of organisational growth. They act as catalysts for organisational evolution. They define the organisational culture. They serve as role models for their teams and the entire organisation. Teams look up to them for guidance, mentorship, and assurance when things go South.

And, for a role that’s this important, we can’t just be banking on performance reviews alone to assess leaders. And, when I say assessment, it isn’t just to judge how a leader performed in the last 6 months. It is to also give the right feedback to leaders so that they grow. And when they grow, their team grows. And, the entire org grows.

Note that when I say leaders, I don’t just mean a higher designation. I mean anyone at an org who has a lot of leverage.

So, how should leaders be assessed?

Leaders should be assessed on the same parameters. OKRs, functional competencies, and behavioiural competencies. But, not just during performance appraisals. And, there are a lot of further nuances to these three parameters that need to be considered. Let’s look at these two factors in detail:

Firstly, the nuances: The weightage of the three attributes should be different for leaders during performance reviews. For a leader, highest weightage should be given to behavioural competencies. Which are nothing but the culture values of the org. Second highest goes to OKRs and lastly the funcational competencies.

As a leader, you aren’t just working on your OKRs. You’re also responsible for enabling your team to work on their set of OKRs. As a leader, you aren’t just living the culture values of the org. You’re also enabling your team to live these culture values. As a leader, you’re responsible for hiring, engaging, growing, and retaining the best talent. You should be evaluated on that too.

Your assessment shouldn’t just include your usual product & business OKRs. Your assessment should also have people based OKRs. Like, how culturally aligned is your team? How diverse is your team? How is the attrition in your team? How’s your team growing? How many folks are actively growing, getting promoted, picking new skills, etc.? All of these should also be evaluated.

Secondly, the frequency: Assessment shouldn’t just be during performance reviews. There should be a continuous feedback that should flow to the leaders. Focus on factors like eNPS (employer NPS) and mNPS (manager NPS) scores too throughout the year (via frequent surveys). Figure out a score for the behavioural competencies - How well a leader is living the culture values and how well are they enabling their team to live the culture values. Calculate these scores via the surveys often. The HR partners should do frequent focus group discussions with the teams and take subjective feedback. All of this, should be used to assess the leader.

In conclusion, assessing leaders requires a special approach that goes beyond the traditional practices. As said, leaders are the driving force behind an org’s growth. An org should take the right calls when it comes to anything related to leadership.

Disclaimer: Hey! These are my unfiltered thoughts, kind of like a stream of consciousness. I’ll be honest, I haven’t done extensive research. So, take all the information with a grain of salt. It’s mostly based on my personal observations and perspectives.

Hope you enjoyed the read! If you have feedback or a different perspective, I’d love to know. Catch me on Twitter or mail me at me@chettyarun.com Thanks!