Crystal clear Featured

8:00pm EDT March 26, 2009

When Holly J. Mitchell took over as CEO of Crystal Stairs Inc. in 2003, she realized the organization needed to evolve.

The nonprofit, which works to provide early childhood care and education, had never adapted to its new size following a period of rapid growth in the 1990s — from a small nonprofit into a 350-employee the organization with an operating budget of $130 million.

And there was too much emphasis on looking to the top for answers.

“There was a line of middle management who were wonderful workers, compassionate people who did their jobs at their level well and really looked to leaders of the organization for answers, direction and strategy,” she says.

To adapt to the organization’s increased size, Mitchell wanted that to change. Instead of having people look only to the leaders, she wanted employees at all levels to step up and assume a certain level of responsibility. To begin that process, three years ago she began instituting a pay-for-performance system.

Smart Business spoke with Mitchell about how to turn your employees into leaders and how to focus your organization on performance.

Spread the responsibility. For this institution to continue, we’ve got to grow leaders from within. Part of that is taking on different and higher levels of responsibility as managers within the organization.

So we instituted a budgeting process that required managers take on a greater level of responsibility for developing and managing the budgets for their departments. It was a push down, from my perspective, in terms of management in responsibility.

Whoever is in the seat of leadership, it shouldn’t matter because all of us have a responsibility for maintaining this organization and the integrity of its work.

I’ve worked since I came in the door to spread the responsibility, hold folks accountable at a different and higher level than they had been, and really create a new paradigm around accountability and responsibility as managers of the organization.

That’s the way I know how to lead, and I believe that’s the best strategy in terms of truly creating an institution where, as my grandfather would say, ‘One monkey don’t stop no show.’

Create metrics for accountability. When we made the transition to our performance management system, we created a whole system where supervisors work with their staff to develop their performance plans for the year, develop metrics by which they would be measured and, therefore, held accountable.

We created documents that each staff member has the opportunity to work with their supervisor to develop their individual performance plan and their individual professional development plan for the year.

So in January, when you work with your supervisor to develop these documents, you both sign off. You understand those are the standards by which you are being appraised. Meeting those standards will determine whether you will get an increase and what level. Instituting this performance management team really helped solidify an expectation around performance.

We had to look at and refresh job descriptions. We created standards by job description. If you’re a specialist, we developed baseline standards on what your skills needed to be and what your work performance needed to be. Standards for how many pieces of paper you were expected to process, how many cases you were expected to manage. We had to create those norms and standards by which people would be held accountable.

The process of creating those metrics involved input from staff and management. We looked at the work. We looked at funding terms and conditions. We looked at a variety of data points to determine what was reasonable for each employee in every job.

There is flexibility based on how many years you’ve been here, but for every job, there would be some basic core standards that are expected of employees. If you’ve been here 15 years, the core standards for your job may be the same as your office mate, but your individual performance plan may be different.

You may be higher on the pay scale, having been here longer, so there is a different expectation for you individually, but there is a core level of standards for all jobs in the organization, including mine.

Explain how things work. I spend a great deal of time helping people connect the dots — understanding our funding sources, understanding the source of our revenue, helping them connect the work they do. If we have a dip in productivity, show them how that impacts our revenue and, therefore, the type of decisions we have to make.

We earn our revenue based on the number of families we serve. So people understand, ‘Oh, gee, if I meet my goal and enroll 20 families a day, I’m contributing to the revenue that keeps this corporation running.’

Having a fuller understanding about their role, the kind of work the organization does and how that plays into the revenue that we earn ultimately helps people understand the decisions that are made that may have an impact on them as employees.

For example, I update the staff when the board passes the corporate budget about how that will impact them. This year, we had to make an adjustment to benefits, had to pass on more costs to employees.

Two weeks before Christmas, I had to tell employees that we were not in a position to make pay increases available beginning in January. I was overwhelmed by the responses from staff members who said, ‘We get it. We understand. We’re glad we’re not getting pink slips.’

I’m crystal clear that’s due to the work we’ve engaged in the past year and a half in making sure our employees understand how we earn revenue and how the external landscape directly impacts that. Three or four years ago, it would not have been received the same way.