Goodway, Inc.

, is a large pharmaceutical company with two key divisions that develop prescription drugs and over-the-counter medicines. Two years ago, Goodway ventured into the consumer health care market and created a third division to develop products such as mouthwash and body lotion. Each of the company's three divisions operates independently. They each have their own research and development, marketing, and sales staff. Unfortunately, little knowledge sharing takes place across divisions and cross-collaboration is virtually unheard of. One year ago, a new chief executive officer took the helm at Goodway. His mission is to bring the three divisions closer together in order to leverage capabilities and present a more unified face to the customer. He's made it clear that improving collaboration across divisions is his number one priority. Implementing the new vision is the responsibility of the firm's three vice presidents.

Paul Rosenthal, Vice President, Consumer Health Care Products

Paul has been a vice president at Goodway for the past two years. Paul is charged with growing his new division's revenues. The consumer health care products division has been designated as an area of high growth potential. If the division performs well, it will have a viable future. If it misses its revenue targets, the division may face cutbacks or even close.

Adam Mitchell, Marketing Director, Consumer Health Care Products

Adam is a talented marketer who reports to Paul Rosenthal. Paul has just hired Adam because of his strong track record of delivering outstanding results. In his previous job, Adam exceeded revenue targets three years in a row. Adam enjoys a challenge and is eager to generate the revenues needed to make the consumer health care products division a success.

Emily Reyes, Vice President, Over-the-Counter Medicines

Emily has been a vice president for Over-the-Counter Medicines for seven years. As a fellow vice president, Emily has been helpful to her colleague Paul during his two years at Goodway. Emily strongly supports the chief executive officer's mission to bring the three divisions closer together. She knows that cross-division collaboration will ultimately benefit everyoneespecially the customers. She is known for being a good manager and is well regarded by others in the company.

January

PAUL Adam, it's great to have you on board. We have an ambitious year ahead. As you know, all eyes are on usthis year is critical for bringing in revenues. Our performance will determine whether this division is viable. ADAM Our targets are aggressive, but I'm excited about the challenge. I think we'll be able to achieve our goals.

PAUL Terrific. One last thing: individual performance expectations are due in a week. Given our conversation, I think one of your expectations should focus on growing revenues. Another should focus on expanding into new markets. And the last one should probably focus on new channels. Could you draft these goals and get them to me by Friday? ADAM Sure thing.

our months later, April

Adam, Congratulations on the success of the mouthwash campaign. The numbers are phenomenal25% over target. Keep up the good work! Paul

he next day

PAUL Hey Em, what did you think about Adam's marketing campaign for the new mouthwash? Sensational results, right? EMILY Yeah, the results of the mouthwash campaign werefantastic. But Paul, can I give you some unsolicited feedback? PAUL Sure. EMILY According to my marketing group, Adam was difficult to work with on this campaign. My team was under the impressionin the spirit of improving corporate "collaboration"that they'd be working with him to brainstorm ideas and launch the new mouthwash product together. They told me he had his own agenda and wasn't interested in learning from our group. The irony is that the product launch was a huge success. His revenues exceeded everyone's expectations. PAUL Hmm . . . I appreciate your telling me this. I'll be sure to follow up with him.

A week later

Adam, I'm in New York today, but wanted to mention this to you while it's on my mind. I ran into Emily Reyes last week. She said that her marketing group enjoyed working with you on the mouthwash campaign, but that they had hoped to be more involved in the "process." Do me a favor, as you plan future campaigns, be sure to bring them into the loop. Emily's team is smartwe can learn a lot from them. Thanks, PaulThree months later, July

Goodway Quarterly Newsletter Revenues Skyrocket for Consumer Health Care The quarter is over and the numbers are in. Consumer Health Care had another tremendous three months. Marketing outperformed its budget by 18%. Sales were also over target by 9% . .

September: Voicemail from Emily to Paul

EMILY

Hi, Paul. Do you have time to talk later today? I want to discuss two things. First, my marketing group just finished up a project with Adam and they're completely up in arms. Some of them refuse to work with him again. The issue is his lack of collaborationthey say it's been an ongoing problem. The second thing is marketing expenses. One of my team members reviewed Adam's vendor costs, and the numbers were high. Apparently, Adam has been using his own vendor for direct marketing campaigns. If my calculations are correct, Adam paid $35K more than he would have if he'd used our vendor. I know you're busy, but this is important.
Later: Voicemail from Paul to Emily

PAUL

Emily. Got your voicemail. I'm surprised. I wasn't aware of this. Let's talk at 2:00. I want to hear what you have to say so I can address it in Adam's performance review; his review is coming up in a few weeks. I'll make sure we figure out next steps so this doesn't happen again.
Three weeks later, October 15

PAUL . . . yeah, I just got the e-mail from human resources. Performance reviews again. I don't know when

I'm going to get to them. Didn't we just do reviews? I guess I'll just pick a day, close the door, and get them done.

Two weeks later, November 1

PAUL

Two down. Four to go. Next upAdam Mitchell. Where's his self-appraisal? Here it is. Yup, in sync with my thoughts. A great year. First big success was the mouthwash rollout. Twelve out of 21 campaigns exceeded revenue targets. Expenses were a little over budgetmaybe because of those vendor costs Emily mentioned. Interesting . . . Adam didn't talk about his working relationship with Emily's marketing group. Wonder what he thinks about that.
Ten days later, November 11

PAUL As you know, the purpose of this meeting is to review your performance over the past year. We'll talk about what you did well, what you could improve, and next steps. I thought we'd begin with your selfappraisal. Tell me how you think things went last year. ADAM I think I had a great year. I had ambitious goals and worked hard to achieve them. The majority of my campaigns were successful. Twelve out of 21 campaigns exceeded revenue targets. I feel like our division hit its goals largely because of my campaigns. PAUL Our division did hit its aggressive revenue targets because of your successful campaigns. You did an excellent job of implementing creative campaigns, forecasting market demand, and generating revenues. I was impressed by your ads on drug store Web sites. Outstanding work. ADAM Thanks. Of all the campaigns, I was most pleased by the mouthwash rolloutmy first product launch at this company. PAUL Tell me more about that campaign. ADAM We generated 25% more revenues than expected. We blew it out of the water! PAUL Could you describe your working relationship with Emily Reyes's marketing group?

ADAM It's been fine. We met throughout the year to collaborate on campaigns. I found them helpful, but I didn't think they added a whole lot of value to our marketing efforts. PAUL Really, why not? ADAM They approach things differently. They rely on tried-and-true practices that work for their markets. Our markets are different. PAUL Do you think there are lessons they've learned that we could leverage? ADAM Sure, and I think we did.

he review continues

PAUL I'm asking about this because Emily Reyes told me that her group was frustrated working with you this year. Her group thought they would be more involved in the brainstorming and decision-making processes. They felt you had your own agenda and had little interest in learning from their best practices. ADAM What? That's ridiculous. If anything, I've bent over backwards to listen to their ideas. Name one time when I wasn't collaborative. PAUL Emily said her team felt that way on all the campaigns that you worked on together. She said it started with the mouthwash campaign. ADAM Look, my memory is foggy because the mouthwash campaign was nine months ago, but here's how I remember it: I analyzed customer needs, competitive products, market trends, and created several game

hen I met with her team, they ignored my research. We only talked about how they roll out products. I listened, but when I asked for data from previous launches, they seemed put off and said everyone was "swamped." I couldn't consider their suggestions without supporting data.

PAUL I can see how that would be a problem. So what did you do about it? ADAM I met with her group several times but conversations didn't get far. In the end, I worked with my team to craft a strong marketing campaign. The results were phenomenal. I don't see what Emily's team could have added to improve results. decision The performance review meeting did not unfold the way Paul intended. Paul knows he has to hand in a formal, written performance review for Adam's personnel folder. If you were Paul, what would you do at this point? Consider the following questions:

What should Paul say when he meets with Adam the next morning? How should Paul readdress the issue of collaboration so that he and Adam can have a productive dialogue about it? What should Paul say in Adam's written performance review?

he next morning
PAUL

. . . I've thought a lot about our meeting yesterday and realized that had I done things differently, a lot of what we're talking about wouldn't be an issue. For starters, I shouldn't have just rattled off your performance expectations. We should have worked together to write them in the context of your job requirements and aligned them with the company's goals.

ADAM

Then the corporate goal of improving collaboration would have surfaced.

PAUL

Correct. We would have discussed this goal, what it means, and how you would carry it out. And then put it in writing in your performance expectations.

ADAM

If this had happened, I would have no problem being evaluated against it.
PAUL

Another thing I should have done is followed up more proactively on Emily's comments. When she mentioned things weren't going well from her group's perspective, I should have asked her for more specifics, so I could have given you more constructive feedback. And then I should have talked with you in person to get your perspective. The second time Emily gave me feedback, I should have followed up with you immediatelyrather than wait for your performance review.

ADAM

Then this wouldn't have turned into such a big deal.

PAUL

Right. No surprises! There should never be any surprises in a performance review. Going forward, let's work together on the collaboration issue.

ADAM

Sounds good. After the meeting, Paul finished Adam's performance review. The review listed Adam's accomplishments against the performance expectations established at the beginning of the year. The review was strong as Adam exceeded all his goals. However, Paul did note that, in support of the company-wide collaboration goal, he and Adam saw opportunities for more cross-functional collaboration and would include this expectation in Adam's future goals. Paul also noted that he and Adam would create a development plan for the coming year.

The next day

Adam, Thanks for a good meeting yesterday. I've attached a copy of your performance review. I think you'll be pleased. If it looks okay, sign it and leave a copy on my chair. Let's schedule a time next week to create a development plan. Listed below are some of the things we said we would work on together:

Draft next year's performance expectations. Tie your expectations to corporate goals and include an expectation on collaborating with the other divisions. Ensure that your expectations specify any behaviors needed to accomplish them. Provide ongoing, timely feedback to each other about how things are going. Identify ways I can better support you.

I also want to participate in some of your meetings with the other divisions so we can discuss opportunities for and better approaches to collaboration. If I missed anything, let me know. Best, Paul While the initial performance review meeting was contentious, Paul and Adam dealt honestly with the situation by discussing what went wrong and what to improve going forward. From Paul's experience, we can learn much about assessing and managing performance. Performance reviews are part of an ongoing performance management process. As Paul discovered, managing performance is not a one-time event that takes place at the end of the year. Rather, it's an ongoing communication process between manager and employee whereby expectations are clarified and feedback is continuously providedall with the goal of improving employee

performance. The issues that surface during these ongoing discussions set the stage for the documented performance review at the end of the year. Paul recognized that if Adam's expectations had been clear and feedback had been provided, his performance review would have been relatively straightforward. However, since Paul failed to supply expectations and feedback, the performance review was a source of frustration and miscommunication. Effective performance expectations align individual expectations with unit and company goals. While Paul did a good job of aligning Adam's individual performance expectations with the unit's financial goals, he failed to tie them to larger organizational goals. Adam's expectations focused on growing revenues and expanding business for the division. While these expectations were important, the CEO had also made it clear that the divisions needed to collaborate more. Paul should have incorporated this goal into Adam's individual expectations by asking Adam to coordinate his marketing efforts with other divisions and to involve members of other teams in the decision-making process. Since this expectation wasn't articulated, Paul couldn't fairly address this issue in Adam's performance review. Productive performance expectations outline how job requirements will be accomplished in terms of behaviors as well as tasks. Paul did an excellent job of outlining the functional tasks that Adam needed to accomplish, such as growing revenue. He failed, however, to identify the behaviors Adam needed to exhibit while achieving these goals. A better expectation might have been: "Grow marketing revenues by 10% over the next fiscal year by working cross-collaboratively with the Overthe-Counter Medicines marketing group. Seek input from this group on at least six campaigns, involve key members of the group in the decision-making process, and take calculated risks." Because Adam's individual expectations were task-focused and behavioral expectations were not put in writing or discussed, Paul had difficulty at year-end holding Adam accountable for unspecified behaviors. When performance management is approached as a partnership, better results typically follow. In the follow-up meeting to the initial performance review, Paul recognized that he mishandled the performance management process. He acknowledged that had he worked more closely with Adam from the beginning, much of what transpired could have been avoided. Paul recognized that instead of dictating Adam's individual performance expectations, he and Adam should have reviewed Adam's job requirements and crafted expectations together. Had he done this, misunderstandings about what was expected of Adamwhether related to behaviors or taskscould have been avoided. Had a discussion taken place, Paul might have realized that Adam's individual performance expectations had not been aligned with the company goal of collaboration. In addition to developing performance expectations, Paul should have worked more closely with Adam over the course of the year to provide constructive feedback to help Adam improve specific skills. At the beginning of the year, when Emily mentioned that her group found Adam difficult to work with, Paul failed to ask questions that probed further. As a result, he left with an inaccurate picture of what had happened. He followed up by sending an e-mail to Adam to "keep Emily's team in the loop." Paul thought he had provided helpful feedback, but he didn't give Adam any concrete information to help him do his job better. Paul missed another opportunity to provide Adam feedback when Emily contacted him to talk about her group's ongoing frustration with Adam. She reported that her team continued to find Adam

uncollaborative and that, had he worked more closely with them, he could have minimized costs. While Paul followed up immediately with Emily, he failed to take what he learned back to Adam. Instead, Paul decided to "save" this feedback for Adam's upcoming performance review. Paul should have followed up immediately with Adam to better understand the situationand given Adam constructive feedback. Saving Emily's feedback until Adam's performance review was a poor course of action on Paul's part. Since Adam was unaware of Emily's issue regarding his behavior, Paul's feedback during the performance review took him by surprisesomething that should never happen in a performance review.