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W. Edwards Deming said 94% of problems in organizations are system driven. Only 6% are people problems. We all nod when we hear that. We love the quote. We put it in our slide decks. And then we go right back to building performance improvement plans.

The Work Institute found that 75% of voluntary turnover is preventable. Three out of four departures did not have to happen. And yet we're spending our energy on the 6% while ignoring the 94%.

Imagine you're a surgeon and your patients keep dying on the table. You blame the patient. You get a new patient and they die too. At some point, do you start to wonder if maybe the problem isn't the patient, maybe it's the operating room?

What You'll Learn

The faulty assumptions that get leaders stuck:

• "We need to hold people accountable for results" assumes performers control the variables that determine success. Research shows 70% of the variance in team engagement relates to managers.
• "A good performer can succeed anywhere" assumes talent is portable. A role that burns through three leaders in 18 months is a role design problem, not a talent problem.
• "PIPs help underperformers improve" assumes they're developmental tools. In reality, 67% of employees say performance evaluations are based on subjective observations, not clear metrics.
• "High turnover means we need to hire better" ignores that 71% of voluntary turnover stems from poor management, not bad hires.
• "Fixing individuals is faster than fixing systems" ignores the math. A PIP plus recruiting plus onboarding takes 15 months. Redesigning a broken system takes 6 weeks.

The four questions to ask before any PIP or exit:

1. The pattern question: Is this the first time the role has failed to deliver?
2. The load question: Was this role designed for a human or for a superhero?
3. The attribution question: Are we measuring people or the systems they're in?
4. The capital question: Where is your time and money actually going?

The plays for next week:

• Run a failure audit on your last three exits
• Build a system load assessment for critical roles
• Change performance conversations to start with what the person was asked to do and what they had to do it with
• Run stay interviews before exit interviews

Key Quotes

"A bad system will beat a good person every time. If your system makes failure likely, you will keep finding people to blame until you run out of people."

"We're not saying individual accountability doesn't matter. We're saying most of what we call individual failure is actually a system failure wearing a name tag."

"Fixing people is a low altitude mandate. Fixing systems is a high altitude mandate."

"If replacing your top performers with average performers would break the system, you're relying on heroics. And heroics don't scale."

"You can hear the problems while people are still on payroll, or you can hear them on the way out. That's a choice."

The Diagnostic Questions

• How many people have failed in the same role in the last 18 months?
• If you replaced your top performers with average performers, would the system break?
• When someone misses quota, how much was actually in their control?
• What percentage of your energy goes to people problems vs. system problems?
• Are you running stay interviews or just exit interviews?

Resources

• My Talent Sherpa: mytalentsherpa.com
• Talent Sherpa Substack: talentsherpa.substack.com
• Scott Morris / Propulsion AI: getpropulsion.ai
• Dripify: try.dripify.com/talentsherpa