Summary

• Principles must be clearly understood and agreed by everyone. This process begins as soon as someone starts work, and is reinforced every day.

• When behaviour is consistently in line with principles, people trust more and respect each other. This, in turn, creates trust in the customer.

• We all want to do a good job - it is basic to our sense of self. When people are truly valued and respected, they will do their very best.

• A company can be successful when actions and behaviour are congruent with principles. Only when those principles are people- centred can the company become great.

• Appraisal is an important tool, ensuring that people can use their talents effectively in the right job. Used regularly, it is a positive tool for self and company development.

• Ignoring poor performance is a matter of principle. It demonstrates a lack of respect for colleagues and is a major cost to the business. Great companies ‘bite the bullet' and address the issue, seeking the right job for each person.

Respect others - keep track of development

‘Respect for others' is a strong principle for Asda, as it is for many other great companies. It is played out on a daily basis in the relationship between colleague and manager. Regular conversation and support ensure that talent is leveraged for the benefit of the business and person alike.

Gal Shivti used to be part of the Retail-tainment team at Asda. He was the one who ensured that we all had a great time doing the shopping, returning later to the car park for a pop concert or a karaoke competition. ‘Asda Goes toTrolleywood' was his favourite headline!

But talent is never left to languish at Asda and he was approached by the chief operating officer to see if he would be interested in moving into Dairy to head up the team of buyers. You have to admit that that is a big jump and yoghurt is not necessarily a match for karaoke. He knew little or nothing about the ins and outs of the chill cabinet, but, as Gal says, ‘If the company has faith in you, you can believe in yourself.' Knowing that he would be given the support he needed, he took the job on and is having a great time with his new team.

Teamwork is the essence of success for Gal. His team are full of enthusiasm and love for their work and Asda. He puts a huge amount of effort into supporting and challenging them. Everyone writes their own appraisal and, with his input, this forms the basis of their development plan for the year. Their upward appraisal contributes to his own plan. For many companies this is where it ends until appraisal time next year. Such is his commitment to his team of six that Gal sits down each week with everyone to chat through their personal development plan (PDP) for at least an hour. This does not have to be a formal meeting - travelling to a store or taking lunch together is a great opportunity - but one way or another he has that conversation.

Gal is not alone in this level of care. Everyone in Asda has an appraisal meeting each month. Gary Hogan, MD at Flight Centre, agrees strongly that this is the only way to do it. He feels really sorry for the manager who does a yearly appraisal on a colleague's ‘day from hell' - it colours the whole year. Yet talk with them regularly about how they are doing and the process becomes highly productive. The concept of underperformance is anathema in great companies - through regular conversation and tracking of the PDP, they ‘strike while the iron is hot', before behaviours become embedded and tough to address. Looking for development opportunities, they see the value of acting fast. Plus the fact that if you believe in respecting people, leaving them in the dark is not the right thing to do - for them or for their team.

Action steps

Working closely with your team takes time. If your workload is too heavy to allow this, brush up on the main points of delegation or speak to HR about a course. With the time this frees up:

• Meet with each of your direct reports to find out how they are doing against their personal development plan and agreed objectives.

• Where possible, delegate work that will help them develop skills and talents in an appropriate way.

• If you struggle with appraisals, ask for help from your boss or HR representative to understand more about the process.

• Make sure you understand the talents of each person and be on the lookout for opportunities to develop them.

• If there is an issue that you have been avoiding, look at it from the perspective of the person concerned - what do they need in order to improve performance/do the best job? If you are not clear, ask them directly. Begin by expressing your concern and desire to help. Follow through on agreed actions and allocate time for regular meetings to track progress.

• If someone is underperforming, do not assume that you have to do all the talking. Ask the person how they think they are doing. We generally know when we are not doing well, and it can be a relief to talk about it. Listen to what they have to say, tell the truth, and look for the next steps together.

• Book a time for an appraisal/development discussion with your own boss. Plan which aspect of your work you want to talk about and gather relevant feedback from your direct reports. Afterwards, write out a clear development plan and keep track through regular meetings.

Guiding principles - a yardstick for behaviour

The only way to ensure congruence with principles is to use them as a yardstick of how to behave. Just as vision shows us the direction, principles show us how to get there. But that means that they must be heartfelt, that everyone is comfortable following them - and more important - is not comfortable when they are ignored.

Bob Henry, CEO of CORGI, lives the principles of the company every moment of every day, and in so doing has earned the respect of those who work with him, inside and outside the company.

Principles for him are the yardstick of behaviour, and every business decision is measured against them. When Bob came to CORGI, there was much tightening up to be done both in the way the company worked and in the registration of gas installers. Not a job to be messed with if we are all to sleep safely in our beds at night. If any installers let their training slip, they still retained their registration on the understanding that they would update the training as soon as possible - but that was not always followed up. Changing this meant taking a tough stance that could deprive a gas installer of their ability to work. Clearly a move you and I, as customers, would applaud.

Many of the businesses that register with CORGI thought Bob and his team would not do it. After all, the bottom line would be directly impacted as the income from registration fees were reduced - they thought it was just bluster. In truth, it is a tough decision for any businessperson - to take an action that will cut the bottom line income. What did they do? They made an assessment against their principle - demonstrate commitment. It reads: ‘We believe in the fundamental importance of safety and take pride in everything we do. We are committed to a safer world and ensure we always demonstrate professionalism, openness and integrity.'

Really pay attention to a statement like that and the decision is a no-brainer. How could CORGI allow a gas installer to pass the sell-by date of his or her training, when they have a commitment to a safer world and to their integrity? It just could not be done. So the step was taken and the numbers of businesses on the register reduced by about 12 per cent, which directly impacted on CORGI's income and the bottom line. But only for a while - now people know that they cannot afford to let their training go, and the world is a safer place for it.

Action steps

• Check out your company principles. How important are they to you? Under what circumstances would you override them? Use real-time situations to test yourself on the significance. For example, if being really honest with your boss could put your job at risk, what would you do? If a customer was treating one of your people disrespectfully, would you refuse to take the customer's money?

• Take the two most important principles and measure your work and work style against them. Identify how you can be more congruent - ie how you might ensure that your behaviour matches your words.

• The next time you take a decision, consider it from a principles perspective first.

• At the end of your next day at work, review your behaviour. Make a note of those actions that are not in line with principles, and identify what you should do differently on the next day. Do this on a regular basis. Build it into your day in a positive way, to make sure you do it regularly - for example, use your journey home to look back over the day and assess your effectiveness.

• If you lead a team, talk about the principles and how they fit your work. Ask each person to talk about what they mean to them, and why they are important. Encourage everyone to live according to the principles and give each other feedback on effectiveness.

• Include principles in appraisal/one-to-one discussions.

‘Brightness of Future' - building potential

Great companies build the principle of developing people into every moment of the working day. Ensuring that colleagues are stretched and appropriately challenged by their work is one way of building business potential. There is a risk that those you develop move on. A much greater risk is that those you do not develop, stay.

‘Our people need to see a clear pathway to achieving their hopes, aspirations and dreams. Flight Centre Ltd is the vehicle for that journey.' This ‘Brightness of Future', which drives people forward to discover the best in themselves, depends on leaders who keep a constant eye on their teams' aspirations.

Sonal is a perfect example. She arrived in Flight Centre bearing a degree in fashion plus experience of designing and selling knitwear in New York. Knowing she had not yet found her niche, she spotted an advert for an open interview for FC and decided to attend. It was really tempting - high bonus levels, opportunities for travel, and it sounded like a lot of fun into the bargain, so she decided to give it a go.

Clearly a young woman of energy and enthusiasm, she already has an eye to her future. I met her when she had been with the company for nine months. Describing herself as having been an enthusiastic drifter with little focus, she is now clear she has found the direction she wants. Working at FC she has built confidence in herself and truly believes she can do her best. The job of area leader is already in her sights, and she has put herself down for a training course to flag up her interest. The role is a couple of jumps away, but Brightness of Future means she has a clear development plan, assessed at regular intervals with her team leader to ensure that she has the best chance possible. I was left with no doubt that she will get there at the right time, with the full support of Jo, her own area leader.

Succession planning is not just for the top team. The job of every leader at FC is to ensure that each person, team and area of the business has Brightness of Future. This extends to when people want to leave. Should Sonal decide to go travelling, she and her leader will produce a plan for how she can make enough money to have a really great time. This also diminishes the chance of her clockwatching and reminding her colleagues that she will soon be on Bondi Beach while they are sitting in an office in New Malden. And the chances are that when she returns or wants to work in another country, she'll look to FC for a job.

Action steps

Personally:

• Book a meeting with your boss and ask for feedback on your performance. If you have any concerns about the standard of your work, speak about it and find out how you can improve.

• Talk about your ambitions for the future and find out what you need to do to be ready for an appropriate opportunity.

• If you cannot do this with your own boss, talk with your HR representative and get his or her support for your plans.

• Make sure you have a clear personal development plan, and make notes of your progress.

As a manager:

• Have a conversation with each of your direct reports about their aspirations and hopes for the future. Work out a plan together for how to achieve it, and support them in gaining the necessary experience.

• Be on the lookout for opportunities for people to move on in the business.

• If you see blocks to progress, be clear about this and identify how they can be overcome. If you believe the person has reached their limit, be honest and look for other ways of making the job interesting. Do not allow someone to go forward in hope, if it is not realistic.

Remember: having good people around will reflect well on you, so always know what potential you have in your team. Great managers hire people who are better than themselves.

High-trust cultures and their impact on cost

Where colleagues are trusted and encouraged to make the best of their jobs, they take ownership of the company. From then on, no one will tolerate behaviour that is not good for business, resulting in higher productivity and a reduction in cost.

‘Building trusting relationships' and ‘responsible behaviour' are guiding principles for TD Industries of Dallas, Texas. Not much new there, I hear you cry - many companies have such fine words in their value set. So let's look at what they actually mean by that. ‘We believe people react positively when trust and confidence are placed in them and when the best is expected of them. We try to reflect this belief in all our relationships.' Having visited TD I know this is exactly how they work, even to the point of each person having shares in the company.

Building relationships translates into high expectations of each other. ‘We expect people to act responsibly and to work for group goals. We expect them to be dependable and to work hard.' Customers are the direct recipients of that standard, and the company has a reputation for being highly trustworthy.

Combine trust and responsibility and you have a workforce that will reach its full potential, seeking out ways to bring improvement to the end product. Peter worked on the production line and could see the job would be easier and quicker if the sequence was changed. He drew up plans and approached his manager, who agreed it made sense. The change required the line be closed for a day, so they went together to talk to Jack. He was very happy to trust Peter's judgement without needing a major presentation or business case - he just knew Peter cared enough about the company to measure his suggestions against the needs of the customer.

The process was to be rearranged over the weekend, so it was all hands on deck. By the end of the day they were exhausted, but happy with the results. A few beers washed the dust away and it was mission accomplished. The proof was of course in the using - on Monday the line started up and work commenced apace. Productivity increased as everyone did their work in shorter time, just as effectively. From Jack's point of view, trusting Peter made absolute sense - only those doing the work day to day had the expertise to make such decisions. Trusting his colleagues proved better all round - affirmation of Peter, leaner costs, higher productivity and deadlines met in short order.

Action steps

• Think about those you work with - how well do you trust them? Unless they have given you reason not to, consider increasing the trust you give them.

• Identify one area where you could give more responsibility than you do at present. Talk it through with the appropriate person, reassure them that you will give support when needed, set a deadline to check on progress, then leave them to get on with the task.

• If you do not yet have a trusting relationship with your own boss, have a conversation to find out what you can do to improve it.

• Keep everyone in the loop with any changes - make sure that no one feels left out in the cold, not knowing what is happening. This may feel like overkill to begin with, but as trust builds, you can assess the level of communication that will be needed in order to go forward.

• Give direct and honest feedback at all times - make sure that everyone knows where they stand.

• Celebrate successes - even if only with a cuppa and a bun!