Picture this. Sixteen executives are standing in a circle. Half are blindfolded, while the other half are serving as leaders. A paint can filled with foam balls stands in the center of the circle, and each blindfolded participant holds a rope connected to the can. The challenge is for the blindfolded participants to move the can of foam balls across a large field by manipulating the rope. The can will drop and spill all the balls unless everyone applies pressure evenly on the rope. As the exercise begins, everyone is laughing a little nervously.

Those used to giving instructions now are receiving them. Those used to working alone now are members of a team. The only way to accomplish the task is for the leaders to provide flawless instructions to the blindfolded participants. Those who are blindfolded must listen to and execute the instructions and allow themselves to be led. This is an interesting exercise in teamwork, as everyone has a role to play, everyone has limitations, everyone must demonstrate trust, and everyone has to be a team player. Before the exercise is over, everybody has dissolved into laughter.

First Steps
Working with a talented management team over a long period of time poses many challenges. On the one hand, you learn each other’s strengths, weaknesses, and styles. On the other hand, you sometimes forget to account for change and growth. In San Marcos, Texas, the average tenure of our managers is 13 years. We, the current management team, have worked together for a long time. Then, two years ago at a directors’ retreat, the city manager posed this question to us: How can we better manage San Marcos?

Like many communities, San Marcos is facing phenomenal growth and change. As part of the Austin-San Marcos MSA, we are a component of one of the fastest-growing metropolitan areas in the nation. Over the past five years, we have seen a 121 percent increase in building permits and a 19 percent rise in population.

Ten years ago, the organization employed 240 people. Today, it has more than 500 employees. We believe that building the best-performing management team possible will help us ensure that our community grows and prospers long after we are gone.

With all of this in mind, we began looking for answers to the manager’s question. The staff, having chosen to focus on creating the highest-performing management team that we could, took a close look at the city’s performance evaluation system to see if it supported this goal. We didn’t take long to conclude that the existing system was a good way to give merit increases but did little to enhance the team’s performance. We had a traditional process that included:

• Formal appraisal instruments.
• Mandatory supervisor/employee evaluation meetings twice annually.
• Merit increases in 3 percent, 4 percent, or 5 percent increments (tied to the evaluation instrument).

What We Did
The manager and deputy manager identified these weaknesses in the existing appraisal system:

• It took too much executive time to administer.
• The system was inflexible.
• It had lost meaning for the evaluators.
• Most directors knew their scores before coming to the evaluation meeting.
• There was no mechanism to give critical feedback in a positive manner.
• There were too many evaluations; they happened too often.
• The process did not require director involvement.

• The performance evaluation system promoted teamwork.
• Performance feedback was self-explanatory.
• The system helped people to develop professionally.
• Participants believed the system to be fair.
• Performance was tied to strategic plans.
• We had a positive way to discuss subpar performance.
• Participants looked forward to feedback.
• There was a “take-away” from the feedback meetings.
• There was strong interest and investment among senior management.

For months, we researched both private and public entities using 360-degree evaluation systems, looking for success stories but also for lessons learned. Based on this research, we outlined a new evaluation system.

To promote teamwork and buy-in for the new system, we asked six directors to participate on a committee to review the proposed evaluation process and to draft an evaluation instrument. We provided the group with our research and our proposed system, and together we developed a list of issues that needed to be addressed:

• Devising a feedback instrument that emphasized teamwork.
• Designing a process that ensured full information and buy-in.
• Determining who would participate as evaluators. (Would all directors evaluate each other, and would we include subordinates in the initial implementation?)
• Creating a safe environment in which directors would be honest with one another.
• Avoiding a popularity contest.

Directors’ scores were aggregated as staff feedback, and managers’ scores were aggregated as managers’ feedback. This helped preserve the anonymity that we knew to be critical to the process.

We also began designing an instrument for the evaluation process. The team developed a basic instrument and presented it to the full directors’ group for evaluation and feedback. The key to the instrument was that it focused on the behaviors we believed to be critical to the outcomes we had defined at the start of the project.

Measuring the Gaps
The team also decided to hire a consultant to help fine-tune the instrument and to design the initial implementation of the program. We felt that this step would go a long way toward sending the message that this was not a “gotcha” exercise but a team development tool.

A consulting firm was hired to assist in the development of this evaluation system. The firm’s staff had been instrumental in devising the existing evaluation system some 10 years before and continued to be involved in updating it and helping the organization with compensation issues.

At the consultant’s recommendation, we adjusted the instrument to measure gaps between actual behavior and expected behavior. For each item on the instrument, the evaluator assessed how often the person did exhibit the behavior and how often the person should have exhibited the behavior.

For example, each assessor had to indicate how often the person did coordinate priorities and how often they should have done so. The difference between these two scores, called a “gap,” has become the focus of the evaluation. If you “almost never” coordinate priorities, and the expectation is that you should “almost never” coordinate priorities, there is no gap—your performance is right on target. On the other hand, if you “almost never” coordinate priorities, but the expectation is that you “always” should, then you have a significant gap, an area that needs work.

We liked the gap analysis because it allowed us to customize each evaluation item to the particular needs of the person being evaluated. In a locality with 15 departments ranging from parks to public works, the leadership needs vary. Our instrument has allowed us to account for this variation.

Implementing the New System
In September 1998, the manager, deputy manager, and each director completed the first round of evaluations. The consultant compiled the scores and prepared feedback binders for each director, containing a team profile that showed our overall strengths and weaknesses as a group.

The evaluation became the focus of the directors’ retreat, which was scheduled for the end of September. Each participant received his or her feedback binder, and the consultant discussed how to interpret the data. This debriefing took an entire morning and was an intense session, both because the analysis was complicated and because people were seeing peer feedback for the first time.

This debriefing was followed by a low-ropes course. This part of the program involved games that emphasized the value and importance of teamwork. But perhaps more meaningfully, the games provided a much-needed outlet during which the group could reconnect and a time for some healing of wounded egos. The simple but salient messages of teamwork were well received.

The next month, the manager and deputy manager met with each director to discuss the results individually. Directors were required to prepare a performance improvement plan based on the information contained in their evaluations and to bring their plans to their sessions. Each director selected several areas for improvement and submitted a written explanation of how he or she would accomplish each goal. Individual plans became the bases for discussion at the evaluation meeting and the foundations for a merit increase of 0 to 4 percent awarded to each director.

What We’ve Learned
The new evaluation system has been extremely successful. Everyone has had to adjust to seeing such honest (and anonymous) feedback. Participants’ initial instinct was to want to identify the person who “gapped” them and to retaliate. We knew this would happen because our research had predicted it. Because we had placed such a strong emphasis on teamwork, however, and had combined the tough feedback with practical follow-up, we found the process to be effective.

Happily, we have seen a much higher and more meaningful level of teamwork among the directors. Staff meetings are becoming opportunities to share and exchange information on what is happening in the organization, as well as chances to do problem solving. People are making a concerted effort to learn about each other’s operations, even if there doesn’t seem to be a need to coordinate.

In virtually all cases, we are finding that tremendous benefits accrue from such greatly improved teamwork. We have discovered that we are better able to respond to the council’s priorities and vision because we are thinking more holistically about the programs and services we provide. Our conclusion is that, through high-quality teamwork, we are better managing San Marcos.

Laura Huffman is deputy city manager, and Carolyn Linér is director of human resources, San Marcos, Texas.