Here is an excerpt from an article written by Lindsay McGregor and Neel Doshi for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

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In 2007 Harvard Business School professor Ethan S. Bernstein studied assembly-line performance at a company he called “Precision.”
Based in Southern China, Precision was the second-largest manufacturer of cell phones in the world at the time. Precision made it easy for managers to oversee their employees. Every spot on every line was visible to managers. Every step of the process was measured, and real-time metrics were easily accessible. Workers were carefully trained to follow processes exactly as they were laid out.

But Bernstein and his team observed that when managers were not watching, employees secretly developed and shared better ways of doing the work. When Bernstein hid a set of production lines from managers’ view, the performance of employees on those lines increased by 10% to 15%. It turns out that when employees felt that they were being monitored, they felt pressured to stick to “proven” methods. They couldn’t adapt to improve their work.

Our research into over 20,000 workers of all skill levels across U.S. industries, and a review of hundreds of academic studies on the psychology of human performance, shows that most leaders and organizations tend to focus on just one type of performance. But there are two types that are important for success.

The first type is known as tactical performance. Tactical performance is how effectively your organization sticks to its strategy. It is the driver of focus and consistency. It allows organizations to increase strength by directing limited resources to the fewest targets. In Precision’s case, good tactical performance required developing rules, checklists, and standard operating procedures and then following them closely. Similarly, when Starbucks baristas make your latte the same way across cafés, or when a software engineer delivers the expected features each sprint, you are witnessing tactical performance.

The second type, known as adaptive performance, is how effectively your organization diverges from its strategy. Adaptive performance manifests as creativity, problem solving, grit, innovation, and citizenship. It allows organizations to create value in a world filled with, as the U.S. military says, volatility, uncertainty, complexity, and ambiguity, where technology and strategy changes rapidly. At Precision, good adaptive performance would have included every line worker coming up with new ideas and then teaching them to their colleagues. If you’ve ever seen a Starbucks barista adapt their greeting to make you feel personally welcome, or an engineer lean over to help a colleague solve an unexpected problem, you’re witnessing adaptive performance.

Essentially, tactical performance is how well you stick to your plan, and adaptive performance is how well you diverge from your plan. Every high performer needs both. A great salesperson will operate much more efficiently with a defined process for reaching out to prospects. They will represent the products more consistently. But they must also adapt the standard approach based on each customer’s unique needs. The same is true for any team or organization.

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Here is a direct link to the complete article.