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Focus and Discipline - The Way to Become a High Performance Organization

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Professor Andre de Waal MBA - Expert Author

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What is your scarcest, and therefore your most important, asset? Money? Machines and buildings? People? Ideas? None of the a above! It is time… YOUR time. Management time is the asset that can only be spent once, that cannot be exchanged and that cannot be earned back. If your time is so scarce, then it is logical for you to do everything to use this asset as optimally as possible.

Focus, Focus, Focus

But in practice this is not as simple as it sounds. You are overwhelmed with advice, websites, books, advisors, conferences, good friends and colleagues about how you can best use your time to improve the organization. Slowly you are really starting not to see the forest for the trees. Where should you start? Doing nothing is not an option. After all, you are living in an age of extreme competition. An age in which organizations are having an increasingly difficult time due to the combined pressure of worldwide competition, rapid technological developments, better and better reachability all over the world, economic liberalization, more and bigger mergers and clients and citizens that are becoming increasingly demanding. In short, you must do something; you must prove yourself. Luckily, there is the up and coming advice area of the excellent organization. Since the resounding success of Jim Collins’ bestseller Good to Great more and more books are being published that are expanding upon Collins’ ideas. Books with wonderful titles such as Enduring Success. What top companies do differently (Bailom, Matzler and Tschemernjak), Meaning Inc. The blueprint for business success in the 21st century (Bains and Bains), Cracking the performance code. How firms succeed (Bevan, Cowling, Horner en Turner), Stretch! How great companies grow in good times and bad (Deans en Kroeger) and Hot spots. Why some companies buzz with energy and innovation - and others don’t, (Gratton). These are all interesting books that tell you how you can spur your organization on to perform better. But how do you know which of the proposed improvement methods is the best for you? To what should you devote your scarce time? Or would you do better to play it safe and simply apply all of them? That should ensure success, shouldn’t it?

But the haphazard application of various improvement methods is like shooting with hail: overall the chance that you will hit the target is very small. It is more accurate take aim at the target, with one specific bullet. In order to find this “magic bullet,” I spent five years researching the characteristics of excellent organizations, or High Performance Organizations (HPOs) all over the world. Due to the large amount of studied management literature and the large number of participants who took part in the study, the study has the broadest basis of all HPO studies that have been conducted to date. The research focus was on what successful organizations do right and what unsuccessful organizations do not do right and on what unsuccessful companies spend a lot of time on and excellent organizations spend insufficient or no time on. The result of the study is that the elements that make and keep organizations excellent for the long term were discovered in a scientifically supported manner. Based on the outcomes of the HPO study, a diagnostic test was developed that managers can use to guide the course of improvement. Thanks to this you no longer have to navigate based on intuition or belief and you can work on improvement with more certainty. You can implement target measures based on knowledge in order to let your organization grow in the direction of high performance. And… you now also know what is not important in order to excel so that you no longer have to devote time to this.

What you no longer need to focus on…

To come straight to the point: Many elements that were traditionally considered as being important appear not to be decisive for long-term excellent performance. It is not that they are unimportant, but only performing well in these elements does not ensure that the organization becomes “high performing.” The HPO showed that there is no direct connection between organizational structure and better results, for example. In principle, it does not matter what type of organizational structure the organization has when it comes to performing well. Functional design, a process-oriented institution or a matrix organization – none of these organizational designs guarantees the transition to a high-performance organization. Reorganization, something for which many organizations appear to opt time and again when difficulties arise, will thus not necessarily help sustainably improve performance. Even greater employee independence does not “automatically” lead to better results. Too much freedom for employees can even lead to large financial losses – just think of the example of Ahold and Food Services. Management must indicate the playing field in which the employees can operate autonomously and thus also the limits they may not exceed. It also appears that the type of strategy of an organization is not decisive for excellent performance. It is relatively unimportant for the rendering of top performance whether an organization opts for cost/price leadership, product differentiation, customer intimacy or a combination of these strategies. The factor that differentiates the HPO from the non-HPO is oneness in the chosen strategy within the sector in which the organization is operating. In conclusion, technology appears to play a relatively unimportant role in performing better than the competitor. Many organizations spend a lot of time and energy implementing new ICT systems, for example, but this does not “automatically” lead to becoming an HPO.

... and what you should focus on.

But which elements determine whether an organization can or cannot become an HPO: an organization that achieves better financial and non-financial results than comparable organizations over a period of at least five to 10 years. The study showed quality of management to be the first important HPO factor. Managers of an excellent organization are characterized by integrity, decision-making capability, action orientation, performance orientation, effectiveness, self-confidence and a strong leadership style. They are so-called high performance individuals (HPIs): people who are lead in all their actions and their manner of working by principles of customer orientation, quality thinking and continuous improvement, through which they inspire others to achieve excellent performance. The second HPO factor is the presence of an open and action-oriented organizational culture. An excellent organization stimulates interactive internal communication ("an open dialog") between member of an organization so that free and continuous vertical and horizontal information exchange takes place. The third HPO factor is an organization’s long-term thinking: long-term continuity always comes before short-term profit at an HPO. The fourth factor that determines whether an organization is excellent is continuous improvement and renewal. The excellent organization has a strategy that clearly differentiates the organization from comparable competitors and subsequently continually improves its processes in order to be able to implement the strategy. The fifth and last HPO factor is the quality of the employees. Employees of an HPO want to be held responsible for their results and want to be inspired to achieve outstanding results. Just as the management of an HPO, the employees of an HPO are also HPIs who work just that much harder to get the best out of themselves and out of the organization.

Open doors... through which you must pass.

Are the five factors that emerge from the study actually open doors? You knew this all along? Because you were always bombarded with one or the other improvement method in recent years? However, many available methods do not have a scientific basis, which in principle limits the chance of success because success depends more on luck than really knowing what works. It is like taking a trip and arriving at an intersection with a hundred open doors. Which door should you choose? They all lead somewhere, don’t they? Unfortunately, many of the chosen doors send organizations on the wrong track and cause them to devote much effort in the area of improvement without achieving demonstrable, permanent results. The HPO study only indicates the doors that actually lead to the desired end-result: the permanently excellent organization. How you subsequently pass through the doors, quickly or slowly, with a leap, limping or shuffling, depends on the specific circumstances in which you (and your organization) find yourself. The HPO study gives you scientific proof that you must pass through the doors in a disciplined manner. You may therefore not slacken as regards the HPO factors but you must continuously pay attention to them and bring your organization to a higher plane. To this end, familiarity with the listed factors is an advantage, which significantly increases the chance of improvement measures succeeding. Or: You can immediately embark on the path of improvement with confidence.


About the Author

Professor André de Waal MBA is an associate professor of strategic management at the Maastricht School of Management (The Netherlands) and Academic Director and owner of the HPO Center , as well as a renowned global Performance Management expert. He has been selected as one of the ten Dutch Masters in Management, thinkers and writers that have influenced management thinking in the Netherlands the most in the past decade. He is also a former partner at Arthur Andersen.



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Article Published/Sorted/Amended on Scopulus 2011-03-28 12:48:21 in Personal Articles

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