Developing a High Performance Organization Part II

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This is my last article in the series “Developing a High Performance Organization”. What most organizations fail to do when developing a high performance strategy or structure (design) is consider the impact culture has on success. No strategy, regardless of how well defined can be successfully executed without a supportive culture.  There must be an alignment between Strategy-Design-Culture!

A HPO Culture must consider the following elements (taken from our Organization Dynamic Model™):

Values &Beliefs
- Integration
- Credibility

HPO Leadership
- Modeling
- Strategic & Tactical Balance
- Empowerment
- Coaching
- HPO Teams

Human Resource Systems
- Selective Recruitment
- Employee Orientation
- Continuous Learning
- Performance Reviews
- Reward Systems

Organization Character
- Informal Communications
- Organization Feedback
- Adaptability to Change

The Human Resources Department is not solely responsible for creating the firm’s culture! It is the responsibility of management starting with the CEO. It is said that an organization typically takes on the values and beliefs of its CEO as reflected through his/her management team. I learned this lesson the hard way in my first role as President.

When taking over the senior leadership role of the Smith Group, I was gung ho to develop a strategic direction that would ensure financial sustainability. We developed a strategic direction, and completed a structural reorganization, selling a few non-performing divisions and starting a few new ones. This was the easy part. The most difficult aspect of being the new leader was changing the culture to align itself to the new strategic direction. And to my surprise, those who talked about change had difficulty accepting and executing change. While opportunity was given to those who faced change with apprehension, there are those times when a leader must make the tough decisions and get the “right people on the bus”, as Jim Collins wrote in his bestselling book Good to Great. This we had to do and what a difference it made. With the right team, we enjoyed not only years of continued record earnings performance but we were consistently recognized as being one of the “50 Best Managed Companies in Canada” until we sold the company in 2001. But it is said the true character of an individual or a company is not properly tested when you are living on the mountain top but when you go through the valley experience. After several years of record earnings performance (and might I add, exceptional bonuses), we lost our largest account, Digital Equipment of Canada, who moved their operations to the US and were eventually acquired by Compaq who themselves were later acquired by HP. Losing a major account within three months meant we went from making millions to losing millions over night. The turnaround specialists advised us we would need at least three to five years and an investment of millions of dollars in order to restore this wounded company. But that we did not have. So, we carefully re-examined our strategy, our design and our culture, realigned the three, and within a year we had Smith profitable again. Later I was asked, what did “I” do to create such a miracle. And honestly, my reply always has been: “I didn’t do anything. It was our team who was focused, committed, and aligned.” And so to Mike, Scott, Greg, Ross and Gerard, I express my gratitude, amazement and thanks for what “we” accomplished. Our shareholders were in awe, and when we sold Smith, even the competition asked what made the difference: It was I said, an “HPO Culture”.

It begins and ends with leadership. While the topic of leadership has been examined thoroughly over time, allow me to end this series with my comments on this critical subject. Collins calls it “Level 5 Leadership”. The Centre for Organizational Design and 360 Solutions call is “HPO Leadership”. Whatever the title, the critical components are the same. 

Leaders can be categorized into five distinct sets:

  1. Technician
    1. High degree of technical proficiency
    2. Sought by others for expertise
    3. Uses analytical tools to diagnose problems
    4. Good at troubleshooting
    5. Likes to fight fires
    6. Makes decisions quickly
       
  2. Manager
    1. Plans and schedules work
    2. Directs resources to accomplish work
    3. Sets daily goals and priorities
    4. Measures progress
    5. Completes reports
    6. Runs meetings
    7. Maintains discipline
       
  3. Trailblazer
    1. Analyzes the environment
    2. Articulates vision
    3. Translate vision into objectives
    4. Communicates and enforces boundaries
    5. Interfaces with others outside
    6. Encourages risk taking
       
  4. Architect
    1. Documents and standardizes
    2. Aligns systems to vision
    3. Analyzes and improves systems
    4. Challenges practices
    5. Reinforces culture
    6. Benchmarks with others
       
  5. Coach
    1. Sets standards for performance
    2. Empowers people to make decisions
    3. Provides information and training
    4. Evaluates abilities
    5. Acts as mentor
    6. Conducts performance evaluation, organizationally and individually

Effective leaders know their strength and weaknesses! Very seldom will you find categories 1-5 in one individual. The job of the CEO is to examine “team balance” and ensure that all 5 categories are represented on the management team. But an HPO Team must have certain common characteristics. These include:

-a shared mission
-autonomy and authority
-interdependence and shared leadership
-broadly defined jobs
-meaningful participation in decisions
-high standards of performance

An HPO Team then, if characteristic of the above can be defined as:

“a self-managing , multifunctional, group of people organized around a whole process and empowered with full authority for their success”.

The following diagram helps put all this into perspective.

 

In these tough economic times, the difference between the winners and losers will always be the degree to which the company has Strategy-Design-Culture aligned! If there is one function of the senior leadership team that is more important than any other, it is the extent it has created alignment in the organization. And alignment will not occur while we as leaders/managers sit behind a desk.  Our leadership responsibility is to completely understand the leadership required in different situations and circumstances and ensure we are at the right times, supporting, delegating, directing or coaching our people to get optimal results. And if we can’t do that or refuse to do so we need to take ourselves off the bus and let those who can and will take the leadership wheel. If our culture prevents us from achieving our goals, it is managements’ fault! They have no one else to blame but themselves.

So in conclusion, what does a High Performance Organization look like? An organization which achieves outstanding results by making each person a contributing partner in the business!