18 Apr. 2013 | Comments (0) Share Follow @Conferenceboard
People in a High Performance Organization (HPO) feel a moral obligation to always strive for the best results and to get the best out of themselves, their colleagues, and the organization. HPO leaders continuously strive to improve their current products, services, processes, and core competencies. To achieve these goals, they seek to become better at what the organization is already doing, and, at the same time, continuously renew what they are best at, while continuing to develop and be truly innovative. In my previous articles, we’ve discussed the definition of an HPO and the first three HPO factors. This article discusses the four characteristics associated with the fourth HPO factor: “continuous improvement & renewal.”
Characteristic 1: A Unique Strategy
Successful business strategies consciously ponder and then answer the questions: “Why should people come to our organization and not go to the competitor? What makes us different?” They then build this strategy gradually and consequently, thereby creating widespread opportunities and breakthroughs. They are consciously developing many new options and alternatives to compensate for dying strategies. Often, strategic plans become elaborate, overly detailed processes which are difficult to comprehend. In contrast, HPOs make sure the first page of the strategic plan matches the description of the organization’s uniqueness, so people are directly focused on the distinguishing factors of the organization and can easily understand how a new strategy corresponds with company goals.
Ideas to get started to create a unique strategy:
- Redefine the industry you are operating within so that the minds of your people are broadened and more possibilities emerge. For instance, Southwest Airlines says it is not in the airline business but in the freedom business.
- Let your people think consciously about and then articulate what makes working at the organization a unique experience.
- Hire people from outside the industry, to get fresh ideas. Look outside your own sector into other industries where you can acquire new ideas and become inspired. Also, realize that you don’t always have to be the first with an idea: you don’t always have to be original, as long as you are different in your industry.
- Keep spending time teaching how management and employees can live up to the uniqueness of the organization.
Characteristic 2: Process Improvement, Process Simplification and Process Alignment
HPO leaders are continuously looking for ways to improve and simplify all the organization’s processes in order to improve the organization’s ability to respond to events efficiently and effectively. They eliminate unnecessary procedures and all forms of excess and waste, and standardize the remaining work. They fight information overload, use just-in-time practices, and reengineer procedures to improve speed. They align all processes seamlessly, removing any bottlenecks and hick-ups. They achieve continuous process optimization by connecting the entire value chain and applying value chain efficiency models. They do this by applying a strong systems perspective, thinking lean about every aspect of work, and becoming adept at rapidly designing and installing new ways of working.
Ideas to get started with improving business processes:
- Focus, focus, focus! Select a limited number of improvement initiatives for implementation and make clear how important these are in relation to the day-to-day business.
- Make sure that no body can start an improvement initiative without first submitting a plan with clear accountability setting, due dates, and deliverables.
- Hire a dedicated person, such as a chief improvement officer, who is in charge of systematic development and improvement of all processes.
- Introduce quality assurance procedures for improvement initiatives and make these initiatives and procedures topics of regular discussion.
Characteristic 3: Performance Management
People in the HPO develop a model of the business that links overall goals to specific items the organization needs to control – and, therefore, needs to measure with critical success factors and key performance indicators. Then, they rigorously measure progress on the critical success factors. By doing this, they also, consequently, monitor goal fulfillment – openly confronting and analyzing the reasons why goals were not reached. HPO leaders focus on results and output, not on input, and design measures that are timely, understandable, and easy to calculate. They make sure that the financial and non-financial information needed to drive improvement is reported to everyone in the organization, so people can use this data to improve their own operations.
Ideas to get started to improve performance management:
- Because performance management consists of two parts – the performance management system and the people using it – you need to address both to improve.
- Keep the performance management system (PMS) simple by basing it on a limited number of critical success factors and key performance indicators and by making sure that strategic plans and budgets are only made for these measures.
- Make sure the reports and IT systems used in the performance management process are easy to understand and to operate. Use as much standardization as possible, without ignoring relevant local differences.
- Align the human resources tools with the PMS so that people are trained in, evaluated on and rewarded for the items that are important to the organization (the critical success factors and key performance indicators).
- Apply exception reporting, which means that only unexpected negative or positive results are discussed and acted upon.
Characteristic 4: Innovation of products, services, processes and core competencies
HPO leaders are continuously innovating products, services, processes, and core competencies, thus constantly creating new sources of competitive advantage for the organization and responding to market changes. Continuously seeking improvement, they encourage creativity through cultivating an environment of learning, possessing an openness to change, challenging old methods, and constantly pushing for innovation. HPO managers foster new ideas and then excel at implementing them. They continuously innovate current core activities while simultaneously developing new activities, and look for both incremental and disruptive innovations. They know what the unique core competencies of the organization are, master these, and then develop and renew them. They stick to what the company does best, keep core competencies inside the organization, and outsource non-core competencies.
Ideas to get started with innovation:
- Create space for entrepreneurship in the organization: Make sure there is room for taking risks and making mistakes, create excitement for trying new things, make room for learning, actively encourage employees to come up with ideas, encourage trying unusual and “crazy” approaches, ask people to do things they have never done before, welcome uncertainty and luck.
- Create space for creativity: Make sure there is diversity among your employees, cherish mavericks, see customers and partners as part of your business and involve them too, make use of social media to involve, create an attitude of “it can always be improved.”
- Create a customer-centric orientation: Don’t just listen to your customers but really understand them, their needs and wishes, their situations, their points of view, and then think about how you can address these.
- Create room for trying out things: Don’t launch a new idea on a grandiose scale but first pilot them and learn from problems and mistakes, then try again and again.
If there is something that distinguishes HPOs from non-HPOs, it is their strong focus on continuous improvement. People in an HPO always strive for better, not because they have to, but because they want to, and because they feel they should get the best out of themselves and their colleagues for the stakeholders. Management of HPOs are not afraid to face the brutal facts. They put an emphasis on performance management: not only measuring performance, but also acting on information received, without excuses or hesitation. Everybody in an HPO receives the information they need to improve and renew.
View our complete listing of Strategic HR blogs.