The Inescapable Truths of High Performance Organizations
If you run an organization, you want it to be considered a high-performance organization (HPO). If you are a member of an organization you also want to be working for an HPO because we all want to be on a winning team. “Good to Great”by Jim Collins and “In Search for Excellence”by Thomas Peters are two books written about HPOs without referring to them in that way. CEOs and managers have read these works and try to emulate their principles, but the results are inconsistent. There is substance to the methodology of these works, but they lack the robustness of the scientific principles of objectivity, reliability and validity. Some of the organizations highlighted in “Good to Great”are now faltering and there is no empirical evidence backing the findings of “In Search for Excellence”.Programs and processes that steer us to becoming an HPO include the Baldrige criteria and its state counterparts, ISO standards, Lean Six-Sigma, and total quality management (TQM).
We tend to think of HPOs in the financial sense. Businesses that are financially sound and profitable must be HPOs. The logic is reasonable but flawed. The Forbes 100 is a popular compilation of the 100 top-performing companies. A comparison of the Forbes 100 in 1917 to the 1987 list shows that 61 have ceased to exist. Of the survivors, they collectively earned 20 percent less than the overall market with only two slightly exceeding the average. Expanding on that concept, the Standard & Poor‘s 500 from 1957 showed similar declines with only 74 of the 500 organizations remaining on the list 40 years later. So if financial success is not the defining matter, what is? Can we safely say that those that survived are HPO material? Maybe, but those that remain on these lists are not stellar performers.
So what is an HPO?
Maybe we should look at quality. However, Baldrige winners have filed bankruptcy. Much to the dismay of many management teams, ISO certification, Lean Six-Sigma and TQM will not cure a faulty system. They are designed to sustain a robust system, not fix a broken one.
A definition has to be lasting so we can’t say it is companies that are financially successful. The ones we identified today might fit the bill now but not tomorrow. We also can’t say that it is those that have endured over time, as they don’t appear to be profitable. However, a definition can still be had and was compiled by Andre de Waal, professor at Maastricht School of Management in the Netherlands. Following common themes from various sources, de Waal proposed the following definition:
“A high-performance organization is an organization that achieves financial results that are better than those of its peer group over a longer period of time, by being able to adapt well to changes and react to these quickly, by managing for the long term, by setting up an integrated and aligned management structure, by continuously improving its core capabilities, and truly treating its employees as its main asset.”
I am not going to rehash some of the fine work that is already out there and has referenced seminal research on HPOs from reliable sources. These deal with the form, structure and mechanisms that make an HPO. These are the concrete tangible hard issues that are easy for management to grasp.
“Setting up an integrated and aligned management structure” where employees are a vital part of that alignment and structure — it isn’t a good old boy management exclusive club. And, “truly treating its employees as its main asset.” I emphasize “truly” as too many organizations just give this lip service in underestimating the intelligence of its employees and thinking they will buy it. I don’t like the reference to people as a work asset because it has two meanings (as strength and as property).
With the available information on building an HPO, it should be understood that this is not a cookie cutter approach. We are not going to find the “seven steps to building an HPO”or advice that tells us that if we do these seven things our organization will be successful instantly. This is when solid sound methods paved with good intentions go awry.
Tailoring business needs
All businesses are unique and require unique applications. We will need to come to the reality that there is no magic bullet or plug-and-play business formula, especially when people are involved. One size does not fit all. We must tailor any concept to fit your organization. Along with that customization are the people who comprise our organization. We must bear in mind that when dealing with people, consistency is inconsistent, common sense is not common, and rational logical thinking is neither rational nor logical. Humans are irrational.
Many business books talk about group synergy and working with a singular focus. This all sounds good, and while getting people to lock step in unison is efficient, it also promotes group think, suppresses innovation, destroys free thinking and stifles progress. Without that person who is given the freedom to roam outside of the box and question the status quo without reprisal, you will always be stuck in the present.
some valid data
What I am going to provide here is information from the science approach that is objective (unbiased), reliable (repeatable) and valid (measuring what it purports to measure). It is also counter-intuitive and contradictory to what we may have originally thought of as true.
In our journey as supervisors and managers there have been certain inescapable truths that we have chosen to ignore and those are the ones that might prevent your organization from becoming a HPO. It is the soft stuff that we tend to avoid or not address but we have to deal with people, and people are mostly made up of soft stuff.
The works that I have looked at are scientific research papers that study HPOs, organizational behavior, organizational psychology and social psychology. They are difficult reads. They don’t supply simple solutions and might not supply solutions at all but raise more questions than they answer, fueling further research.
Benjamin Franklin said, “In this world nothing can be said to be certain except death and taxes.”In science there are no absolutes, as that would imply that we have 100 percent vision of the future. I had a statistics professor tell me that when writing a research paper you “prove” nothing, you only show probabilities of occurrence. Science shows statistical reference and inference, probabilities not possibilities, sequential reasoning instead of intuition, and evidential conclusions instead of subjective suppositions. In other words, “I have numbers to support what I say but there are no absolutes.” One thing we can be 100-percent sure of is that anyone who says they are 100-percent certain is not. Absolutes and all-inclusive statements imply perfection, and although perfection is one of those fallacies I will refer to, we should strive for excellence.
What I intend to do in my articles in 2015 is to peek into the human side of not only HPOs but business and life in general. Why do we do what we do? Keep in mind that I will report on composite behavior that is statistically driven. If you reduce any statistic to its discrete elements, the statistic breaks down. For example, stating that a typical American family has 2.5 children is a valid portrayal of the population, but we will not find that distinct family represented. The same anomaly occurs in reverse order: the characteristic of a discrete component disappears when the population is observed. You see this when one or a few items are falsely attributed to be representative of the population, called group attribution error.
The Baker’s Dirty Dozen
To refresh your memory, the Dirty Dozen (in no specific order) are:
1. Lack of communication
2. Complacency
3. Lack of parts
4. Pressure
5. Lack of knowledge
6. Distraction
7. Lack of assertiveness
8. Stress
9. Lack of teamwork
10. Fatigue
11. Lack of awareness
12. Norms
Note that half of the Dirty Dozen refer to a lack of something needed and the other half refer to the presence of something not needed. Over the years I have seen the Dirty Dozen expand to include another element, making it “The Baker’s Dirty Dozen.”
13. Professional arrogance
So I am going to end this article with that hook and a lead into what is coming next, like the TV serials of long ago. Now that I have set this challenge for myself, let’s see if I can live up to my own hype!
Patrick Kinane is an FAA-certificated A&P with IA and commercial pilot with instrument rating. He has 50 years of experience in aviation maintenance. He is an ASQ senior member with quality auditor and quality systems/organizational excellence manager certifications. He is an RABQSA-certified AS9100 and AS9110 aerospace industry experienced auditor and ISO9001 business improvement/quality management systems auditor. He earned a bachelor of science degree in aviation maintenance management, a master’s of science degree in education, and a Ph.D. in organizational psychology. Kinane is presently a senior quality management systems auditor for AAR CORP and a professor of organizational behavior at DeVry University.