Want to transform into a high performance business?

A car crash on Jagtvej in Copenhagen, Denmark.
A car crash on Jagtvej in Copenhagen, Denmark. (Photo credit: Wikipedia)

I’ve been thinking about this question a lot lately, as I work to better relate my own “transformation” value proposition into language meaningful and attractive to my clients. I mean, who wouldn’t want to own and operate a “high performance business”? But, what does that actually mean? What does a high performance business actually look like, and why are they so darn hard to build and maintain?

It’s pretty easy to speak generally about a “high performance business”: superior performance through a tight, well articulated business model and associated streamlined business processes, with a team of very capable mature leaders sprinkled throughout the organization that challenge conventional thinking, can effectively balance the renegades and the outliers with the “status quo” managers to help drive continual rebirth and innovation while simultaneously delivering on customer commitments in the here and now through leveraging jazzed employees who are passionate about their work environments, effectively making everything work together seamlessly while still getting home to their families by 6:00 pm for their “balanced work-life”. A mouthful to say, and very rare to actually find.

What’s strange about most of our organizational change models is that they take those two critical components — the “business machine”, and the people — separate them out, and never really bring them back together again effectively. The “hard stuff” — the business model, related processes, and enabling tool sets — get dropped  into the IT silo to work on and codify. The “soft stuff” — the people side of the equation — is dropped into the HR silo to focus on. When you stop to think about it, if there are any two silos that really don’t see much of the world in common and have few opportunities that bring them together in the day-to-day operations of the actual business, those would be the two — HR and IT. They generally have polar opposite views of the world and manage accordingly.  I guess it’s not really surprising, then, that the literature suggests that 70% to 80% of company business re-engineering efforts fail to meet their design objectives.

Instead, here’s the basic model the consulting industry talks you into: A large budget owned and operated by IT drives the hard-wiring of the business model based on a bunch of workshops conducted by external consultants working from industry blueprints, effectively ensuring your basic business model becomes the same as everyone else in your industry. (Can’t see why that might be a problem…). In the process the company ends up with a bunch of shiny new hardware and software, which all requires new ways to operate it. These new work processes are then cascaded through the company by training courses run through the HR group. Often, many of the people touched by these training initiatives won’t have a job — or at least the same job — once things are fully implemented. So naturally there is lots of push back, avoidance, and even sabotage. If you are really lucky, it all doesn’t prove to be too disruptive to your company operations and you eventually get things back on an even keel.  As a bonus, industry stats suggest you got a 30% chance of meeting your business objectives. Nice approach.

For me, a simple and telling illustration of this general approach of “separation” was when I was a fresh employee at a high tech manufacturing company, which had $500M in annual revenues, mounting annual loses, and a high level of management churn. The executive team chose to address the challenges with a company wide focus on “quality”. This was in the mid 1980’s and we were living through the Quality Revolution throughout North American industry. So the company spent something like $3M on quality training and cascaded the classroom training through every level of the company from CEO through to shop floor employees. So far, so good.

But when we worked in teams in our training classes to “implement quality processes” we worked in made-up quality teams on made-up problems. In particular I remember various workshops where we focused on driving improvements in the mythical  “Quality Flypaper Company”. REALLY? We worked in a real company that was hemorrhaging real money, we were putting in the time to be trained, and we were working in FAKE TEAMS on FAKE BUSINESS PROBLEMS. My guesstimate is that maybe 20% of the training investment stuck — so as a company we probably got $600k of “value” from a $3M training investment.  If we had taken a more integrated view of the opportunity and investment in time and resources — by marrying real work teams with the quality training basics and then feeding in real business problems to be addressed, with real timelines, investments, and business objectives —  I believe we would have got more like a 20X return on our investment. It would have taken quite a bit more effort to manage the logistics of a real-time business focus, been a lot messier, and probably taken a lot longer to cascade the training through the company. But it would have kick-started some serious business improvements in the company.

Instead, we all joked about the “Quality Flypaper Company” during coffee breaks and meetings. It was the easy, painless, and ultimately fruitless path we chose to follow, that not surprisingly did not lead to becoming a high performance business. Really, a squandered opportunity, and pretty sad. Great lesson, though.

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2 thoughts on “Want to transform into a high performance business?

  1. “Hi Tim,
    You’ve described what I refer to as an Organization Development (OD) approach to training, in which new knowledge and skills are introduced, explored — and ultimately “learned” and applied — in the context of the learners’ “real world” challenges and opportunities — IN REAL TIME.

    In an OD approach, “simulated” scenarios and exercises can have a place (a conversation for another time perhaps), but the main thrust of training design and facilitation is on enabling learners to build competency in particular subject matter BY working on tasks meaningful to them.

    As you’ve suggested, an OD approach to capacity building requires significantly more effort (i.e. investment) in coordination, design and time — which is why most companies ultimately reject it (including the one in which you and I have shared experience.) On the other hand, because learning, application and outputs are more closely linked in time and space in the OD approach, the return on the training investment (or lack thereof) is much more obvious and measurable.

    Because the OD approach engages people who normally interact, on challenges and opportunities for which they have some shared responsibility, it engages both the human and the technical dimensions of work — the WHAT and the HOW of what they do.

    To be clear, I am not advocating that the OD approach is best for all learning (again, a larger conversation.) However, in general, I believe in most learning initiatives the connections among between learning, application and outcomes have been too loose, a dilemma that can be addressed — in part — through the OD approach.

    All that said, on the larger issue of organizational change (you started it), and in particular the high failure rate of change initiatives, it seems to me that a central challenge is the disconnect between expectations for — and the realities of — change. By that I mean that executives (and markets) expect that change will take us from where we are to where we want to be — in a (relatively) straight line. The reality of change is that performance (of individuals, teams and whole systems) often suffers in the short term as new skills, processes and tools are introduced. It is the risks and implications of this performance paradox that contributes to the hesitation of executives to begin down the change path, and, even more importantly, to fully commit to “staying the course” of change in the face of scrutiny and potential disapproval from various quarters.”

    Cheers

  2. Hi Rod, great to hear from you! Thanks for weighing in on the blog post and the general idea of driving successful change and what it looks like.

    I certainly concur with your statements about what you refer to as OD, and also the main challenges with successful change as setting and managing executive expectations and having the patience to see a change initiative through and be open to learning/discovering new things along the way.

    It seems to me that an incredibly important part of a high performance business team is being able to maintain a sense of curiosity and a willingness to be open to unexpected outcomes and learning from them — that is very hard to nurture in an environment where the executive is expected to “know all the answers” and the company is driven almost entirely by short term financial results.

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