High Performing Organizations II

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.

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