Why Some Companies are Better at Everything. How to Become a High Performing Organization

That line belongs to Andre De Waal, professor of Strategic Management at Maastricht School of Management. De Waal does research into what makes organizations high performing. By high performing, he means ‘achieving results exceedingly better than peers, over a period of at least 5 years, by focusing in a disciplined way on what really matters’. In short, outperforming your sector. There always seems to be someone that everyone thinks of, who fits the description of high performing. I’d guess you’re probably thinking Google, or maybe Amazon. A few decades ago it might have been General Electric. Getting there takes great ideas, great leadership, and great people. However, staying there is possibly the greater challenge. Will Google still be out in front 10 years from now? Or will Tesla be the new darling? Or someone we haven’t heard of yet, led by a gen Z CEO, if we still use that title.

It’s hard to be continuously in the limelight. Uber seemed to be doing fine, until the recent negative press. Hopefully, they will get back to where they were when they have addressed their culture issues. It raises the question though, how do you sustain being better at everything and keep all the plates spinning.

What Makes Them Different?

De Waal’s research identified 35 characteristics that are common in all high performing organizations. They are almost all about people. The 35 characteristics fit into 5 categories:

  • Quality of management
  • Quality of people
  • Openness and action orientation
  • Long-term orientation
  • Continuous improvement and renewal

This research was one of the main influencers of the most recent Investors in People standard. Sustainable success through leading and managing people is the essence of the Standard.

Both Investors in People and de Waal’s research are designed to make outperformance accessible to any organization with an ambition to stand out from the crowd, in a positive way. Investors in people is a bit different to de Waal’s approach because it is designed to be an accreditation. There are 27 elements of good leadership and management practice. The Standard guides organizations in what practices to put in place, how to get them working effectively, how to create positive outcomes, and then use those results as the basis for continuous improvement. Here’s an example of one of the 27 good practices and how it becomes embed in the organization:

Putting the good practice in place

Let’s look at ‘understanding people’s potential, one of the themes in the Standard, and part of ‘building capability’. The first step is to have a practice of line managers having conversations with their people to identify their potential and plan their development. Managers need to understand how to have these conversations. Everyone in the organizations needs to understand what these conversations are for. Questions that discover people’s passions and dreams, and what they want to be, are a very good place to start. A HBR review article mentions 2 of the factors that differentiate high potential people are a drive to excel, and a catalytic learning capability. Conversations that uncover someone’s passion will also show you where they will be most likely to excel and learn. During a recent Investors in People assessment I spoke to someone who told me that until they joined their current organization they were content to do their work and take their salary, without any ambition for self improvement. When they joined their current organization their supervisor asked them the simple question, “What do you want to do in your life?” Just being asked the question made him realise that he could do and be more. He has already progressed to a more senior role.

Marrying the capabilities the organization needs with people’s ambitions will ensure the right capabilities are being developed. Managers therefore also need to be aware of the capabilities their organization needs now and in the future.

All managers regularly having these kind of conversations with they team members, is the starting point for the good practice of ‘understanding people’s potential’.

Activating the Practice

The development conversations are a good start, but of course their has to be some action as a result. So there needs to be learning and development opportunities that help people to follow their dreams and passions. Perhaps they love the creative part of their work, and learning graphic design would help them excel. Or maybe they love helping others and they can become the mentor for new team members. When everyone is learning in ways that fulfil their potential then the good practice is activated.

Creating Positive Outcomes

When developing potential becomes well embedded in an organization the ways of developing people become increasingly flexible and innovative. Learning is designed to meet individual needs, as well as the organizations and people are really learning and growing. This is where some measurement of the impact will be needed so that the organization can set improvement targets. The organization can measure things like the readiness of people to fill critical roles as a result of their learning and development, or the impact career development is having on retention, for example.

Embedded and Improving

When the organization consistently collects and uses this kind of data to help to determine how they can improve, and explains this to employees, then employees can take their own initiative to develop their capabilities in a way that meets their career goals and supports the organization’s capability requirements. This is an indication of a high performing organization in relation to developing people’s potential. To stay high performing the organization will regularly measure how well it is doing, and keep improving.

De Waal says when you have improved like this in all the 27 elements of Investors in People, to the point where you are seeing positive outcomes from your efforts, and use measurement to support continuous improvement, then you will also be a high performing organization. It takes sustained effort, but it’s not impossible. It might require culture change and different styles of leadership, but the effort will be worth it. To give you some idea of the 27 elements, in addition to building capability as mentioned above, they include transparency and trust, empowering people, encouraging innovation, and living the organization’s values.

Perhaps Uber could have avoided the current trials if their values had been more oriented around people. According to media reports, the President of Uber has just resigned stating that the company’s values are inconsistent with his own. Uber’s success has certainly been phenomenal until recently, so let’s hope they get back on the right track. There are a lot of things to get right to be and remain high performing. Fortunately, there are some well researched, tried and tested practices that organizations can use to stay on the right path.

How to Make Your Company Better

All organizations can improve, and need to keep improving to keep up with competitors and a continuously changing environment. Even high performing organizations need to improve. In fact continuous improvement is what differentiates high performing organizations from everyone else. The Investors in People standard is a framework that organizations can use to prioritise improvements in people management, in a way that makes a difference to business results. Investors in People has a free online self diagnostic which helps organizations to benchmark against the 27 themes, and see how well embedded good leadership and management practices are within the organization. It will help you identify, for example, if you need to work on building trust within the organization, or you need to make it easier for people to collaborate, or lead change more effectively. To quote a CEO from an Investors in People organization in the Philippines, “I’m an advocate of Investors in People, because I get a return”. Being Investors in People accredited gives organizations all the guidance needed to avoid the kind of problems Uber is having, and join the set that are better at everything. The journey to high performance is a never ending one, but it’s a good journey to be on. Check out the free self diagnostic at https://www.investorsinpeople.com/online-self-diagnostic

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