By James T. Stodd, MS, SPHR, SHRM-SCP
February 8, 2018
What is a “high performance organization”? Well, they frequently include those most recognized and admired; the ones that tend to stand out and to serve as role models for the rest of us. According to Fortune , today’s list of those “most admired” would include Apple, Amazon, Alphabet, Berkshire Hathaway, Starbucks, Microsoft, Southwest Airlines, and the list goes on. Of course the names on such lists change with the times, but many of us have been reading about such stand-out business organizations for years, and some like Jim Collins , Ken Blanchard , Tom Peters and others have made a career of studying, teaching and writing about them for some time. And, no doubt someone is currently writing the next business best-seller that will highlight and summarize the same enduring themes and principles, but to a new generation.
Contrary to what these books may illustrate, being a high performance organization (HPO) does not require size, scale, a global presence or “rock star” notoriety. Rather, the characteristics that frequently make the “most admired” such outstanding organizations can equally reside within smaller, localized, privately held (vs. publically traded) and even non-profit service organizations, and often do. In fact, the purpose of this paper is to encourage such high performance characteristics and practices amongst the common and not-so-famous business enterprises that comprise the backbone of our economy and local business communities. So what makes these organizations so special? Let’s look at the enduring characteristics that follow.
1. Disciplined and Unrelenting Focus
HPO’s have disciplined cultures that focus the organization’s efforts on achieving and maintaining the following positions:
• Provider of Choice (Customers)
• Employer of Choice (Existing Employees and New Recruits)
• Investment of Choice (Stockholders, Investors and/or Charitable Donors)
HPO’s strive to simultaneously achieve and maintain a superlative position with each of these three groups (customers, employees and investors), and to maintain an ongoing balance of interests between the three (what Blanchard refers to as the “healthy triple bottom line”). Everything else becomes secondary. Doing so requires cultural discipline and commitment with an understanding that “excellence” always begins and ends with the customer. In short, HPO’s understand that in the long-run neither investors nor the organization’s employees can “win” unless the organization continuously delivers superlative products and/or services to its customers.
2. A Culture of Empowerment
Students of HPO’s almost universally believe that attaining a HPO-level of customer focus can only be accomplished when an organization has a highly talented, superbly equipped, highly motivated, and fully engaged workforce…you just don’t get the one without the other. According to Blanchard, Collins and Peters the key to building this type of customer-focused workforce can be summed up in the word “empowerment”. Blanchard describes empowerment as “the creation of an organizational climate that releases the knowledge, experience and motivation that resides within people.” Put a little differently, it means letting people bring their brains to work and apply them liberally to achieving the results and outcomes desired by customers, investors and other employees.
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3. Purposeful Measures & Metrics
Sustaining focus on the right goals requires purposeful measures and metrics that provide useful feedback about where you stand relative to the goal. That being said, a great example of purposeful measures and metrics can be found on the corporate fact sheet as well as the investor relations section of Southwest Airline’s corporate website. There you will find a lengthy list of facts, distinctions and recognitions, many of which speak to Southwest’s relenting focus on customers, employees and investors. Examples include:
• Customers: Rated #1 in the DOT’s customer satisfaction rankings for 22 of the last 26 years
• Employees: Ranked on the list of Best Places to Work in 2017 by Indeed
• Investors: The only domestic airline with 44 consecutive years of profitability, and a decades-long history of returning capital to shareholders
How should we measure the outcomes sought by our customers, our investors and our fully engaged employees? Needless to say, the answer concerning the best measures and metrics will vary from company to company. The first issue is to know what is both relevant and measurable for your organization. The second issue is to devise a method of using these measures and metrics to maintain focus, assess accomplishment, provide feedback, and distribute appropriate recognition and rewards to those who make these achievements possible.
4. Linking Rewards to Purposeful Measures & Metrics
Most of us would likely agree that being able to work in an organization that truly empowers its people would naturally provide meaning, personal growth and many other intrinsic rewards…in short, it just has to feel good! However, in a previous white paper we reviewed recent data confirming that “pay” continues to be a critical factor in attracting, retaining and engaging top talent, particular in today’s economy. As such, sharing the monetary rewards reaped by the organization’s investors serves to strengthen workforce attraction, retention and engagement significantly above what can be accomplished relying merely on the intrinsic rewards associated with the work. Equally important, sharing these rewards demonstrates true respect and appreciation for those whose work has resulted in superlative outcomes for customers, and gainful returns to investors. As such, I would expand Blanchard’s definition of “empowerment” to mean the creation of an organizational climate that releases and rewards using the knowledge, experience and motivation that resides in people.
5. Pay Transparency and Communication
Employee perceptions regarding both the “competitiveness” and “fairness” of pay practices have been shown to be important in attracting, retaining and engaging top talent. Both PayScale and the Economic Research Institute (ERI) have recently released whitepapers arguing the need for greater transparency and more frequent communication regarding an organization’s pay practices. Why? Research has shown that employees naturally tend to believe they are underpaid (and undervalued) if factual information to the contrary is not presented. Furthermore, research also shows that the mere perception of being underpaid, regardless of whether it’s true or not, is the biggest driver of talent attrition.
Finally, perceptions of inequity (lack of fairness) contribute to a “cognitive dissonance” that often leads to adjustments in attitudes and/or engagement behaviors. The adjustments caused by this “dissonance” are almost always contrary to maintaining the emotional commitment and engagement that fuel high performance organizations. According to the ERI report, “…high performing organizations with engaged workforces have transparent compensation communications that …explain the complexities of compensation decisions in a user-friendly, intuitive manner.”
So, let’s do inventory! Does your organization…
• Place paramount focus on being the “best” in the view of your customers, the employees that serve them, and the investors that capitalize your firm?
• Keep these goals in balance and pursue them simultaneously?
• Ensure your employees feel fully empowered and equipped to make good things happen?
• Use purposeful measures and metrics to establish goals, maintain focus, and celebrate accomplishment?
• Proactively discuss your compensation practices with your staff so they understand your respect for their work, your concern for fair treatment, and your desire to share the rewards associated with doing what is valued by both customers and investors?
 Fortune: Worlds Most Admired Companies for 2017 (see fortune.com/worlds-most-admired-companies)
Jim Collins, Good to Great: Why Some Companies Make the Leap…And Others Don’t, New York: HarperCollins Publishers Inc, 2001.
 Ken Blanchard, Leading at a Higher Level: Blanchard on Leadership and Creating High Performance Organizations; Upper Saddle River, NJ: FT Press (The Blanchard Management Corporation), 2007.
 Thomas J. Peters and Robert H. Waterman, Jr., In search of Excellence: Lessons from America’s Best-Run Companies, New York: HarperCollins Publishers Inc., 1982.
 Southwest Airlines, Southwest Corporate Fact Sheet (see https://www.swamedia.com/channels/Corporate-Fact-Sheet/pages/corporate-fact-sheet)
 Southwest Airlines, Investor Relations (see http://www.southwestairlinesinvestorrelations.com/)
 James T. Stodd, Employee Engagement, Retention and Pay (Part 1), LinkedIn Posts, 2015.
 PayScale, Getting Real About Employee Engagement, (see https://www.payscale.com/content/whitepaper/Getting-Real-About-Employee-Engagement-How-to-Get-Started.pdf)
 Economic Research Institute, Why Is Pay Transparency Important? (see https://downloads.erieri.com/pdf/Why_Is_Pay_Transparency_Important.pdf?utm_source=Email&utm_medium=Newsletter&utm_campaign=ERI_Compensation_News_January_2018)