Key Components of High Performance Organizations

Principles of high performance are ubiquitous amongst organizations that traditionally outperform their competition. Consulting psychologists and business professionals are viable resources to identify and cultivate seminal attributes for high performing organizations. High performance organizations (HPOs) are designed to accentuate employees’ best performance and to “produce sustainable organizational results,” (Schermerhorn, Jr., Hunt, Osborn, 2003, p. 26). High performing organizations fundamentally underscore the pertinence of prioritizing people and intellectual capital. According to R.V. Armstrong and Associates, a high performance organization is reflected within a company’s structure, management operating system and culture where everyone participates in a shared vision and innovative leadership, dynamic change, sharing of information, systems understanding, self-managed teams, cross-trained workers, customer focus and the on-going introduction of new technology is present (R.V. Armstrong & Associates, 1997).

The five components of a high performance organization include employee involvement, self-directing work teams, integrated production technology, organizational learning, and total quality management (Schermerhorn, Jr., Hunt, Osborn, 2003). Employee involvement is a continuum polarized by uninvolved employees and highly involved employees. Self- directing work teams are empowered to make decisions about key facets of their individual work. “Integrated Production Technologies focus on providing flexibility in manufacturing and services and involve job design and information systems as a part of the technology” (Schermerhorn, Jr., et al, 2003, p.29). Organizations' ability to adapt to their settings and to gather information to anticipate future changes is known as organization learning. Organizational learning is a valuable tool to improve organizational performance by incorporating the processes of adaptive learning, which is deemed reactionary and incremental, and proactive learning, which is deemed intentional and premeditated (Beck, 1997).

Total quality management (TQM) is dedicated to ensuring that an organization is committed to high quality, continuous improvement, and customer satisfaction. Quality in this sense means that customer's needs are met and that all tasks are executed correctly the first time. These attributes and characteristics lead to outstanding performance in market standing, employee enthusiasm, customer response, innovation, productivity, quality and profitability. The process of reengineering, measurement, and the like through mapping has produced extraordinary results. This approach defines quality in terms of customer's needs, recognizes the tie between quality and profitability includes quality planning in the strategic planning process, and stresses continuous organization- wide improvement.

“While the TQM furor has cooled down substantially, the fundamental principles have had a tremendous impact on forward-thinking sales organizations” (Coker, Del Gaizo, Murray & Edwards, 2000). Consulting practitioners can assist managers in identifying viable action steps to build a TQM culture and instilling the commitment for established organizational performance measures, such as: Visible, unequivocal, and unyielding commitment to total quality and continuous improvement, including a quality vision and specific, measurable quality goals. Nudging people toward TQ-supportive behaviors by initiating such organization programs as (screening job applications rigorously, quality training for most employees, using teams and team building exercises to reinforce and nurture individual effort, etc.). Empowering employees so that authority for delivering great service or improving products is in the hands of the doers rather than the overseers (Thompson, Jr., Strickland III, 1999, p. 319).

Furthermore, utilizing virtual information systems to speed the diffusion and adoption of best practices organization- wide is also an interactive and iterative process for quality control. Lastly, instilling the impetus to not rest on “past laurels” and maintain a competitive edge is an added action step Total Quality Management provides (Thompson, Jr., Strickland III, 1999, p. 319).

Internal criteria for a high performance organization per Moravec & Associates (2004) entail: Changes in key leadership, business and organizational strategy, outcomes. Board member suggestion. Workforce and competitor competencies. Significant changes in products, services or the portfolio of products and services. Delayering, reorganization, rightsizing, early retirement: now how do we go forward? Unexpected breakthrough technology. Over-capacity, under-capacity. Inventory turnover. “Success brings failure.” Costs.

Budgeting. Time for a ‘major tune up’ (of start-up or mature business); team building. Obsolete, but comfortable, management practices Annual step back, assess, create a view of the future and plan outcomes. Upgrade management, question current practices; business stretch goals, targets, results; slow decision making, sluggish performance, to much same- same. Crisis or looming crisis. On-the-job development and assessment of management. Assess and develop successors. Organization competencies. Business plan (R.V. Armstrong & Associates, 1997).

External criteria important consequential changes in the business environment: Economy, Demand shifts, Competitive conditions, Globalization of markets, intense international competition, deregulation, Shifting resources, merging operations, adding operations, Obsolesce, Pace of change, Market demand, market share, industry trends, Growth, different customers, Suppliers, New competitors. New products, services. Patents. Loss, acquisition of major customers. Synergy, integration with an acquisition, new business. Sold off assets; discontinued a business, product line. Growth. New partner, joint venture, merger. International ventures (R.V. Armstrong & Associates, 1997).

In conjunction with the aforementioned criteria established by leaders in HPOs and identified by analysts, high performance organizations rely on relationships. Leading executives relate that long- term relationships are vital to their organizational success. Building partnerships with loyal customers may be regarded as equally important as employee involvement, self-directing work teams, integrated production technology, organizational learning, and total quality management (Coker, Del Gaizo, Murray, & Edwards, 2000). Consultants can assist organizations transcend from low performers to high performers by instituting these key facets. To remain competitive in today’s market without regards to industry, HPOs have exemplified a balance that will enable them to prosper in all aspects of their operation.

References:

Beck, K. (1997). Organizational learning and knowledge management. Retrieved November 12, 2006
Coker, D., Del Gaizo, E.R., Murray, K.A., & Edwards, S.L. (2000). High Performance and all of its members are Sales Organizations: Achieving Competitive Advantage in the Global Marketplace. 2nd Ed. [eBook]. New York, NY: McGraw-Hill Professional.
Moravec & Associates. (2004). Developing a high performance organization. Retrieved April 14, 2004
R.V. Armstrong & Associates. (1997). High performance organizations. Retrieved April 14, 2004
Schermerhorn, Jr., J.R., Hunt, J.G., & Osborn, R.N. (2003). The High Performance Organization. In Schermerhorn, Jr., J.R., Hunt, J.G., & Osborn, R.N. (11th Ed.), Organizational Behavior. (pp. 22-36). Hoboken, NJ: John Wiley& Sons, Inc.
Thompson, Jr., A.A., Strickland III, A.J. (1999).Implementing strategy: budgets, policies, best practices, support systems, and rewards. In Thompson, Jr., A.A., Strickland III, A.J. (8th Ed.), Strategic management: Concepts and cases. (pp.314-319). New York, NY: Irwin McGraw-Hill.