Last month, I shared 34 best practices that have been demonstrated to promote high performance in organizations. I labeled them the “silver bullet” for achieving and sustaining performance excellence—they represent best practices in customer focus, workforce engagement, process improvement, and organizational measurement (to see the column, visit http://performanceexcellencenetwork.org/newsletters/).
This month, I’ll share another 12 best practices that can instantly help your organization improve its performance. I’ll also offer a tool to help your organization improve its results – a complimentary gift to PEN members. So I hope you can invest 10 minutes to see how your organization can reach higher levels of excellence…
As I mentioned last month, there are six general things that leading organizations – organizations that are at the top in their industries or markets – do. I think you’ll agree that:
5) High performing, world class organizations plan for the future. They focus on their changing environment; systematically address strategic challenges; ensure adequate resources to accomplish key goals; and deploy, measure, and adjust plans as needed.
However, (effective) strategic planning is hard. As I referenced in a newsletter column a couple of years ago, about 70-90% of business strategies fail, which has a huge impact on organizational results (from a Digineer study, January 2010):
- Decreased employee commitment, 67%
- Lost Market Opportunities, 53%
- Decreased Revenue, 53%
- Increased Costs, 39%
- Increased Cycle Times, 28%
- Decreased Customer Loyalty, 28%
- Lost Market Share, 28%.
Here are some best practices in strategic planning:
- Understand your organizational environment – your strengths, weaknesses, opportunities, and threats in terms of changing market and customers’ needs, shifts in technology, competition, regulations, and risks.
- Identify your strategic challenges, strategic advantages (marketplace benefits that ensure future success), and core competencies (areas of expertise/strength that are difficult to imitate and create a sustainable competitive advantage). And then determine strategic objectives that address your challenges or leverage your advantages/competencies. Strategic objectives should be measurable, outcome-oriented results the organization must ACHIEVE to be successful in the future (they are NOT action plans). They should be challenging, but realistic.
- Develop action plans that align with strategic objectives. Action plans should include the details of resource commitments and time horizons for accomplishment. Deploy them throughout the organization, assigning ownership and accountability for completion.
- Involve all key stakeholders in the development of your plans. It increases buy-in, develops stronger plans, and assists in ownership for implementation.
- Determine resources (human, financial/budget) AFTER you establish direction (most organizations do it the other way around).
- Track the achievement and effectiveness of action plans, and adjust plans as environmental factors dictate. Project your organization’s performance as well as your competitors (so as to see a path forward and to have milestones that facilitate adjustments when plans are not on track).
- Design and innovate work systems that relate to and capitalize on your core competencies. “Work systems” refers to how work gets accomplished (through workforce, suppliers/partners, contractors, collaborators to produce and deliver products and services). In the context of planning, great companies will systematically determine what they choose to outsource to external resources and what they choose to retain internally due to core competency, intellectual property, efficient and cost, or other factors.
There are many effective planning processes (Hoshin Planning, large-scale change, catch-ball techniques, balance scorecard, and many others). But the key is to understand your environment; set strategy to address challenges and leverage advantages; and deploy, measure, and adjust plans. The role of organizational planning rests with its leaders…
6) High performing, world class organizations have visionary leaders. Leaders’ actions should guide and sustain the organization – they should create an environment for performance improvement, accomplishment of mission and strategic objectives, innovation, high performance, organizational and workforce learning, and agility.
Why is leadership important? Simply: effective leadership is the single biggest predictor of organizational excellence. Period. Quite a bit of research backs that up.
Here are some best practices in leadership:
- Be personally involved in setting vision and values and in deploying and reinforcing them throughout the organization. Be personally involved in creating a focus on action, on balancing value for customers and the organization, on rewarding/recognizing performance that supports high performance.
- Create an environment for the achievement of your mission, improvement of organizational performance, performance leadership, organizational and personal learning, innovation and succession planning.
- Be personally involved – and create systematic processes – to ensure ethical behavior on all stakeholder transactions. Include ethics in training, communications, measurement, performance appraisals.
- Ensure effective, frank two-way communication with the workforce. Use various media/vehicles for different messages and for different workforce groups. Measure effectiveness of communication to see if messages are received (correctly).
- Ensure effective governance – accountability, transparency, and protection of stakeholder interests. Evaluate leadership (senior leaders and governance board) effectiveness.
- Systematically address impact on society of your services and operations, and anticipate public concerns with current and future services and operations.
- Support and strengthen key communities, focusing on areas related to your core competencies and strategic objectives. Consider societal well-being – environmental, social, and economic systems – as part of your strategy and daily operations.
So there you have it – the six things that organizations need to do in order to achieve and sustain performance excellence:
- You need to focus on customers – to listen and anticipate their needs, to build relationships and engage customers so that they are committed to your organization, are loyal, and are willing to advocate for and recommend your organization to others.
- You need to engage your workforce so that they are satisfied, capable, and fully motivated to reach high performance, to serve customers, and to achieve organization objectives.
- You need to focus on your processes so that you can optimize your resources and deliver products, services, and programs that satisfy – fully satisfy – customer needs and create value for the enterprise.
- You need to measure performance, both at the day-to-day operating level as well as the strategic level – ensuring that facts (rather than intuition) become the basis for organizational decision making and improvement.
- You need to set and deploy strategy – to set a course for the future, a grand vision for the organization.
- You need to have effective leadership that sets vision; aligns, guides, and manages the organization; focuses on workforce, customers, and partners; communicates effectively; and ensures accountability, transparency, ethical behavior, support of key communities.
Incidentally, these six things are captured in the Baldrige Criteria for Performance Excellence, as set of best practices that change every two years by studying organizations with demonstrated high performance outcomes, and incorporating their best practices into future Criteria against which other organizations can gauge performance. As such, these Criteria have become the “leading edge of validated management practices.”
Last week, we hosted our 26th annual conference – PENworks 2013 – at which 23 organizations presented their best practices for achieving organizational excellence. For more information, see article 2 below, and for presenter slides and a link to keynote videos, visit www.performanceexcellencenetwork.org.
So if those 46 best practices all work, and if all of them are important in driving organizational excellence, then what’s the most important to ensure your organization’s success?
(Pause, crickets chirp.)
I believe that’s where many organizations need some help. You see, I believe that ALL of these things are important to an organization’s success. But organizations are highly complex – they are a system of literally hundreds of processes that fit together to create something of value (presumably) for stakeholders. Therefore, organizational leaders sometimes struggle to understand how the system is working: leaders sometimes fail to cut through the complexity in their system to understand where they have strengths on which they can build, and where they have opportunities or gaps on which they need to focus.
That’s where PEN’s core service – a comprehensive organizational assessment – can help leaders identify and prioritize opportunities for improvement, help leaders optimize their resources and maximize their performance outcomes, and help leaders help their organizations achieve the highest performance possible.
There’s the silver bullet…the secret sauce: it’s about managing your organization as a system. It’s not easy. But it’s no longer an option. After all, can you name any organization that doesn’t have to focus on its customers (patients, students, stakeholders), doesn’t have to engage its workforce, doesn’t have to set a direction for the future and align resources towards achieving that vision; doesn’t have to measure performance and make course corrections; doesn’t have to manage and improve its processes so that value is created for its stakeholders and the organization can sustain its vitality? ALL organizations need to manage and improve ALL of these areas – it’s really only a matter of how WELL they manage the system.
So I’m going to offer a “deal you cannot refuse.” PEN is going to offer a FREE mini-organizational assessment to the first 3 organizations who respond (or if you’re already using the framework, a $900 credit on your next assessment). It’s on-line and fully automated, and it will give you the voice of your people – not an employee opinion survey or an employee satisfaction survey, but an employee perception survey of how your organization is performing. It’s a couple of dozen questions, takes about 30-45 minutes per employee to complete (anonymously), can be given to a sampling of your people, and it will give you insights into how your enterprise is performing – on your strengths, on your opportunities for improvement on which you might focus your energy and resources.
This offer is completely, 100% free for member organizations of the Performance Excellence Network (an $1800 value). Since it is designed for organizations, we request only organizations of two or more employees respond rather than individuals or sole proprietors. It can, however, be administered to parts of an organization (department, unit, team, division, site). For more information, contact me at firstname.lastname@example.org. The first 3 to respond are free; any beyond those three are eligible for the member discounted rate ($900).
Also, if you’re interested in learning best practices from any of the 23 organizations that are on the journey to performance excellence visit www.performanceexcellencenetwork.org.
Achieving organizational excellence is difficult; sustaining it is even more challenging. The journey to excellence never ends.