How effective organisations are delivering high performance

Productivity is vital but insufficient for successful competition.  Knowledge workers should be delivering more than productivity.  Organisations need performance which is driven by innovation focus and productivity.  And the most consistent and effective ideas are coming from teams of knowledge workers.  The best ideas are seldom created by gurus working in isolation.  So how can you develop teams develop adaptable, high performing teams that:

• Make money for the company
• Introduce new products, services or processes
• Open new markets

Are your teams performing?  For teams to deliver their best you need to create an environment in which people can take risks, can review their results and learn from their mistakes.  The whole team should be involved in understanding and resolving problems and in learning from mistakes.

In a global study of knowledge workers by Susan Annunzio, 77% said their team was high performing.  However, only 10% of the respondents could provide evidence of high performance.   The distribution in the study was skewed towards non performance, something like this:

90% of the highest paid and best educated employees around the world are not in high-performing teams!

Here is a bit more detail on this introduction

So how can we improve this shocking figure?  The answer it seems, lies in how you treat your teams.

Performance comes from people

Treating people well makes money.  Performance monitoring, compensation, benefits and rewards are useful management tools.  However, relying only on these tools runs the risk of generating unwilling compliance or worse still, malicious obedience.  High performance depends on an environment in which people feel respected and appreciated.  According to Steven Covey heartfelt commitment and creative excitement are dependent on teams feeling a love for what they do and understanding the meaning of their work.  Jim Collins, who wrote “Good to Great” says the key is to find good motivated people and to ensure that you don’t do things that demotivate already motivated people.  And no talk about teams would be complete without reference to the work of J Richard Hackman.  Here is a diagram showing his requirements for Internal Motivation in teams:

When teams experience the responsibility doing meaningful work, and when they get immediate feedback on the results of what they do, they have a better chance of becoming more internally motivated.

But it is not always possible to offer everyone in an organisation the focus required to increase motivation.  How do you choose where to focus your management effort?

There are some key principles required for high performance.  Susan Annunzio shows how a number of organisations have built successful businesses on a philosophy of creating the most effective environment for their teams.  She suggests three core factors required for a high performance:

The Susan Annunzio study showed how organisations with the most invigorating, challenging and supportive environment attracted the best people.  But how can you use these factors to achieve high performance in your organisation?  Not all organisations have the kind of budgets that allow them to develop everyone in the organisation.  Here is a high level process you may wish to consider for implementing a performance improvement programme.

A staged process for achieving high performance

Step 1 Get the most from your top performers.

Even the best can do better.  The first step is to help the teams in the top 10% of performance to reach their full potential.  10% is a manageable size for a pilot project and these teams will respond most readily to input.  There is some more detail about this in this posting.  This may produce a distribution similar to this:

Susan Annunzio describes a project at Lion-Nathan, a large brewer in Australia.  They selected leaders who went through an intensive programme to learn about their leadership styles and behaviours.  Each participant also received intensive coaching to improve interpersonal skills and team dynamics.  They received ongoing feedback on their success in creating a high performance environment.  Every two years the company holds a culture survey with results fed back to all the teams.

In the years from 2000 to 2003 annual sales in Lion-Nathan rose 41% and net income increased from $2 million to $122 million.

Step 2:  Develop the best of the middle

52% includes a large potential for improvement.  Once the top performing teams are operating at their best, the next step is to boost the performance of the most promising teams from those performing moderately well.  This process can be done using representatives from the most effective teams.  Success in this endeavour will move these teams into the “High Performing” bracket.    Here is a posting that will provide more detail on this step.  This may produce a performance distribution similar to this:

In her book “Contagious Success” Susan Annunzio describes how the Bank of Ireland is using the Operations and Payments team, which is performing well above the rest of the bank, as facilitators in the process to improve performance throughout the bank.

Step 3:  Encourage the rest of the middle

Those at the bottom end of the middle of performance can be encouraged to up their game.  This part of the model is not highlighted in the Annunzio model.  The endeavour does not need to be time consuming or costly.  And any in this group who can be stimulated will be a win for the organisation.  Those who do not activate will join the lower group after Step 4 below:

Step 4:  20-70-10 – move the underperformers out

People consistently under-performing are probably doing the wrong job.  Susan Anunnzio points out that you can’t cut your way to performance.  But Jack Welch from General Electric says the lower 10% have to go!

This was part of the 20-70-10 differentiation process he implemented while he was CEO of GE.  (Winning p41).  This approach may seem harsh but there are ways to address this.

The approach is congruent with the leadership and teamwork models developed by John Maxwell.  One of his “Indispensable Laws” is that the weak links create difficulties for teams.  They don’t deliver and they demotivate the more enthusiastic members who are left wondering why the weak links are tolerated by the team leadership.

In this step, the lowest performers are either stimulated to perform.  Or if they cannot perform, they feel the pressure to leave the organisation.

This is explained in a little more detail in this blog posting.

20–70–10

Every year each team identifies the top 20% of performers, the middle 70% and the bottom 10%.  The top 20% are rewarded magnificently.  The middle 70 are nurtured and given a sense of belonging.  They are trained, given positive feedback and thoughtful goal setting.  The bottom 10% are fired.

When the cycle is complete the result is an increase in performance:

And it is a cycle.  It may look like you need to go step by step but of course this is not necessary.  The cycle would look like this:

Step 5:  An ongoing process of team performance improvement

This will have the effect of raising the bar of performance for teams in the organisation.  It will also have the potential to create enormous enthusiasm for growth in the teams in your organisation.  This process should change the distribution to of the performance in your organisation.