Want to unlock the door to business success? Use 9 keys to high performance
Part II in an Organizational Excellence Framework series
Successful companies don’t just happen. We build them—consciously, carefully and strategically. There’s a recipe, too, if you will, for hitting your highest potential: the nine key principles of the Organizational Excellence Framework.
In my first post of this series on the Organizational Excellence Framework, I described what an excellence model is and why it’s important for your business. In this post, I highlight the framework’s nine key principles. My next post will focus on the practices high-performing organizations actively pursue to operate consistently using these business principles.
An Organizational Excellence Framework gives you a holistic view of your business, providing consistency and structure. Staying competitive has always been tough, but in today’s hyper-accelerated global and digital economy, it’s even harder. A full half of all Canadian small businesses will fail within the first five years, according to the Financial Post, making a strong central framework even more essential to reaching your top potential. The first step is incorporating the very best in industry-leading management principles. Let’s dive in.
What are business principles?
These define how an organization expresses core values, rules and norms. Business principles describe the way a company will operate and what behaviors support its values. From these foundational and value-driven statements, the organization builds its operating policies, standards and guidelines.
Peter Drucker’s well-quoted adage “Culture eats strategy for breakfast” highlights the common belief that having a great company culture gives your business a distinct competitive advantage. But what core values, rules and norms must be in place to create that extraordinary culture? A recent strategy+business article pinpoints 10 principles for mobilizing your organizational culture—the second of the 10 is “change behaviors and mind-sets will follow.” Organizations worldwide, and across industry sectors and size, that are consistently high performing all share nine key business principles. They are:
1. Leadership Involvement
While it may seem elementary, the most common quality leaders lack is communicating a vision. That’s what Suzanne Bates concluded in her research study of business leaders and the 15 key traits and behaviors that make up “executive presence.” To be consistently high performing, leaders and leadership teams must be actively involved in establishing—and communicating—the organization’s direction.
A recent Fast Company article on successful employee engagement showcased one business and its leaders that have effectively communicated the vision—Quicken Loans, a multi-year award-winner as one of the best places to work in America. Quicken Loans’ CEO Dan Gilbert annually updates the company “book” that describes the organization’s values and then “ensures every person knows what behaviors are rewarded and what principles are to inform every decision.”
What is your company’s purpose? Alignment is based on the understanding that each organization is a system of interrelated and interconnected work processes. Businesses achieve higher performance when all resources, including people, processes and systems, are optimized towards the company’s purpose and strategic objectives. In my first series post, I shared Jonathan Trevor and Barry Varcoe’s insights from their Harvard Business Review article that the best companies are the best aligned. A simple test is to ask, “How aligned is your strategy to your long-term purpose?” and “How aligned is your strategy with your organizational capabilities?”
3. Focus on the Customer
Being customer-focused is a tenet of businesses today. But does everyone on the front line and the leadership team have understanding, plus meeting customer needs as a primary focus? How is this expressed? What values, norms or rules need to be in place in order to satisfy the ever-changing customer's needs?
From its experience consulting with laggard and leading customer-centric organizations, McKinsey & Company found companies require three levels of effort/behaviors. No. 1 is to have a customer-centric leadership structure that reports directly to the CEO. Second, the leadership team must demonstrate and model behaviors consistent with having a customer-centric focus throughout—all the way to the frontline. Finally, the business needs to have metrics and incentives that reward cross-functional team efforts rather than solely within siloes.
4. People Involvement
Only 32% of the U.S. workforce and 13% of employees worldwide consider themselves engaged at work, Gallup research found. That’s not very good, and it warrants consideration. What core values does your company express that support workplace engagement? One model suggests there are five elements driving engagement: meaningful work, hands-on management, positive work environment, growth opportunity and trust in leadership (Josh Bersin of Bersin by Deloitte).
In top performers, the organization places value on employees developing to their fullest potential. The company rewards behaviors that nurture and reinforce cooperation and teamwork. In the same article, Bersin indicates that “high-impact organizations also spend 1.5 to three times more on management development than their low-impact peers.”
5. Prevention-based Process Management
Does your company have a prevention-based mindset about business processes? These are the activity or set of activities formalized within the business to reach a specific goal. A prevention-based approach values operating consistently in a way that reduces waste (non-value-adding activities) and helps minimize risk for the organization. The values and principles of an agile approach support a prevention-based mindset by, for example, eliminating redundant meetings and taking an iterative approach.
6. Partnership Development
Developing and maintaining relationships with suppliers and partners is key. What core values and behaviors support the development of these strategic alliances? Individuals and companies can succeed by taking an ecosystem mindset, says John Geraci in a recent Harvard Business Review article. It starts with a journey toward understanding your ecosystem: building new connections; establishing channels between possible partners; then partnering with others; and fostering sustained action.
Ask key questions when forming strategic alliances, suggests The Business Development Bank of Canada (BDC), a financial institution supporting entrepreneurs. For example: What are the attributes you are looking for in a partner? Do you have the same objectives? Have you clearly articulated your expectations of each other?
7. Continuous Improvement
Does your business relentlessly pursue improvement? Leading organizations have this embedded in their cultural DNA. A consistent focus on business principles—and establishing a systematic way to harness the collective knowledge, skills and creativity of their stakeholders—sets these companies apart. Take this example of Norwegian Cruise Line that has benefitted from promoting a systematic kaizen (Japanese for improvement) approach to fostering the owner's mindset for all employees (Chris Zook, Harvard Business Review). Norwegian’s customers benefit from an organizational culture where ideas are encouraged and shared by all stakeholders, and from a company that is continuously improving and streamlining processes.
8. Data-based Decision Making
There is a data deluge in today’s business world. How can the workforce “change their behaviors and use analytics in their day-to-day jobs, and rely on facts?” This is the question posed in the Deloitte article, Today’s organizational challenge: From gut feeling to data-driven decision-making. But beyond any data or technology-based issue, as the business world adopts data-driven decision-making, the authors see this as an organizational issue. Top organizations use performance measurement findings and support behaviors that accelerate data-driven decision-making throughout the organization.
9. Societal Commitment
What core values and behaviors demonstrate societal commitment? While global definitions vary, the Government of Canada defines Corporate Social Responsibility (CSR) “as the voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner.” In an interview with NewCo, Tim O’Reilly said, “We have to make it clear that the obligation and the self-interest of every company is to build a robust society that works over the long term.” This final principle underscores the foundation of today’s pioneering companies—and paves the way to future success.
Does your organization have a culture committed to excellence? In upcoming posts I'll dive into the best management practices businesses use to further develop these principles and the way people work together to achieve high performance.
This is the second in a series on the Organizational Excellence Framework.
If you are interested in a snapshot of your organization today, highlighting your strengths and areas for improvement, take a quick free assessment here. Or if you want to discuss your organization’s strategic needs in greater detail, please contact Katherine directly.