Business Strategy

The Core Components of a High-Performance Organization

high performance organization

In the never ending struggle to build a well-oiled machine, leaders have been asking the question: “What do I do to turn my company into a high-performance organization?”

The Organization Development Practice at the Global Strategy Consulting firm, Kaiser Associates, defines a High-Performance Organization (HPO) as “an organization that performs better than its peers in regards to business performance, innovation, employee productivity, and engagement, over a sustained period of time.” To outperform your peers in one of (if not all of) those regards is certainly a tall order. Which is why Kaiser Associates set out to create a framework to help companies move the needle.

The firm conducted a study of numerous HPOs and has identified four core components that are paramount in turning an organization into a top-performing outfit including: Organizational Structure, Process, Culture, and People – which the firm defines accordingly:

  • Organizational Structure – “Designing an organizational structure that provides a clear governance structure, roles and responsibilities, and visibility of areas of importance to the executive level”
  • Process – “Designing processes that ensure a high quality and consistent approach to workflow, often enabled by technology, to accomplish the organization’s goals effectively”
  • Culture – “Organizational culture that fosters performance, innovation, productivity, employee engagement, teamwork and excitement for future”
  • People – “Hiring the right people for the right role, developing talent from within, and capitalizing on strengths of employees to support both the individual and the organization”

Kaiser Associates advocates for a holistic approach of nurturing each component while keeping the others in mind, and accounting for outside factors which may cause a firm to reprioritize their focus in ever-changing market conditions. However, focusing on one component while neglecting the other three “will lead to sub-optimal outcomes,” warns the firm.

The framework is designed so lines can be blurred between the four quadrants to enable innovation and creativity. They offer the example of Nike, who created the “Innovation Kitchen” – an open-incubator space for employees to collaborate and create outside of the company’s standard product lines.

In this example, they created a new process that encourages engagement with their people, fosters an innovation-driven culture, which blurs the organizational structure in a ‘safe to do so’ environment. As a result, “Kitchen Employees” created a new product line known as “Nike Flyknit” – which after three months from the release date had increased Nike revenue 40%.

In addition to this framework – Kaiser Associates states that there are two Key Enablers that allow for the development of the core components: leadership commitment and change management. Without buy-in from senior management and a systematic change management approach, the agility at which an organization is able to achieve high levels of performance is significantly hampered.

To access the full report on High-Performance Organizations, and Kaiser Associates’ analysis of HPOs including: Hubspot, JetBlue, BMW and Intuit Click Here.

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