Thought Paper

A Look at High Performance Management

It turns out that the most respected and successful companies have some notable things in common.  In particular, they excel in their focus on three critical areas of business performance: 

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Total Customer Satisfaction (TCS)

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Total Productivity Improvement (TPI)

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High Performance Management (HPM)

While on the surface these may seem obvious, most businesses fall short of what it takes to make their performances truly great.   Read on and think about how your business ranks in these three areas and how you might accomplish significant improvements, personally and corporately.

Total Customer Satisfaction (TCS)

We all know the importance of customers.  Without healthy revenues on the top line, our businesses would cease to exist.   But Great Companies have a customer service mentality that permeates the company at all levels and the customers sense it.  Decisions are driven by how those actions would impact customers.  

Total Customer Satisfaction doesn’t mean caving in to every client’s demands or wishes, but it does mean open and frequent communications and an attitude of respect.  Further, achieving TCS means: 

    • On-going account managment and face time with customers (even during the pandemic)
    • Having a sense of urgency in solving customer-related problems
    • Customer Satisfaction measurement systems exist and are used
    • A service (versus product) driven philosophy prevails

Since customers buy from those who best meet their needs, it’s critical to know what those requirements are.   Thus, having available excellent market research, strong product management, and clearly-stated value propositions are important factors in achieving Total Customer Satisfaction.

In contrast, not-so-great companies are internally-oriented instead of customer-focused.  They are rule-driven, risk-adverse and control-biased.  They tend to be enamored by “products” and measure things important to the company, not customers.  Decision structures are complex and lots of people can say “no.”   The bottom line is they’re not in touch with customers and their needs.   This is not where you want to be!

Total Productivity Improvement (TPI)

Surprise, surprise:  Great Companies actually measure productivity.   And they do so in multiple ways and at multiple levels.   It is common for manufacturers to measure units per hour, percentage output per unit of input, # of defects, etc.   Software companies measure lines of code or function points produced per unit of programmer time, # of bugs at various levels of unit and system test, etc.  And many companies have metrics such as Revenue per employee, or base their sense of productivity on Net Income or EBITDA ratios.  Those are all fine … but not enough.

Companies achieving the best TPI results also measure productivity on an overall basis as their prime metric.  The calculation is a simple indexing of the ratio of total results to total input on an inflation-adjusted basis.   What’s that mean?   First, take the current period’s total revenues and deduct the impact of any price increases from the prior period.  Next total all the expenses, again adjusting out any cost inflation impact.   Now divide the adjusted total revenue by the adjusted total cost and get a ratio.   Divide that ratio by the prior period’s ratio.   The result is the positive or negative TPI index. 

Often, executives looking at a TPI index for the first time are surprised at the answer.  For example, they may have felt via all other measures that the organization’s productivity was good, but in fact, the results were skewed by price increases in excess of cost increases.  Or, for example, by not incorporating the true cost of an acquisition, they were fooled into thinking productivity trends were favorable when the reality was a significant negative.

With a focus on Total Productivity Improvement, Great Companies assure that their foundations are healthy and contributing to positive profitability growth.  Not only is productivity measured, but there is a constant challenge to the status quo, the organization is geared to expect and accommodate change, and rewards are tied to results.   At Great Companies, there is a clear vision of direction and little wasted motion.   Individuals feel empowered and the culture is one of problem-solving and high expectations.

High Performance Management (HPM)

It certainly makes sense that high performance organizations would be comprised of high performance managers and teams, and indeed, that’s the case.   Great Companies have a special focus on recruiting and training employees to assure they reflect high-performance characteristics.   Here are some of those key traits:

    • Proven track record on prior assignments
    • Customer-focused
    • Has a vision, expressed with passion and clarity
    • Enables and empowers
    • Considers consequences and deals with issues timely
    • A Change Agent

The “Change Agent” characteristic is a critical one in achieving success in High Performance Management.   As you think about your company, what percentage of your employees can you say are truly change agents?  Probably not that many.   But Great Companies encourage, train and reward employees such that many fall under that label. Let’s think about what it takes to be “High Performance”, and therefore, an excellent Change Agent.

First and foremost, Change Agents make a clear difference.   They turn opinions and complaints into action.  They are proactive and not reactive.  They have a vision and the drive to achieve it.

Change Agents are committed to action.  They make things happen, are accountable, and take ownership.   They are resilient, persistent, and non-resistant.   They have a strong internal sense of personal responsibility and acceptability, and that’s expressed by setting goals and meeting their commitments.

Not every person in a High Performance company is or needs to be a change agent.  But your formal and informal leaders do need to have those traits.   In addition, High Performance Managers demonstrate additional important skills.  They are able to remove obstacles, for example, thereby turning problems into opportunities.  They take appropriate risks, and they are capable of making tough, fact-based decisions.  In so doing, they first understand the likely consequences of the alternative actions, weigh and balance the outcomes, and then avoid procrastination.

A High Performance Manager moves promptly on low performers, which means identifying them quickly, documenting appropriately, and taking timely action.  Further, HPM means having integrity and honesty in all dealings.  That “truth in lending” approach encourages candor and the prompt surfacing of problems, obstacles and issues.  Certainly, a “shoot the messenger” attitude has no place in a high performance culture.

In empowering and enabling, the High Performance Manager sets tough, but doable goals.  The relationship with employees is a respectful, but “demanding”, partnership that challenges and stretches.   Clear accountabilities are established.  That means setting the parameters – i.e., the size of the “sandbox” – delegating, and then monitoring appropriately.

High Performance Managers focus on building stronger organizations via upgrading skills, counseling and coaching, teaching, praising, and disciplining.  Importantly, they also listen.   Through that listening they create a “learning” environment, leverage group intellect and creativity, encourage “team play,” and surface issues that need attention and action.  In addition, they know when to be involved so as to avoid over-managing or “upward delegation” by their direct reports.

conclusion

Great Companies are by definition High Performance Companies.  To accomplish this, they are driven by achieving Total Customer Satisfaction, Total Productivity Improvement, and High Performance Management.

Performance in each of the “three legs to their stool” is measured, monitored, assessed and improved continuously.   The business is customer-centric and market, not product, driven.  Employees are treated with respect and tapped for their energy, intellect and creativity, but also encouraged, challenged and stretched.

Making it all happen are High Performance Managers, who exhibit solid “Change Agent” characteristics.  Those managers excel at:

  • DOING the Right Things Right!
  • Being role models, not critics or cynics
  • Listening and Absorbing
  • Communicating with clarity, energy, & passion

key takeaways

As often quoted, “If you always do what you always did, you’ll always get what you always got.”   Set for yourself the goal of being a High Performance Manager in a High Performance “Great” Company.   It’s not that hard, but it does take focus and work.

As long as your efforts are validated against appropriate KPIs or OKR’s, focusing on these programs will not harm you. 

  • Ask yourself if your team really has intimacy and current understanding of your customers?
  • Is your organization aligned with current strategies, goals and objectives? If not, High Performance teams will identify the gaps and inconsistencies.
  • Can you improve your business performance today? It doesn’t have to be a jump to “greatness,” but a chance at improvement will go a long way towards the path to greatness

Also, consider a more holistic approach, such as a business accelerator program.  These programs can establish improved performance, customer responsiveness, and leadership that will then help you get ready for the larger climb to a new future state of higher profit, growth rates, and performance.  Accelerator programs will improve your business and included the three programs discussed in this paper.