Creating a High-Performance Culture
Published in the Houston Business Journal in
September, 2004.
Authors:
Robert A. Peiser, President and Chief Executive
Officer, Imperial Sugar Company, a $1.1
Billion food products company.
Ravi Kathuria, President, Effective Execution, Inc.
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Peiser |
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Kathuria |
Companies focus on improving their
organization-culture due to its importance in
driving bottom and top-line performance. However,
culture improvement initiatives often fail to
improve performance because they are implemented
under the wrong context. The goal of improving
culture is not just to create a "feel-good"
organization but to create a high-performance
organization.
Many leaders believe that their organization's
malaise stems from lack of people motivation. Hence,
motivational speakers, team-building exercises,
social get-togethers and "creative" employee reward
programs are often employed to motivate employees.
Communication is increased through weekly
business-update e-mails, newsletters and town-hall
style meetings. The mission, vision and values of
the organization are displayed in common areas. Such
initiatives while useful for creating a "feel-good"
environment are insufficient for creating a
high-performance culture.
The challenge is to develop a culture where people
do not need to be motivated but rather perform up to
their potential because they believe in their
ability to affect results. Three essential elements
must exist for building a high-performance culture.
1. Business Clarity: Employees must clearly
understand the business direction and the impact of
their contributions; 2. Ability to Influence:
Employees must have the ability to influence the
business direction; and 3. Effective Rewards:
Employees must be rewarded on the basis of objective
performance indicators as opposed to subjective
assessments.
Business Clarity: Clarity and specificity
around the business direction, strategies and
tactics is often an unmet need. This results in a
lack of focus, misalignment and a feeling of
helplessness among the employees. The most important
communiqué in an organization is the articulation of
its business direction in an easy to understand,
quick-read format.
Most companies dictate an outcome (typically
financial results) without explaining the specific
roadmap to get there. Employees must be able to
clearly understand the business drivers and the
rationale behind the company's strategy and tactics.
Making it easy to connect the day-to-day activities
with the strategy and tactics enables employees to
perform far more effectively.
Ability to Influence: In addition to employee
participation in strategy development sessions, it
is critical to establish a system of candid
feedback. New ideas and suggestions must be
respected and rewarded, and more importantly every
idea that is not adopted must receive an appropriate
explanation.
Getting new ideas implemented requires approachable
leaders. Not just leaders who interact with
employees and maintain an open-door policy, but ones
who are mentally approachable and who respect the
employee's thought process. A high-performance
culture is built when the leadership team is not
afraid to get challenged and is open to being
influenced in a different direction.
Giving people the ability to influence strategy is
powerful because annual management retreats alone do
not produce superior strategies - otherwise every
company's strategy would be superior! Strategies
become superior as a result of systematic
implementation of good ideas that emerge
spontaneously from different parts and levels of the
organization.
Effective Rewards: Employees must be rewarded
more on the basis of objective performance than on
the basis of purely subjective assessments. Tying
compensation and rewards to concrete indicators
increases employees' faith in controlling their own
destiny and improves their work effort. Objective
metrics reduce emotional and varied interpretations
of situations. Without objective measurement and
verification, a high-performance culture cannot
exist.
A high-performance culture takes work to establish,
but those organizations that are successful in
establishing one are more likely to dominate their
marketplace.
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