A practical framework for continual improvement and growth
In a fairly benign economic environment, it's no longer possible to rely on a buoyant market for business growth. At our recent Business Forum series, we discussed two practical things businesses of any size can do to compete successfully in today's economy. One is innovate – to try new ideas. The other is to create an internal culture of high performance.
But what does that abstract concept really mean?
To make it more tangible, and something we can measure and strive for every day, Macquarie has developed a framework for a high performance organisation. It's grounded in the research from higher education and consultancy practices, but it is simple enough to apply to any group or business.
"At Macquarie, our aspiration to be a high performance organisation – to be better every single day – runs through everything we do, and we needed to be able to set goals and measure progress in a systematic way," explains Ros Coffey, Global Human Resources Director for Macquarie's Banking and Financial Services Group.
"No one is achieving double digital growth by riding the economic wave, and we have relentless digital change. So what are the things we can control to drive high performance, to ensure we are making the most of our people's potential?"
Coffey defines a high performance organisation as:
An environment that inspires and enables individuals and teams to
continually improve performance to achieve superior results
"It's not just about business performance – a sports team or an orchestra could be a high performance organisation," she explains. "It's also not a destination in itself, it's an ongoing journey of continual improvement."
In organisations with the highest performance, staff report feeling proud, valued, optimistic and cheerful. Their clients also reported receiving greater levels of service and higher instances of innovation and creativity.
Does high performance really matter?
There's certainly a sound business case for giving this framework some thought. "The results are significant," says Coffey. "High performing organisations have revenue growth 4.1 times higher, and achieve a return on investment that's 15 times higher. They have an exponentially higher net income improvement."1
Studies also highlight a profound difference in the way employees feel, and this has impact on recruitment and retention, as well as client service.
"In organisations with the highest performance, staff report feeling proud, valued, optimistic and cheerful2 – which sounds like a great way to show up to work every morning," says Coffey.
"Their clients also reported receiving greater levels of service, higher instances of innovation and creativity. And those clients are more loyal, they stay with that business for longer. So there is a high business resonance for creating a high performance culture."
Building the high performance house
Applying a high performance framework is something any business can do – it's not necessarily an expensive investment, but it does require mindful change and committed leadership.
"To create sustainable and long-lasting change, we are building our high performance organisation as a house," says Coffey. "One with three pillars – people, environment and culture – supporting a roof made up of leadership, external focus, and strategy."
A high performance roof holds the organisation together
Strategy – Put simply, when organisations align their strategic intent and their culture, they outperform on every financial performance metric.
- Is your business strategy clearly articulated and unanimously understood by everyone in the organisation?
- Does everyone understand how their role fits in with that strategy?
External focus – as Jack Welch once said, if the rate of change on the outside exceeds the rate of change on the inside, the end is near.
- Are you more focused on what's happening outside or on internal turf wars?
- Do you really know what's happening in the market with your clients and competitors?
Leadership – This is not just about the quality of management – it's leadership behavior throughout the business.
- Does everyone feel empowered to act as though they are the owner, to spend money as if it was their own, or manage every client as their own?
The pillars support every decision and activity
People – You need high performing individuals, teams and leaders to bring this framework to life.
- How do you attract high performers?
- Do you empower them to be their best when they are there?
- Have you defined a narrow range of acceptable performance parameters, to make expectations clear?
- How do you recognise and reward high performance?
Environment – The physical tools of trade (technology and workflow processes, for example) and the intangible (how decisions are made and voices are heard).
- Are you investing in technology and information to help staff to do their jobs exceptionally well and provide an effortless, superior client experience?
- How do you ensure you get a range of perspectives and different ideas – do you actively look for challenging points of view?
Culture – As the saying goes, 'culture eats strategy for breakfast' – no matter how good a strategy is, culture will resist if it is not aligned. Consider four critical areas here:
- Behaviour – how do we talk to each other and to clients; how do we deal with setbacks?
- Symbols – what signifies status and how is that allocated?
- Rituals – what are the things we do together that define our team culture? For example, bringing in a birthday cake, or celebrating a client win or promotion.
- Stories – the fastest way to change your culture is to change the stories you tell, so think about how stories are shared and what perspectives they provide.
Start building your high performance house
There are two important questions to ask before you implement this framework in your business.
First, think about the model in relation to your business. Where are you already strong, why is that important and what impact does that have?
Then, identify the area that needs the most work. It's not insurmountable, just start with one thing that offers the most opportunity and find a way to improve it. Focus on the benefit it will bring to your business to communicate change to your team.
Coffey says the most important thing is for "every individual to take ownership of this aspiration that they will be better every day. You need that individual commitment to realise the full benefits of this model."
The high performance model is a simple yet effective way to get a holistic view of business performance, but that's where it offers the most value. You should soon see a way to articulate this as a new point of difference in your business – and see a subsequent impact on staff recruitment and engagement, on client satisfaction and loyalty, and hopefully on financial performance.