A Performance Excellence Culture is the Nutrient-Rich Soil that Enables your Business to Grow and Thrive
Between 1986 and 1996 the Evergreen Research Project was undertaken to identify business practices that were common to high performing firms. A team of 50 leading academics and consultants compiled data on dozens of companies and the 200 most common business practices used. The objective: find those few practices that truly made a difference.
The findings were published by William Joyce, Nitin Nohria, Bruce Roberson and McKinsey & Company in a book entitled, “What Really Works: The 4+2 formula for sustained business success” published by Harper Collins.
The conclusion: High performing firms adhered to four common behavioral imperatives, plus two behaviors from another secondary group of four.
Success was demonstrated by a 15X greater Total Return to Shareholders than companies not practicing these business behaviors. Not only was their performance better, it was sustained over a longer period of time.
The four essential practices are:
- Make your strategy clear and focused
- Execute flawlessly
- Build a performance-based culture
- Make your organization fast and flat
You’ll need to buy the book for the rest. But here’s my point: The bottom three essential practices all relate to performance excellence.
Good soil yields good crops
A culture of performance excellence is like highly nutritious soil. Business initiatives are seeds. Even a marginal seed planted in excellent soil will yield a crop – maybe not a great one, but at least something. On the other hand, an excellent seed planted in depleted spoil will yield nothing.
If you must work at anything in your firm, it is most imperative to work on fortifying the soil by building a culture of performance excellence.
Taking a quick look in the mirror
If you’re wondering whether your business culture is nutrient-rich, take the organizational performance excellence self-assessment that follows. For each of the bulleted items, ask yourself, “To what degree is this performance discipline practiced consistently across our business?” Rate each on a scale of 1 to 5, with 5 being the highest rating. When you are finished, total the results.
- Goals and Objectives Setting: Our goals and objectives are clearly understood by all. They are strategically-sound, economic and quantitative. Everyone has several goals. They are specific, coordinated and aligned.
- Project Planning: Our project plans are detailed. They have timelines, milestones and adequate funding. We consider team member selection carefully based on skills not simply availability.
- Ownership/Leadership: The ownership of each of our major business initiatives is clear. There is a single point of project manager responsibility and authority. Our project managers exhibit good project leadership skills and resourcefulness.
- Sense of Urgency: Meeting deadlines is a cultural imperative in our firm. Meeting commitments is critical. People work late and on weekends to assure they don’t miss a deadline.
- Expectations: Individual performance expectations are clear, documented, measureable.
- Accountability: Individual rewards and consequences are clearly understood.
- Measurements / Metrics: Both process and outcome metrics are measured in all important aspects of our business.
- Checkpoints / Feedback: Our business initiatives are characterized by frequent and productive team working sessions vis-à-vis presentations, reviews or ineffective meetings.
- Personal Performance Management: Individual goals, targets and roles are clear. People’s performance evaluations relate directly to achievement of goals and the way in which they were achieved or not achieved.
- Training Programs: We have standard training programs across the firm for all critical roles. Training is expected. People are not assigned to a task without being trained, tested and qualified.
- Process Consistency: Our critical business processes are consistent across the firm as are the tools and systems used for executing them.
- Priorities: There is high level of clarity amongst our employees regarding priorities. They know how to determine the difference between urgent and important. They consistently follow-through on tasks to completion.
It is not uncommon to find a struggling business scoring (if the assessment items have been rated honestly) in the mid 20’s. But whether the core is 23 or 38, imagine the economic benefit of driving either score to something closer to 50.
Changing the Culture
It’s not hard to imagine the concern a small to mid-size business owner might feel after taking this look in the mirror. Embarking on a cultural change that would move the company from, say, a score of 23 to 48 might well seem daunting. What will his people think? Will they head for the door? Will they embrace the initiative? Will they understand how important it is?
A well-respected and successful CEO, once told me that when faced with the uncertainty, consequences and fear associated with making critical decisions, he was always spurred on to make those tough decisions by the uncertainty, fear and consequences of not making the decision.
Like every major quest, if considered as a mountain it appears impossible to climb, but as a series of small, guided steps it is achievable – and worth it.
How much is it worth?
If you are a small to mid-sized business owner and can achieve a 15 times greater total return to shareholders than your competition, how much more will your business be worth when you sell it? And how much more will you be worth in the years between now and then.
And what would the consequences be if your main competitor did it first?
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Learn more about a QMP Performance Excellence cultural transformation