What to change to? (HPtE #12)

Wouldn’t it be great if we could get synergy between achieving financial outcomes, continuous improvement of value for consumers and a constructive culture?

An HPtE Strategy® assists people to seek out improvement opportunities, strengthen peoples ability to solve problems when a conflict occurs, all the while helping to build positive relationships between people. This saves time and money.

It is a path to sustainable high performance.

But, an HPtE Strategy® is a big commitment.

Many organisations have already recognised the need to find a synergy between the 3C’s and have developed their strategy around it.  This is certainly a great step in the right direction and those who have invested in it have reaped the rewards.  While the benefits are big, sustaining the effort and focus takes a great deal of effort.  The pressure to compete for time and money erodes the impact of the effort put in and the transformation will slow or stagnate.  Sometimes it will regress.

If you have ever seen an organisation whose leadership changes focus to just one or two of the C’s you will have witnessed the stagnation or regression.

An HPtE Strategy® takes engagement and culture to a new level that is less influenced by a change in any one leader.

This is achieved through a mix of focus, structural, process, system and leadership style changes.

It would not be judicial to enter into such an approach without first testing it within your organisation.  Before committing to an HPtE Strategy® a Proof of Concept Project is recommended.

But, before you even get to a proof of concept, organisational leadership must answer four important questions:

  1. Why Change? Is sustainable high performance really the goal or do we have a more short term focus?
  2. What to change? We have already described the endless cycle that erodes Commercial Responsibility, Consumer Value and Culture.
  3. What to change to? We have already described the reverse of the cycle.
  4. How to change? That is the focus of the #HPtE series from here on in.

As a starting point, an HPtE Strategy® is an injection into the business system to address the competition and conflict caused by a localised focus on one of the necessary conditions (The 3C’s). It addresses the assumption that The 3C’s are mutually exclusive of each other.

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The impact of conflict in an organisation (HPtE #11)

In order to achieve sustainable high performance an organisation must achieve three necessary conditions:

  • Commercial Responsibility
  • Consumer Value
  • Constructive Culture

“Tell me how you measure me and I will tell you how I will behave. If you measure me in an illogical way … do not complain about illogical behaviour”.

Eliyahu Goldratt

In his paper about the “Balanced Scorecard and Theory of Constraints: A synergistic framework” Dr Mahesh Gupta provides a summary of the traditional metrics used to drive organisational performance.

Traditionally, Commercial Responsibility has been the sole interest of shareholders. More specifically there is an attempt to answer “How do shareholders view the organisation?” To deliver on Commercial Responsibility leadership focuses on cost-based strategies.  Key components of cost-based leadership strategies might include constructing efficient- scale facilities, emphasizing operating efficiency, and vigorously controlling and reducing costs and overhead.  The most common financial measures may include net profit, return-on-investment, and cash flows.

When performance drops in a cost-based environment the pressure to compete for money goes up, the conflict increases and the behaviour becomes more defensive. This becomes a vicious cycle.

Traditionally, Consumer Value has been the interest of operations management and consumers.  More specifically there is an attempt to answer “How do consumers view the organisation?”  This usually involves retention related measures such as quality, flexibility, work in progress and on-time performance. The increasing Agile, Six Sigma and TOC based initiatives in the past few decades demonstrate an increasing realisation of the importance of consumer focus and customer satisfaction.  Poor performance from this perspective is seen as a leading indicator of future decline in profitability.

When performance drops in a consumer-focused environment the pressure to compete for time goes up, the conflict increases and the behaviour becomes more defensive.  This becomes a vicious cycle.

The conflict is compounded when a consumer focus is attempted in a cost-based environment because now we have increasing competition for both time and money.

Traditionally, Culture was ignored. In the main, this was because it was perceived to be difficult to measure. Human Synergistics International are global leaders in culture assessment. Their Circumplex model describes “Flight” based behaviours as Passive Defensive (green on the circumplex) and “Fight” based behaviours as Aggressive Defensive (red on the circumplex).

Left unchecked the impact of competing for time and money causes a Passive/Aggressive culture and reinforces the cycle of poor performance.

This cycle fuels a passive-aggressive culture. It is unsafe, provides little security and less satisfaction.

This cycle fuels a decline in consumer value. Products and services are poor in quality, slow and perceived to be expensive:

This cycle drives costs up and reduces income leading to commercial failure:

This is not an environment where sustainable high performance can exist.

Now that we understand the challenge and obstacles to achieve sustainable high performance we can begin to explore how to reverse this cycle.

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Up next in the #HPtE series: What to change to and how? (HPtE #12)