Becoming a high performance organization

May 04 2012 by Andre de Waal Print This Article

An increasing number of organizations are expressing their determination to become a High Performance Organization (HPO). But what does 'become an High Performance Organization' really mean? What are all those ambitious organizations really talking about?

Here at the HPO Center, we define a High Performance Organization as: "an organization that achieves financial and non-financial results that are exceedingly better than those of its peer group over a period of time of five years or more, by focusing in a disciplined way on that what really matters to the organization."

How does your firm measure up to this definition? If you're not sure, let's pick apart this definition so you can know where you stand.

High performance is relative, that is, performance can only be denoted as "high" when compared to a peer group comprised of competitors in the case of for-profit companies, or comparable organizations in the case of non-profits or governmental agencies.

If your organization has obtained results that have exceeded your peer group or comparable organizations for a period of only four years or less, you still have not achieved HPO status. You have one more exceptional year to go!

High performance is characterized by sustainable good results over a prolonged period of time of five years or more. That way, we can know that a firm has not performed well merely because it was lucky but because it has been doing the right things again and again and again.

It's been estimated by many analysts that the life span of the typical organization today is approximately 12Ĺ years, a time period continually going down. Thus an organization that performs much better than its competitors for five years or more has exhibited its HPO ability for almost half of its expected life span of a normal organization.

Recent research shows it's very difficult for organizations to achieve consistent growth, even at modest rates. But case studies in my new book What Makes a High Performance Organization, reveal that true HPOs know what makes them highly successful over time.

HPOs exhibit the discipline not to be distracted by the newest management fad and to continue doing what made them successful in the first place, eg, processes, systems, behavior. They expend great effort to ensure that their processes, systems and behavior will continuously see improvement. They typically will only initiate something different if they perceive an opportunity to strengthen their core capabilities and competences.

Deviating from this path they know could spell trouble in the form of declining performance. Thus HPO managements are keen to maintain their discipline.

A client once said in an interview about high performance organizations: "Just because a world-class skater or cyclist is in good shape does not mean they cannot perform even better. Top athletes also need regular check-ups with a sports doctor, who gives them condition tests, checks their vitals and examines their training schedule. We also make sure our organization undergoes regular check-ups by an external party to determine where improvements can be made."

So how does your firm measure up? Have you maintained five years or more of HPO status? Or does my definition make you wonder if you are on the right path? To obtain an answer, find out what your HPO Score is on all 35 HPO characteristics!


About The Author

Andre de Waal
Andre de Waal

Dr Andre A. de Waal MBA is Associate Professor of Strategic Management at the Maastricht School of Management and Academic Director of the HPO Center (Center for Organizational Performance), an organization that researches and gives advice about high performance organizations.