HR Management, Leadership

If You’re Using These Management Methods, You’re Wasting Time AND Money

highperformance

Organizations that aim to earn the label HPO, or “High Performance Organization,” can draw upon literally hundreds of management techniques, methods and activities to help them reach this enviable stature.

Most seem perfectly reasonable things to do except for one “minor” detail: in most cases, there is absolutely no proof whatsoever that any of them will actually improve performance in the short term, let alone in the long term, let alone at all!

It’s difficult to figure out which of these methods are genuinely important for an organization to embark upon in its quest for HPO status. That’s why in my extensive global research of 290 HPO studies, I attempted to resolve this dilemma by identifying 189 characteristics in the various descriptive literature, then evaluating and comparing them all to 35 tried-and-true HPO characteristics. Below is a partial list of what I found out NOT to do.

One caveat, however: the many HPO studies I reviewed do not definitively state that the techniques, methods and activities listed below are not important in any sense. Some of them in fact are important, e.g., every organization does need a strategy because without one it would be rudderless and could easily go adrift. However, simply having a strategy will not make an organization an HPO because its competitors will also have strategies! So merely having a strategy is not enough. Instead, HPO research shows a strategy must be unique.

Similarly, the following techniques, methods and activities will, on their own, constitute a waste of time and money:

Organizational Design or Structure

It turns out that no specific organizational design or structure shows a correlation with achieving high performance status. It makes no difference at all (neither positive nor negative) whether management chooses a functional design, a process design or a matrix design for its organizational structure. Consequently, launching a reorganization to boost a firm’s performance cannot be recommended. In fact, my research kept finding that most reorganizations failed to yield any long-term performance improvement.

Employee autonomy

It’s been fashionable in recent years to grant more and more empowerment to employees but this does not necessarily contribute to high performance either. My research results showed me that a high level of autonomy in fact can have a negative correlation on competitive performance.

Too much freedom for employees can lead to an internal disorder and confusion unless backed up with sufficient means of coordination. Without coordination, employee autonomy can even seriously damage an organization. People want clarity about goals, what is and isn’t allowed, and what is expected from them. If they know these then they will not need further empowerment.

Strategy

With regard to the strategy, it turns out that it’s not so much the chosen strategy that’s important— but the uniqueness of a strategy compared to competitors in the same industry. All characteristics concerning cost leadership, product differentiation and customer intimacy strategies must be distinguishing characteristics. Adopting merely a “me-too” strategy is thus not enough to become an HPO.

Technology/ICT

Many organizations spend a lot of time and resources on implementing new information and communication (ICT) systems. Sadly, this too will not necessarily transform them into a HPO. Although several HPO characteristics such as “continuous improvement and renewal,” cannot be improved without ICT systems, a standalone implementation of new systems and technology does nothing to help the organization perform any better for a sustained period of time as implementation has to support at least one of the principle HPO factors.

Benchmarking

My study results show that benchmarking is much less effective than everyone assumes. When an organization embarks on a benchmarking project, it usually aims to identify best practices, emulate these and attain if possible the same level as the industry’s best.

True HPOs, however, have a completely different view on best practices, regarding their competitors’ best performance benchmark merely as the baseline for their own performance, i.e., a starting point from which the HPO distances itself as much as possible.

Communication

In many organizations, top management can often be heard to comment: “We have to communicate more! If we do, they will understand.” However, it turns out that employees are typically not concerned about understanding what management has to say, but rather about whether or not management is listening to what they have to say.

Thus ‘communication,” defined as one–way traffic from manager to employee, is not what’s critical, instead dialogue is critical. In a dialogue there is two-way communication with both sides listening and hearing and exchanging ideas and working towards mutual understanding. In other words, HPOs spend less effort on “soap-box speeches” and on town hall meetings and more on round tables and back-and-forth discussions.

Bonus & Reward systems

There remains a continuous interest in the topic of bonuses and reward systems but he HPO research reveals that these are not distinguishing factors for creating and sustaining HPO status. Instead, they are mere “hygiene” factors. An organization needs to have an appropriate reward system (whether or not this includes bonuses) and one that is considered by employees to be fair and equitable. If such a reward system is not in place, the organization will run into trouble and opposition with its employees, making HPO status virtually impossible.

If a fair and equitable system is in place — and note that it does not seem to really matter what type of reward system this is as long as it’s appropriate for the organization in question — then employees will consider it acceptable and will be content. At that point, the organization can start legitimately thinking about how to turn itself into a genuine HPO.

André de Waal, PhD, MBA, MSc, is Academic Director of theHPO Center, an organization which conducts research into high performance organizations. He is also Associate Professor of High Performance Organizations at the Maastricht School of Management, guest lecturer at Vrije Universiteit Amsterdam and Erasmus University Rotterdam, and visiting fellow at Cranfield University (United Kingdom). André has conducted several years of scientific research, examining 290 international studies and analyzing studies in 50 countries involving over 1,470 profit, non-profit and government organizations.
  • http://twitter.com/SOart77 Stacey Olson

    I love what you said regarding Communications – it is absolutely a two way street. (The rhetoric about working with Millenials supports this and the “new collaborative leadership” mindset also supports this.) I’m wondering what your studies have uncovered about Training and Development. I often think that companies get Training and Communications confused. Thinking that if they get their message out there, employees will automaticly jump on board and fall in line.

    • Andre de Waal

      Hi Stacey, my reserach didn’t find training programs in itself to be a differentiator for becoming a high performance organization. Of course you can use training for working on your skills but it is – as we all know! – the application of what you learned that will make the difference. So when an organization says it has great training programs or, even better, an in-house university, that is great and I applaud them. But this organization should not expect to ‘automaticaly’ become an HPO because of this, that takes a lot more.

  • http://twitter.com/JumpstartHR Jumpstart HR

    This entire post reminds me of the fact that a tool is only as good as its user.

    What tool, technology or system is effective in and of itself? Let alone without careful utilization by a skilled professional? Would you say that a weight-loss program or exercise program is a waste of time or money if the owner is not using it right?

    I hope that no one reads this article at a glance and considers these very valuable methods to be a waste of time. What alternatives would you suggest?

    The real challenge or “waste of time” is not the system. The real waste of time is an organization’s ineffective or ill-informed attempt at utilizing a system or process and their inability to effectively understand that people drive systems and not the other way around.

    Regards,

    Joey V. Price, MS, PHR
    CEO, Jumpstart:HR
    http://www.jumpstart-hr.com

  • http://managingandleading.blogspot.com/ Illysa Izenberg

    “People want clarity about goals, what is and isn’t allowed, and what is
    expected from them. If they know these then they will not need further
    empowerment.”

    Yes: so many managers and leaders think they’re empowering people when they’re really abdicating responsibility.  Ask people to think for themselves and to choose the best method of accomplishing their work.  Who defines the work?  All employees need to have the outcome spelled out or everyone will work toward their own goals, some of which will be at cross-purposes.

    “HPOs spend less effort on “soap-box speeches” and on town hall meetings and more on round tables and back-and-forth discussions.”

    Yes again!  So often people think they’re communicating by talking _at_ another person. This is not communicating! Leaders must find ways to listen to their employees and respond to their suggestions (taken and not). Further, we must find communication methods that do not require talking — actions, symbols, and environment can send messages that are more powerful than a leader’s words.

  • http://10tenets.com/ Anthony J Proctor

    Thanks for writing this article.  You have made many valid points.  In summary, I suppose more than anything else, people prefer to work with organization who show consistent integrity and transparency in every situation.