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High Performance

What Makes a High-Performance Organization?

Nov. 5, 2020
A look at the metrics behind standout middle-market manufacturers.

A high-performance organization gets better results than its peers over time. These results show up in higher revenues and profits, highly satisfied customers, owners wanting to invest, employees who want to remain on the team, higher employee engagement and morale, and a culture that hinges upon mutual respect, accountability, and an expectation of winning.

Employees in high-performance organizations tend to solve problems, innovate, and execute better, which results in satisfying stakeholder needs. 

In a high-performance organization, you will experience the following:

  • Over 90% of employees are A-players.
  • Friends and associates of those employees want to join your organization, creating a talent pool without recruiting fees.
  • Employees are excited to come to work each day because they enjoy improving processes and solving problems.
  • Your current and potential customers are giving you more market share because your team executes better than the competition, and your team utilizes their intellectual curiosity to address unspoken needs of your customers.
  • Operational breakthroughs in safety, delivery, productivity, and scrap reduction become routine.

For many, this may seem like a dream. However, these outcomes are achievable. If we want better financial results, we need to invest in better leadership and talent along with a process to create and sustain the high-performance organization. As an example, consider how you evaluate your favorite sports team. I think about how my team compares to their competition in areas such as:

  • Coaching (servant leadership)
  • Talent (capability & performance)
  • Scheme (business model)
  • Health of the players (safety & culture)
  • Utilization (engagement)

Based upon these factors, I estimate how well my team will fare against their competition.  These same types of factors should be considered in any organization.  Winning in business is providing an optimum return on investment to your shareholders over time.  A high-performing team will maximize the return for the owners and provide a better culture and workplace for all employees. 

The process for developing a high-performance organization requires measurement.  If you value something, then it should be measured.  If you think that measurement is unnecessary, then you do not place much value on the activity. To track and assess progress toward high-performance, an organization should measure these areas:

Safety performance is assessing your Company’s ability to protect your people.  It reflects the fact that you care about their wellbeing.  If people feel that you do not care about them, they will not follow you.  You must strive to be accident and occupational illness free.  However, you must be at least twice as good as the average for your industry.

Skill development demonstrates your investment in increasing the value of your employees’ skills.  More skills are good for them and good for you as they can provide more value to your organization.  Tracking % skills attained is a meaningful measure to track progress.

Performance management measures how well associates perform. The company must strive to have all A-players. 

Engagement measures the % of your associates who are engaged in solving problems or improving their processes.  While you want 100% engagement, you must have at least 80%.

The percentage of problems that re-occur is a good measure of ineffectiveness. It should be measured and driven down to below 5%. 

The percentage of problems solved by first-line management or their associates is a good barometer of organizational capability. The target for this metric should be at least 80%. In most companies, many problems are solved by top leadership, if at all. Top leaders are spending their time solving problems that should be solved at lower levels within the organization. This leads one to ponder what issues are not being addressed by top leadership.

Once measurement is in place, then we must analyze the data using 80/20.  We must decide what actions will provide the most impact to improve each metric.  Once decided, then we must act. This process must be repeated by leadership on a monthly cadence to ensure the sustainment of the high-performance organization.  If you are not improving in all metrics by double-digits, then something is wrong.

Why not start your journey toward a high-performance organization today?

Steve Thornton is managing partner for APEX Management Partners LLC, a manufacturing consulting firm.

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