Building Winning Organisations: A complete guide to sustaining best-in-class performance for all organisations

Prologue

The Essentials of Winning Organisations

I have worked in senior management positions or have assisted senior managers in various organisations for 30 years in applying operational excellence ideas to create a step change in the performance.

Along the way I have been fortunate to learn many theories, learn different ways of doing things and have seen various models or tools applied with varying degrees of effectiveness. I wish I knew then what I know now, as this could have saved a lot of time and effort of many people as they explored ways to improve the performance of their organisation .

The purpose of this book is to provide managers with a model that can be applied to guide organisations to become the best in their class.

The undeniable truth is that we don’t know what we don’t know. Most organisations have gaps in the way they work that significantly impair how well it functions.

Good people with good intentions often find themselves in senior management positions seeking to be successful within organisations that have many barriers and complexities to overcome. Without a shared knowledge or way of doing things that provides constant focus and guidance, confusion, resistance and collective chaos will affect performance.

New managers often bring a new set of theories or ideas. However, they soon move on and the new flavour of the month comes along. The Winning Organisation Model (WOM) seeks to provide the knowledge of all the essential characteristics that an organisation requires to attain best-in-class performance. It describes the necessary relationship between operational excellence, value focus, organisational effectiveness and effective leadership.

Senior managers must be senior leaders in any winning organisation. In my experience, effective leadership has always been the rate determining factor in the performance improvement of a team.

Gaps in how an organisation functions are often reflected in gaps in the knowledge and behaviours of its leaders. Their underlying motivations and beliefs influence their behaviour.

Gaining alignment in beliefs is essential to aligning behaviour. When a person is asked to behave in a manner that is inconsistent with their beliefs this behaviour will not be sustained or will only be superficially demonstrated. WOM outlines the essential beliefs and practices required—the characteristics that the leaders in an organisation need to establish to achieve best-in-class performance.

The degree of alignment and clarity of the efforts of people to achieve the organisations goals is critical to success. Confusion can be created when introducing new initiatives if there is a poor understanding of how these initiatives contribute to achieving the purpose of the organisation. WOM provides a clear and complete set of characteristics that can be used to assess how well an organisation has connected value focus, operational excellence and organisational effectiveness through effective leadership. WOM provides the clarity of what is required for an organisation to become best in class. By conducting a gap analysis using WOM, the leadership will understand where they need to focus their effort.

WOM provides a complete set of knowledge, beliefs and practices that can be used for gap analysis and improvement. The tips, examples and tools allow an organisation to formulate their own pathway forward that suits their specific circumstances.

Preamble: What Makes a Winning Organisation?

The purpose of this book is to provide a meaningful outline of the capabilities and characteristics required by any organisation to achieve best-in-class performance. I believe that these essential characteristics are as valid for a corner coffee shop as they are for a sporting team or a global company.

Winning organisations are those that achieve better performance than their peers. WOM draws from real experiences to provide simple, cost effective and valid guidance that can be applied where there may be gaps in understanding, capability or essential characteristics. It is both necessary and efficient to understand holistically how to connect four capabilities:

•Value focus

•Operational excellence

•Effective leadership

•Organisational effectiveness

When organisations are aligned around what they are required to do, they can usually learn how to achieve it. Without alignment, an organisation is unlikely to achieve a winning performance as significant effort is expended pulling in different directions.

The success of two organisations that are competing for the same customers will be determined by how effectively they create the value sought by the customer. It is always critical to focus resources on high-leverage improvement opportunities. For example, in a fast food service business, data had identified that time waiting to get the food was the major cause of customers going elsewhere. When compared to other improvement ideas such as increasing range of food, improving presentation and improving quality, reducing time waiting was estimated to have the greatest impact on profitability. In this case, the organisation that is perceived by the customer to offer the best delivery time will capture this opportunity.

The rate of improvement for any organisation will impact its long-term success. This is always determined by how effective the leadership is. WOM provides the framework to connect people and processes to improve performance and create value at a faster and cheaper rate.

A theory is valid only while it is useful to define relationships between variables that are supported by the available data. It is central to scientific learning that theories be clearly defined so that they can be tested and where anomalies arise, new theories can be developed to advance learning. For an organisation to thrive, its employees must understand, value and contribute their capabilities to a common objective. Beliefs and theories influence decision-making within any organisation. These should be clearly defined and reviewed as part of organisational development and improvement.

Winning organisations are built from sustained and aligned teamwork from a group of people who can serve their customer better, faster and cheaper than their competition.

A CEO once told me that he saw no need for any fancy improvement initiatives. ‘Organisations just need good leaders. Good, strong leaders get things done and make the difference between success and failure,’ he argued. When asked to define what makes a good, strong leader and how do we get them, the CEO struggled to provide a clear answer.

Winning organisations do significantly better than their competitors because their people are delivering more of what their customers want more often. They deliver greater value at a faster rate.

They must be dynamic and hungry for improvement. There is a saying that ‘if you are not improving you are going backwards’. It is essential to identify and improve in high-leverage areas faster than the competition. This is what matters.

Our world is constantly changing. Every day we see new technology and new ways for people to express themselves. We’re more connected than ever, most people have more choice and there is a greater predisposition to immediate feedback. People want instant gratification as they jump from interest to interest. Despite all the change in technology, people’s emotional and psychological needs remain the same—a sense of purpose or belonging, a demand for recognition and respect, a desire to be successful (in its many forms) and a desire to be loved.

The wealth of communication options has created broad networks of often shallow communications. Today, people can frequently be seen focusing on their mobile device throughout the day, busy responding to and transmitting brief messages that are more about connection and association than meaningful content.

This short-term focus has become a behavioural norm that seems to be reflected in how organisations operate. Three-year terms for CEOs are becoming the norm. Short-term CEOs often focus on creating a brand to represent their reign. In response to a reporting timeframe of 100 days or so, the CEO must create the appearance that they have provided increased value for stakeholders. All these modern factors challenge the long-term focus required to create sustainable results.

I recall a discussion with the president of a large resource company. I presented him with data suggesting that the production process was being impaired by a lack of skills and a lack of fundamental knowledge within his workforce. He was quick to agree that there was a problem and asked, ‘How long would it take to see the benefits from an effective training program that addressed the gaps?’

‘Probably two to three years,’ I said.

‘I know it is the right thing to do,’ he said, ‘but that kind of timeframe is too long. My timeframe is this year, so why would I invest in this training?’

Building a winning organisation is a journey that needs to be built upon the right foundations and a sustained focus from the senior leadership. The whole organisation must be clear on what the goals are and clear on the work required to achieve those goals.

As we know from the exercise of asking people to pass a message from person to person down along a line, the final version of the message can often bear little resemblance to the original message. Only when the leadership of an organisation understands the importance of clarity and is truly committed to relentlessly seeking alignment with its people, can they work consistently towards a common purpose.

It has been estimated that 95% of all Lean initiatives fail (http://www.qi-a.com/Home). I have heard managers say that they are ‘Doing Lean’ many times. When asked, ‘What are the organisational goals?’, ‘What are the key tasks to achieving the aspirational goals?’ or ‘How is progress being tracked?’ it soon becomes obvious that the clarity and focus is not there.

‘Lean’ is a philosophy that needs to be understood and applied to improve an organisation’s ability to achieve its goals Without the understanding and commitment required to support this philosophy, it is quite common for the introduction of new terms, like Lean, to confuse or send contradicting signals to the people in the organisation.

For example, if an organisation believes that directing decision-making and budget authority towards senior management will deliver the best results, this belief conflicts with Lean Thinking. Lean requires the delegation of authority and decision-making to the lowest level of competence in the organisation, as this supports the development of faster decision making and better process control.

All businesses need to generate value from their processes, whether they are producing physical products or whether they are delivering services. Providing the context, resources and systems that enable people at the front line to improve processes must be the fundamental priority of a management in pursuit of best-in-class performance.

Winning organisations seek to engage the full capability of those working closest to the processes that produce the products or services that customers pay for. It is the role of management to create the conditions and environment that allows for and motivates its employees to do this in the most effective way.

To engage your employees requires effective communication and values-driven leadership People are not machines and will react negatively if they perceive they are being treated as such. You can push a button on a machine and it will respond; people are different and need to be treated with respect and dignity to get the best from them. People always have a choice as to how much effort they apply to any given task. If you want them to give their all, it requires leadership that demonstrates to them that they are respected, trusted and will be treated fairly.

Dr Edward Deming, in his studies of the ways of Japanese manufacturing, said, ‘The worker is not the problem. The problem is at the top! Management! It is management’s job to direct the efforts of all components toward the aim of the system. The first step is clarification: everyone in the organization must understand the aim of the system, and how to direct his efforts toward it.’ (https://en.wikipedia.org/wiki/W._Edwards_Deming). It is such an obvious role for management, and yet, it is the area where most managers struggle to deliver.

Today’s technology allows for increasing levels of automation to eliminate the variability introduced by people in manufacturing. A modern automobile manufacturing plant is a symphony of robotic technology that can assemble the pieces within tight tolerances.

The use of technology is a critical component of winning organisations. The challenge is to balance the what, when, where and how far to go to achieve the best financial return. If you try to automate a process that is neither well-designed nor controlled, it usually fails. It is always better to define and test theories before investing significant capital in designing a completely new process or in the optimisation of an existing process. Investment in technology needs to be supported by a business case that outlines clearly how the investment will create the value that justifies the project as a high priority.

Winning organisations embrace change. They invest in learning and to take measured risks with introducing new technology. When the entire organisation understands the key value drivers, they can communicate, learn quickly (top to bottom) and understand how to contribute to creating value for all stakeholders.

The culture in a winning organisation is built upon core values of trust, respect/dignity, fairness, honesty, courage and caring. People work for their own benefit, the benefit of their family and friends, and for the benefit of the organisation. Team and individual goals need to be aligned.

A manager once explained to me, ‘It is the role of management to pay the employees the least amount required to get the job done.’ This paradigm greatly impedes the ability to build the trust and engagement that is essential for high performance in employees. Winning organisations understand that it is the role of management to achieve the best result for the organisation, the employees and the customers.

In winning organisations, all employees understand that their future prosperity will be determined by how well their organisation performs. The belief that you will be rewarded based on how you and your organisation perform is a motivating one. Only when all employees understand what the organisation’s goals are, and what they as individuals and teams need to do to achieve these goals, can their full capability be engaged.

Most organisations today conduct performance reviews. However, these are often ineffective or even counterproductive. Often managers don’t understand what they’re trying to achieve from the performance system. Often the training is mostly about what is needed to comply with the system rather than how using the system creates value. They don’t really understand what they are seeking to create from performance systems. Some leaders may not even accept accountability for the performance of their team members and blame unfair outcomes on the system.

Managers sometimes express their concern about being held accountable for the performance of their team. The argument is that they cannot control how their people work. Once managers accept accountability for their team’s work, they become more involved in finding new ways to engage their team collectively and individually.

For example, a manager who is motivated to eliminate all injuries will look at an incident and try and find the best solutions to make sure it doesn’t happen again. The motivated manager, in dealing with a slip down the stairs, focuses on actions that ensure all employees are safe when on stairs or ladders. A less-motivated manager will often stop at counselling the individual concerned to ‘take more care’, as they are motivated to act out of compliance. The difference is their level of care or accountability for the team’s performance.

Being exposed to new ideas and new language is generally interesting for people but will rarely translate to the adoption of change unless the context and theory is understood and then applied in the workplace. In performance review systems, the manager is usually motivated to comply with the system, to rate or provide a score and if the employee is lucky, tell the person the outcome in unambiguous terms. When managers understand that the purpose of the performance system is to improve performance, the review becomes more of a discussion between two equals who both desire to improve.

Organisations are built for people by people. Only organisations which can do the following deliver superior results over an extended time:

•Lead people

•Delight their customers

•Tap into that discretionary effort

•Align people to work as a team and focus on the things that matter

•Learn and innovate

•Retain and develop people

•Inspire pride in people to belong

•Be positively viewed regarding core values of care, respect and dignity, fairness, courage, honesty and trust

•Consistently deliver more with less by driving out waste

Winning organisations also feel different and are characterised by a strong sense of belonging, of ownership, of caring for other people, of knowing what needs to be done and for the flexibility that is necessary to adapt and respond to what the organisation needs.

In most cases, people want to contribute their capability and their ideas to produce and deliver quality products and services to someone who appreciates them. People are constantly interpreting, theorising, testing assumptions and learning through asking questions.

Much of this learning can occur in silence (in people’s heads). Some of this occurs in conversation, writing, pictures and through how people behave. These ‘people’ aspects of organisations must be understood as they are likely to impact the future performance of an organisation.

What people understand and believe, as well as the feedback they receive, will shape how they think and how they behave.

Can you imagine launching a business improvement initiative when the people in that organisation feel they rarely receive clear meaningful task assignments or meaningful feedback on their performance? From my experience, most organisations with over 10 people score poorly on clear task assignment and the provision of quality performance feedback to their employees.

A significant commitment from the leader is required to:

•provide a clear task assignment

•specify clearly what needs to be delivered

•define where one task fits in relation to the priority of other tasks

•develop a sufficiently detailed plan of how a task is to be executed

•define the limits in which resources can be used

•define the authorities that the person can apply in doing the task

•define stakeholders

•define who benefits from doing the task (what is in it for me and what is in it for us)

A winning organisation cannot be successful without making progress in engaging its employees.

Involved and motivated people are the creative capability of the organisation. This is where continuous improvement comes from. Whether you are a large-scale multinational or a small coffee shop, people will make the most difference to your organisation in the long run.

The rate of improvement in any team is always highly dependent on how effective its leadership is. They must demonstrate behaviours that are perceived positively by employees.

Leadership is the key in how successful an organisation will be. The unmistakable truth is, winning organisations need the right people in the right roles at the right time, doing the right work to the right standard.

The leadership must inspire and focus people through their positive values-driven behaviour (core values of care, courage, fairness, honesty, trust and respect for dignity of others).

Communication is a common weakness in many organisations. Leaders often make the mistake of assuming they are good communicators without making sufficient effort to test and ensure that they are communicating as effectively as they might like to assume.

WOM provides organisations with clearly defined characteristics that can be used to identify gaps and opportunities for improvement. The first important consideration is whether the leadership understands, accepts and is motivated to make clear communication, a feature of the organisation. Helping the leadership to accept it is the first step, followed by the desire to make it a strength for the organisation. Success requires discussion and debate, combined with a commitment to act.

The Winning Organisation Model (WOM)

The purpose of this book is to provide leaders of organisations with knowledge that can be applied to create an organisation that will consistently outperform its peers.

I have been exposed to many initiatives, theories, teachings and programs that have contained useful information without ever providing a complete picture. It’s a bit like a jigsaw puzzle with some pieces missing and no reference picture to work from. Most managers must learn on the job how to put the jigsaw puzzle together.

WOM is intended to explain all the pieces of the puzzle and how they connect to create best in class organisations. It is the model that I wish I had been provided with at the start of my career. I hope it will assist others in creating better, faster, leaner organisations in the future.

In my experience, when organisations align and focus on a problem, they usually find a solution. WOM seeks to provide clear and essential characteristics that any organisation can quickly use to identify gaps. Most organisations who use WOM will find they already have many of the characteristics at least partially in place.

To be a truly winning organisation requires all the characteristics to be in place and to truly be how the organisation operates. One small error in the process of shooting an arrow at a target can make a big difference in where the arrow ends up, and the same is true of a partial compliance to a characteristic.

Some examples of ‘how’ to achieve each characteristic are provided in the text. However, the prime objective is to provide a clear understanding of ‘what’ is required and ‘why’. Finding the pathway to ‘how’ an organisation achieves competency in a characteristic is best determined by the people that make up the organisation.

To achieve the best performance in any field means that you have generated more value than your competitors. Value is determined by the customers or