Many organizations we talk to say that they have a desire to build a “culture of high performance” or a “high performing culture” – and for good reason. McKinsey reports that organizations with higher performing cultures create a 3x return to shareholders. And, according to Cornell ILR School, a high-performance organization achieves better financial and non-financial results (e.g., customer satisfaction, employee retention, etc.) than competitors over a long period of time.
Despite the pervasive desire for high performance, few organizations excel at fostering high performance. Research from Deloitte found that “87 percent of organizations cite culture as one of their top challenges, and 50 percent call the problem ‘very important’.” Yet, they also found that “only 12 percent felt their organizations were excellent at effectively driving desired culture.”
Why is it that so many companies endeavor to create a high-performance culture, yet so few actually pin the tail on one?
There is Not A Universal Definition
We think the biggest mistake companies make is believing there is such a thing as one universal definition of high-performing culture. Consultants in the space perpetuate this misconception by asserting their own definitions are the correct one.
One group suggests that a high-performance culture is driven through:
- Leadership & Communication
- Values and Rituals
- Work Teams and Structures
- Human Capital
Way to be specific, am-I-right?
Another group recommends that organizations must bolster performance management practices to build a high performance culture
Except for that performance management typically focuses on individual performance. What about team performance? Or culture? Or the many organizations moving away from formal performance appraisals?
A third group lists 30 fundamentals that describe the behaviors they find essential to a culture of high performance, including, but not limited to:
- Do what’s best for the customer
- Make quality personal
- Be a fanatic about response time
- Be process-oriented
- Be relentless about improvement
In a vacuum, all of these fundamentals sound great, but what happens when they’re pitted against each other? What if I have a customer who requires a turnaround on a deliverable that I can’t hit without sacrificing quality…and I additionally have a glut of calls and emails to respond to…and have an idea for a process improvement that I’d like to document/test? Do I prioritize the customer, the quality of my work, the fanaticism of my response time, or the relentlessness of process improvements? If you’re focused on everything, you’re focused on nothing.
There Is Not A Universal Path
When considering how to foster a culture that facilitates high-performance the possibilities are endless. Toyota led the auto industry for years through a culture of continuous improvement and a lean production system. Ray Dalio grew Bridgewater Associates to the world’s largest hedge fund by developing a culture of radical transparency and accountability, which was leveraged to facilitate high levels of innovation. ALCOA ballooned profits with a culture laser-focused on employee safety. Each achieved financial and non-financial results over competitors over time, yet all three reported markedly different cultures unique to their business strategy and needs.
Companies adopt different strategies to achieve high performance, therefore the roadmap to becoming a high-performing culture will differ too. Developing a culture to facilitate high-performance requires assessing where the culture stands today, knowing how that culture supports or detracts from performance, identifying a target culture, and taking purposeful steps to change beliefs, norms, and behaviors.
Be Prepared To Shift Gears
As this work is being done, it is important to remain attentive to business and market shifts that can impact the culture you are working to build. Like strategy, culture needs to be revisited on at least a yearly basis. As the business changes its planned strategy or as a result of emergent requirements (e.g., COVID, external market changes), the culture needs to adapt to be in line with the overall strategy.
What worked yesterday may be irrelevant today. What works well today might be insufficient three months from now. In order to perform at a high level, your culture needs to be dynamic and adjust with the times.