Can you sustain your business’ high performance? James Bowen and Brian MacNeiceis, Kotinos Partners, have the answer.
Creating high-performance leadership is just one step towards achieving success; how companies can sustain it is what ultimately decides the fate of the organization. After studying some of the leading businesses across the globe, James Bowen and Brian MacNeiceis, offer you a model that can help future leaders.
For many years we have been students of organizational high performance. What is it about those organizations that are the best in their fields that underpins their enduring success? Can we identify common elements in the models for success of leading organizations? Is there helpful guidance we can offer to aspiring leaders everywhere, on the creation of sustained high performance?
These questions have framed our research over the last five years—a program of first-hand investigation and analysis that has taken us to all corners of the globe to study leading organizations in multiple sectors. The scope of our work has extended from business to elite sport, from military to arts, from medicine to education, and from crisis response to philanthropy and nation-building. Having studied around fifteen organizations in total across these fields, some key conclusions were obvious.
A primary contributory factor vis-a-vis the organizations we studied having achieved (and maintained) sustained high performance was: having established outcome as a specific, explicit goal in the first place.
Southwest Airlines, America’s largest scheduled air carrier, has achieved 7% annual passenger growth for the last 25 years, and balanced consistent leadership in customer satisfaction with top-tier financial and shareholder returns over the same period. Its sustained progress in the hyper-competitive US aviation industry has been truly remarkable, and it has been enabled by Southwest’s explicit objective of being ‘the world’s most loved, most flown and most profitable airline’. The clarity, stretch, and purpose embedded in the airline’s vision statement have galvanized the efforts of all its stakeholders to work together to achieve its ends for many years.
Secondly, the leaders of each of the high-performance organizations we studied were unanimous in believing in their people and organizations as ‘the’ source of their enduring advantage. They understood that success arising from the development of individual innovations (for example, Lexus in the case of Toyota), or the performance of super-talented individuals (for example, Richie McCaw or Dan Carter in the case of the New Zealand All Blacks), while welcome, was also by definition short-lived. These leaders saw the organizational graveyard as being full of ‘supernovas’—institutions that achieved rapid, brief success before fading equally quickly back to earth. They understood that true sustained high performance arose uniquely from organizations with the capability to maintain a pipeline of innovative new products (for example, Toyota has moved on from Lexus to the equally innovative Prius and Mirai models, and from there to a fleet of concept cars currently under development) or, in more people-centric businesses, a conveyor-belt of new talent (for example, the All Blacks have moved seamlessly from the era of Richie McCaw and Dan Carter to that of Kieran Read and Beauden Barrett). They viewed the essence of their roles as being about designing and mobilizing organizations to deliver every day, while simultaneously building the capability and capacity to grow and extend their advantage.
Thirdly, we concluded that notwithstanding the enormous cultural, sectoral, and geographical diversity of our study base, when it came to thinking about the ‘how’ of sustained high performance, we could identify a discernible best-practice approach we could share with aspiring managers. Simply put, we observed leaders of high-performance organizations working explicitly or implicitly across four key ‘pillars’ of high performance in a consistent and aligned way. These four pillars come together to form our Powerhouse Model of high performance (see figure 01 below).
Figure 01: powerhouse model of high performance
The first pillar is ‘plan’: the definition, articulation, and communication of medium-term direction for the organization such as to provide direction, stretch, purpose, and inspiration for its people. The Cheshire cat from Lewis Carroll’s famous novel Alice in Wonderland said, “If you don’t know where you’re going, any road will take you there”, and while many organizations give the appearance of having interpreted the cat’s wisdom as doctrine, high-performance
organizations take a completely opposite slant. Not only do they establish and communicate a single direction and definition of success, they also maintain and adapt this direction on an ongoing basis to take account of changes in their internal and external contexts. Rather than having a strategy, high-performance organizations are strategic.
The second pillar is ‘priorities’: established, institutionwide priorities for delivering on the plan that reflect both the start-point and the destination. Dr Peter Killing, a professor of strategy at IMD, once said, “the problem with strategy is that ultimately it disintegrates into work”. High-performance organizations use prioritization to proactively drive this disintegration process—addressing and aligning competing initiatives and ensuring that the demand for work is matched up with the supply of resources in the system.
The third pillar we call ‘people’ relates to the cultural and behavioral standards in place in the organization. We would say that all of the organizations we studied could be described as value-driven, and some of them describe themselves explicitly using that term. Valuedriven means having a defined cultural and behavioral identity—a clear definition of who we are and how we work together—that connects the personalities and capabilities of the people to the purpose and ambition of the organization. Southwest Airlines has a clearly articulated ‘Southwest Way’, while the United States Marine Corps operates to its three historic values of Honor, Courage, and Commitment. Tata Group likewise has five core values, while the All Blacks have a documented code that is one of the first things shared with all new arrivals to the squad. These organizations are not at all unique in having written-down values, however they are outliers in the level of their dedication to those values, and the extent to which they make them lived within their organizations. In the words of Reed Hastings of Netflix, “the real company values, as opposed to the nice-sounding values, are shown by who gets rewarded, promoted, or let go.”
The fourth pillar ‘process,’ refers to the more mechanical elements of how the organizations work— again in the explicit context of delivering and evolving their visions. High-performance leaders understand the growth paradox whereby growth creates complexity, and complexity kills growth. They address this paradox in part through maintaining a standard of ‘just enough process’—establishing models that are empowered by design—freeing up, trusting, and expecting leaders to lead, and people to do what they need to get done.
By working over extended periods within and across each of these pillars and, in particular, by proactively managing the interdependencies that exist between them, leaders of the high-performance institutions we studied have managed to achieve sustained performance leadership in their fields. Not only that, but in many instances they have and are managing to increase their institutions’ advantage over time, by constantly refining their models and improving the rate at which they improve. Highperformance leaders understand that the challenge of sustained high performance is in itself enduring, and they live by the words of Southwest Airlines’ founder Herb Kelleher, “If you rest on your laurels, you’ll get a thorn in your butt”. At the same time, they understand that in all cases the view is worth the climb. ■
True sustained high performance arose uniquely from organizations with the capability to maintain a pipeline of innovative new products.
Rather than having a strategy, highperformance organizations are strategic.