Foundations of an HPO: research that spans the world

The HPO Framework (used in the HPO Insight™ questionnaire) was developed after a two-phased research project to examine the determinant factors of sustainable high performance. It consisted of a descriptive literature review (phase 1) and an empirical study in the form of a worldwide implemented questionnaire (phase 2).

Phase 1 consisted of collecting the studies on high performance and excellence that were to be included in the literature review. The criteria used were:

  1. The study was aimed specifically at identifying HPO factors or best practices.
  2. The study consisted of either a survey with a sufficient large number of respondents, allowing generalization of the results, or in-depth case studies of several companies, which meant the results were valid for more than one organization.
  3. The study employed triangulation by using more than one research method.
  4. The study included written documentation containing an account and justification of the research method, research approach and selection of the research population, a well-described analysis, and retraceable results and conclusions allowing assessment of the quality of the research method.

The literature review covered 290 studies which satisfied one or more of the four criteria. These studies formed the basis for identifying the potential HPO characteristics, which were required for developing the questionnaire in phase 2. The identification process of the HPO characteristics consisted of a succession of steps. First, elements were extracted from each of the publications that the authors themselves regarded as essential for high performance. These elements were then entered in a matrix. Because different authors used different terminologies in their publications, similar elements were placed in groups under a factor and each group – later to be named ‘characteristic’ – was given an appropriate description. Subsequently, a matrix was constructed for each factor listing a number of characteristics. A total of 189 characteristics were identified. After that, the ‘weighted importance’, i.e. the number of times a characteristic occurred in the individual study categories, was calculated for each of the characteristics. Finally, the characteristics with a weighted importance of at least nine percent were designated characteristics that potentially make up an HPO. Nine percent was chosen as the cut-off percentage as there was a gap visible around this percentage: several characteristics scored considerably below nine percent while the next closest scoring characteristics scored considerably higher than nine percent, namely fourteen percent. The cut-off resulted in a list of 53 potential HPO characteristics. The research in phase 1 was partly replicated by Cranfield University, which confirmed the conclusion.

In Phase 2 of the HPO research the 53 potential HPO characteristics were included in a questionnaire which was presented to managers during lectures and workshops all over the world. The respondents of the questionnaire – originating from profit, non-profit and governmental organizations from fifty countries – were asked to grade how well their organization performed on the various HPO characteristics on a scale of 1 (very poor) to 10 (excellent) and also how the organizational results were compared to those of peer groups. The questionnaire yielded 2515 responses. With a statistical analysis, 35 characteristics with both a significant and a strong correlation with organizational performance were extracted and identified as the HPO characteristics. The statistical analysis also revealed that these 35 characteristics could be categorized into five factors, the HPO factors. These are described in the next section.

The HPO research showed that there is a direct and positive relationship between the five HPO factors and competitive performance: the higher the scores on the HPO factors (HPO scores), the better the results of the organization, and the lower the HPO scores the lower the competitive performance. The research also showed that all HPO factors need to have equal scores. If for instance four HPO factors score an 8 (out of 10) and one factor is a 5, the organization will not be able to function as an HPO because it is out of balance. An easy way to visualize this is to imagine a child’s propeller (Figure 2.1). When exposed to the wind, it spins around at constant speed. However, if one of the strings breaks, the propeller will no longer turn around smoothly and will eventually break down. It illustrates that an organization should distribute its attention evenly across the five HPO factors to make sure none of these will be ‘broken’ and hold back the organization. Working on just one HPO factor, or only a few characteristics, without paying attention to the other HPO factors or characteristics in due course, will not help the organization in the long run.

HPO Factors
Figure 2.1: Graphic representation of the HPO Framework

Five factors of high performance

This section briefly describes the five factors of high performance – the HPO factors. Table 2.1, at the end of this section, lists the 35 HPO characteristics that underlie the HPO factors (included in the HPO Insight™ software).

HPO factor 1: Management Quality

In an HPO, managers on all levels of the organization maintain trust relationships with employees by valuing their loyalty, treating smart people with respect, creating and maintaining individual relationships with employees, encouraging belief and trust in others, and treating people fairly. Managers at an HPO work with integrity and are a role model to others, because they are honest and sincere, show commitment, enthusiasm and respect, have a strong set of ethics and standards, are credible and consistent, maintain a sense of vulnerability and are not self-complacent. They are decisive, action-focused decision-makers, avoid over-analysis and propose decisions and effective actions, while fostering action-taking by others. HPO managers coach and facilitate employees to achieve better results by being supportive, helping them, protecting them from outside interference, and by being available to them. Management holds people responsible for results and is decisive about non-performers by always focusing on the achievement of results, maintaining clear accountability for performance, and making tough decisions. Managers at an HPO develop an effective, confident and strong management style by communicating the values and by making sure the strategy is known to and embraced by all organizational members.

HPO factor 2: Openness & Action Orientation

In addition to having an open culture, an HPO uses the organization’s openness to achieve results. In an HPO, management values the opinion of employees by frequently having dialogues with them and involving them in all important business and organizational processes. HPO management allows experiments and mistakes by permitting employees to take risks, being prepared to take risks themselves, and seeing mistakes as an opportunity to learn. In this respect, management welcomes and stimulates change by continuously striving for renewal, developing dynamic managerial capabilities to enhance flexibility, and being personally involved in change activities. People at an HPO spend a lot of time on dialogue, knowledge exchange and learning in order to obtain new ideas to improve their work and make the complete organization performance-driven.

HPO factor 3: Long-Term Orientation

In an HPO, long-term gain is far more important than short-term profit. This long-term orientation is extended to all stakeholders of the organization, that is, shareholders as well as employees, suppliers, clients and society at large. An HPO continuously strives to enhance customer value creation by learning what customers want, understanding their values, building excellent relationships and having direct contact with them, involving them in the organization’s affairs, being responsive to them, and focusing on continuously enhancing customer value. An HPO maintains good long-term relationships with all stakeholders by networking broadly, taking an interest in and giving back to society, and creating mutual, beneficial opportunities and win-win relationships. An HPO also grows through partnerships with suppliers and customers, thereby turning the organization into an international network corporation. Management of an HPO is committed to the organization for the long haul by balancing common purpose with self-interest, and teaching organizational members to put the needs of the enterprise first. They grow new management from their own ranks by encouraging staff to become leaders, filling positions with internal talents, and promoting from within. An HPO creates a safe and secure workplace by giving people a sense of safety (physical and mental) and job security and by using dismissal as a last resort.

HPO factor 4: Continuous Improvement & Renewal

The process of continuous improvement starts with an HPO adopting a unique strategy that will set the company apart by developing many new alternatives to compensate for dying strategies. After that, an HPO will do everything in its power to fulfill this unique strategy. It continuously simplifies, improves and aligns all its processes to improve its ability to respond to events efficiently and effectively and to eliminate unnecessary procedures, work, and information overload. The organization also measures and reports everything that matters, so it measures progress, monitors goal fulfillment and confronts the brutal facts. It reports these facts not only to management but to everyone in the organization, allowing all organizational members to access financial and non-financial information needed to drive improvement. People at an HPO feel a moral obligation to continuously strive for the best results. The organization continuously innovates products, processes and services, constantly creating new sources of competitive advantage by rapidly developing new products and services to respond to market changes. It also masters its core competencies and is an innovator in these core competencies by deciding on and sticking to what the company does best, keeping core competencies inside the firm and outsourcing non-core competencies.

HPO factor 5: Employee Quality

An HPO makes sure it assembles a diverse and complementary workforce and recruits people with maximum flexibility to help detect problems in business processes and to incite creativity in solving them. An HPO continuously works on the development of its workforce by training staff to be both resilient and flexible, letting them learn from others by going into partnerships with suppliers and customers, inspiring them to improve their skills so they can accomplish extraordinary results, and holding them responsible for their performances and with that encouraging them to be creative in looking for new productive ways to achieve the desired results.

 

35 HPO characteristics included in the HPO Insight™ software
1 Our organization has adopted a strategy that sets it clearly apart from other organizations.
2 In our organizational unit processes are continuously improved.
3 In our organizational unit processes are continuously simplified.
4 In our organizational unit processes are continuously aligned.
5 In our organizational unit everything that matters to performance is explicitly reported.
6 In our organizational unit both financial and non-financial information is reported to both managers and employees.
7 Our organizational unit continuously strengthen its core competencies.
8 Our organizational unit continuously innovates its products, processes and services.
9 In our organizational unit management frequently engages in dialogue with employees.
10 Employees of our organizational unit spend much time on knowledge exchange and learning.
11 Employees of our organizational unit are always involved in important processes.
12 Management of our organizational unit allows making mistakes.
13 Management of our organizational welcomes change.
14 Our organizational unit is performance driven.
15 Management of our organizational unit is trusted by all employees in the unit.
16 Management of our organizational unit has integrity.
17 Management of our organizational unit is a role model for employees in the unit.
18 Management of our organizational unit applies fast decision making.
19 Management of our organizational unit applies fast action taking.
20 Management of our organizational unit coaches employees to achieve better results.
21 Management of our organizational unit focuses on achieving results.
22 Management of our organizational unit is very effective.
23 Management of our organizational unit applies strong leadership.
24 Management of our organizational unit is confident.
25 Management of our organizational unit is decisive with regard to non-performers.
26 Management of our organizational unit always holds employees responsible for their results.
27 Management of our organizational unit inspires employees to accomplish extraordinary results.
28 Employees of our organizational unit are continuously stimulated to become more flexible and resilient.
29 Our organizational unit has a diverse and complementary workforce.
30 Our organizational unit grows through partnerships with suppliers and/or customers.
31 Our organizational unit maintains good and long-term relationships with all stakeholders.
32 Our organizational unit is aimed at servicing the customers as best as possible.
33 Management of our organizational unit has been with the organization for a long time.
34 New management is promoted from within the organization.
35 Our organizational unit is a secure workplace for employees.