High Performing Organisations

A high-performing organisation achieves its long-term goals based on both financial and non-financial criteria, that are significantly higher than other organisations operating within the same industrial sector.

They accomplish this by focusing their resources in a disciplined way, using methods of lean and Six Sigma to eradicate all areas of non-value-adding activities within the organisation surrounding:

• Its management activity.

• The non-productive use of financial resources.

• Eliminating time deficiencies within its operational parameters.

High-performing organisations concentrate on ensuring the efficient use of their resources over the long term by focusing, in a tightly disciplined way, on the aspects of the organisation that are of the utmost importance to the organisation's management team, staff, and customers. 

The commercial environment is changing at an ever-increasing pace in a globally competitive and increasingly technologically sophisticated way. Some organisations will rise to the challenge and thrive, whilst others will not. However, the most successful organisations will be those whose performance is pushed to the highest levels of attainment within their sector, which creates a culture and blueprint for outperforming their peers in the long term.
 
Within lower-performing organisations, management teams and staff work frantically, often running on the spot regarding their achievements as they become strangulated by their lack of ability to make decisions to navigate their strategic direction. As they procrastinate in their angst at not wanting to upset anyone by keeping everyone happy at the expense of progress, their efforts are getting their organisation nowhere and may even be hurting its progress.
 
That is not to say that people should always be respected. This is, of course, of paramount importance. People do get things wrong, and it is equally important to let them know that they are wrong as it is to refocus them. Through motivation, coaching, and mentoring, the aim must be to get them back onto the right path for their personal development through a sense of achievement that contributes to the high performance of the organisation and the team to which they belong.
 
However, an organisation must utilise high-performing teams to be a high-performing organisation. Often, because staff, teams and management functions are not in sync, the organisation's direction, objectives and goals become unfocused. This leads to the organisation's performance reducing, becoming a low-performance organisation. The effort of staff and teams frequently goes around in circles because no one is clear on the organisation's direction, objectives, and goals, the primary input of which is the organisation's vision, mission, and values statement.
 
A high-performing organisation's staff, teams and management function are characterised by clarity and coordination. Each part of the organisation's structure plays a crucial role in driving the organisation forward. The actions of the individual, team and management contribute to the organisation's direction, objectives, and goals, as each part of the structure adds to the organisation's overall success. This enables the organisation to reach levels of achievement significantly better than those of its peer group by focusing in a disciplined way on the issues of the highest importance to the organisation.
 
A five-year study by the HPO Centre in the Netherlands shows that high performance within organisations matters because the better the organisation's performance, the better the bottom line. Organisations that adopted a high-performance ethos increased their revenues by 10%, profitability by 26% and total shareholder return by 23%, achieving higher customer satisfaction and loyalty with fewer customer complaints.
 
Morale and the clarity of the organisation's direction, objectives and goals are strategically crucial, as when the organisation stops focusing on what matters, the organisation will pay the price in lost productivity, reduced turnover and increased costs as staff and teams leave the organisation to find greener pastures. New staff will only stay long if the original problems surrounding the organisation's culture and leadership are resolved. There are strategically essential qualities that organisations must have to be considered high performers:

• Quality of Management: Within a high-performance organisation, designated leaders within the management function steer the organisation and plan. These leaders create the organisation's strategic direction to achieve excellence by bringing out the best in staff and teams, helping each to adapt to changing circumstances, and promoting the best levels of harmonious teamwork. The management function must act with integrity and serve as role models for staff and teams with credible and consistent ethical standards that gain the trust and respect of those around them in a people-focused, results-oriented way. They make swift and effective decisions instead of overanalysing. They encourage others to do the same by giving their staff and teams continuous support, coaching and the freedom to act in ways consistent with the organisation's standards to take calculated risks, make tough decisions and hold themselves accountable for their choices.

• Continuous Improvement and Renewal: All high-performing organisations integrate the highest standards of excellence into their operating structures and introduce people to these standards when they join the organisation. The standards are more than just words in a mission statement. They are a living document in which staff are encouraged to share their ideas and knowledge to bring fresh impetus to the table to ensure that the organisation is focused on improvement.

• Openness and Action Orientation: Communication is like the game "telephone", where people whisper a message to the next person along the line, and the person at the end of the line must shout out the news to see if they have got the statement correct. When organisational communication happens this way, staff do not hear the intended message. High-performing organisations do the opposite of the "telephone" game as they establish open, multidirectional lines of communication. This ensures that messages flow freely and laterally between staff and teams. With solid communication channels, an organisation can strive for excellence through innovation, staying ahead of the market sector by creating new sources of competitive advantage by evolving its core competencies and finding ways to do it better and more cost-effectively.

• Long-Term Thinking: High-performing organisations have well-defined vision, mission, and value statements that convey the reason for their existence. These statements focus on long-term outcomes rather than short-term gains. Relationships are central to these statements as high-performance organisations work hard to understand what their stakeholders want, what they stand for, and how they can add value to build sustainable relationships. Staff and teams within high-performing organisations are not only clear about the vision, but they also understand what they must achieve for the organisation to deliver its vision of success. They understand the connection between the job roles of staff and the organisation's vision, mission and values, where the organisation's staff and teams move in the same direction as everyone is focused on the same goals and objectives.

• Quality of Staff: Organisations adopting high-performance habits tend to assemble a diverse and balanced body of staff and teams, where individual personalities do not dominate, and staff work together to achieve mission-critical aspects of the organisation's strategy. Training and mentoring are the foundation of a high-performing organisation, as staff are encouraged to be flexible and resilient through leaders who motivate staff to achieve their full potential by applying entrepreneurial thinking to their job roles. This results in a highly creative workforce where people become proactive, solutions-focused, and comfortable taking risks.

Training and mentoring are the foundation of a high-performing organisation, as staff are encouraged to be flexible and resilient through leaders who motivate staff to achieve their full potential by applying entrepreneurial thinking to their job roles. This results in a highly creative workforce where people become proactive, solutions-focused, and comfortable taking risks.

More articles can be found at Procurement and Supply Chain Management Made Simple. A look at procurement and supply chain management issues to assist organisations and people in increasing the quality, efficiency, and effectiveness in the supply of their products and services to customers' delight. ©️ Procurement and Supply Chain Management Made Simple. All rights reserved.

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The Essentials of High-Performing Organisations

High-performance teams, whether elite special operations units, winning professional sports teams, or high-functioning business organisations, exhibit common characteristics. These include high levels of internal trust and accountability, the ability to adapt to change effectively, and resilient mindsets. Such teams are sustainable, show increased engagement, and consequently, higher efficiency.

High-performing organisations function based on a well-defined mission statement, resulting in increased employee and customer contentment, improved staff and customer retention rates, accelerated growth, enhanced intelligence, and higher profitability. Similar traits might include:

• Enjoy a Shared Vision: Highly efficient business organisations function based on a well-defined mission narrative, resulting in increased staff and customer satisfaction, enhanced staff and customer retention, accelerated growth, heightened intelligence, and improved profitability.

• Trust is a Given: The team recognises that trust influences productivity, engagement, and profitability. The organisation upholds behavioural standards of integrity, honesty, and transparency in suitable situations and environments.

• Embrace a Learning Culture: The organisation consistently strives for excellence by focusing on continuous learning and development, refusing to settle for current affairs.

• Staff are Self-Managed: Team leadership shifts based on the necessary skills, with team members stepping up to address weaknesses or gaps.

• Have Guiding Principles: The team functions based on a clearly outlined set of guiding principles that govern their behaviour and communication. A shared language is an integral aspect of the organisation's approach. Guiding principles are consistently considered for talent acquisition, promotion endeavours, and reward systems.

• Initiate High Participation: Staff members strive to ensure everyone's active involvement. The key driver behind this is engagement, which fosters increased participation. It is rare to find staff members who actively disengage or work counterproductively against the organisation.

• Gain a Culture of Accountability: Staff members strive to ensure everyone's active involvement. The key driver behind this is engagement, which fosters increased participation. It is rare to find staff members who actively disengage or work counterproductively against the organisation.

• Engenders a Servant Leadership: The organisation adopts a leadership approach that prioritises serving others. They concentrate on accomplishing objectives with humility, always prioritising the team's needs over their own.

• Embrace Ecosystems, Not Hierarchies: High-performing teams adopt a decentralised approach to leadership and decision-making. Although the planning phase usually stays centralised and concentrates on overarching strategies, the implementation of tasks and responsibilities is decentralised. Authority is delegated down the hierarchy.

• Exude at Strategic Planning: The team has established protocols and standard operating procedures for planning and execution. They actively seek input and involvement from all relevant team members during the planning phase, ensuring everyone's perspective is considered.

• Encourage Comfort Zone Expansion: The team operates outside their usual comfort zone, taking calculated risks and constantly questioning potential outcomes. They welcome challenges and excel in difficult situations. The organisation prepares for unforeseen circumstances, making them more adaptable to obstacles.

• Are Time-Oriented: The team abides by set deadlines to deliver outcomes. SMART objectives are standard practice.

• Enshrine Seamless Communication: All individuals make exceptional efforts to guarantee that the plan and the advancements made towards the plan are easily comprehended. Appropriate resources are employed. Leaders and managers actively participate in the purposeful narrative through formal and informal channels to disseminate information throughout the organisation.

• Undertake Post-Action Reviews: The team pauses at suitable intervals to assess the quality of their most recent work, aiming to identify improvement areas and valuable insights to share with fellow team members. This after-action review is conducted consistently, with the results being recorded in a centre of excellence.

• Come Together to Celebrate Success: High-performing teams acknowledge and celebrate small wins on reaching their goals. Team members actively support one another, showing genuine concern for each other's progress and advancement.

An organisation that excels achieves its long-term objectives by surpassing financial and non-financial benchmarks compared to other organisations in the same industry. They accomplish this by focusing their resources in a disciplined way, using methods of lean and Six Sigma to eradicate all areas of non-value-adding activities within the organisation surrounding:

• Its management activity.

• The non-productive use of financial resources.

• Eliminating time deficiencies within its operational parameters.

High-performing organisations prioritise the efficient utilisation of resources in the long run by focusing on critical aspects crucial to the management team, staff, and customers. The business environment is evolving rapidly due to global competition and technological advancements.
 
While some organisations will excel, others may need help to adapt. The most successful organisations will set high-performance standards within their industry, establishing a culture that enables them to outperform their competitors in the long term.
 
In contrast, lower-performing organisations may find themselves stuck in a cycle of indecision, hindering their progress. It is essential to balance respecting individuals and addressing mistakes to ensure continuous improvement and growth.
 
The aim is to guide individuals towards personal development and high performance within the organisation and their respective teams through motivation, coaching, and mentoring. They can be redirected onto the right path by achieving a sense of accomplishment.
 
However, for an organisation to be high-performing, it must have high-performing teams. When staff, teams, and management functions are often aligned, the organisation's direction, objectives, and goals become clear. This lack of focus leads to a decrease in the organisation's performance, resulting in it becoming a low-performing organisation.
 
The efforts of staff and teams often go in circles because there is no clarity on the organisation's direction, objectives, and goals, primarily defined by the organisation's vision, mission, and values statement. In a high-performing organisation, there is clarity and coordination among staff, teams, and management functions. Each part of the organisational structure is vital in driving the organisation forward.
 
The actions of individuals, teams, and management contribute to the organisation's direction, objectives, and goals, with each part of the structure contributing to overall success. This enables the organisation to achieve significantly higher levels of success than its peers by focusing on the most critical issues in a disciplined manner.
 
A five-year study conducted by the HPO Centre in the Netherlands demonstrates the importance of high performance within organisations, as it directly impacts the organisation's bottom line. Resolving the issues surrounding an organisation's culture and leadership is essential for retaining new staff in the long run.

When an organisation fails to prioritise what truly matters, it will face consequences such as decreased productivity, higher turnover rates, and increased expenses as employees seek better opportunities elsewhere. There are strategically essential qualities that organisations must have to be considered high performers:

• Quality of Management: In a high-performance organisation, leaders in the management function guide the organisation and strategies. These leaders establish the organisation's strategic direction to achieve excellence by motivating staff and teams to perform at their best, assisting them in adapting to changing circumstances, and fostering a high level of teamwork. The management function is required to demonstrate integrity and set an example for staff and teams by upholding ethical standards that are credible and consistent, earning the trust and respect of those around them in a people-centred, results-driven manner. They prioritise making prompt and efficient decisions rather than getting bogged down in analysis. By providing continuous support, coaching, and empowering staff and teams to act in alignment with the organisation's standards, they encourage others to do the same, enabling them to take calculated risks and take responsibility for their actions to make difficult decisions.

• Continuous Improvement and Renewal: Highly successful organisations incorporate the utmost levels of excellence into their operational frameworks and acquaint new members with these standards upon joining the organisation. These standards extend beyond mere words in a mission statement. They are a dynamic document that encourages staff to contribute their ideas and expertise, injecting new energy into the organisation's pursuit of progress.

• Openness and Action Orientation: Effective organisational communication is crucial for success. Unlike the game "telephone", where messages can get distorted, high-performing organisations prioritise open and multidirectional communication channels. This allows for a seamless flow of information between staff and teams, fostering innovation and maintaining a competitive edge in the market.

• Long-Term Thinking: Highly effective organisations possess clearly defined vision, mission, and value statements that articulate the purpose of their existence. These statements prioritise long-term results over short-term benefits. These statements emphasise the importance of relationships, as high-performing organisations strive to comprehend the desires of their stakeholders, their core values, and how they can contribute value to establish enduring relationships. Employees and teams in high-performing organisations need to understand the vision and what they need to accomplish to achieve their vision of success. They recognise the correlation between staff job responsibilities and the organisation's vision, mission, and values, ensuring that everyone within the organisation moves in unison towards the same objectives and goals.

• Quality of Staff: Organisations that embrace high-performance practices typically form a well-rounded and diverse workforce, where no single personality overshadows others. Instead, employees collaborate harmoniously to accomplish the mission-critical elements of the organisation's strategy.

Training and mentoring serve as the bedrock of a high-achieving institution, fostering adaptability and perseverance among employees. Leaders play a pivotal role in motivating their staff to unlock their utmost capabilities by embracing an entrepreneurial mindset in their respective roles. Consequently, this cultivates a workforce with ingenuity, where individuals proactively seek solutions and confidently embrace risk-taking.
 
Cultivating a team where each member shares a connection and communicates openly is crucial. This occurs when they align with the values of the team leader and collaborate harmoniously to reach a common objective. When team members believe they can succeed together, they become more productive. Shared values, a high level of interaction, and a sense of trust among members, elements that make up a cohesive team, significantly enhance productivity.
 
The role of the leader is crucial in addressing this issue. In his Forbes article on strategies to build high-performance teams for Forbes, Joseph Folkman, an author of many books on leadership skills, emphasises the importance of leaders assisting team members in staying focused on the vision through consistent communication. He advises leaders to be like a "broken record" and guide the team towards achieving goals.
 
Team members often refrain from expressing their viewpoints and ideas during meetings due to their fear of vulnerability. This lack of psychological safety hinders productivity, and leaders must establish a work environment that promotes interpersonal risk-taking. Such a team culture will motivate employees and facilitate the implementation of new ideas to foster innovation.
 
Creating a continuous learning culture is vital for addressing skill gaps and adapting to the ever-changing landscape of digital transformations. Technology, particularly emerging technologies, is constantly evolving. Consequently, organisations emphasise the importance of their teams' ability to learn quickly and regularly upskill. While a significant amount of learning occurs through collaboration among team members, it is equally important to enhance a team's capabilities through documentation tools and training to build a high-performance team.
 
Establishing measurable and effective goals with clear intent is crucial for building a high-performance team. When team members share a common goal, they become motivated, energised, and more creative, resulting in increased productivity. Common values also contribute to achieving more in less time, a defining characteristic of a high-performance team. Additionally, rewarding and recognising effective performance helps maintain a positive and efficient atmosphere within such teams.

More articles can be found at Procurement and Supply Chain Management Made Simple. A look at procurement and supply chain management issues to assist organisations and people in increasing the quality, efficiency, and effectiveness in the supply of their products and services to customers' delight. ©️ Procurement and Supply Chain Management Made Simple. All rights reserved.

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Increasing UK Productivity

UK Labour productivity is a principal factor in determining the long-term economic growth rate, Government tax revenues, inflation, and actual wage levels. Since the recession in 2008, UK labour productivity growth has remained well below the historical average. The Office for National Statistics (ONS) estimates 20% below its 2008 pre-crisis trend.
 
In post-war Britain, UK labour productivity growth averaged 2-3% annually. However, since 2008, UK labour productivity has increased by only 5% in 13 years. There are a multitude of factors affecting UK labour productivity:

• Skills and qualifications of staff.

• Nature of employment.

• Staff morale.

• Technological progress.

• Substitution of capital for labour.

• Manufacturing capacity utilisation.

• Levels of investment.

• Politicism of the management process.

Pay trends generally reduce as the level of skill and productivity falls within the available labour force. Raising skills and productivity increases the output level per hour worked, resulting in staff earning proportionally more, with increased sustainability. In this scenario, organisations increase the hourly rates they pay staff, and reduce labour costs by employing fewer people.
 
There are many explanations for the fall in UK productivity growth. The rise in unemployment was a lot less during the 2008 - 2012 economic recession than in the previous recessions of 1981 and 1991. Current levels of unemployment have fallen to 3.8% within the UK.
 
The recent increased employment levels support the theory that organisations retain staff for longer and are far less likely to make redundancies despite lower economic demand, resulting in lower hourly productivity rates. Maintaining staff numbers prevents organisations from having to rehire and re-train staff after a recession ends, to the detriment of hourly labour rates, which invariably fall due to lower productivity levels.
 
During recent years, the UK has seen falling absolute wage levels and a slowing of wage growth. Organisations may be more willing to employ staff than invest capital in reducing the levels of labour required, as low wage growth means retaining staff is relatively more attractive than usual. Therefore, with lower labour costs, organisations are willing to employ more staff utilising labour-intensive production methods.
 
During the early 2010s, the credit crunch held back investments because of the general lack of funds available for new capital investments, to increase manufacturing capacity that was less labour intense, or to fund research and development projects, ultimately holding back employment opportunities and productivity growth.
 
Labour market flexibility in recent years, with increased part-time, temporary, and zero-hour employment contracts, has helped further reduce organisational production and service costs. Therefore, organisations are more willing to employ additional staff without increasing hourly productivity rates.
 
The growth of EU labour productivity, measured by real GDP per hour worked, increased at the onset of the COVID-19 pandemic before declining during the subsequent economic recovery, contradicting the general notion of productivity being procyclical and reflecting the unique nature of this crisis.
 
Between Q4 2019 and Q1 2021, EU labour productivity growth remained positive. It accelerated compared to before the pandemic as staff were furloughed, fewer hours were utilised, and production rates remained constant. The average annual GDP per hour worked increased by 1.7% during this period.
 
The increase in GDP was more than twice the average productivity growth for 2014 – 16 and 2018 – 19, during which real GDP and total hours worked declined by annual averages of 5.7% and 7.4%, respectively. The decline was principally down to organisations seeking to increase production levels through increased labour, rather than looking internally to increase production efficiency.
 
During the COVID-19 pandemic, unemployment was reduced due to the job retention schemes employed across the EU. Employment levels, on average, fell by an annual 1.6% during the pandemic. However, in Q2 2021, these trends reversed, with the number of hours worked and employment rates rebounding sharply, causing productivity growth to slow.
 
Increasing productive growth is crucial for the UK, as it navigates the economic headwinds in an increasingly uncertain world as factors such as an ageing population, an ongoing shift to low-productivity services, and the uncertain outlook for trade and investment post-Brexit take hold. However, there are measures that the UK could take to improve its productivity:

• Provide funding grants and tax incentives to organisations to increase the use of technology and engagement in effective R&D.

• Deregulate market sectors and decrease unnecessary bureaucracy to remove barriers to entry and encourage new and dynamic market entrants.

• Reduce the politicism of the management process and adopt performance-related pay measures to increase hourly productivity levels.

• Promote greater competition and mobility in labour markets by removing restrictive work practices and protecting employment rights.

• Improve the education system to develop general numeracy and literacy skills to promote educational flexibility and human capital development.

• Use the tax system to incentivise training to upskill the UK labour force, invest in R&D, and develop markets outside the EU.

An often-overlooked area of falling productivity levels is the politicism of the management process. An organisation is as reliant on its staff as its managers to service its customers' needs. An organisation is only as strong as its weakest part, which is often the low productivity of its staff.
 
Customers do not have a right to incur poor performance. Organisations must be accountable for their performance and customer service offerings. It is important to remember that staff are paid for their services in exchange for a salary. There is an important balance to be struck between prioritising staff "rights" at the expense of customer service. Staff and customers have equal importance, and one should never be put at the disadvantage of the other.
 
Many organisations prefer to hire additional staff to resolve their service or productivity difficulties, which leads to reduced productivity levels and real wage growth, rather than looking at their operating procedures to negate the need for additional staff and increase productivity levels. 

More articles can be found at Procurement and Supply Chain Management Made Simple. A look at procurement and supply chain management issues to assist organisations and people in increasing the quality, efficiency, and effectiveness in the supply of their products and services to customers' delight. ©️ Procurement and Supply Chain Management Made Simple. All rights reserved.

#procurement #procurementtransformation #procurementmanagement #procurementstrategy #supplychainmanagement #supplychain #supplychainexcellence #purchasing #purchasemanagement #commerical #business #managementconsulting