A few weeks ago, I published a post titled, “High Performing Companies Know How to Manage Change.” I received a Twitter response to the piece suggesting that I add a little depth to the post.
Let’s start by defining what a high performing company looks like. The best definition I ran across is an organization that delivers profit margins 50-150 percent above industry average. We’re talking about companies that have significant market share, increasing profits, and a history of growth.
The only way an organization is able to do this successfully is by creating and maintaining a high performance culture. Now I don’t mean a high burnout culture. High performance isn’t about working a lot and wearing employees down. High performance is about ethics, standards, commitment and accountability.
One of the ways to build a culture of high performance is to think of it in as a “learning organization.” The phrase “learning organization” was coined by Dr. Peter Senge in the book, “The Fifth Discipline.” Learning organizations are those entities that are constantly improving themselves as a result of their surroundings. Learning organizations become high performing because they are continuously trying to improve their business standards and competitive advantage. There are five components to developing a learning organization:
- Systems thinking is a framework to study the business and its processes.
- Personal mastery is the commitment to individual learning.
- Mental models are the assumptions held by individuals and organizations that need to be challenged.
- Shared vision is just that, the vision that is shared throughout the organization.
- Team learning is the ability for individuals to come together to accomplish goals.
As you look at the five components, it’s obvious that, to become a learning organization, companies must be open to change. Whether it’s change in the form of learning a new skill or in changing business assumptions.
It’s important for us to remember that the process of change doesn’t mean going from a state where something is bad or wrong to a state where something is good. Change can involve going from a state of good to better. I think that’s some of the reason that individuals are reluctant to change – because there’s this assumption that change means what we’re currently doing is wrong. And that’s simply not the case. I also think that’s why becoming a high performing organization is so difficult. Change is hard.
But here’s the other thing: learning organizations or high performing companies aren’t only focused on the company’s product or service. They focus on everything – operations, sales, human resources, etc. Any organization that plans to deliver the kind of results we’re talking about needs to have every aspect of their business held to the same level of accountability. Again, this is difficult. Let’s face it, sometimes organizations don’t do this. One department is considered more important than another.
High performing organizations achieve the results we’re talking about because they understand and buy-into the fact that change benefits them as individuals and as an organization. Change isn’t scary to them because they know it works.
Image courtesy of Sharlyn Lauby1
Tim Collins says
Helpful post Sharlyn. From where I sit, design thinking is the future and where we should go. It’s a more modern approach to systems thinking, centered on elegant simplicity, how people think and work and where technology is going. http://www.nytimes.com/2015/11/15/business/ibms-design-centered-strategy-to-set-free-the-squares.html?_r=0
Sharlyn Lauby says
Thanks for sharing. Very interesting article!
Dave Blum says
I agree that change is hard. We humans aren’t so different from our prehistoric ancestors. In fact, the brain hasn’t changed much in 100,000 years. That means we’re still trying to get enough food, avoid being eaten, and procreate. Change often feels threatening– we won’t get enough food, we’ll be eaten, and our genetic viability will be at risk. So that’s what we have to overcome. I think one way to do this is to make it exciting…we’re going to change the world…we’re rebels (even within an organization)…we’re going to shake up the status quo because it’s fun.
Sharlyn Lauby says
@Dave – Thanks for sharing. I like the idea of making change exciting. Possibly even fun. I think this is where gamification could bring some value.
Sharlyn, great article! I totally agree that building a culture of high performance can be done effectively when you approach it as a “learning organization.” I think that nowadays, a lot of companies suffering from poor performance management, and of course, declining employee engagement levels. And the five components to developing a learning organization which you’ve identified here could be a great solution for them.
I also can add that recognition is critically important for companies’ performance.
Everyone needs recognition to feel appreciated, stay engaged, and perform well, but the amount of recognition a manager must provide varies from person to person. More importantly, the most effective means of delivering recognition may vary from one individual to the next, too. Some individuals prefer to receive their praise in response to their weekly pulse reports, while others prefer to receive it face-to-face during weekly one-on-ones. It’s a good idea to test different approaches with each of your employees to see what works best for everyone.
Ullhas Pagey says
Extremely insighful Sherlyn . In fact you may like to plan series of articles for indepth treatment.