What Is a High Performance Organization?: Definition & Five Qualities

The business landscape is changing faster than ever before. It's more global, more competitive and more technologically savvy. Some organizations will thrive in this environment, while others will not. The most successful organizations – so-called high-performance organizations – are those that create a culture and a blueprint for outperforming the competition for the long haul.

Tip

A high-performance organization performs exceedingly better than its competitors over the long term.

In an organization that is not high performance, people are working frantically, but their efforts are getting the company nowhere and could even be hurting its progress. Why? It is because the group members are not in sync with each other or the company's objectives. In a low-performance organization, the work effort frequently goes around in circles because no one is clear on the organization's mission and goals.

A high-performance organization, on the other hand, is characterized by clarity and coordination. Everyone plays a crucial role in driving the company forward, and everything that happens at the individual, group or departmental level contributes to the organization's goals. People understand their roles and how their efforts contribute to producing the desired results.

André de Waal of the HPO Center offers this more formal definition: "A High Performance Organization is an organization that achieves financial and non-financial results that are exceedingly better than those of its peer group over a period of time of five years or more, by focusing in a disciplined way on that which really matters to the organization."

Simply put, high performance matters because the better the organization's performance, the better the bottom line. According to a five-year study by the HPO Center in the Netherlands, companies that adopted a high-performance framework increased their revenues by 10 percent, profitability by 26 percent and total shareholder return by 23 percent. They also reported higher levels of customer satisfaction, increased customer loyalty and fewer complaints.

Consider also what happens to the people in a low-performance organization. Who is going to stick around in a team that argues, carries on blindly without clear objectives, fails to innovate and has many false starts? Who wants to work in an organization that does not help employees reach their full potential?

Morale and the clarity of work decline when the company stops focusing on what really matters. Ultimately, the company will pay the price in lost productivity and steep turnover costs as employees leave to find greener pastures. There's no guarantee that new hires will stay long unless the original problems surrounding the organization's culture and leadership are resolved.

There are dozens of qualities that organizations must have in order to be considered high performers. However, these qualities consistently appear in five categories:

• Quality of management.
• Continuous improvement.
• Openness and action orientation.
• Long-term thinking.
• Employee quality.

In a high-performance organization, there is a designated leader or leaders who steer the ship and always keep an eye on what's ahead. These leaders help the organization achieve excellence by bringing out the best in people, helping them adapt to changing circumstances and promoting good and harmonious teamwork. Making the best use of the company's most valuable resource – its people – is key to delivering sustainable success.

Managers act with integrity and serve as role models for their reports. They are credible and consistent and exhibit a strong set of ethical standards that gain the trust and respect of their teams. They are people-focused, and they are results-focused.

High-performance managers make swift and effective decisions instead of overanalyzing, and they encourage others to do the same. They give people continuous support, coaching and freedom to act in ways that are consistent with the organization's standards. Ultimately, they expect people to take risks, make the tough calls and hold themselves accountable for their own decisions.

High-performance organizations integrate standards for excellence into their operating structures and introduce people to these standards from the moment they join the organization. These standards are more than just pretty words in a mission statement. Rather, they are a living document. People are encouraged to share their ideas and knowledge in order to bring fresh ideas to the table and ensure the organization is permanently focused on improvement.

As tempting as it is to stick with "the way we've always done things," there really is no way of avoiding change. High-performing organizations understand this and create a culture that is poised to adapt to changing circumstances. They also train leaders to manage the change process effectively in the best interests of the company and its people.

Have you ever worked in a place where communication is like the children's game "telephone," where everyone whispers a message to the person next to him, and the person at the end of the line has to shout out the message and see if it is right? When communication happens this way, it results in people not hearing the message that was intended to be delivered. This is frustrating since it creates extra work and uncertainty for everyone involved.

High-performance organizations do the exact opposite of the "telephone" game. They establish open, multidirectional lines of communication so that messages flow freely around the organization – top to bottom, bottom to top and laterally between peer groups.

With solid communication channels in place, the organization can focus on action. This takes the form of continuously striving for excellence – innovating products and services, staying ahead of the market and looking for ways to create new sources of competitive advantage. The company will also evolve its core competencies by sticking to what the organization does best and finding ways to do it better and/or more cost effectively over time.

High-performance organizations have well-defined visions that convey the reason for the organization's existence. The vision is focused on long-term outcomes, which are much more important than short-term gains. Relationships are central to this vision. High-performance organizations work hard to understand what stakeholders want, what they stand for and how the organization can add real value for them. The idea is to build win-win relationships for life.

People within these organizations are not only clear about the vision, but they also understand what they have to do to help the company deliver its version of success. They understand the connection between their individual job roles and the organization's vision, mission and values. A high-performing organization is like a team rowing in the same direction where everyone is focused on the same goal.

The fifth and final quality centers around the quality of the workforce. Companies that adopt high-performance habits work hard to assemble a diverse and balanced team where individual personalities do not dominate, and everyone works together in partnership to achieve the mission-critical aspects of the company's strategy.

Training is the foundation of a high-performance organization. Every individual is trained and encouraged to be flexible and resilient. Leaders motivate employees to achieve their full potential and apply entrepreneurial thinking to their job role. The result is a highly creative workforce where everyone is proactive, solutions-focused and comfortable with taking risks.