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Creating a High-Performance Culture


Published in the Houston Business Journal in September, 2004.


Authors:
Robert A. Peiser, President and Chief Executive Officer, Imperial Sugar Company, a $1.1 Billion food products company.
Ravi Kathuria, President, Cohegic Corporation


Peiser

Kathuria

Companies focus on improving their organization-culture due to its importance in driving bottom and top-line performance. However, culture improvement initiatives often fail to improve performance because they are implemented under the wrong context. The goal of improving culture is not just to create a "feel-good" organization but to create a high-performance organization.

Many leaders believe that their organization's malaise stems from lack of people motivation. Hence, motivational speakers, team-building exercises, social get-togethers and "creative" employee reward programs are often employed to motivate employees. Communication is increased through weekly business-update e-mails, newsletters and town-hall style meetings. The mission, vision and values of the organization are displayed in common areas. Such initiatives while useful for creating a "feel-good" environment are insufficient for creating a high-performance culture.

The challenge is to develop a culture where people do not need to be motivated but rather perform up to their potential because they believe in their ability to affect results. Three essential elements must exist for building a high-performance culture. 1. Business Clarity: Employees must clearly understand the business direction and the impact of their contributions; 2. Ability to Influence: Employees must have the ability to influence the business direction; and 3. Effective Rewards: Employees must be rewarded on the basis of objective performance indicators as opposed to subjective assessments.

Business Clarity: Clarity and specificity around the business direction, strategies and tactics is often an unmet need. This results in a lack of focus, misalignment and a feeling of helplessness among the employees. The most important communiqué in an organization is the articulation of its business direction in an easy to understand, quick-read format.

Most companies dictate an outcome (typically financial results) without explaining the specific roadmap to get there. Employees must be able to clearly understand the business drivers and the rationale behind the company's strategy and tactics. Making it easy to connect the day-to-day activities with the strategy and tactics enables employees to perform far more effectively.

Ability to Influence: In addition to employee participation in strategy development sessions, it is critical to establish a system of candid feedback. New ideas and suggestions must be respected and rewarded, and more importantly every idea that is not adopted must receive an appropriate explanation.

Getting new ideas implemented requires approachable leaders. Not just leaders who interact with employees and maintain an open-door policy, but ones who are mentally approachable and who respect the employee's thought process. A high-performance culture is built when the leadership team is not afraid to get challenged and is open to being influenced in a different direction.

Giving people the ability to influence strategy is powerful because annual management retreats alone do not produce superior strategies - otherwise every company's strategy would be superior! Strategies become superior as a result of systematic implementation of good ideas that emerge spontaneously from different parts and levels of the organization.

Effective Rewards: Employees must be rewarded more on the basis of objective performance than on the basis of purely subjective assessments. Tying compensation and rewards to concrete indicators increases employees' faith in controlling their own destiny and improves their work effort. Objective metrics reduce emotional and varied interpretations of situations. Without objective measurement and verification, a high-performance culture cannot exist.

A high-performance culture takes work to establish, but those organizations that are successful in establishing one are more likely to dominate their marketplace.