Last updated: July 2009

Transcription

1 Building a High-Performance Culture Last updated: July 2009

2 Overview A high-performance culture is a key component of effective organizations Culture tends to be an asset for nonprofits, as reflected in organizational diagnostic scores Many organizations indicate that their organization embodies high-performance values and behaviors that enable it to achieve its strategic goals Note: The willingness-to-change dimension of culture, which is beyond the scope of these materials, often surfaces as a weakness An organization s culture must align with its strategy; accordingly, when considering a strategy change it s important to: Make sure aligning the culture to the new strategy is feasible If so, invest in making that cultural change happen Cultural change is most effectively achieved by working around the org wheel (e.g., designing decision-making processes to support the desired culture); it s generally counter-productive to focus on changing culture directly Building a High Performance Culture 2

3 Effective organization design considers five, interrelated components Clear vision and priorities Cohesive leadership team Clear roles and accountabilities for decisions Organizational structure that supports objectives 5. Culture Organizational and individual talent necessary for success Performance measures and incentives aligned to objectives Superior execution of programmatic work processes Effective and efficient support processes and systems High performance values and behaviors Capacity to change Source: Bain & Company organizational toolkit and Bridgespan analysis Building a High Performance Culture 3

4 Principles of effective organizational design Consider all five components of the wheel : A common misstep is to focus on structure alone (boxes and reporting lines) as the solution 1 Align the five components to one another: One element that doesn t fit can limit the performance of the whole system 2 Align strategy and organization to one another: Organizational strengths and weaknesses influence the range of feasible strategies; in turn, organizations should evolve with any new strategic direction 3 Building a High Performance Culture 4

5 Gaps in multiple aspects of organizational design can decrease organizational effectiveness Likely root causes Symptoms of an ineffective organization Leadership Decisionmaking & structure People Work processes & systems Culture Lack of coordination: work unfinished, teams isolated, out-of step Excessive conflict: Needless friction among internal groups Unclear roles: Functions overlap and/or fall through the cracks; lack of performance expectations Gap in skills or misused resources: Missing or underutilized skills or resources Poor work flow: Disruptions, cumbersome processes Reduced responsiveness: Slow reactions to environmental shifts Conflicting communications: external stakeholders confused, complaining Low staff morale: lack of confidence or drive; poor teaming Source: Strategic Organization Design: An Integrated Approach, Mercer Delta Consulting (2000); Interview with Peter Thies, Equinox Organizational Consulting; Bridgespan analysis Building a High Performance Culture 5

6 An effective organization depends on having highperformance values and behaviors along with the capacity to change 5. Culture Focus of this presentation The organization embodies highperformance values and behaviors that enable it to achieve its strategic goals The organization has clear values, and employees are personally inspired by what the organization stands for The organization appropriately balances time spent on serving clients, engaging with other stakeholders, and managing internal matters Employees take personal accountability for delivering on commitments and resolving issues, going beyond adequate to exceptional in the areas that really matter The organization has the capacity to change as necessary to adapt to evolutions in its operating environment and/or strategy Employees are open to change when appropriate Once a change is agreed upon, the organization carries it out effectively Building a High Performance Culture 6

7 Just what is culture? Culture is the way we do things around here. Tom Tierney, founder of The Bridgespan Group Culture is in essence an organization s operating environment the implicit patterns of behavior, activities, and attitudes,, shaped by a shared set of values and beliefs,, that characterize the way people work together Source: Tom Tierney; The Culture Challenge by Oliver Wyman Building a High Performance Culture 7

8 What are some of the facets of culture? Facet How people operate individually and collectively to implement the organization s strategy What patterns of leadership behavior are considered desirable How people deal with one another How people think about service recipients How people think about peer organizations and the broader external environment Sample behaviors Collaborate, work independently Separate into siloes, integrate Command and control, delegate Communicate openly, hold cards tight to chest Support one another, compete Confront one another, avoid conflict See one-way value exchange (i.e., us to them), value their input Believe strongly in their potential, are skeptical about their prospects Focus on what we do, learn from peers experience Operate largely independently, develop alliances with others Source: Informed by The Culture Challenge by Oliver Wyman Building a High Performance Culture 8

9 Bain s analysis shows that effective organizations tend to be culturally strong Difference in percent of "strongly agree" answers between "highperformers" and "all others" 80% 60 61% 54% 40 42% 40% 37% 37% 34% 32% 26% 23% 20 0 Vision & priorities Performance culture Decision roles Talent development & deployment Leadership team Measures & incentives Front-line execution Back-office effectivness & efficiency Capacity to change Organization structure Source: Bain & Company organizational diagnostic database (n = 365) Building a High Performance Culture 9

10 Culture tends to be an asset for nonprofit organizations as well Culture that inspires and promotes values Percent deviation from the average of all category averages in the organizational diagnostic 18.9 Nonprofits in Bridgespan s organizational diagnostic database (n=132) Culture that gets performance and results 11.1 Culture Culture that helps the organization achieve its goals 5.8 Openness and adaptability to change 2.7 Clarity in communication about change -6.7 Ability to execute change -4.5 Source: Bridgespan organizational diagnostic database (n= 132) Building a High Performance Culture 10

11 Culture can be both a powerful ally and a real barrier to implementing a strategic change High culture scores on Bridgespan s organization diagnostic could either hinder or enable execution of a strategy The bad news: Hard and fast adherence to the existing culture could get in the way of change The good news: People are very enthusiastic about the organization; with the right work, that good will and motivation could be harnessed to make change happen Low culture scores may impede a new strategy A low culture score is likely caused by a weakness elsewhere in the organization wheel, with leadership being a likely candidate A weak culture is a signal for a case team and client to think very hard about any going forward with strategy that calls for major change* * The article When Good Strategies Fail to Deliver, Culture May Be the Culprit by Mike Perigo (then with Marakon Associates) offers advice on how to create a high-performance culture Building a High Performance Culture 11

12 Culture is a result, not a lever Building a High Performance Culture 12

13 Bain s research shows what factors shape culture; changing culture means addressing these factors Percent of respondents 100% Which factors have a strong influence on your organization's culture? Leadership behaviors Type of people recruited Evaluation and promotion systems Compensation systems Type of people encouraged to leave Source: Bain EIU Organizational Survey (n=201) Building a High Performance Culture 13

14 To align culture to strategy, determine how to use other parts of the wheel Start with leadership: little will change unless leadership commits to a new vision for culture, and changes their own behavior as appropriate Design decision-making processes to support desired culture, not undermine it Build structure to fit with culture and strategy 5. Culture Engineer processes and systems to drive desired behavior, e.g. collaboration, quality, innovation, loyalty, etc. Ensure the right people are on the bus, and remove obstacles if necessary Align measures and incentives to the desired goals and strategy Building a High Performance Culture 14