Tuesday, September 26, 2017

The Paradox of High Performance Cultures

'Creating a high-performance culture' is a phrase that adorns many a corporate presentation, made by both Business and HR Leaders. Once you have spoken about whatever else you wanted to say about your business strategy and plan adding this magic phrase, 'creating a high-performance culture', seem to give it a nice 'human touch' and demonstrates your commitment to facilitating the unfolding of human potential in your organization!

So, what is the problem? Just because something looks good on PowerPoint slides, we can’t assume that it won’t work in real life. The problem begins when we start asking questions. Is there really something like a high-performance culture? Does it remain constant across organizations? Is it a naturally occurring phenomenon or is it something that can be created? If it can be created, what kind of creation is required?  Once created, can it be sustained? It is when we try to answer these questions we come to the paradox mentioned in the title of this discussion.
An issue becomes a paradox when there are multiple opinions the issue, each of which appears to be true, but they seem to be in conflict with one another.  In this discussion, we will look at the various perspectives that exist regarding high-performance cultures and try to make some sense out of them.  Let’s start with some of the perspectives:

  • High-performance culture is the ultimate source of competitive advantage and hence developing a high-performance culture should be given the highest priority
    High-performance culture is just a fad. It sounds good. But it is very difficult to bring it down to specifics and impossible to implement. It is just something that has been invented in retrospect to explain the success of some high-performing groups
  • Culture is a characteristic of a group whereas high-performance is an outcome that depends on multiple factors. So it is misleading to speak about high-performance work cultures. One should instead speak about high-performance work systems
  • There is no one culture that leads to high-performance
  • There are cultural traits leading to high-performance that hold good across organizations
  • We can define a target high-performance culture and create it in a short period of time
  • Culture is something that evolves over a period of time and deepest levels of culture consist of unconscious assumptions. It is not something that be ‘copied and pasted’ on a group
To make sense out of this we need to clarify what is ‘culture’ and what is ‘high-performance’.  While there are multiple perspectives here also, let us use the following as working definitions. A group is said to be high-performing when it consistently achieves its goals. Culture is the ‘way we do things around here’ – the recurring patterns of behavior in a group. If we put these two definitions together, we can define a ‘high-performance culture’ as those recurring patterns of behavior in a group that enables the group to consistently achieve its goals. So, the real question becomes ‘is there really a set of such of behaviors that by itself lead to high performance of the group’?

 If we have to understand the functioning of groups, we have to look at both its hardware and software. Hardware is the structure, policies, processes etc. Software is the people and the culture. Often, problems at the hardware level get conveniently misdiagnosed as software problems, because it is much easier to train people and to run culture-building sessions as compared to making significant changes in structure, policies and processes. So, if we have to have a high performing group, both the hardware and the software have to be good and also in sync with each other.

 Most of the studies in the domain of high-performance cultures list a set of characteristics and factors associated with high-performance cultures. These characteristics and factors and their relative importance vary across the different studies, Yes, sometimes they do look like wish-lists and not like proven causal factors for high-performance cultures. Nevertheless, it is instructive to take a look at them.

Some of the popular characteristics listed are passion for excellence, shared understanding and buy-in to the organization purpose, vision and goals, outward focus, decisiveness, sense of urgency, speed and agility, sense of ownership and personal accountability on the part of all the employees, discipline, diversity and inclusion, innovation and risk taking, passion for learning and renewal etc. All these do seem reasonable. What is not proved is whether these characteristics are causally linked to high-performance or if they are just correlated with some of the high-performance situations.

Now let us look at the factors that the studies on high-performance culture list as the ones responsible for high-performance. They include high performance standards and benchmarks, alignment of goals, high person-job fit, clarity of individual performance goals coupled with real-time feedback, review and coaching mechanisms, streamlined, and simplified processes and procedures, policies that enable and not hinder performance, flatter organization structures, realigned competency frameworks and incentive schemes to reinforce appropriate behaviors, high degree of performance based differentiation in rewards, role modeling by the leaders etc. Here again all these factors seem reasonable. But, they seem to be part of any good performance management system and not something unique to high-performance cultures.

May be, that exactly is the crux of the issue. If these factors corresponding to good performance management are coherently and consistently implemented, it will lead to high-performance. That is, when these gets consistently done and get role modeled by the leaders, it becomes ‘the way things get done’ and that is exactly the definition of culture that we have been using! When these are also structurally reinforced by appropriate structures, processes and policies they become sustainable. This helps us to realize the true power and importance of performance management. The performance management system, when properly designed and implemented, can be the most effective culture building tool instead of being a collection of annoying forms and formats!

Yes, spelling out what exactly is high performance and what exactly is the target culture required in their particular context would be helpful for a group to work towards high performance. High-performance need not necessarily be relative. It is with respect to whatever goals a group sets for itself though the group might refer to external performance benchmarks before arriving at the its goals. Similarly, there is no one right blueprint for culture as the culture that will lead to high-performance for a group will depend on the group’s strategy, context and stage of evolution.

The most important thing here is to go beyond broad statements of intent and empty platitudes. To make things we work, we have to identify the few most important cultural characteristics that needs to be changed and reinforced. We also need to keep in mind the interrelationships, structural reinforcements and alignments. We must ensure that the new cultural characteristics that we are trying to build is in alignment with the core values of the organization. Another important enabler is to remove impediments to high performance like ‘passive resistance’. All these, when done consistently, becomes the way of life and hence fit to be called ‘culture’!

So where does this leave us? Yes, groups vary in terms of performance levels and some of that variations in performance can be attributed to differences in the patterns of behavior (culture) in the group. Since these groups function in different contexts and with different goals, we can’t identify a single blueprint for high-performance culture that will be valid across groups though there could be some common characteristics and factors. Yes, in any group we can examine the hardware and software of the group to see if they are optimized and aligned for the achievement of the goals that the group has set for itself. When we detect gaps in the same, steps can be taken to address the same. However, these will often require fundamental changes in the functioning of the group and that requires commitment and investment from the leaders for an extended period of time. We must remember that what often differentiates a high-performance culture is the intensity and rigor of the implementation and not content of the culture! Unless the group is fully committed to the change, in both letter and spirit, the changes can’t be implemented and sustained. After all, a culture becomes real only when it is experienced!

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