High Performance Organisations
Volume 17, Number 4 Article by Abhoy K Ojha December, 2005
High Performance Organisations: Discussion :
Business organisations have always faced competition and changing contexts, and the search for organisational forms and systems that can deliver consistent high performance has been constant. In recent times, the process has been dramatically impacted by globalisation and information technology. IIMB Management Review (IMR) invited representatives from a range of high performing organisations to discuss what makes for high performance.
For Swati Ramanathan, Co-founder of the not-for-profit Janaagraha Centre for Citizenship and Democracy (JCCD), credibility is the moot point, and Janaagraha has gained credibility through its transparent intentions and processes, its self-funding initiatives and above all, its solution-oriented approach where it is not concerned with ‘exposing’ the government but partnering with it. It put in place performance indicators to assess itself, adopted strong training processes and aims to build leadership skills and the spirit of volunteerism in the community. Janaagraha’s tangible successes have been in the Ward Works campaign to get citizens involved in the budget for the improvement of infrastructure in their neighbourhoods; Jalamitra, a part of the greater Bangalore Water Supply and Sanitation Programme; and PROOF — Public Records of Operations and Finance – inducing government organisations to give reports of their expenditures and revenues. Their grassroots efforts include the establishment of ward sabhas modelled after gram sabhas and their advocacy initiatives have led to the inclusion of disclosure, citizen participation and integration of service providers and arms of government in the National Urban Reformation. A restructuring process threw up new challenges — the difficulties in strengthening an idea, the pros and cons of a participatory, transparent, non-hierarchical decision-making model and the difficulties in scaling the model.
In their move towards global quality, T R Parasuraman, General Manager, Manufacturing, Toyota Kirloskar Auto Parts, explained that the company believes its people to be its strength and has a top-down approach to training. Standardisation, quantification and documentation are the cornerstones of the Toyota production system. The strategy is that all operations should be defined, the work very clearly distributed and the team member’s job should be made simple and easily visible. The company’s Quality Network anticipates the likely problems and plans detailed counter measures while Quality Circles identify and eliminate problems at the operational level. The process of abnormality management includes an ‘NG’ – no good – library and a dent management library through which ‘rejections’ are studied, and the counter measures worked into processes. The good practices of similar Toyota plants are shared worldwide, thus creating a synergy across operations.
Can high performance organisations, Prof Sourav Mukherji, IIMB, asks, learn from high profile failures? No failure could be more spectacular than the space shuttles Columbia and Challenger exploding in space. Given the high degree of similarity that emerged between the two cases, the predominant question was how an organisation like NASA could commit the same mistake over again despite having time and resources at its command? At a very fundamental level, NASA failed to manage the unexpected, something that a high reliability organisation (HRO) does consistently. HROs sense deviations early as they are preoccupied with failure; are reluctant to simplify interpretations, being comfortable with complicated mental models; are sensitive to operations; and they defer to expertise. Organisations today are complex systems, defying received wisdom and accepted practice, evolving into hybrid intermediate forms. Perhaps it is time to look at them afresh, suggests Prof Mukherji.
There are no ready-made recipes for attracting and retaining talent, admits Puneet Jetli, General Manager, People Function of the high performer MindTree Consulting. But the simple truth that MindTree learnt in the six years of its existence in the knowledge industry was that they were in a people’s business and hence they had to listen to people and understand their aspirations. MindTree’s annual People’s Perception Survey tracks the four important outcome variables — organisational commitment, employee performance, organisational identification and job satisfaction and sees how best it can influence the predictor variables that influence outcome. Based on the inputs it continuously amends its processes, policies, practices and systems. MindTree’s strong value system is married into its HR sub-processes and the organisation carries out a value fitment of potential candidates at the time of recruitment. Its performance management system is geared to give objective inputs for competence development to people rather than merely appraising them. MindTree’s employees are its brand ambassadors, with 50% of the organisation’s recruitment coming through employee referrals.
While Sasken today is one of the two companies in the world who have patents in DSL technology, Hari Iyer, Vice President, HR, related the ‘story’ of how the company grew and its vision, objectives and processes were honed along the way. Starting as a technology company and learning from its initial teething mistakes, Sasken decided that the three most important aspects of the organisation were competence, commitment and character. The organisation ensured competence by hiring the best talent. To build affective commitment, it worked on its purpose of creating brand India and unleashing Indian creativity by harnessing technology potential and demonstrating its concern. It offered a relationship to its prospective employees instead of a job or a career, and an environment where ideas and dissent could be aired freely. To ensure fairness and justice, it introduced team assessment of individuals and transparent, universally applicable processes. The character of the company, which was defined as consistency of behaviour across time, was put to the test during the downturn when all employees took a 20% cut in their salaries, demonstrating an equal sense of ownership.
Susheela Venkataraman, Partner, IBM Global Services India, elaborated on the trends emerging in the global market – the shift from cost to growth and top line, the emphasis on responsiveness and the challenge for companies being more internal than market oriented. HPOs must be driven by focus — differentiating their competencies, using tightly integrated strategic partners to manage selected non-differentiating activities; an intuitive ability to sense and respond to unpredictable changes; variability — to adapt cost structures and business processes flexibly; responsiveness; and resilience — organisations must be prepared for changes and threats. While a confident Indian MNC with a global mindset is emerging, it must pay attention to customer focus, ‘value-adding’ growth, innovation, the key ‘people’ factor, and building scale, branding and communication.
Prof V Anand Ram, IIMB, shared his thoughts on the leadership challenges of managing change. Research findings reveal that a majority of change initiatives considered critical to organisational success fail. While a planned effort in response to external pressure, with participation from all management levels would facilitate change, the commonly encountered obstacles are lack of commitment of senior management, a disconnect between actions and expected results, lack of follow-up, employee resistance to change, and inadequate resources. However, strong leadership is an important influential factor in change efforts. Referring to the ‘S’ shaped Sigmoid curve that Charles Handy spoke about, Prof Anand Ram explained the leadership challenges that organisations face in their different phases — start-up, managing success, managing realignment and turnaround.
The issues that emerged for general discussion included the ability of organisations to tread the balance between process orientation and innovation, whether different parts of an organisation can be oriented differently and the complexities of leading an HPO where the autonomy of the individual worker, the diversity of teams and the compulsions of building organisational norms have to be balanced. As for the definition of an HPO, the discussion yielded a canvas of multiple perspectives in the definition and measurement of high performance.
Reprint No 05406a