Building a High-Performance Culture
Performance Culture
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 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
performance culture is a key component of effective organizations Culture tends to be an asset for nonprofits, as reflected in organizational
Many organizations indicate that their organization embodies high-performance values and behaviors that enable it to achieve its strategic goals
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 making processes to support the desired culture); it’s productive to focus on changing culture directly
Effective organization design considers
five, interrelated components
5. Culture
Source: Bain & Company organizational toolkit and Bridgespan analysis
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
• 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
Principles of effective organizational design
•
Consider all five components of the “wheel”:
common misstep is to focus on structure alone
(boxes and reporting lines) as the solution
•
Align the five components to one another
element that “doesn’t fit” can limit the performance
of the whole system
•
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
1
2
3
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
Align the five components to one another
: One
element that “doesn’t fit” can limit the performance
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
Gaps in multiple aspects of organizational design
can decrease organizational effectiveness
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
Symptoms of an ineffective organization
Source: Strategic Organization Design: An Integrated Approach, Mercer Delta Consulting (2000); Interview with Peter Thies, Eq Organizational Consulting; Bridgespan analysis
Leadership
Gaps in multiple aspects of organizational design
can decrease organizational effectiveness
Likely root causes
Source: Strategic Organization Design: An Integrated Approach, Mercer Delta Consulting (2000); Interview with Peter Thies, Equinox
Decision-making & structure People Work processes & systems Culture
An effective organization depends on having high
performance values and behaviors along with the
capacity to change
• The organization embodies
performance values and behaviors
that enable it to achieve its strategic goals
• The organization has the
change
evolutions in its operating environment and/or strategy
5. Culture
Focus of this presentation
An effective organization depends on having
high-performance values and behaviors along with the
The organization embodies
high-performance 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
Just what is culture?
Source: Tom Tierney; “The Culture Challenge” by Oliver Wyman
“Culture is the way we do things around here.”
– Tom Tierney, founder of The Bridgespan Group
Culture is in essence an organization’s
environment
– the implicit patterns of
activities, and attitudes
, shaped by a shared set
of
values and beliefs
, that characterize
people work together
“Culture is the way we do things around here.”
Tierney, founder of The Bridgespan Group
Culture is in essence an organization’s
operating
the implicit patterns of
behavior,
, shaped by a shared set
, that characterize
the way
people work together
What are some of the facets of culture?
• 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
Facet
Source: Informed by “The Culture Challenge” by Oliver Wyman
What are some of the facets of culture?
• 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
Bain’s analysis shows that effective organizations
tend to be culturally strong
0 20 40 60 80%
Difference in percent of "strongly agree" answers between "high performers" and "all others"
61% 54% 42% 40% 37% 37% Vision & priorities Performance culture Decision roles Talent development & deployment Leadership team Measures incentives
Source: Bain & Company organizational diagnostic database (n = 365)
Bain’s analysis shows that effective organizations
tend to be culturally strong
37% 34% 32% 26% 23% Measures & incentives Front-line execution Back-office effectivness & efficiency Capacity to change Organization structure
Percent deviation from the average of all category averages in the organizational diagnostic
Culture tends to be an asset for nonprofit
organizations as well
Source: Bridgespan organizational diagnostic database (n= 132)
Culture
• Culture that inspires and promotes values
• Culture that helps the organization achieve its goals
• Culture that gets performance and results • Ability to execute change • Openness and adaptability to change • Clarity in communication about change
Percent deviation from the average of all category averages in the organizational diagnostic
Culture tends to be an asset for nonprofit
-4.5 -6.7 2.7 5.8 11.1 18.9 Nonprofits in Bridgespan’s organizational diagnostic database (n=132)
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
–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 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 offers advice on how to create a high-performance culture
Culture can be both a powerful ally and a real
barrier to implementing a strategic change
on Bridgespan’s organization diagnostic
execution of a strategy
The bad news: Hard and fast adherence to the existing culture 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
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
Culture is a result, not a lever
Culture is a result, not a lever
Bain’s research shows what factors shape culture;
changing culture means addressing these factors
Source: Bain EIU Organizational Survey (n=201)
Which factors have a strong influence on your organization's culture? 0 20 40 60 80 100% Percent of respondents Leadership behaviors 80 Type of people recruited 70 Evaluation and promotion systems 56
Bain’s research shows what factors shape culture;
changing culture means addressing these factors
Which factors have a strong influence on your organization's culture? Evaluation and promotion systems 56 44 Type of people encouraged to leave 41 Compensation systems
To align culture to strategy, determine how to use
other parts of the wheel
5. Culture
• Start with leadership: little will change unless leadership commits to a new vision for culture, and changes their own
behavior as appropriate
• Engineer processes and systems to drive desired behavior, e.g.
collaboration, quality, innovation, loyalty, etc.
To align culture to strategy, determine how to use
Culture
• Design decision-making processes to support
desired culture, not undermine it
• Build structure to fit with culture and strategy
• Ensure the right people are on the bus, and remove obstacles if necessary
• Align measures and incentives to the desired goals and strategy
