A High Performance Organisation is one that achieves Sustainable Performance through satisfying it's Commercial, Customer and Cultural needs.

Dr. Eliyahu M. Goldratt was an educator, author, physicist, philosopher and business leader, but first and foremost, he was a thinker who provoked others to think. He is best known as the father of the Theory of Constraints (TOC), a process of ongoing improvement that continuously identifies and leverages a system’s constraints in order to achieve its goals. He introduced TOC’s underlying concepts in his business novel, The Goal: A Process of Ongoing Improvement, which has been recognized as one of the best-selling business books of all time. First published in 1984, The Goal has been updated three times and sold more than 7 million copies worldwide. It has been translated into 32 languages. 

Of particular importance in relation to High Performance Organisations was Dr. Goldratt’s articulation of three necessary conditions for any organisation to flourish.

He describes the necessary conditions as being:

1. To make more money now as well as in the future
2. To provide satisfaction to the market now as well as in the future
3. To provide a secure and satisfying environment for employees now and in the future

That is to say, if your goal is to make money it is absolutely necessary to provide satisfaction to the market and provide a secure and satisfying environment for employees. If your goal is to satisfy customers it is absolutely necessary to make money and provide a secure and satisfying environment for employees.  If your goal is to provide secure and satisfying jobs you have to make money and satisfy your customers.  If you don’t your organisation will not last.

Dr. Goldratt claimed that no matter what your focus once you choose one the other two become necessary conditions.

Another way of looking at these necessary conditions is to describe them as:

1. Commercial
2. Customer
3. Culture 

Fast forward 30 years and organisations are recognising that in order to maintain sustainable performance all three of these conditions must be satisfied.  There are many examples of companies through-out the world that have successfully balanced all three conditions.

In “An Everyone Culture: Becoming a Deliberately Developmental Organization” by Robert Kegan and Lisa Lahey (and their collaborators) describe and study three such companies - Next Jump, Decurion and Bridgewater.  They called them Deliberately Developmental Organizations or DDO’s.

In “Firms of Endearment: How World-Class Companies Profit from Passion and Purpose” by Rajendra Sisodia and David Wolfe they reference companies like great like IDEO and IKEA®, Commerce Bank and Costco®, Wegmans and Whole Foods® and how they earn the powerful loyalty and affection that enables truly breath taking performance.

“Reinventing Organizations: An Illustrated Invitation to Join the Conversation on Next-Stage Organizations” by Frederic Laloux cites even more examples of organisations that have evolved to consider culture a fundamental pillar of sustainable performance.

In our home country of New Zealand we have been fortunate to work with one of the best and most explicit example of a company that is striving to meet these conditions - Air New Zealand.   In October of 2017 the NZ Herald reported:

“Air New Zealand's board demanded the company achieved three very interdependent goals; commercial returns, enhanced customer experience and a strong people culture within the business.”

Taking care of culture is no longer the domain of the ‘Human Resources’ department but a fundamental component of business strategy.

On the front page of this course is a quote from Stephen R Covey:

“We are in the middle of one of the most profound shifts in human history, where the primary work of mankind is moving from the Industrial Age of “control” to the Knowledge Worker Age of “release.”

As we move out of the 'Industrial Age' and into the 'Knowledge Age' there is a slowly emerging understanding that in order to achieve sustainable performance in an organisation it is necessary to listen to our intuition and create environments where we can work together, learn from each other, bring our contribution to the table and achieve greater collective satisfaction.

A High Performance Organisation is one that achieves Sustainable Performance through satisfying it's Commercial, Customer and Cultural needs.  In summary:

But, before we jump in too far, it is important to acknowledge and understand where we are currently and what we actually need to change.

For centuries people have organised themselves into collective groups intuitively knowing that together it is possible to achieve more security and satisfaction than we can alone as individuals.

But, somewhere in our pursuit of higher performing organisations this intuition got lost in favour of a focus on cost and efficiency. Multiple business and economic failures caused by an exclusive focus on efficiency led to a new drive toward customer satisfaction. This has proven to be somewhat successful although many implementations of approaches like TQM, Quality Circles, Lean and Agile have failed to deliver the expected results.

Christopher Luxon, CEO of Air New Zealand, reflects:

"I could get a much higher share price for Air New Zealand in an instant by cutting jobs, cutting investment, cutting customer service and culture."

"The reality is that the business world is sadly littered with companies that are just cutting costs and ultimately not fulfilling their purpose to do anything useful in society. That's pretty sad."

This course is an ongoing exploration of what is necessary to balance Commercial, Customer and Cultural in any organisation that wants to achieve sustainable high performance.  Striking this balance is not an easy task. There is an apparent conflict between these three needs that must be addressed.

For a company to truly become a High Performance Organisation it must resolve this tension. To resolve it we must first explore it. That is the topic for the next lesson.