High-Performing Organizations

In 1997, Vital Enterprises embarked on an extensive research effort to summarize the

literature on what was thought to differentiate the very best commercial enterprises from
all others (Vitalo, 1997). Our first task was to formulate a definition of such high-
performing organizations. Our second task was to develop an understanding of the
formative factors that create and sustain such an enterprise.

High-Performing Organization Defined

We distilled this literature and augmented it with both outcome research from allied
areas such as psychology and management sciences and our own experience. From
this effort, we anchored our definition of a high-performing organization (HPO) in its
ability to produce extraordinary results for all stakeholders (i.e., customers,
shareholders, employees, communities, and suppliers). We developed the definition
further by elaborating what "extraordinary results" meant. HPOs are the vital few
companies that account for most of the change that occurs in each industry, market,
and region. Their extraordinary results extend beyond customer service and
shareholders gain. HPOs are said to fulfill societal and industry ideals by becoming
agents and models of constructive innovation and by being places where people can
learn, achieve, and grow. Although these companies produce extraordinary results, they
do not necessarily have unbroken records of success. Indeed, HPOs may experience
setbacks at different points in their history. What HPOs do consistently display is the
ability to sustain performance over time and over changing market circumstances. Their
record of achievement has a positive slope over decades. And, even more significantly,
they produce benefits for all stakeholders inclusively—not for the benefit of
management at the expense of employees and shareholders, or for employees and
shareholders at the expense of suppliers and the community.

Formative Factors

Our research identified one source for the success of HPOs and three principles that
govern its operation.

One Source

People make the difference in any enterprise, and they alone determine whether an
HPO exists or fails to exist. The right people, therefore, are the single source for
achieving all the esteemed benefits produced by an HPO. They are the heart, head, and
sinew of such companies. It is from their substance that all other elements of an HPO
emerge.
The right people have these qualities: (1) they align to a purpose larger than self-
interest, (2) they are teamed in their performance, (3) they are energized from within, (4)
they have or acquire whatever expertise their tasks demand, and (5) they are always
pioneering. People who create and sustain HPOs align to a business intent that
commits to commerce through excellence and to producing benefits for all
stakeholders inclusively. They team with the other members of the business they
implement as well as across the company. Their inner desire to produce excellence
energizes their performance. Their first step in every endeavor is to acquire the
knowledge and proficiency needed to execute their tasks. Throughout, they are
pioneering, driving to achieve the previously unachievable, to probe new opportunities,
and to create new benchmarks of accomplishment.

The enlightening yet disturbing implication of this single source of effect is that you
cannot change your company without changing its people.

Three Principles

The three principles that explain the performance of an HPO describe its relationship
with the people who power it, clarify what these people focus on, and explain how they
view the rest of what surrounds them.

Principle 1 asserts that the right people are the origin and end of the HPO. This means
that aligned, teamed, energized, capable, and pioneering people create HPOs, and that,
reciprocally, HPOs attract, nurture, and develop these people. The relationship is
circular and self-sustaining. An HPO never acts in a way that compromises this
relationship.

Principle 2 states that enterprise and learning are the only activities on which people in
an HPO focus. Their single imperative is to maximize enterprise through learning.

Principle 3 declares that all elements other than people are optional. If these elements
exist, it is on a "just-in-time" and "only-for-so-long-as-useful" basis. This paraphernalia
includes structure, strategy, systems, procedures, equipment, tools, and facilities.

The Role of Kaizen in Creating a High-Performing Organization

The methodology of Kaizen described in Kaizen Desk Reference Standard encourages

the development of the right people, the right focus, and the right attitude toward all
else.

The Right People

Kaizen is a teamed activity that aligns performers to a larger purpose of advancing

business success and benefiting all stakeholders. It attracts people energized by the
opportunity to make a difference and equips them with knowledge and skills that
empower them to realize that opportunity. Further, it encourages performers to
challenge the usual way of performing work and to devise better methods that enhance
the value of work from the perspective of the customer. Every one of its features draws
to it the kind of people who are the single source of effect in creating and sustaining the
HPO's extraordinary results. Kaizen provides these people an opportunity to exercise
their qualities and grow in their capability, involvement, and contribution. If allowed its
full impact, the broad application of Kaizen acts to nourish the seeds of an HPO's
creation and propagate them throughout the workplace.

The Right Focus

Each Kaizen event roots its direction in producing business benefits and uses learning
as its means of achieving those benefits. Its very substance emphasizes a focus on
enterprise and learning. Moreover, its leave-behind measure and the follow-up team
meetings it fosters sustain and enhance the presence of the right focus in each
workplace it enters.

The Right Perspective

Kaizen continuously challenges people to question the value of each element in a work
process. It raises the question of necessity for every action and every resource. In this
way it eliminates "sacred cows" and reinforces the third principle of an HPO, that all
elements other than high-performing people are optional. From a Kaizen perspective,
each element in the workplace either adds value as defined by the customer or it is
waste. There are no products or product features that must exist, or production or
delivery methods that must be used, or paraphernalia of any sort that must be present.
Similarly, there are no roles, structures, or divisions of responsibility that are givens.

Kaizen, then, can be a means to the strategic business goal of becoming an HPO. Each
event, when completed as described in the Kaizen Desk Reference Standard, is itself a
mini-HPO in that it is "governed by purpose and powered by teamed, capable people
who use learning to achieve extraordinary results for all stakeholders." A stream of
events with a company wide scope can be used to model and teach the principles of an
HPO and attract, develop, and elevate the contribution of the kind of people needed to
power one.