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High Performance:
by John G. Carlson, System Change, Inc. Sustainable high performance requires a systems approach that integrates a comprehensive range of performance factors and interrelationships. Achieving this next generation of strategic leadership involves five steps: 1. Closing performance loops. Obtaining control and leverage over performance requires development of a closed-loop system in which common processes are integrated through goal-setting and feedback mechanisms. Leaving critical processes outside the measurement system restricts your ability to manage performance factors. You need to close all performance loops, drawing involved parties into the performance equation. 2. Balancing performance trade-offs. Organizations operate through interdependent processes. Perceived cost savings can translate into higher ultimate costs unless performance factors are well understood and performance interrelationships and total costs controlled. Critical performance trade-offs exist between direct costs and other direct costs, direct costs and indirect and hidden costs, costs and product or service quality, and costs and employee productivity. 3. A complete view of waste. All costs do not have the same value. There are those of an investment nature, and others that are pure waste and candidates for reduction. In full cost analysis of processes as part of the total cost of quality, attention is placed on eliminating waste embedded in direct, indirect and hidden costs. In the absence of a systems approach for performance, equivalent attention has not been placed on eliminating employee waste to parallel what has been achieved in eliminating product and service waste. Refocus your attention on employee processes as part of the total cost of productivity, which includes expenditures for health, safety, health care, workers’ compensation, disability, human resources training, work-family, and related indirect, employee-related program and hidden, operating costs. The benefit is development of a new closed loop, total system, integrating employee issues now fragmented throughout the business system. 4. Leveraging resources through investment. Eliminating waste requires continuous improvement in quality and productivity at the operational level and requires reorientation toward Return on Investment at the strategic level. Both the quality and total cost of productivity provide a framework for investing upstream, reducing wasteful downstream costs through ROI-driven action. Putting the right money in the right places such as information and education drives down total costs by defining new performance annuities in product or service and employee processes. 5. Reducing risks systematically. Every process involves some level of risk. What has been lacking has been an information-based, learning-driven approach for reducing risk on a strategic and operational, rather than solely financial, basis. Risks need to be managed upstream as an exposure across the total environment through a combination of operational, financial and risk-sharing actions rather than downstream as a financial liability. In recent years, we have seen the continuous evolution of information-based, learning-driven management, of which quality management and process reengineering represent critical leaps forward. Making all of these strategies and tools work as an integrated whole is the key to sustainable high performance.
First publication, copyrighted 1995 by System Change, Inc.: John G. Carlson is Founder and CEO of System Change, Inc., a methods-based consulting firm featuring assessment services. He can be reached at jcarlson@systemchange.com or through his firm's website: www.systemchange.com. |
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