What is a HPS HPO HPWS MGT 5371

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What is a HPS/ HPO/ HPWS?MGT 5371
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HPO PROVIDES
The delivery of Routine Excellence, thus
creating the capacity for Frequent Breakthrough
or step change in results and processes. The
greatest competitive advantage -a knowledgeable
and personally invested individual. HPOs
provide a framework for developing people to be
ready to flow to the work needed today and in
the future.
____________________________ Source B.A. Macy,
Successful Strategic Change, Berrett-Koehler
Publishers, San Francisco, CA (forthcoming)
3
What is a High Performing Organization?
What Is It?
A High Performing Organization (HPO or HPS)
is an organization intentionally designed to
bring out the Best in People to produce
sustainable Leadership and Business Results.
Source B.A.Macy, Successful Strategic Change
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
4
Vertical Processes
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Lateral Processes
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Star Model How Organizational Design Affects
Behavior -2
Major Drivers of High Performance 1.
Commercial/Customer Changes 2. Technological
Changes 3. Organizational Changes
Strategies
Skills and mind-sets
Power
Structures
People
Vision Direction and Breakthrough Goals
Systems
Processes (Business People)
Rewards
Information
Motivation
Behaviors
Performance
Culture(s)
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Horizontal Design Categories that Produce
Improvement of Financial Performance
Structures
Processes
Systems
Vision Direction, Strategies Goals
Leadership
____________________________ Source B.A. Macy,
Successful Strategic Change, Berrett-Koehler
Publishers, San Francisco, CA (forthcoming)
8
HIGH PERFORMING WORK SYSTEMS FIFTEEN MAJOR
CHARACTERISTICS - 1

• CLEAR/CONCISE VISION, DIRECTION, STRATEGIES
• CONSISTENT CORE VALUES PHILOSOPHIES
• PEOPLE ARE COMMERCIALLY ASTUTE
• FLAT/LEAN STRUCTURES
• SOME CENTRALIZATION - GREAT DEAL OF
  DE-CENTRALIZATION
• LARGE SPANS OF CONTROL
• (OFFICE 120 OPERATIONS 134)
• NEW LEADERSHIP MODEL/ROLE

B.A. Macy, Successful Strategic Change. San
Francisco, CA Berrett-Koehler Publications
(forthcoming)
9
HIGH PERFORMING WORK SYSTEMS FIFTEEN MAJOR
CHARACTERISTICS - 2

• MANY P/L CENTERS
• RE-ENGINEERING OF CORE COMPETITIVE
• BUSINESS PROCESSES
• TWO-WAY EMPOWERED TALENT
• TECHNOLOGICALLY ADVANCED
• OPEN COMMUNICATION SYSTEMS
• FOCUS ON SIMPLE/FEW BALANCED SCOREBOARD
• RESULTS MEASURES
• FOCUS ON EXPONENTIAL CHANGE IN EMPLOYEE
• CAPABILITIES
• RENEWAL FEATURES BUILT IN

B.A. Macy, Successful Strategic Change. San
Francisco, CA Berrett-Koehler Publications
(forthcoming)
B.A. Macy, Successful Strategic Change. San
Francisco, CA Berrett-Koehler Publications
(forthcoming)
10
SUMMARY OF HIGH PERFORMANCE SYSTEM CHARACTERISTICS

• Advanced Organization Capacity
• Advanced Human Resource System
• Advanced Technologies
• Advanced Total Quality Leadership
• Advanced and Sustainable Business
• and People Results
• Commercially Astute Employees

NOT One or Two but--- all Six Elements
B.A. Macy, Successful Strategic Change. San
Francisco, CA Berrett-Koehler Publications
(forthcoming)
11
HPOs Are Intentionally and Directionally
Designed
- Founded on the Companys Values,
Principles and Expectations - Driven by business
and organization imperatives - Effective and
efficient HPOs integrate business
strategies, technologies, systems,
structures, processes and their people.
Source B.A.Macy, Successful Strategic Change
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
12
HPOs Are Intentionally and Directionally
Designed
- Strong leadership commitment and
behavior required - Creative, innovative and
reapplica- tion ideas and innovations are
shared, utilized, and leveraged across the
businesses in the firm
Source B.A.Macy, Successful Strategic Change
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
13
HPO Best in People, Teams, Structures, Systems
Processes

• Individuals/Teams who see their part in the
  Companys success and are focused on
  fulfilling the Purpose of the Company
• Individuals/Teams with high per sonal
  commitment who are energized and enabled to do
  what is needed

Source B.A.Macy, Successful Strategic Change
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
14
HPO Best in People, Teams, Structures, Systems
Processes
- Individuals/Teams do what is right
regardless of perceived risk -
Individuals/Teams that take pride in what
they do, how they do it, and the results
achieved
Source B.A.Macy, Successful Strategic Change
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
15
HPO Best in People, Teams, Structures, Systems
Processes
- Individuals/Teams collaborate with others,
act like owners, and do their best work based
on a foundation of trust
Source B.A.Macy, Successful Strategic Change
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
16
Trends in Organizational Shapes
Yesterday
Today
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Traditional vs. Innovative System Changes - 2
TASK ORIENTATION
INDIVIDUALIST/ SPECIALIST
TEAM/ GENERALIST
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Traditional vs. Innovative System Changes - 3
DECISION-MAKING
CENTRALIZED
DECENTRALIZED
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Traditional vs. Innovative System Changes - 4
PHILOSOPHY
AUTHORITARIAN
PARTICIPATIVE
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IMPLICATIONS

• Structural Changes
• Joint Decision-Making
• Higher Involvement/Empowerment/
• Direct Participation
• Better Communication
• New Leadership Roles - For All!!

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Vertical Processes
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Lateral Processes
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THE PACE SETTING 21st CENTURY ENTERPRISE

• VISIONARY
• LEADERSHIP
• VISION DIRECTION
• SETTING PACKAGE
• (V.D.S.P. -THE WEDGE)

• CUSTOMER INTIMACY
• QUALITY SERVICE
• TIME BASED/SPEED
• INNOVATIVE
• NETWORKED
• TECHNOLOGIES

BUSINESS DRIVERS
TRANSFORMATION ARCHITECTURE

• GLOBAL
• VALUE-ADDED PRODUCTS SERVICES
• CORE CAPABILITIES FOCUSED
• HIGH PERFORMANCE LEARNING ORGANIZATIONS
• FLAT/LEAN STRUCTURES
• FLEXIBLE EMPOWERED WORKFORCE
• CUSTOMER, STAKEHOLDER EMPLOYEE FOCUSED
• TOTAL QUALITY MANAGEMENT
• INFORMATION TECHNOLOGIES BASED
• S.B.U. DESIGN
• SUPPLY-CHAIN DESIGN
• HORIZONTAL DESIGN
• BUSINESS/PRODUCT DESIGN
• MACRO WORKSITE DESIGN
• MICRO WORKSITE DESIGN

INTENSE GLOBAL COMPETITION
RAPID TECHNOLOGICAL CHANGE
SHIFTING DEMOGRAPHIC BASES
B.A. Macy, Successful Strategic Change,
Berett-Koehler CA (forthcoming)
24
ORGANIZATIONAL PROCESSES
Increased Value

Financial Performance
Market Position
- Trust - Focus On Results - Empowered
Employees - Self-Motivated Employees - Employee
Ownership - Flexible - Defined Boundaries -
Common Defined Goals - Value Added Activities
Customer Satisfaction
Continuous Improvement
Business Environment
Acquire Knowledge
Transfer Knowledge
Apply Knowledge
_________________ B.A. Macy, Successful Strategic
Change. San Francisco, CA Berrett-Koehler
Publications (forthcoming)
25
HIGH PERFORMING WORK SYSTEMS FIFTEEN MAJOR
CHARACTERISTICS - 1

• CLEAR/CONCISE VISION, DIRECTION, STRATEGIES
• CONSISTENT CORE VALUES PHILOSOPHIES
• PEOPLE ARE COMMERCIALLY ASTUTE
• FLAT/LEAN STRUCTURES
• SOME CENTRALIZATION - GREAT DEAL OF
  DE-CENTRALIZATION
• LARGE SPANS OF CONTROL
• (OFFICE 120 OPERATIONS 134)
• NEW LEADERSHIP MODEL/ROLE

B.A. Macy, Successful Strategic Change. San
Francisco, CA Berrett-Koehler Publications
(forthcoming)
26
HIGH PERFORMING WORK SYSTEMS FIFTEEN MAJOR
CHARACTERISTICS - 2

• MANY P/L CENTERS
• RE-ENGINEERING OF CORE COMPETITIVE
• BUSINESS PROCESSES
• TWO-WAY EMPOWERED TALENT
• TECHNOLOGICALLY ADVANCED
• OPEN COMMUNICATION SYSTEMS
• FOCUS ON SIMPLE/FEW BALANCED SCOREBOARD
• RESULTS MEASURES
• FOCUS ON EXPONENTIAL CHANGE IN EMPLOYEE
• CAPABILITIES
• RENEWAL FEATURES BUILT IN

B.A. Macy, Successful Strategic Change. San
Francisco, CA Berrett-Koehler Publications
(forthcoming)
B.A. Macy, Successful Strategic Change. San
Francisco, CA Berrett-Koehler Publications
(forthcoming)
27
A High Performance Work System A Strategic
Balance Between Business and People Needs

• Reasonable Employment
• Assurances
• Work Challenge
• Broad Learning Contract
• Belonging
• Opportunities for Growth
• Recognition
• Participation/Involvement
• Skill and Ability Utilization
• Financial Sharing of the
• Wealth

• High EBIT
• Speed to Marketplace
• 1st or 2nd in Market Share
• Product Quality
• Customer Service
• Delivery Time
• Customer Responsiveness
• Low Costs
• Efficiency/Productivity
• Flexibility
• Benchmarking
• Responsive/Innovative
• Future Oriented
• Customer Satisfaction

TWO-WAY EMPOWERMENT PROCESS (Changing their
work, work systems, processes, work structures
and business processes)
B.A. Macy, Successful Strategic Change. San
Francisco, CA Berrett-Koehler Publications
(forthcoming)
28
CORPORATE CULTURES AND HIGH PERFORMANCE LEARNING
ORGANIZATIONS
1980-91 100 of the Fortune 500 Companies
Adaptive culture companies have
satisfied all three (customers,
employees, and stockholders) of
Companies with strong culture but
their constituents.
satisfying only one or two of key
Increased Sales 682
constituents
Increased Value of Stock 901
Expanded Workforce 282
Improved Net Income 756
Adapted from J. Kotter J. Haskett Harvard
(1992),
Corporate Culture and Performance
. The Free Press, p. 11
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PG Example

• PG has built a strong foundation for consistent
  sustainable growth, with clear strategies and
  room to grow in each strategic focus area, core
  strengths in the competencies that matter most in
  our industry, and a unique organizational
  structure that leverages PG strengths
• We are focused on delivering a full decade of
  industry-leading top- and bottom-line growth

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PG Core Strengths

• PGs core strengths are in the competencies that
  matter most in the consumer products industry
• Shopper and consumer understanding
• Branding
• Innovation
• Go-to-market capability
• Global scale

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Unique Organizational Structure

• We get the full value of the Companys strengths
  with a unique organization structure and
  supporting work systems. PG is the only
  consumer products company with global business
  unit (GBUs) profit centers, enterprise teams
  (along both sides of the value team as modified
  profit centers), the a global Market Development
  Organization (sales) and global shared business
  services (functional staff units), all supported
  by innovative corporate expertise
  centers/functions.

32
PGs Current Structure 2001
Consumer Teams (30) External
Relations Teams (6)
7 Global Customer Teams Customer Enterprise
Teams (130)
GBU
Corporate
Key Customers/ Trade
GBS
Consumers
Office
Top Management
Govt.
Core Functions
________________ Source B.A.Macy, Successful
Strategic Change Berrett-Koehler Publishers, San
Francisco, CA (forthcoming)
33
Unique Organizational Structure

• We are essentially running a number of highly
  focused companies that share common go-to-market
  operations and business services. Weve made it
  possible for each business unit to focus on its
  individual consumers, customers and competitors
  while capturing all the capability, knowledge and
  scale of a 70 billion global company. In
  addition, we have created the capability to
  collaborate, learn quickly from one another, and
  reapply successes across PG businesses.

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Unique Organizational Structure

• The primary benefit of allowing business units to
  focus singularly on consumer, customers and
  competitors in their individual categories is
  evident in the growth of PGs Skin Care, Oral
  Care, Feminine Care and Home Care Business.
  These four businesses have delivered 11 average
  sales growth over the past six years, adding
  nearly 1 billion per year in sales since the
  beginning of the decade.

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Unique Organizational Structure

• In the much more agile, flexible and responsive
  current structure, these limitation have been
  stripped away and businesses such as Skin Care
  and Home Care have become strong global
  businesses in their own right, with the resources
  and focus necessary to grow.

36
Unique Organizational Structure

• Organizational structure can be a liability,
  particularly for large, diversified multinational
  companies. By linking structure so tightly with
  strategies and strengths, we have made
  organizational design and supporting business
  systems critical enablers of sustainable growth.