Organizations fail to get the focus right in reorganizations
Global study shows what organizations should concentrate on when reorganizing.
Global research performed by the HPO Center in The Netherlands shows that many organizations make the wrong choices when undergoing a reorganization. Cuts are made in the wrong projects, poorly performing employees stay in place and the organization focuses mainly on internal cost savings. The center is calling for directors to focus on the five success factors of leading organizations that enable them to survive now and stay fit for the future.
Declining consumer confidence, poor results, the prospect of economy rounds and the euro crisis are prompting many directors to take drastic action. Reorganizations and redundancies are announced. Strong organizations sharply focus their interventions. Scientific research shows what makes these organizations stand out from the rest. According to Esther Mollema, the center’s managing director, many organizations fail to get the focus right in their reorganizations: “I see many organizations getting into a complete panic and not knowing how they can survive the crisis. Let alone how they can emerge from the crisis stronger. Unfortunately, many decisions are based on the short term and are taken intuitively. An impression of doing something to improve the results is given, but without the right focus and coherence it is unlikely to have the right effect. Certainly not in the long term. There is a task here for directors, but also for works councils when it comes to making the right decisions now and keeping their heads.”
André de Waal, academic director of the HPO Center notes that the best performing organizations also reorganize but focus completely differently. “We see that these organizations think carefully about the long-term implications before they make cuts in projects. They part company with people who continually put in substandard performance. They make cuts in everything that doesn’t affect the organization’s core activity. But they also pay special attention to their best employees so that they can serve as an example to others even more effectively. They do everything possible to hold on to as much knowledge and experience as they can. And perhaps even more importantly, they continue to concentrate on getting the best result for their customers. The focus in reorganizations is therefore truly placed on the long term, and this is continuously shared with the employees.”
The HPO Center surveyed the most important qualities needed to be and remain successful at more than 1,400 organizations in 50 countries, including many USA based companies. The Center concluded that five success factors give organizations the right focus in a reorganization:
- Quality of Management
The management combines integrity and coaching leadership with fast decision-making. They take a resolute approach to ‘non-performers’, are result-driven, but always focus on the long term. - Openness and Action Orientation
These organizations have an open culture. Everyone is involved through dialogue and knowledge and experience are shared and concerted into action for improved performance. Mistakes can be made as long as people learn from them. - Long term focus
Building up good alliances aimed at the long term with customers, suppliers and partners in the supply chain, and above all for management and staff. New management is supplemented through internal promotions and when reorganizations are carried through talents are retained by the organization wherever possible. - Continuous Improvement and Innovation
The organization knows its distinguishing characteristics in the market and allows all managers and employees to continuously contribute to renewing its processes, services and products. Cuts are made in processes that do not contribute to remaining a High Performance Organization. The organization continuously improves its core competencies, especially in times of crisis. - Quality of Staff
The employees are varied, complementary and able to work effectively together. They are flexible and resilient in their focus on achieving the intended result. The fact that the management and staff hold a continuous dialogue ensures that everyone knows precisely which steps need to be taken in a reorganization.
The Center has shown scientifically that these five factors emerge in all sectors (profit and non-profit) and internationally as the success factors of leading organizations. “Put simply: the five success factors of High Performance organizations give organizations the right focus in reorganizations. Organizations that know how they are performing on the five factors also know where they can make cuts, what is important to the long-term result and where they should concentrate their investments. This helps to reorganize in such a way that they survive now but remain fit for a good future.”, says Esther Mollema.
-- / --
ABOUT THE RESEARCH
In order to unravel the secret of High Performance Organizations (HPOs) dr Andre de Waal MBA, academic director of the HPO Center, studied the characteristics of excellent organizations all over the world for five years. In order to determine the distinguishing characteristics, more than 290 international studies were examined that were conducted over the past 30 years in the area of high performance. The characteristics that were observed the most often in the studies were then tested with the aid of a questionnaire in a worldwide study 1,470 organizations in the for-profit, non-profit and government sectors.
The basis for the study was formed by a comprehensive literature study of both scientific as well as non-scientific studies on HPOs. The study was validated by a research colleague at Cranfield University. With the aid of statistical analysis, the characteristics were determined that exhibit a correlation with the performance of an organization. There appeared to be 35 of these. Using a factor analysis, these characteristics were then clustered into five factors that exhibit a direct and strong correlation with the competitive performance and that therefore determine whether an organization is or is not an HPO.
The academic responsibility is published on this website: http://www.hpocenter.com/index.asp?uid=3&sid=22&url=academic-responsibility-the-hpo-study-approach-by-andre-de-waal
ABOUT THE HPO CENTER
During the spring of 2007, the HPO Center reached the point where it could clearly indicate which success factors have a direct correlation to the competitive performance of an organization. We now know exactly "what" makes an organization high performance! Performing well in the HPO factors not only results in more financial elbowroom, but also a continuous strategic edge on comparable organizations (customer orientation, employee satisfaction, innovation strength, etc.).
The HPO Center aims to become the global expert in "what" makes organizations better. Based on studies in 50 countries involving 1.470 organizations, an HPO diagnosis was developed that has been tested extensively in practice. This HPO diagnosis enables us to hold a mirror in front of organizations, providing a clear indication of their strengths and areas requiring improvement. The diagnosis also provides a clear-cut and broadly based focus for improvement.
CONTACT INFORMATION
Marco Schreurs (HPO Center - schreurs@hpocenter.com)
Stem of voeg toe aan
