Interview with the European Jim Collins
By Walter van Hulst
Consultants and conferences, methods and management books – when it comes to helping organizations make improvements, the choices are plentiful. But whether EFQM, Six Sigma or Balanced Scorecard is used, a scientific foundation is often lacking for the effectiveness of these methodologies in the long run, claims André de Waal in no uncertain terms. In fact, you would be better off aiming specifically at your target with only a single bullet than firing indiscriminately with a hail of bullets. With a background in physical chemistry, De Waal prefers the scientific approach. Using systematic and statistically based studies at more than two thousand organizations around the world, he has uncovered what really works. Five factors ultimately determine whether or not an organization is a High Performance Organization (HPO) and whether it can remain so. De Waal has written a book on the subject called ‘Turn your company into a world-class operation!’. The following is an interview with the man who is referred to as the Jim Collins of Europe. “What it really boils down to is passion and professional skill.”
The elephant
Ikea, Toyota, BMW and Giant. These are all examples of companies that can be considered High Performance Organizations (HPO). As far as both turnover and profit are concerned, they tower above the rest, embrace quality, have customers and employees who are clearly more than satisfied and loyal than at the competition, and manage to continuously improve their products and services. All of this takes place over a period of five to ten or more years. “These companies clearly have passion - passion for their product, passion for improvements, passion for satisfying customers. How they accomplish this is not always determined beforehand. You don’t need to map out every detail in advance, but instead recognize opportunities and make your own luck,” replies De Waal when asked about the essence, the core of success.
His own career has also been more or less a series of accidental opportunities that he has seized whenever possible. De Waal was brought up with travel and adventure. As a young boy, he had an unexpected encounter with an elephant when riding his bike further from home than allowed. This was when his father worked as a manager for Shell in Nigeria. Various other foreign countries would follow. His studies in physical chemistry at the University of Leiden were also in keeping with his career expectations, but the young André was less interested in following in the ‘Royal’ footsteps of his father. Using borrowed money, he got an MBA degree in Boston in only a year’s time – which was anything but common at the time – and, at the age of 25, began working at Arthur Andersen, as an IT consultant of all things. This was back in 1986 at the start of the unstoppable advance of the computer.
Knee fracture
A knee fracture presented De Waal with the opportunity to take a new direction. “After the operation, I wanted to get back to work as quickly as possible. But obviously I couldn’t visit clients in my condition and was stumbling through the office on crutches. But spending too much time in the staff room, even if only between jobs, is never good for a person’s image. That was obvious. So I was pleased when one of the managers asked me to do some research into critical success factors. At first, I didn’t really know what this was, but, after doing a bit of reading, I became more and more fascinated by the topic. That is when my passion for performance measurement and performance management was kindled.” The more De Waal studied the subject, the less he was impressed by the business community, its working methods and the existing management methods. He also began writing, first about financial management and later about its limitations. He smiles and adds, “I had the good fortune that my first article was immediately accepted for publication. Afterwards, I thought to myself, ‘Wow!’. After my third article was published, I decided to write a book (together with my colleague Henk Bulthuis) and was fortunate once again to get published. The publishing house Kluwer took me seriously this time round since I had already been published. That first book, Numbers aren’t everything!, sold extremely well for ten years, but is now sold out.”
An unforeseen opportunity once again emerged. “More and more students were approaching me who wanted to obtain a degree in the subject matter we were covering since, if you’ve written a book on the matter, you’re considered an expert. One of them was very interested in working on the interaction between behavior and performance. So Henk and I went to Paul Jansen, professor of business psychology at the VU, for advice.” That visit ultimately led to doctoral research by De Waal himself.
Meta-research
If following new paths and seeking out adventure and the unknown are one side of De Waal’s passion, the other is the urge to improve organizations. “The focus is not necessarily on profit, but more on having the organization actually function more effectively. The question that drives me is, How can I make both employees and clients happy?”
After receiving his doctoral degree, De Waal began the Center for Organizational Performance consultancy and research agency and started teaching strategic management at the Maastricht School of Management (MSM). This was a great combination that offered him the possibility to set up extensive international meta-studies. For five years and from a ‘helicopter’ perspective, de Waal carried out hundreds of studies and complementary research at more than two thousand organizations around the world. His approach was utterly thorough, systematic and meticulous. After an initial screening of all of these studies, he determined that 290 ultimately met the prevailing scientific criteria of documentation and verifiability. Only those studies were eligible for further study. De Waal then extracted those elements that were designated by the authors concerned as important for excellent performance and incorporated them into questionnaires that were then distributed broadly. His network in Maastricht was of great help here since, after all, MSM attracts students from around the world and works with outreach programs in more than twenty different countries.
Long term
A statistical analysis of the completed questionnaires yielded a list of 37 elements that demonstrated a strong correlation to the performance of an organization. Clustering reduced this list to five main factors that, according to De Waal, determine whether an organization is high performing and will continue to be. First and foremost, the management must be of high quality and the integrity and coaching leadership must be combined with a fast decision-making process. A true HPO must also have a continuous focus on the long term, not only with regard to clients and suppliers, but also and, more importantly, regarding management and employees. Focusing on short-term results often produces the contrary effect. An open culture oriented towards knowledge exchange in order to implement actions for better performance is another important factor, as is having an HPO continuously allow employees to improve and revitalize the company processes, services and products. Finally, the fifth and final cornerstone for success: HPO employees that are diverse, complementary and who work together well. They are flexible and resilient in achieving results.
De Waal’s meta-research also yielded factors that are not distinctive in the long term for having organizations perform better than the competition. “Scores of different factors are built on shaky foundations,” claims De Waal, “even though entire bookshelves are filled with books on these very factors”. There is no demonstrable relationship, for instance, between salary, bonus and high performance. This same is true of communication. The focus should be on active dialogue, not primarily on one-way communication. “ICT and competence management also turn out to be little more than hygiene factors,” claims this MSM professor. “They can provide support, but are of little use individually.” Another surprising conclusion: there is absolutely nothing to be gained from investing in and coaching employees who continue to perform poorly. The same is true of continuously reorganizing. “The problem is not in the structure”.
High performance individual (HPI)
Passion is a word that comes up repeatedly during the interview. “What it ultimately boils down to is passion and professional skill. What skilled professionals all share is an urge to do things better. No matter which country, sector or size, organizations that rise above the competition have the same inherent drive to continuously improve themselves - like swimmers and other athletes who immediately look at the scoreboard to see their finishing time. Their personal record is often more important than winning.”
Not surprisingly, De Waal has little positive to say about the impatient Anglo-Saxon pursuit of shareholder value and its constant hunt for results. “This leads to short-sighted decisions, such as immediate dismissals or other abrupt actions within the organization. In most cases, this solves nothing in the long term. You need to give an organization time to develop quality. Genuine processes of change can easily take up to five years.” This is also the amount of time it took De Waal to conduct a penetrating HPO study.
Turning points and opportunities continuously emerge for those who are open to them. After, all, isn’t luck for those who know how to make the most out of it? De Waal was pleasantly surprised during a workshop in Tanzania last year when a number of participants suggested an interesting new concept, namely, the High Performance Individual (HPI). De Waal adds, “Organizations are made up of people. Our research has shown that these individuals are more important than the structure itself. You also often see ‘pockets of excellence’ within organizations. The question is then whether you can build a High Performance Organization based on High Performance Individuals. What is the relationship between the two? And what are the characteristics and qualities of a High Performance Individual?”
Upcoming markets
These are questions that offer De Waal sufficient challenges for further research. “If you look at the stacks and stacks of books on leadership, you cannot help but conclude that much of the wisdom presented in them is gibberish. I want to try to create a leadership profile with an extremely solid foundation in relation to demonstrably successful organizations.” The growing numbers of sole proprietors also intrigues him. And he wants to further expand his earlier HPO studies.
“We have demonstrated what the crucial factors for a high performance organization are. The next step of course is to determine how to improve these factors. It is the combination of theory and practice that fascinates me.” As a third line of study, he wants to examine HPOs in upcoming markets. “The focus of much management research and literature is primarily on the West, but developments are taking place in upcoming markets elsewhere that could be far more interesting. The balance in the world is going to shift at any rate, but few managers in the West seem to be aware of this.”
To contact Dr. André de Waal: dewaal@hpocenter.com
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