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Why We Do What We Do
The Center for Organizational Performance is an independent, international research and inspiration center for the permanent performance improvement of organizations. We provide the market with a continuous stream of new knowledge and inspiration regarding High Performance Organizations (HPOs) based on scientific and practical research that is collected in a unique HPO knowledge base.
The HPO Center provides knowledge in the form or diagnoses, interviews, books, articles, lectures and workshops with best practices. This knowledge supports organizations with implementing the desired improvements.
The Center’s core competencies are as follows:
- We conduct thorough, international research (also in emerging markets) where science and practice intersect.
- We are incurably curious about how things can be better and how we can do things better and want to share the knowledge we acquire in this regard.
- We are absolutely devoted to our customers.
- We aspire to be an HPO ourselves and wish to exemplify HPO behavior.
Why Improved Performance Is Necessary for Every Organization
The Holy Grail of Management
by Dr. André de Waal
We continuously hear that we are currently living in an age of extreme competition. An age in which the combined pressure of worldwide competition, rapid technological developments, better and better reachability everywhere in the world, economic liberalization, more and larger take-overs and continuously more demanding customers and citizens are making life increasingly difficult for companies, non-profit organizations and government agencies. The following facts and figures illustrate that the above statement is not a fable.
More »
The Holy Grail of Management
by Dr. André de Waal
We continuously hear that we are currently living in an age of extreme competition. An age in which the combined pressure of worldwide competition, rapid technological developments, better and better reachability everywhere in the world, economic liberalization, more and larger take-overs and continuously more demanding customers and citizens are making life increasingly difficult for companies, non-profit organizations and government agencies. The following facts and figures illustrate that the above statement is not a fable.
More »Why Improved Performance Is Necessary for Every Organization
The Holy Grail of Management
by Dr. André de Waal
We continuously hear that we are currently living in an age of extreme competition. An age in which the combined pressure of worldwide competition, rapid technological developments, better and better reachability everywhere in the world, economic liberalization, more and larger take-overs and continuously more demanding customers and citizens are making life increasingly difficult for companies, non-profit organizations and government agencies. The following facts and figures illustrate that the above statement is not a fable.
The average life span of an organization is currently only twelve and a half years. Thereafter, the company disappears as an individual entity, either through take-over, merger or bankruptcy. In addition, the speed at which a company loses its leading position in an industry, the so-called "topple rate," has doubled in the last two decades. And the speed at which new companies disappear from the Standard & Poor 500 list, whereby established and often respectable organizations are pushed out, has doubled in the last 50 years.
The average time that a director or chief executive officer occupies a certain top position has decreased from 10 to two and a half years over the course of two decades. The interesting part here is that previously directors were usually fired because they did not perform well enough. Nowadays they are increasingly perishing because the supervisory board thinks the director is not the right person to steer the organization in the future. Thus not because the results were inadequate!
Most of the shareholder value has been destroyed in the last decade, not as a result of the accounting scandals but as a result of mismanagement, making the wrong strategic and operational decisions, bad implementation of the strategy and operational inefficiency. Not so surprising, because more than 50 percent of managers says they base decisions on their feeling or intuition and not on hard facts. In addition, 36 percent of the managers says they don't even know everything that is going on in their organization. In fact, the organization is a sort of black box for them. One could thus speak of a rampant epidemic of dysfunctional management.
Of all the mergers and take-overs, only 17 percent creates added value in the combined organization; no change takes place in 30 percent and active value is destroyed in 53 percent. This means that the recent succession of take-overs, the so-called second wave of take-overs, does not take place in order to add value to the organizations in question but for other reasons. Expectations are that history will repeat itself and in the next 10 years the same activities will be undertaken as in the decade after the first wave of take-overs in the 1980s. Then much time was devoted to systematically breaking up the previously combined companies that seemed to perform poorly after the merger.
Despite the fact that it has been proven that a high degree of employee satisfaction and employee loyalty ensure more customer satisfaction and loyalty, which significantly increases revenues and profitability, 40 percent of organizations is still not actively working on increasing employee satisfaction and loyalty. A direct consequence of this is that the quality of services is dramatically decreasing. The guarantee costs and the number of returned products in greatly increasing while customer satisfaction scores are decreasing across the board. An ominous sign is the disappearance of books with titles such as "We Won't Take it Any Longer" where "we" means the customer, and "Crappy Customers."
Seventy percent of the Dutch population finds the government not to be very effective and is therefore increasingly losing trust in government agencies. Remarkably, almost the same percentage of government officials has the same opinion! Trust in business has also decreased: from 60 percent in 1980 to 40 percent in 2006. And only 29 percent of the population thinks that top management of businesses tells the truth. Nevertheless, this is still 10 percent higher than trust in politicians.
It's getting more difficult for everyone; for-profit, non-profit and government organizations
What do all of these facts have in common? There are signs that for-profit, non-profit and government organizations are having an increasingly tougher time of things. They begin to crack under the pressure that all sorts of stakeholders apply. Jack Welch, former Chief Executive Officer of General Electric, once said that the 1980s would be a white-knuckles decade of heightened competition and that the 1990s would add its two cents worth on top of that. In retrospect you could say that the 1990s were a piece of cake compared to what is currently happening in the world:
numerous trends and developments are fundamentally changing business. In a so-called limitless economy the competitor can literally come from anywhere in the world. The increasing globalization of businesses and brands ensures that organizations must be capable of doing business in various countries with various cultures. An increasingly larger part of traditional industry is being moved to low-wage countries such as China and India, where the strong social bonds and family relationships and the rapidly developing education level are creating a strong foundation, But that won't be all. For example, the number of patents that China has registered in the past 10 years has increased 800 percent. It is expected that this country will conduct more and more value-adding activities itself and will become the largest economy in the world in the foreseeable future.
The booming growth of the Internet and the decreasing costs of telecommunication are bringing about an increased impact of new technology on doing business. Now there is an almost unlimited supply of information that is available at all times and everywhere, so that competitive data are known in the blink of an eye. In addition, business is increasingly being conducted 24/7, and this increasingly in cooperation with suppliers and customers who are located all over the world.
And it won't stop at information technology. New materials and production techniques such as nanotechnology will turn entire industries upside down. At the same time, the gap between rich and poor, the "haves and have-nots," is increasing both within countries as well as between countries. For example, the standard of living in the US has grown 300 percent in the last three decades, but 90 percent of this growth affected the one percent of the total population that was already the wealthiest to begin with. This is creating more and more tension in society and the associated increase in conflicts. At the local, regional and international level.
The environment is also increasingly subject to pressure. Global warming and pollution are still increasing substantially. Clean water is becoming a precious commodity. And in part thanks to the fast growth of emerging markets, there is a large lack of raw materials. The population in industrialized countries is aging, while the life span is increasing. This is placing enormous pressure on the social services establishment but also means that filling open job positions is becoming more and more difficult. A true race for talent will occur, including a race to win over the smartest people in the developing countries. This will be all the more important because the economy is more and more driven by intangibles: the knowledge, skills, mentality, attitude and innovation capability of employees who must ensure a constant flow of new products and services.
What does all this mean for organizations?
Let's take a look. Despite the described field of influence, managers of today's organizations are still expected to achieve excellent results in the organizational unit for which they are responsible. This means that they can no longer be a sheep with five legs but have to mutate into a centipede: they must be able to flexibly deal with the above-mentioned trends and developments and they must be able to proactively deal with them in order to capitalize on them; at the same time they must increase quality and service and decrease costs, and they must keep all stakeholders - employees, shareholders, the government, society, customers and suppliers - satisfied. This applies not only to managers from the corporate world but also for managers from the non-profit and government sectors.
These sectors are changing quite a bit as well. Especially under the pressure of the New Public Management they are expected to become more public-friendly and to obtain better, and especially more consistent, results for citizens. It is therefore no wonder that managers heatedly began searching for the organizational elements that are decisive for achieving consistently good results. Since the publication of the bestsellers "In Search of Excellence" by Peters and Waterman in 1982 and more recently "Built To Last" and "Good to Great" by Jim Collins, their interest is above all focused on the so-called high-performance organizations, or "HPOs" for short. They are particularly interested in those factors that ensure that organization perform better as regards financial and non-financial parameters over a long period of time than a comparable group of organizations.
The Holy Grail of Management
In order to unravel the secret of HPOs, nothing less than the holy grail of management, the Center for Organizational Performance studied for five years the characteristics that comprise excellent organizations all over the world and that can also be influenced by managers. The objective was to give managers the knowledge and opportunity to implement targeted measures in order to allow their organization to grow in the high-performance direction. In order to find out the distinguishing characteristics, more than 280 international studies were examined that were conducted over the past 30 years in the area of high performance. The characteristics that occurred the most in the studies were then tested in a worldwide study in over 200 organizations in the for-profit, non-profit and government sectors with the aid of a survey in order to distinguish the most important characteristics.
The difference in approach compared to other studies, such as that of Peters and Waterman and Collins, is great. These researchers, and many others, made a selection, based on financial analyses, of organizations that perform well or excellently in a certain sector and then compared them to competitors that did not perform as well. It is from this comparison that they then abstracted the distinguishing characteristics. The weak point of this approach is the first selection: if this is not made carefully, the validity of all other study results can be impugned. And there is always an element of coincidence. Was the right information available? Was the selection made based on the right criteria? In the study approach that the HPO Center used it was not organizations that were selected but potential HPO characteristics. Furthermore, a very broad meta-analysis was conducted in which studies from as many scientific disciplines as possible were involved and the professional literature was thoroughly studied. This guarantees that a wide range of elements, such as structure, human, emotional, strategic, material, resources, or HRM have been included in the study. No selection of certain respondents was made with the provision of the questionnaire either. The respondents were chosen randomly. Due to this the study has the broadest basis of all HPO studies that have been conducted until now.
You can read more about the results of the study under "HPO Knowledge Center".
For more information about the HPO Diagnosis, go to "Our Offer".
Back
The Holy Grail of Management
by Dr. André de Waal
We continuously hear that we are currently living in an age of extreme competition. An age in which the combined pressure of worldwide competition, rapid technological developments, better and better reachability everywhere in the world, economic liberalization, more and larger take-overs and continuously more demanding customers and citizens are making life increasingly difficult for companies, non-profit organizations and government agencies. The following facts and figures illustrate that the above statement is not a fable.
The average life span of an organization is currently only twelve and a half years. Thereafter, the company disappears as an individual entity, either through take-over, merger or bankruptcy. In addition, the speed at which a company loses its leading position in an industry, the so-called "topple rate," has doubled in the last two decades. And the speed at which new companies disappear from the Standard & Poor 500 list, whereby established and often respectable organizations are pushed out, has doubled in the last 50 years.
The average time that a director or chief executive officer occupies a certain top position has decreased from 10 to two and a half years over the course of two decades. The interesting part here is that previously directors were usually fired because they did not perform well enough. Nowadays they are increasingly perishing because the supervisory board thinks the director is not the right person to steer the organization in the future. Thus not because the results were inadequate!
Most of the shareholder value has been destroyed in the last decade, not as a result of the accounting scandals but as a result of mismanagement, making the wrong strategic and operational decisions, bad implementation of the strategy and operational inefficiency. Not so surprising, because more than 50 percent of managers says they base decisions on their feeling or intuition and not on hard facts. In addition, 36 percent of the managers says they don't even know everything that is going on in their organization. In fact, the organization is a sort of black box for them. One could thus speak of a rampant epidemic of dysfunctional management.
Of all the mergers and take-overs, only 17 percent creates added value in the combined organization; no change takes place in 30 percent and active value is destroyed in 53 percent. This means that the recent succession of take-overs, the so-called second wave of take-overs, does not take place in order to add value to the organizations in question but for other reasons. Expectations are that history will repeat itself and in the next 10 years the same activities will be undertaken as in the decade after the first wave of take-overs in the 1980s. Then much time was devoted to systematically breaking up the previously combined companies that seemed to perform poorly after the merger.
Despite the fact that it has been proven that a high degree of employee satisfaction and employee loyalty ensure more customer satisfaction and loyalty, which significantly increases revenues and profitability, 40 percent of organizations is still not actively working on increasing employee satisfaction and loyalty. A direct consequence of this is that the quality of services is dramatically decreasing. The guarantee costs and the number of returned products in greatly increasing while customer satisfaction scores are decreasing across the board. An ominous sign is the disappearance of books with titles such as "We Won't Take it Any Longer" where "we" means the customer, and "Crappy Customers."
Seventy percent of the Dutch population finds the government not to be very effective and is therefore increasingly losing trust in government agencies. Remarkably, almost the same percentage of government officials has the same opinion! Trust in business has also decreased: from 60 percent in 1980 to 40 percent in 2006. And only 29 percent of the population thinks that top management of businesses tells the truth. Nevertheless, this is still 10 percent higher than trust in politicians.
It's getting more difficult for everyone; for-profit, non-profit and government organizations
What do all of these facts have in common? There are signs that for-profit, non-profit and government organizations are having an increasingly tougher time of things. They begin to crack under the pressure that all sorts of stakeholders apply. Jack Welch, former Chief Executive Officer of General Electric, once said that the 1980s would be a white-knuckles decade of heightened competition and that the 1990s would add its two cents worth on top of that. In retrospect you could say that the 1990s were a piece of cake compared to what is currently happening in the world:
numerous trends and developments are fundamentally changing business. In a so-called limitless economy the competitor can literally come from anywhere in the world. The increasing globalization of businesses and brands ensures that organizations must be capable of doing business in various countries with various cultures. An increasingly larger part of traditional industry is being moved to low-wage countries such as China and India, where the strong social bonds and family relationships and the rapidly developing education level are creating a strong foundation, But that won't be all. For example, the number of patents that China has registered in the past 10 years has increased 800 percent. It is expected that this country will conduct more and more value-adding activities itself and will become the largest economy in the world in the foreseeable future.
The booming growth of the Internet and the decreasing costs of telecommunication are bringing about an increased impact of new technology on doing business. Now there is an almost unlimited supply of information that is available at all times and everywhere, so that competitive data are known in the blink of an eye. In addition, business is increasingly being conducted 24/7, and this increasingly in cooperation with suppliers and customers who are located all over the world.
And it won't stop at information technology. New materials and production techniques such as nanotechnology will turn entire industries upside down. At the same time, the gap between rich and poor, the "haves and have-nots," is increasing both within countries as well as between countries. For example, the standard of living in the US has grown 300 percent in the last three decades, but 90 percent of this growth affected the one percent of the total population that was already the wealthiest to begin with. This is creating more and more tension in society and the associated increase in conflicts. At the local, regional and international level.
The environment is also increasingly subject to pressure. Global warming and pollution are still increasing substantially. Clean water is becoming a precious commodity. And in part thanks to the fast growth of emerging markets, there is a large lack of raw materials. The population in industrialized countries is aging, while the life span is increasing. This is placing enormous pressure on the social services establishment but also means that filling open job positions is becoming more and more difficult. A true race for talent will occur, including a race to win over the smartest people in the developing countries. This will be all the more important because the economy is more and more driven by intangibles: the knowledge, skills, mentality, attitude and innovation capability of employees who must ensure a constant flow of new products and services.
What does all this mean for organizations?
Let's take a look. Despite the described field of influence, managers of today's organizations are still expected to achieve excellent results in the organizational unit for which they are responsible. This means that they can no longer be a sheep with five legs but have to mutate into a centipede: they must be able to flexibly deal with the above-mentioned trends and developments and they must be able to proactively deal with them in order to capitalize on them; at the same time they must increase quality and service and decrease costs, and they must keep all stakeholders - employees, shareholders, the government, society, customers and suppliers - satisfied. This applies not only to managers from the corporate world but also for managers from the non-profit and government sectors.
These sectors are changing quite a bit as well. Especially under the pressure of the New Public Management they are expected to become more public-friendly and to obtain better, and especially more consistent, results for citizens. It is therefore no wonder that managers heatedly began searching for the organizational elements that are decisive for achieving consistently good results. Since the publication of the bestsellers "In Search of Excellence" by Peters and Waterman in 1982 and more recently "Built To Last" and "Good to Great" by Jim Collins, their interest is above all focused on the so-called high-performance organizations, or "HPOs" for short. They are particularly interested in those factors that ensure that organization perform better as regards financial and non-financial parameters over a long period of time than a comparable group of organizations.
The Holy Grail of Management
In order to unravel the secret of HPOs, nothing less than the holy grail of management, the Center for Organizational Performance studied for five years the characteristics that comprise excellent organizations all over the world and that can also be influenced by managers. The objective was to give managers the knowledge and opportunity to implement targeted measures in order to allow their organization to grow in the high-performance direction. In order to find out the distinguishing characteristics, more than 280 international studies were examined that were conducted over the past 30 years in the area of high performance. The characteristics that occurred the most in the studies were then tested in a worldwide study in over 200 organizations in the for-profit, non-profit and government sectors with the aid of a survey in order to distinguish the most important characteristics.
The difference in approach compared to other studies, such as that of Peters and Waterman and Collins, is great. These researchers, and many others, made a selection, based on financial analyses, of organizations that perform well or excellently in a certain sector and then compared them to competitors that did not perform as well. It is from this comparison that they then abstracted the distinguishing characteristics. The weak point of this approach is the first selection: if this is not made carefully, the validity of all other study results can be impugned. And there is always an element of coincidence. Was the right information available? Was the selection made based on the right criteria? In the study approach that the HPO Center used it was not organizations that were selected but potential HPO characteristics. Furthermore, a very broad meta-analysis was conducted in which studies from as many scientific disciplines as possible were involved and the professional literature was thoroughly studied. This guarantees that a wide range of elements, such as structure, human, emotional, strategic, material, resources, or HRM have been included in the study. No selection of certain respondents was made with the provision of the questionnaire either. The respondents were chosen randomly. Due to this the study has the broadest basis of all HPO studies that have been conducted until now.
You can read more about the results of the study under "HPO Knowledge Center".
For more information about the HPO Diagnosis, go to "Our Offer".
Back