By Jon R Katzenbach
The author undertook a study of 25 successful enterprises, all of which attribute their success to the peak performance of their frontline employees. His intention was to uncover what these organisations do to harness and maximise the positive emotional energy of their workforces, and his findings are set out in the pages of this book.
He believes there are five paths to what he describes as an energised "peak-performance" workforce, and it’s these paths that create and/or maintain a balance between worker fulfilment and work performance. The paths are:
Mission, Values and Pride
Process and Metrics
Recognition and Celebration
In this summary, each of these paths is outlined in brief to provide an overview of the main messages.
My Top 3 Takes from the Summary
Those who succeed in energizing workers along a Mission, Values and Pride path typically benefit from an existing legacy of accomplishment, reputation and history in which front-line employees can take pride.
To some degree every good company pursues the Process and Metrics path. The path is based on sound principles of accountability and consequence management.
If you see a lasting value in the pursuit of a strong emotional commitment within key segments of your company's workforce, you are ready to embark on one or more of the five paths.
Aligning the Hearts and Minds of Your Employees
One: The Mission, Values, and Pride Path
This path is characterised by a noble purpose, a rich history, value-driven leadership, and ample team opportunities. The US Marines and 3M are used as examples of this path in practice. He writes: The best example of the Mission, Values, and Pride path is the U.S. Marine Corp, which draws on a 200-year history of defending American values. Perhaps no other organization - military or civilian - better demonstrates the power of a noble purpose and core values. The primary source of energy that motivates the Marine Corps is its history and legacy of winning against all odds. Over the years, Marines have become legendary for their bravery and enthusiasm, and with every victory and heroic rescue, Marines draw on, as well as add to, their unique history.
Those who succeed in energizing workers along a Mission, Values and Pride path typically benefit from an existing legacy of accomplishment, reputation and history in which front-line employees can take pride. Another characteristic is the strong identification of employees with the corporate values of the company. These values are so deeply ingrained in the enterprise that those who cannot accept them invariably leave.
Two: The Process and Metrics Path
This path is characterised by clear measures and focused processes designed to reflect worker perspectives as well performance priorities. Avon Manufacturing and Hill’s Pet Nutrition are used as examples of this path in practice.
He writes: To some degree every good company pursues the Process and Metrics path. The path is based on sound principles of accountability and consequence management. Performance goals are set, and revenue, cost and profitability measures are established, tracked and compared. The company reports on its competitive position and market share regularly. If this all sounds very familiar, it should. This is how most companies have chosen to measure themselves. But higher-performing companies who rely on the Process and Metrics path don't lean on it exclusively. Instead, they pursue one or more additional paths at the same time. In addition, they involve employees more actively in shaping the processes.
One successful enterprise pursuing the Process and Metrics Path in its manufacturing facilities is beauty products giant Avon. Avon is probably best known for its 2.6 million-member direct marketing sales force, but should perhaps be better known for some of its excellent manufacturing operations. The company's mission is to "deliver quality products and services, defect free, on time every time, and at the lowest total delivered cost to our sales representatives and customers." At Avon, the Process and Metrics path works well because the cosmetic industry demands close attention to quality as well as cost. Quality problems would erode customer confidence and hurt future sales. To produce quality products, Avon must engage its workforce so it is willing to be measured against precise standards. The cosmetic industry is also subject to rapid changes in preference and products, so Avon must be capable of meeting changing demands against tight time constraints.
One secret to Avon's success is that input and innovation is expected from everyone, whether associate, advisor or leader. Performance transparency is also key. Workers are frequently and publicly rewarded for meeting goals - and performance metrics are charted as often as weekly. Every processing station, assembly line and packaging operation has huge placards that display the relevant metrics on daily and weekly production, quality and safety activities - an open display of performance information that not only provides direct feedback but also a sense of accomplishment and pride. At Avon, workers value the feeling that they belong to a family, and they want the manufacturing facility they work at to be the best.
Three: The Entrepreneurial Spirit Path
This path is characterised by an abundance of high-risk, high-reward opportunities, significant employee “ownership” potential, and a hands-off leadership philosophy. BMC and Hambrecht & Quist are used as examples of this path in practice. He writes: Entrepreneurs are a special breed. Few of us have the determination, courage and creative attributes required both to envision a unique business opportunity and to incur the personal and financial risks required to bring it to fruition. It is a high stakes game full of pressure. People who pursue this path do so for more than wealth; many simply want to create their "own thing."
Today, there's much talk about developing entrepreneurial spirit in established business operations. Unfortunately, this is a tough task. One example of the successful transfer of entrepreneurial spirit to a corporate structure is venture capital firm Hambrecht & Quist (H&Q), a Silicon Valley leader in financing rapidly growing entrepreneurial companies. H&Q has cultivated - and sustains - a higher-performing workforce by creating a high-risk/high-reward environment - thus following the Entrepreneurial Spirit path to peak performance. Its best-known initial public offerings include Apple, Amazon and Starbucks, and it draws much of its energy from its customers: passionate companies in exciting cutting-edge business areas led by energized and committed entrepreneurs.
These emerging companies are still small enough to be influenced by advisors, thus enhancing the direct contribution of H&Q to their success. H&Q employees are excited about working with companies that are changing the way business is done and are thrilled to have the opportunity to work directly with upper-level management. H&Q channels this energy into a high-performance workforce first by creating widespread opportunity. The firm offers big opportunities early and allows people to take risks and make mistakes. Leaders at H&Q value their people and treat them with respect. There is a non-hierarchical, open-door atmosphere where even junior employees can walk into upper-management offices to discuss professional or personal issues.
Four: The Individual Achievement Path
This path is characterised by a wide array of opportunities and incentives for personal growth and individual advancement. The Home Dept and McKinsey & Company, Inc. are used as examples of this path in practice.
He writes: The Individual Achievement path incorporates our culture's belief that everything is possible with enough hard work. It isn't surprising, then, that many companies want to incorporate the cultural norm of achievement into their corporate culture. This path lets workers say, "This company offers opportunities that allow me to take initiatives and lets me be judged and rewarded based on my achievements." In order to make the Individual Achievement path work, you will have to make sure your company is deeply committed to developing people. Training, coaching and evaluation all take center stage on this path. Along with that commitment comes a belief on the part of the leadership that every worker has the ability to contribute to the company's overall mission. Individual Achievement path companies also are known for going to extraordinary efforts to help employees in need.
Home Depot is a good example of a company pursuing this path. Home Depot started as a local hardware store and within twenty years has grown into one of America's most successful ventures. Sales for the nearly 700-store chain topped $24 billion in 1998 - rather remarkable for a company started by two mavericks, Bernard Marcus and Arthur Blank, who had just been fired from their jobs at Handy Dan's, a Los Angeles-based hardware chain. The affection generated by Bernie and Arthur, as most employees refer to the two friendly founders, is one important energy source for Home Depot workers. Also important: an obsession with the customer. The Home Depot approach to hardware is to offer superior customer service and low price on a vast array of merchandise. It emphasizes individual achievement, job enhancement, and broadened personal achievement. For example, it gives its employees more freedom than is usual in retail to innovate in their responses to customers. Almost every promotion is from within. And employees can acquire real ownership of the company through the stock purchase plan. In sum, Home Depot shows people their true value, creates widespread opportunity, distributes leadership broadly and enhances the work itself. Ask top Home Depot executives what their chief competitive advantage is and they will tell you it's their associates (the company's name for employees.) This sincere attitude explains why Home Depot has been successful on the Individual Achievement path.
Five: The Recognition and Celebration Path
This path is characterised by its integrated approaches to recognising workers for their performance and celebrating their success, thereby motivating them to achieve more. He writes: Most good companies make a conscious effort to celebrate the accomplishments of their people with rewards that don't involve money. These efforts range from Christmas parties and picnics to employee-of-the-month awards, million-dollar sales clubs and handwritten thank-you notes from top management. Those choosing the Recognition and Celebration path to peak performance, however, go far beyond the annual picnic; they will use any excuse to celebrate employee accomplishments.
It should be noted that Recognition and Celebration companies usually combine this path with other paths, it is almost never the primary path. Marriott International, for example, combines the Recognition and Celebration path with a strong Process and Metrics path as well as the Mission, Values and Pride path. The company places employees at the top of its value chain, creating a peak-performance workforce. The company's stated goal is to become the employer of choice in any market in which it develops a property or establishes a presence. In an industry that can't rely on high financial rewards to attract workers, the company has chosen to praise a job well done. This taps into people's insatiable desire for recognition. One example is the Marriott Pathways to Independence program, which trains welfare recipients into productive workers. At the end of training, participants get a framed certificate, a permanent nameplate and a job.
The pursuit of customer satisfaction is the primary source of energy at Marriott. The Marriott culture is thus driven by customer reaction, which is measured and reported on relentlessly - reflecting the Process & Metrics path. Then there is the rich history of the company, which serves as the Mission, Values and Pride energizer. Finally, there is the recognition and celebration of associates who make it possible for customers to walk away satisfied.
The author writes: Not every company needs or wants the kinds of higher-performing workforces described so far. Many enterprises can achieve success focusing on traditional consequence management and remain satisfied with average workforce performance. But if you see a lasting value in the pursuit of a strong emotional commitment within key segments of your company's workforce, you are ready to embark on one or more of the five paths.
The contents of this book provide the reader with everything they need to know to be able to embark on any of the detailed paths, and thereby achieve better performance from their own workforces and gain the resulting competitive edge. As the author points out: For the most part, companies do not create this energy from scratch. Instead, they draw on energy sources, such as past heroes or fierce competitors. Your company probably already has one or more sources of energy on which you can draw. The key is to identify and tap into these sources effectively. The sources of the energy will guide you to choose the most appropriate of the five paths.
The book is split into three parts, with the detailed exploration of the five paths sandwiched between parts 1 and 2: Maintaining the Critical Balance, and Applying the Lessons Learned. This gives the reader everything they need to understand the importance and value of the author’s research, and identify and then apply the appropriate path to generating a peak performance in their own workforce.
Bio of the Author
Jon R Katzenbach is a leading practitioner in organisational strategies for Strategy&, a strategy consulting group. He is a managing director with PwC US, and also founder of the Katzenbach Center, a centre of excellence in the areas of organisational culture, leadership, informal organisation, and motivation.
Peak Performance by Jon R Katzenbach, 2000, ISBN: 978-0-875-84936-2 is available to buy at Amazon.