Management insights for the next-gen global organization.

High Performance Organizations continually outperform peers and competitors, with a methodology now available to companies of all types and sizes. Yes, including yours!

By José Alvarado, Cedrela Confidential

Many executives aspire to convert their companies into the best version of themselves, but few businesses have a grasp of the organization needed to reach their full potential. These companies often fail to grow or simply go bust when the business climate changes.

One way to improve the chances of success, reach that best-version level and outperform peers is by adopting strategies that turn a company or government agency into a High Performance Organization, or HPO, a solution delivered by Cedrela Consulting Group.

The data is clear. HPOs are better and more consistently able to:

  • Adapt to changing market conditions.
  • Create and maintain a strong culture.

  • Have happier and more productive employees.

  • Produce superior results.

Globally, multinational companies such as Amazon, IBM, Procter & Gamble and Southwest Airlines continually attribute their outstanding indicators to HPO strategies, and the approach is accessible to organizations of any size or industry.

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But what exactly is an HPO? What does a company or government agency need to do to reach that level? According to Cedrela Managing Partner David Lugo, there are three foundational ingredients you must have:

  • Visionary leadership.

  • A clearly defined strategy.

  • A total-organization commitment to continuous improvement.

“The problem is not doing the financial statement on paper; it is how to get the numbers, and that called for a project-management approach.”

– David Lugo,
Managing Partner

With those fundamentals firmly in place, each component of the strategy is then executed, but only following a project-management model. That is:

  • Define the problem.

  • Measure against best practices, including industry-leading key performance indicators (KPIs), standards and outcomes.

  • Establish action plans.

  • Execute with sustained discipline following what Lugo describes as the Four Ps:

    • Policies
    • Processes
    • Personnel
    • Platforms (Information Technology)
  • Implement strategic training, a results-based meritocracy culture, and enthusiastic buy-in by everyone in the organization.

One recent example is the Puerto Rico Treasury Department, which was famously years behind issuing the government’s annual comprehensive annual financial reports (CAFRs), an accountability tool essential in meeting stakeholder (i.e. federal government, investors, citizens) requirements.

“This had been treated as a financial-statement issue, a compliance issue,” explained Lugo. “We were instrumental in persuading them to change the approach. The problem is not doing the financial statements on paper; it is how to get the numbers, the final numbers. It is an accounting process issue, a change management issue, and that called for a project-management approach to financial statements.”

A financial statement, that is, is not just a document; it is a process. In leading the effort, Cedrela pointed the client to the policies required, as well as ensuring that agency management and personnel, some of which were initially unsure about the new approach, were properly trained, motivated and involved, starting with talks explaining the changes and the steps needed to achieve the goals.

Of Platforms and Leaders

Platforms, the fourth P, often lead teams in the wrong direction. This is the tech, and so many leaders, Lugo surmises, have fallen into the bad habit of thinking “everything is an information-technology issue.” He noted the example of a retailer on the island who sought the firm’s services after implementing an expensive system that failed to get off the ground despite “hiring a lot of IT consultants.”

The company lacked a clearly defined strategy and vision to guide the consultants. The retailer wanted faster numbers and more insights into invoicing and operations and established a set of dashboards to that end, but the dashboards, it turned out, were communicating the wrong data. They had not followed the Four Ps methodology as called for by best-practice project management.

In this Cedrela Confidential Spanish-language podcast interview, Lugo outlines how it all begins with a visionary leader or leadership team that understands what it takes to be an HPO, and in fact what it takes to be a visionary leader. It comes down to seven characteristics:

  • Ego-free brutal honesty, always welcoming constructive feedback.

  • Encourages all leaders to manage in teams and to make decisions by committee, building an empowerment culture that does not rely on top-heavy or single-leader decision-making.

  • Understands and is comfortable with complexity.

  • Embraces constant, relentless change and disruption as the new-normal context.

  • Manages risk with skill and process.

  • Communicates the strategy and vision in ways everyone grasps and buys into.

  • Insists on and embeds standard operating procedures (SOPs) to achieve continuous improvement.

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