strategic performance management in practice

From crisis to “all time high” customer satisfaction: Ziggo CR’s improvement approach on the basis of the high performance organization framework

André de Waal Maastricht School of Management, Maastricht, the Netherlands Center for Organizational Performance, Hilversum, the Netherlands

Eric Mooijman Vitrum Consulting, Harderwijk, the Netherlands

Martine Ferment Ferment Management, Nieuwegein, the Netherlands Former interim Vice President Ziggo Customer Care

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INTRODUCTION Managers are increasingly interested in approaches to transform their organization into a high performance organization (HPO). Because of this interest several dozen HPO frameworks have been developed, which unfortunately more often than not lack a solid scientific foundation. The HPO Framework as developed by de Waal (2012a) does have an academic basis and thus provides managers with reliable insight into the aspects which they should be addressing during their improvements efforts. However, this HPO Framework does not contain instructions or recipes that managers can simply follow: the framework indicates what is important to become an HPO but does not stipulate how the organization can achieve this HPO status. In this article a long-term improvement program is described with which an organization, Ziggo Customer Relations, wrested itself from a prolonged period of crisis using de Waal’s HPO Framework and subsequently found its way back to sustainable performance improvement. In the article three main questions are answered: How and when did the two thousand demotivated employees of the organization became inspired for change and improvement? Which change and communication interventions had the most impact? What was the role of the HPO Framework during the change? With the case description of the change program used at the case company managers can identify how they should shape, set up and manage a transformation to HPO at their organization, while using the improvement potential of their employees and the HPO Framework.

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ZIGGO CUSTOMER RELATIONS The company Ziggo is the outcome of a merger between three regional media companies, Home, Casema and Multikabel, and is a national provider of media and communication services. Ziggo services approximately 2.9 million households, 1.8 million broadband internet customers, 2.2 million customers of digital television, and 1.5 million telephone subscribers. Products and services for the business market concern telephony, data communication and electronic payment options. Business-toBusiness customers use services as data communication, telephony, internet and television. Ziggo is the owner of a next-generation-network with which it is possible to offer the broadband needed for all future services. On March 21, 2012 Ziggo obtained a listing on the Amsterdam stock market. The goal of Ziggo is “to let its customers experience the utmost ease and fun in the field of information, communication and entertainment in a constantly changing world.”

The department Customer Relations (CR) is responsible for all customer contacts with Ziggo as these expire through call centers, mechanics, invoices, and retail and internet channels. The department takes care of invoicing, maintenance and repairs, sales, maintenance of the website, call center activities, and providing other services to customers. As the merger between the three predecessors of Ziggo did not go smoothly a lot of pressure was put on the integration of the networks, the administration and the call centers. A logical consequence was a huge backlog at CR in processing of orders, poor accessibility, and many problems in conveying rehousings and new addresses of customers. This caused much bad publicity for Ziggo and created a crisis situation which only got worse through time. The CR department at that time could only be describes as a low performing organization that was not able to achieve set goals and targets, provided inadequate service and made too many mistakes. In order to stop the downward spiral, in 2008 a conscious effort was made to improve processes and improve accessibility of the call centers. Subsequently in 2009, with strong top-down steering, the operational base of the organization was sorted out so that CR could start satisfying at least the basic expectations of customers. When this was the case in early 2010 the CR management team formulated an ambition to continue with the deployed organizational development activities in order to increase the achieved level of average performing organization to a high 3

performing organization. The management team also decided to apply de Waal’s HPO Framework to help CR in its transition to the desired state of high performance.

THE IMPROVEMENT APPROACH As a first step in the change approach the starting position of CR was determined by the management team. This situation consisted of the CR culture (characterized as innovative, technological and customer driven, result oriented, and a mix of a new culture and the cultures of the merged parties), the leadership situation (a recently appointed management team, many newly recruited managers, a lot of newly created teams), limited investment opportunities through lack of money, many different categories of employees (vocational trained mechanics, vocational trained call center and administrative personnel; polytechnical and university trained website specialists, staff and managers), and a mix of own employees working with external staff originating from Ziggo’s partners. These outsource partners were mainly used for customer support, collection activities, and installation services at customers’ homes in case of severe disruptions or a large customer demand. In the next step the goals of the change approach were set by the management team. The first goal was to make the change result-oriented, in the sense that not only the starting position and the desired end situation had to be measurable but also the progress during the transition (Klarner and Raisch, 2013, Raineri, 2011; Schaffer and Thomson, 1992). The second goal was to make sure that the change and communication interventions had to be of the highest quality, so they would be effective in such a diverse population as in CR and in an environment where the work planning for mechanics and call center employees was of overriding importance. Thus the interventions not only had to be aligned with the environment and experiences of the diverse categories of employees but should also entice them to start showing new high performance behavior. The third goal was to make the change approach an integral one, aimed at both individual employees and managers, teams, the CR department, and the outsourcing partners.

The next step was the concrete design of the transition program. Essential questions to be answered in this step were: How do we identify where we stand now and where we need to go? How do we prove 4

that we are actually changing and are achieving our ambition? How can we make managers and employees aware that there is a real need for change? How can we make them aware of the causes of identified bottlenecks? How do we get people in motion? How do we manage the change over a longer period of time? How do we steer the change parallel to ‘normal’ operations? How do we secure the changes and improvements in the organization? And finally: How can we involve our outsourcing partners in the intended change? In Table 1 an overview is given of the ways these questions were addressed per change target group, with the change and communication interventions applied and the methods that were used to measure the actual effects of these interventions. In the next sections the change approach per target group is discussed in more detail.

Change target

Change and communication

Effect measurement of

group + goal

interventions

intervention

CR organization:

- HPO diagnosis (= measurement +

- Customer satisfaction survey

creation of a high performing

interviews) - Organization-wide development programs

organization

- Employee satisfaction survey - Change Score Card - Academic study (Master

(HPO)

thesis) into the change and improvement interventions - Degree of realization of improvement plans

CR teams:

- Awareness sessions

- Degree of realization of goals

creation of high

- Call2Action sessions

of team development plans

performing teams

- GoHPO sessions

(HPTs)

- Perspectives/Weather picture

- Frequency of review/previews sessions

measurement - Quarterly review and preview sessions - ‘Peeking at the neighbors’ - Target books - Team Development Plans and Team Statutes CR managers:

- Real drives

creation of high

- PI Company 360 degrees

performing

- Reflector test

- Frequency of HPM portfolio conversations

5

managers (HPMs)

- Management days - Coaching courses - HPM Portfolio conversations - HPM monthly learning impulses - Ziggo management development programs

CR employees:

- Coaching sessions

creation of high

- Logbook

performing

- HPI-ontwikkelgesprek

individuals (HPIs)

- HPI monthly learning impulses - Ziggo employee development programs

- Self assessment test on HPI characteristics - Usage of HPI learning impulses - Progress of HPI development conversations

CR partners: creation of high

- HPP diagnosis (= measurement + interviews)

performing


partnerships


(HPPs)

- Improvement programs within the

- Degree of realization of goals in HPP improvement plans - Frequency HPP conversations

partnerships - Policy on working with partners All

- Progress mails from the management

- E-poll’s

team - HPO Intranet - Reporters on the work floor (“Jackals”) - Employee lunches with management - Films - Year plan Customer Relations - Yearly regional meetings

Table 1: Overview of change and communication interventions and their measurement methods

High Performance Organization All managers and employees of CR filled-in the HPO Questionnaire with which they scored CR, using a scale of 1 (very bad) to 10 (excellent), on the 35 HPO characteristics. Subsequently the scores for the five HPO factors was calculated, analyzed and depicted in a graph. In Figure 1 it can be seen that CR, 6

as expected, was not an HPO. To be an HPO an organization needs to have a score of at least 8.5 on all five HPO factors (Waal, 2012a). Figure 1 also indicates the HPO factors which need to be strengthened in order to improve the results of CR. The diagnosis results were discussed with CR’s management team and an arrangement was made to repeat the diagnosis every two years, with inbetween a limited interim metering. The intention was emphatically to have every time an increased HPO score compared to the previous diagnosis.

[PLACE FIGURE 1 HERE] Figure 1: The HPO Diagnose scores of Ziggo CR, for 2010 and 2012

In addition to this improvement arrangement several organizational goals were set by the management team to be able to monitor the success of the change effort: the scores on the monthly customer satisfaction survey, the scores on the bi-yearly employee satisfaction survey, certificates to be obtained (such as an ISO certification), prices to be won (such as ‘the best website of the Netherlands’), and evidence which would prove there was social recognition for the quality of Ziggo CR (such as public praise and recognition for providing support to customers with payment problems). The realization of these goals, together with additional targets from already running improvement programs, was put in the so-called CR Change Score Card (Figure 2). With the aid of this scorecard the transition to HPO was monitored on several change dimensions and subsequently discussed weekly in the management team meeting, so change and communication interventions could if need be accelerated, delayed or adjusted.

[PLACE FIGURE 2 HERE]

Figure 2: CR’s Change Score Card

Multiple communication interventions were devised to inform employees about the change approach and to involve them in the transition to HPO. Examples of these interventions were: regular HPO 7

update mails from the management team; reporters (so-called Jackals) who made short movies about the various change interventions on the work floor; yearly regional meetings about the HPO transition; short opinion polls via e-mail on the effectivity of the HPO transition and the change and communication interventions; lunches of employees with a management team member where the HPO transition was discussed; and publishing the CR Year Plan. Finally a program structure was set up, with an external program manager, to guide the change process, safeguard the integral character of the transition, and prevent operational issues to hamper the transition to HPO.

High Performing Teams CR was divided into 120 teams, split over five regions in the Netherlands. Inspired by the idea of Theory U (Scharmer, 2009) the management team choose to let the employees understand and experience the current situation through team awareness sessions, one for each tem (120 in total). In this sessions root cause analyses were made of the issues and attention points which surfaced in the HPO Diagnosis, in order to come to effective solutions. Goal of the sessions was to create an open mind, an open hart and an open will regarding the HPO transition (Scharmer, 2009). As the HPO Framework was aimed at the organizational level, is was decided to use an alternative instrument on the team level, the Perspective/Macrolook meter (Hatchfund Nederland, 2009a). Through questionnaires and so-called weather icons (“Is it raining here or does the sun shine, or is it may be cloudy?”) employees indicated how they felt about CR and about their team and also whether they were confident they could realize their ambitions with their current competences. During the awareness sessions the results of the HPO Diagnosis and the Perspectives and weather icons test was presented and discussed with the employees. Subsequently 120 Call2Action sessions were conducted in which the employees drafted a team development plan containing the improvement activities for their team. The improvements that transcended the team level were given to the managers to present to a higher organizational level, to be addressed there. The teams then got the job to quarterly conduct review and preview sessions. In these sessions they looked back at what had happened and what was achieved in the past quarter (review) and they looked ahead at activities to be performed this quarter

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(preview). This made it possible to closely monitor progress and to put in, if needed, adjustments to the team development plan.

High Performing Managers To let managers of CR develop to the required HPO level is was necessary to invest in them. For this the Real Drives test (Hatchfund, 2009b) and a 360 degrees Reflector test, specifically developed for Ziggo, were used. The latter was for a large part based on the HPO manager characteristics which were part of the High Performance Manager profile developed by Waal et al. (2012). Every manager completed the Real Drives test themselves and then let their employees and colleagues fill in the Reflector test on them. On the basis of results of both tests the managers drafted their own personal development plan and subsequently they were offered so-called HPO leadership learning impulses (i.e. monthly short courses on specific leadership characteristics needed to achieve the HPO level), supplemented with organization-wide Ziggo management development programs. Every year the managers held so-called portfolio conversations in which they shared their test results and their progress on the personal development plan with their employees, colleagues and their own manager.

High Performing Individuals Ziggo CR also invested heavily in the development of its employees. The aim here was to teach them specific HPO competences, such as being able to better cooperate, show a stronger result orientation, and be more flexible (Waal and Oudshoorn, 2012). In addition, the development was geared toward increasing the motivation of employees to continuously strive for improvement. All employees were given the opportunity to fill in an HPO self test, and with the results of this test choose from monthly offered HPO learning impulses and CR-wide employee development programs. Employees were also stimulated to visit other departments and to make contacts there in order to more easily improve processes that went over team and departmental borders. This so-called ‘Peeking at the neighbors’ stimulated self-initiative, led to more mutual understanding, and reduced cultural differences between teams. Parallel to this employee development their managers were taught how to better coach the employees during their development and continuous improvement efforts. At the end of the year 9

employees held a development conversation with their managers, in which they shared the results of their self test, development plan, personal goals, and examples of actual improvement efforts.

High Performing Partners CR used quite a lot of strategic partners who provided temporary staff, executed activities when there was an extra high production demand, or supported the implementation of new products and services. CR’s management team was of the opinion that these partners should also participate in the transition to HPO. After all these partners collectively provided almost 30 percent of CR’s workforce, and the customer should not notice a difference between regular CR employees and employees of a partner. Therefore specific strategic partners were asked to participate in the High Performance Partnership (HPP) program which consisted of an objective evaluation of the quality of the partnership relation from both CR’s perspective as the perspective of the partner (Waal et al., 2013). Special attention was given to the degree of openness in the partnership, the equality of the partners in the partnership, and conflict management in the partnership. The HPP Diagnosis was followed by workshops in which CR and its strategic partners shared the results and thus their opinion about each other and jointly drafted improvement plans for the partnership. After this, it was agreed to conduct quarterly review and preview sessions to monitor and safeguard the quality of the partnership.

Table 2 provides a chronological overview of the change and improvement interventions which took place at CR during the period of 2009 -2013.

Year

Intervention

Spring 2010

Starting position for the change program formulated Selection of de Waal’s HPO framework as guidance tool for the program

Fall 2010

Baseline measurement of the HPO level of Ziggo CR Design of the change and communication interventions program

Fall 2010

120 HPO team awareness sessions

Spring 2011

120 HPO team Call2Action sessions, under the guidance of HPO Coaches

Spring 2011

Baseline measurements of HPI, HPM and HPP 10

Fall 2011

Development of improvement programs for HPI, HPM and HPP Interim HPO diagnosis to measure progress

Fall 2011 – 2012

Continuation of team development sessions Execution of improvement programs for HPI, HPM and HPP

Fall 2012

Second HPO Diagnosis

2012 – 2013

Continuation of team improvement sessions Continuation of improvement programs for HPI, HPM and HPP

Spring 2013

Embedding of HPO ideas and thinking in the organization

Table 2: Chronology of the CR change and improvement program 2009 - 2013

EFFECTIVITY OF THE CHANGE INTERVENTIONS As mentioned before the possibility to measure concrete results of the change program was one of the goals of the change approach so that the effect of specific change and communication initiatives (as described in Table 1) on the various change target groups in CR could be evaluated. These effects were studies scientifically be distributing a questionnaire among CR’s managers and employees (Heijtel, 2012). In this questionnaire the respondents had to indicate for each intervention whether it had been effective in the sense that they felt more closely involved and committed to the HPO transition and that the intervention had enticed them to start showing HPO behavior. The scores were converted into percentages of respondents that indicated to have experienced a positive effect of a specific intervention. When an intervention scored a percentage of less than 60 it was deemed to be ineffective, with a percentage between 60 and 80 it was seen as effective, and with a percentage higher than 80 the intervention was earmarked as highly effective. Table 3 provides an overview of the effectivity of the change and communication interventions at CR. The effects of the interventions at the partners in the HPP program, and of long-term interventions (like manager and employee development programs) are not included as these had not been yet measured at the time of this research.

Change target

Change and communication intervention

Effect of intervention

group 11

CR organization

CR teams

CR managers

CR employees

CR partners

- HPO diagnosis (= measurement + interviews)

- Effective

- Organization-wide development programs

- Not measured


- Very effective


- Very effective

- GoHPO sessions

- Effective

- Perspectives/Weather picture measurement

- Effective

- Quarterly review and preview sessions

- Effective

- ‘Peeking at the neighbors’

- Effective

- Target books

- Not very effective

- Team Development Plans and Team Statutes

- Not measured

- Real drives

- Very effective

- PI Company 360 degrees

- Effective

- Reflector test

- Effective

- Management days

- Very effective

- Coaching courses

- Effective

- HPM Portfolio conversations

- Not measured

- HPM monthly learning impulses

- Not measured

- Ziggo management development programs

- Not measured

- Coaching sessions

- Effective

- Logbook


- HPI development conversation

- Not measured

- HPI monthly learning impulses

- Not measured

- Ziggo employee development programs

- Not measured

- HPP diagnosis (= measurement + interviews)

- Not measured

- Awareness sessions - Call2Action sessions - Improvement programs within the partnerships - Policy on working with partners All

- Progress mails from the management team

- Very effective

- HPO Intranet


- Reporters on the work floor (“Jackals”)


- Employee lunches with management

- Effective

- Films

- Effective

- Year plan Customer Relations

- Not measured

- Yearly regional meetings

- Not measured

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Table 3: Overview of the effects of the interventions, per CR change target group

Table 3 shows that 80 percent of the interventions were effective to highly effective. Thereby the managers were the most positively affected, probably because most of the interventions had been aimed at them. This is in line with the HPO Framework in which HPO Factor Management Quality plays a heavy role – because it contains 12 of the 35 HPO characteristics – which is basically why a lot of interventions are needed to strengthen this factor. With the change interventions that turned out to be not very effective it was conspicuous that this concerned mostly individual interventions: individually looking at the intranet, individually maintaining the log and target books, an individual employee that was interviewed by the Jackals. The very effective change interventions were those that took place in teams and groups of people and which made these people start having a dialogue: the awareness sessions, the Call2Action sessions, and the management days. Although the change intervention Real Drives was individual the results of the test were discussed in the group which basically made it a mutual intervention. This is also in line with the HPO Framework in which HPO Factor Openness & Action Orientation advocates frequent dialogue.

On the basis of the measurement results over a longer period, aimed at various improvement and organizational aspects varying from behavior to results and from processes to communication, we can uncover the mechanisms that have enticed CR’s managers and employees to open themselves for insights; execute improvement actions; stimulate colleagues to participate in these improvement efforts; and strive for high performance on individual, team and organizational levels. Firstly, employees regained their pride in the organization. During the crisis they were continuously confronted with complaints and poor performance while they were basically powerless to better the situation. During the HPO transition it turned out they were after all capable of delivering good performance and they all could play a part in remedying problems, both individually and in teams. Regular measuring and communicating of the results was a big motivating factor in this. Secondly, people were empowered to identify bottlenecks in their area of influence, draft improvement plans for these, and then execute these plans themselves or with their team. The trust and mandate they received 13

from management inspired them to energetically pick up the issues. Thirdly, the learning and development efforts which were deployed to strengthen individuals and teams uncovered much “hidden” talent in the organization, especially among mechanics and call center staff who traditionally were regarded as groups of people with limited development potential. Through the development efforts many people dared “to raise above themselves” and their managers did a good job in stimulating them. Fourthly, the plenary and national “GOHPO sessions” contributed to a shared CRfeeling. It became clear to many people that they were part of a bigger entity, i.e. an organization that was becoming increasingly successful, and that they were able and also expected to contribute to this success. During these meetings progress and improvements were reported, successes were celebrated, and “HPO heroes” were hoisted on the shield. It also dawned on people that management was very serious about the change and the transition to HPO , that this was not a one-off event but a long-term program, and that joining offered opportunities, while not participating was not really an option.

PROGRESS OF THE HPO TRANSITION AND CONCLUSION Now, almost five years after the start of the transition to HPO we can unequivocally conclude the following based on the scores of the indicators in CR’s Change Score Card: the change approach achieved its intended effects. Sustainable improvements have been made on individual, team and organizational levels, and the cooperation with partners has significantly improved. This translated in CR achieving a for this industry “all time high” customer satisfaction score of 7.5. The HPO level has thereby increased in a relatively short period of time by approximately 10 percent (see Figure 1) which indicates Ziggo CR has found the way toward the high performance level. The HPO Framework offered managers and employees an accessible vocabulary to speak in daily work life about continuous improvement in a tangible way. More than 70 percent of the goals in CR’s improvement plans have been realized, the development level of the teams has increased significantly, and employee satisfaction scores increased with 13 percent. Employees are of the opinion that they have gotten more responsibility to do their work in the way they like, they show a greater willingness to change, they feel more involved in the ups and downs of CR, and are proud to be working there. The CR teams find each other more easily, and HPO has become the standard and “accepted way of working.” And in the 14

end this translated in better financial performance as Ziggo as total organization increased its profits considerably in the period 2009 – 2013.

Not everything went according to plan, though. Several prices, certifications and social recognitions have not been realized, mainly because the internal changes required so much energy and attention causing the orientation on the market to sometimes drop. In addition, the effects of the increased customer satisfaction score of 10 percent has not translated fully in financial performance and also this high level of satisfaction has to be perpetuated and get a stable character. An improvement initiative that has been started for this is called “Passion for the Customer” in which every quarter a CR employee who delivered exceptional service to a customer, and of which this customer has given testimony, is rewarded with a plaque and a nice gift (Waal and Heijden, 2013). The next step for CR is to complete the journey from a stable and robust average performing organization into a stable and robust HPO. This is a challenge but as both CR’s managers and employees now know what changing entails, how intended results have to be made measurable, and which change and communication interventions work, this certainly is not an impossible task.

REFERENCES Hatchfund Nederland (2009a), Perspectives, the magic of performance, Hatchfund.nl. Hatchfund Nederland (2009b), Real Drives, how drives shape identity, views and actions, Hatchfund.nl. Heijtel, I. (2012), The creation of a High Performance Organization, the 5 strands of success, Master thesis, Vrije Universiteit Amsterdam, the Netherlands. Klarner, P. & Raisch, S. (2013), Move to the beat, rhythms of change and performance, Academy Of Management Journal, 56, 1: 160-184. Raineri, A.B. (2011), Change management practices: impact on perceived change results, Journal of Business Research, 64, 3: 266-272. Schaffer, R.H. & Thomson, H.A. (1992), Successful change programs begin with results, Harvard Business Review, 70, 1: 80-89. 15

Scharmer, C.O. (2009), Theory U, leading from the future as it emerges, Berrett-Koehler, San Francisco. Waal, A.A. de (2006, rev. 2010), The characteristics of a high performance organization, Social Science Research Network, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=931873. Waal, A.A. de (2012a), What makes a high performance organization: Five validated factors of competitive advantage that apply worldwide, Global Professional Publishing, Enfield, UK. Waal, A.A. de (2012b), Applicability of the high performance organization framework at a multinational enterprise, Global Business and Organizational Excellence, 32, 1: 51-63. Waal, A.A. de & Heijden, B.I.J.M. (2013), Hoe creëer je HPO-gedrag? [How can you create HPO behavior?], Holland Management Review, 151: 18-21. Waal, A. de & Oudshoorn, M..(2012), Profielen van de Nederlandse High-Performing Employee [Profiles of the Dutch High Performing Employee], Holland Management Review, 141: 49-55. Waal, A.A. de, Heijden, B.I.J.M., Selvarajah, C. en Meyer, D. (2012), Characteristics of high performing managers in the Netherlands, Leadership & Organization Development Journal, 33, 2: 131-148. Waal, A.A. de, Goedegebuure, R. & Hinfelaar, E. (2013), High-Performance Partnership: de succesfactoren [High Performance Partnerships: the success factors], Holland Management Review, 150: 49-54.

André de Waal is an associate professor of strategic performance management at Maastricht School of Management, the Netherlands, and the academic director of the HPO Center in the Netherlands (www.hpocenter.com). He is the author of 27 books and more than 300 articles in the field of high performance, excellence, and strategic performance management. His latest book is called What Makes a High Performance Organization: Five Validated Factors of Competitive Performance That Apply Worldwide (Global Professional Publishing, 2012). André was involved as HPO advisor during the HPO transition at Ziggo CR. Contact: [email protected]

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Eric Mooijman is partner with Vitrum Consulting. He designs and implements as an advisor and program manager organization development programs, and he published regularly on this topic. Eric published two (Dutch) books on organizational change and learning. He was involved as program manager and consultant during the HPO transition at Ziggo CR. Contact: [email protected]

Martine Ferment is owner of Ferment Consulting. She was

interim Vice President Customer

Relations at Ziggo between 2008 and 2012. Martine published a (Dutch) book on customer service. Martine was the initiator en sponsor of the HPO transition at Ziggo CR and played an important part in the execution of the change interventions. Contact: [email protected]

[SIDE BAR] THE HPO FRAMEWORK The HPO Framework was developed from a literature review of 290 academic and practitioner publications on high performance and the results of a questionnaire that was completed by 3,200 respondents worldwide (Waal, 2006 rev. 2010, 2012a, 2012b). This research yielded the following definition of an HPO: A high-performance organization is an organization that achieves financial and non-financial results that are better than those of its peer group over a period of time of at least five to ten years (Waal, 2012a).

As Appendix 1 shows, the HPO Framework consists of 35 underlying HPO characteristics grouped according to the following five HPO factors: 1.

Continuous Improvement and Renewal (CI). An HPO compensates for dying strategies by renewing them and making them unique. The organization continuously improves, simplifies, and aligns its processes and innovates its products and services, creating new sources of competitive advantage to respond to market developments. Furthermore, the HPO manages its core competences efficiently, and sources out non-core competences. 17

2.

Openness and Action-Orientation (OAO). An HPO has an open culture, which means that management values the opinions of employees and involves them in important organizational processes. Making mistakes is allowed and is regarded as an opportunity to learn. Employees spend a lot of time on dialogue, knowledge exchange, and learning in order to develop new ideas aimed at increasing their performance and making the organization performance-driven. Managers are personally involved in experimenting, thereby fostering an environment of change throughout the organization.

3.

Management Quality (MQ). Belief and trust in others and fair treatment are encouraged in an HPO. Managers are trustworthy; live with integrity; show commitment, enthusiasm, and respect; and have a decisive, action-focused decision-making style. Management holds people accountable for their results by maintaining clear accountability for performance. Values and strategy are communicated throughout the organization, so everyone knows and embraces them.

4.

Workforce Quality (WQ). An HPO assembles and recruits a diverse and complementary management team and workforce with maximum work flexibility. The workforce is trained to be resilient and flexible. They are encouraged to develop their skills to accomplish extraordinary results and are held responsible for their performance. As a result, creativity increases, leading to better results.

5.

Long-Term Orientation (LTO). An HPO grows through partnerships with suppliers and customers, so long-term commitment is extended to all stakeholders. Vacancies are filled by highpotential internal candidates first, and all employees are encouraged to become leaders. An HPO creates a safe and secure workplace (both in physical and psychological terms), and dismisses employees only as a last resort.

The HPO research shows that there is a direct and positive relationship between the five HPO factors and competitive performance: The higher the scores on the HPO factors, the better the results of the organization; the lower the HPO scores the lower the competitive performance. An organization can evaluate its HPO status by having its management and employees fill in the HPO Questionnaire, consisting of questions based on the 35 HPO characteristics with possible answers on an absolute scale 18

of 1 (very poor at this characteristic) to 10 (excellent on this characteristic), and then calculating the average scores on the HPO factors. These average scores indicate where the organization has to improve in order to become an HPO. Since the first publication on the HPO Framework in 2007 more than 2000 organizations worldwide have participated in the HPO Questionnaire, the HPO Center has performed over 130 HPO Diagnoses worldwide, and many new research studies based on the framework have been published. This made it possible to evaluate the financial and non-financial benefits from applying the framework. These benefits turned out to be: a better attitude of employees; better cooperation, both internally between departments as externally with suppliers, partners and customers; a stronger internal organization; higher financial results, and a better competitive position.

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APPENDIX 1: THE HPO FRAMEWORK

HPO Factors

HPO Characteristics

Management Quality

1

My manager is trusted by organizational members.

Management Quality

2

My manager has integrity.

Management Quality

3

My manager is a role model for organizational members.

Management Quality

4

My manager makes decisions quickly.

Management Quality

5

My manager takes action quickly.

Management Quality

6

My manager coaches organizational members to achieve better results.

Management Quality

7

My manager focuses on achieving results.

Management Quality

8

My manager is very effective.

Management Quality

9

My manager applies strong leadership.

Management Quality

10 My manager is confident.

Management Quality

11 My manager is decisive with regard to non-performers. 12 My manager always holds organizational members responsible for their

Management Quality Openness & Action

results. 13 My manager frequently engages in a dialogue with employees.

Orientation Openness & Action Orientation Openness & Action

14 Organizational members spend much time on knowledge exchange and learning from each other. 15 Organizational members are always involved in important processes.

Orientation Openness & Action

16 My manager allows making mistakes.


17 My manager welcomes change.


18 Our organization is performance-driven.

Orientation 19 Our organization maintains good and long-term relationships with all Long-Term Orientation

stakeholders.

Long-Term Orientation 20 Our organization is aimed at servicing the customers as best as possible. Long-Term Orientation 21 My manager has been with the company for a long time. Long-Term Orientation 22 New management is promoted from within the organization. Long-Term Orientation 23 Our organization is a secure workplace for organizational members.

20

Continuous Improvement &

24 Our organization has adopted a strategy that sets it clearly apart from other organizations.

Renewal Continuous

25 In our organization processes are continuously improved.

Improvement & Renewal Continuous

26 In our organization processes are continuously simplified.

Improvement & Renewal Continuous

27 In our organization processes are continuously aligned.

Improvement & Renewal Continuous Improvement &

28 In our organization everything that matters to the organization's performance is explicitly reported.

Renewal Continuous Improvement &

29 In our organization both financial and non-financial information is reported to organizational members.

Renewal Continuous

30 Our organization continuously innovates its core competencies.

Improvement & Renewal Continuous Improvement &

31 Our organization continuously innovates its products, processes and services.

Renewal 32 My Workforce Quality

manager

inspires

organizational

members

to

accomplish

extraordinary results.

Workforce Quality

33 Organizational members are trained to be resilient and flexible.

Workforce Quality

34 Our organization has a diverse and complementary workforce. 35 Our organization grows through partnerships with suppliers and/or

Workforce Quality

customers.

21