Two threads, high performance and learning, wind their way through the business
literature of the past several decades.1
The authors canvassed this literature, traced the snaking of these threads,
and observed how they crossed and looped with each other to form a single fabric.
That fabric is the high performing learning organization (HPLO). This report
summarizes our findings. While these findings are rooted in the literature we
reviewed, they provide a creative synthesis of its contents that simplifies
the HPLO model to its fundamental ideas. Reduced to its basics, an HPLO has
one essential component and is ruled by three principles alone. The essential
component is people. The three principles talk about who these people are, what
they focus on, and how they view what surrounds them. Together, they provide
a refreshingly simple perspective with disturbingly dramatic implications. The
simplicity clears the clutter from our minds and focuses our thinking. To gauge
a firm's capabilities to create its success—as opposed to being successful
by virtue of industry or market conditions or macroeconomic forces—it
directs us to evaluate ourselves, the people who embody it, give it life, and
make it a reality. We are the determiners of its success because we are the
originators and implementers of every action it undertakes. As well, we are
the only responsible component of a firm that can extract learning from our
conduct and use it to improve our performance.
The price of this simplicity, however, is the arduous, unyielding personal
challenge it issues to us to "reprogram" our responses to ourselves
and what surrounds us. With respect to ourselves, the HPLO model tells us that
we are the place to start when we consider any initiative. With respect to what
surrounds us, it tells us that what previously seemed so essential is, in fact,
non-essential. It renders this challenge more disturbing by further asserting
that, while the knowledge that drives an HPLO is utterly simple in its content,
it is absolute in its application. It does not tolerate piece meal adoptions.
Take it up and use it as whole cloth or leave it be. Occasional or selective
use of its concepts yields no benefits.
We begin our review of this knowledge by defining the term HPLO then addressing
the HPLO's single component and the three principles that govern it. Next, we
will explore the implications of these ideas and discuss how a company becomes
an HPLO and measures its progress toward that end.
The High Performing Learning Organization (HPLO) Defined
Our review and synthesis of more than 50 definitions of HPLOs
yielded the following.
"An HPLO is a company that is governed by purpose
and powered by teamed, capable people who use learning to achieve extraordinary
results for all stakeholders (i.e., customers, employees, owners, suppliers,
and the communities within which the company operates).
The operative phrases are: "governed by purpose", "powered by
people," and "achieve extraordinary results for all stakeholders."
Governed by Purpose
In a high performing learning organization, purpose rules. The
company is not governed by its leadership, structure, systems, or other elements.
It is integrated in its performance by every worker's consistent reference to
its purpose. By purpose we mean the company's business intent— its reason
to exist (mission), its core values, and its vision of what it seeks to become.
We do not mean its near term market or organizational strategy nor its yearly
objectives. These latter items are known and factored into decisions when compatible
with the company's business intent or challenged and changed when not. The guiding
light for an HPLO is always the long term. Its mission, core values, and vision
form the "foundation knowledge" that every performer embraces personally
and uses to guide her or his thinking about the business and relating with other
performers and with all stakeholders. It is this personal and common anchoring
in the company's business intent that ensures integration across performers,
teams, components, regions, and time.
Powered by People
People make the difference in every business. They are the root
cause of effect in all enterprise. Indeed, they are the company. HPLOs recognize
and embrace this fact. They acknowledge in all decision making that it is the
people who make its purpose real. It is their deeds that define in facts what
the company is truly about, what values it will not violate, and what reality
it is creating. It is people who measure its progress and steer its implementation.
Finally, they acknowledge that it is the applied capabilities of its people,
individually and collectively, that ultimately achieve its purpose.
Achieve Extraordinary Results for All Stakeholders
With regard to extraordinary results, HPLOs are used as benchmarks
against which other companies compare themselves. They are said to be the vital
few who account for most of the change that occurs in each industry, market,
and region. These extraordinary results extend beyond customer service and shareholder
gain. HPLOs are said to fulfill societal and industry ideals by becoming agents
and models of constructive innovation and change and by being places where people
can learn, achieve, grow, and prosper.
While HPLOs produce extraordinary results, this does not mean
they have unbroken records of success. Indeed, many HPLOs are described as having
set backs at different points in their history. Rather, HPLOs are valued for
the sustained benefits they contribute to all participants over time and over
changing market circumstances. It is the positive slope of their achievement
and the average level of achievement over time and across good and bad market
circumstances and harsh or enabling macroeconomic conditions that impresses
others. This, indeed, is one reason why the concept of an HPLO has been of interest
for so long. Becoming an HPLO is seen as a solution to the challenge of sustaining
success because they are able to negotiate fast changing conditions and highly
competitive marketplaces. This capability results from the common commitment
of their people to leverage learning in order to achieve a single purpose together.
This commitment maximizes synergy and creativity across the organization because
people share and think horizontally and create and implement work processes
that integrate across business functions. An HPLO is, therefore, fast in everything
it does so that it is able to get to the market faster with new ideas and respond
quicker to new customer requirements or competitor initiatives. HPLOs are also
said to sustain their performance with greater consistency than others across
macroeconomic cycles because they emphasize learning and are willing to take
risks and be innovative in response to difficult circumstances. This allows
them to find "the seam in the zone" through which successful commercial
performance can be sustained. As well, their emphasis on learning also allows
them to transform failure into new insights and future success.
The Single Source of Business Success
The HPLO literature underscores people as the single source for achieving or
not achieving these esteemed benefits. People are the heart, head, and sinew
of every enterprise. It is from their substance that all other elements of an
enterprise are created. Consequently, who they are determines whether an HPLO
exists or fails to exist.
Now, some will challenge that this assertion is wrong pointing out that the
literature touts knowledge, for example, as a critical and essential asset to
success. They will also point out that HPLO authors discuss other business elements
such as flat organizational structures, management strategies that emphasize
involvement, lean work systems that are constantly improved, and autonomous
work teams. These challenges are both correct and incorrect. They are correct
in that many (although not all2)
of HPLO authors do describe such components and label them as critical. Indeed,
we have created schema that fully represents these components and the key features
each should possess. They are incorrect, however, in that not one of these elements
comes into existence or generates any benefits except at the hands of the "right"
The right people create these elements, invest them with meaning, and leverage
them to produce benefits by the decisions and actions they take. Others do the
opposite. They strip them of meaning and, through non-use or miss use, produce
only lost opportunities. Poets aside, knowledge has yet to "leap"
into any person's mind, touch that person's soul, reorganize her or his thoughts,
and command the person to act accordingly. Knowledge on its own never produces
a novel design or an innovating work system, or any final product or service.
People do! At least some people do. These are people who value achievement and
appreciate knowledge and learning as its instrument. These people acquire knowledge
initiatively, evaluate its utility, understand its significance, and apply it
intelligently. It is these people who transform knowledge into a higher quality
offering or use it to ensure a superior buying–benefiting experience for
a customer. Such people seek out knowledge, apply it, and refine it continuously.
And yes, their knowledge can be shared with others like themselves and through
that sharing provide greater benefits to the business. But without such people,
knowledge simply fills books or electronic databases.
The root of all success and failure in enterprise, therefore, is people. The
"right" people create and effectively apply the business components
some HPLO authors tout as the sources of its success (e.g., strategy, structure,
system, knowledge). Others neutralize the potential contribution of these components
no matter how well designed they are. While the sustained presence of the components
described by HPLO authors may indicate that a company has the "right"
people, it is simply foolish to imagine that if you put these components in
place that they will create the right people for you. HPLO authors who propose
using "culture" to create high performance, for example, are misunderstanding
the premises from which they are operating. If you have the people who can create
and sustain such a culture, then for whom are you creating it? If you do not
have such people, who will create this culture?
The enlightening yet disturbing implication of this reasoning is that you
cannot change your company without changing its people. People without the "right
stuff" do not conceive, implement, or maintain value-adding business systems.
There is no escape from this implication. People make the difference. Their
impact is easier to see in any industry or market segment characterized by high
levels of competition and rapid change. The reason is that a business has no
agent other than people sufficiently capable of learning and changing to meet
the unexpected turns in the marketplace or the demands of truly competitive
markets. Even in relatively stable markets and industries, enterprises have
no other source for creating all the other elements that are the instruments
of business. Nor do we have any other means for maintaining and overseeing the
performance of these instruments. Only people transform resources into productive
assets. HPLOs recognize this fact and accept the obvious that businesses are
human enterprises—they exist to achieve human ends and they realize their
ends through human performance.
Three Principles Govern HPLO Operations
The three principles that explain the emergence and performance of an HPLO
describe the type of people who power an HPLO, clarify what these people focus
on, and how they view the rest of what surrounds them.
||Principle 1 asserts that people
who are aligned, teamed, energized, capable, and pioneering create and sustain
HPLOs. Others do not.
||Principle 2 states that enterprise and learning
are the only activities that people in an HPLO focus on and immerse themselves
in. Their single imperative is maximize enterprise through learning.
||Principle 3 declares that all elements other
than people are optional. If they exist, it is on a "just-in-time"
and "only-for-so-long-as-useful" basis.
Principle 1: The "Right" People
HPLOs are distinguished by people having a unique set of qualities. They are
aligned to a business intent that commits to commerce through excellence and
to producing benefits for all stakeholders inclusively. They are teamed within
each business that constitutes the company as well as across the company globally.
They are energized by the personal and organizational success they see possible.
And, they are capable. Each performer is knowledgeable of and proficient in
executing the core responsibilities that every role implements as well as their
unique specialty areas. Finally, they are pioneering, internally driven to achieve
the previously unachievable, to probe the undiscovered territory of new opportunity,
and to create new benchmarks of accomplishment at personal, company, and industry
Aligned. The people who power an HPLO uphold
two core values with regard to conducting business. These values are commerce
through excellence and inclusiveness of benefits. They align with these values
because they understand that only in businesses that embrace these values
can they grow to the fullest measure of their capabilities. Indeed, since
such companies create economic environments of continuous growth and, therefore,
continuous challenge, the only avenue of sustained success for these companies
is through enabling their performers to grow in competence continuously to
the full measure of their capabilities.
Commerce through excellence means winning at business by excelling3
in the ability to conceive, develop, and complete commercial transactions
that benefit customers. The people who power HPLOs embrace competitive marketplaces;
they do not attempt to constrain them through fabricating barriers to the
entry of competitors or transfer by customers to other suppliers or by manipulating
markets or leveraging political influence to advance their personal ends.
They affirmatively seek open, free marketplaces because they offer the greatest
stimulation for new learning and new levels of achievement and they appreciate
that new learning and achievement are the essential ingredients for ones personal
Inclusiveness of benefits means accomplishing commerce in a way
that enables the growth and success of all stakeholders. Yes, providing value
as defined by the customer is the primary imperative, but success
means that solving for that imperative must also benefit employees, owners,
suppliers, and the communities within which the business operates. As Collins
and Porras point out, they do not succumb to "the tyranny of the or";
these people embrace the "the genius of the 'and'" (1994, p. 43).
And so, the people who power HPLOs do not lurch their companies from customer
focus (quality of product, service, and price), to shareholder focus (cost
efficiency, revenue enhancement), to employee focus (involvement, morale).
They define and pursue an integrated focus that satisfies the primary imperative
(deliver value to customers as defined by them) while benefiting all other
The conviction of these people requires that any business intent they align
with must incorporate these two core values. Consequently, the business intents
of all HPLOs espouse commerce through excellence and inclusiveness of benefits
in their own unique ways.
Teamed. The people who power an HPLO see themselves
as members of a collective endeavor in which each person owns responsibility
for the ultimate outcome and not simply for the local tasks that s/he performs.
They think horizontally, from the perspective of the firm's business intent
and with awareness of all the other performers with whom they are teaming.
Consequently, they reflect on their tasks from the perspective of their significance
to the goals of the business and relate their discoveries to others across
roles, teams, components, and regions. Each performer assumes a dual responsibly
as leader and member. As leaders, employees look to the larger implications
of what they are doing and try to envision better ways to do it or ways to
eliminate it being done at all. As members, they get the job done and share
their information and learning with teammates business wide.4
They never get trapped into parochial thinking. They never imagine themselves
as solo performers. And so, they always generate local solutions that have
Energized. The people who power an HPLO
are up, active, and initiating in the performance of their work. They apply
themselves with intensity to all they do. They draw energy from new opportunity.
They are stimulated by challenges because learning enlivens them. Their excitement
and optimism is founded, in part, on confidence in their ability to learn.
This ability to learn means that they can, over time, turn any experience
into benefit and any current performance into a better performance. Consequently,
any failure is a moment in their passage to the next success. Their energy
joined with their experience of teaming spurs rapid, unified movement. They
are in the chase continuously—ever reaching for the next level of achievement
in the pursuit of their purpose, ever sharing their ideas with others and
seeking their ideas in return. These people display exuberance in the everyday
because everyday offers the opportunity for new discovery. They have confidence
in that reality because it is the product of their intent, energy, and commitment
to learn elevated by those like-minded people with whom they team.
Capable. Capable refers to the degree of mastery
performers have in the fundamental competencies needed for high performance.
By competencies we mean the knowledge, skills, abilities, and other personal
characteristics needed to successfully execute the five core responsibilities
of every performer (see Exhibit 1). The areas in which competence is required
include: goal setting, action planning, problem solving, communication, measuring
performance, self management, learning, teaching, teaming, and leadership.
As well, one must be competent in her or his discipline or area of specialization.
The people who power an HPLO have these competencies at proficiency levels
sufficient to implement the five basic responsibilities of their common role.
With the performance of these responsibilities, workers elevate continuously
themselves, their teammates, and the business they collectively power.
||Exhibit 1. Basic Responsibilities of Every
Performing in an HPLO
||Every performer in an HPLO has the same core set of responsibilities.
These responsibilities are:
||Add value as defined by customers in a manner the benefits all stakeholders.
||Measure your impact on value.
||Improve your performance continuously.
||Leverage your learning by sharing it with others.
||Team with others within your business, across your company's other businesses,
and around the world to accomplish your common purpose.
Pioneering. The performers who create and sustain
HPLOs thrive on pushing the envelop of achievement. They need no carrots or
sticks to "bust bureaucracy" or challenge the current paradigm;
they glory in it. Indeed, they react with disdain to efforts to manipulate
them with external reinforces because of the insult it implies. They demonstrate
no "rubber band" qualities, stretching when pressure is applied
by others then rebounding to their "comfort" zone once the pressure
is removed. They are forward leaning forever. That is their nature.
The "Right" People Replicate Themselves.
The fact is that all people replicate themselves because we attract others
who are like us and we tend to form alliances with them. With the people who
power HPLOs, these two "facts of life" power two wonderfully positive
corollaries. The first is that high performers create and sustain cultures
of growth that attract new high performers and enrich all who participate
in them. The second is that high performers create alliances only with others
who uphold the same core values as they do. As a result of the second corollary,
they avoid the most common pitfall of business alliances of which over 50%
fail (Geringer & Hebert, 1991). That pitfall is incompatible business
intents. By both attracting other high performers and by allying with firms
having similar core values, they replicate themselves, populate their enterprise,
and create a network of partners with the essential resource needed to achieve
and sustain success—the right people.
Principle 2: The "Right" Focus
The second principle of the HPLO model asserts that people in an HPLO focus
on enterprise and use learning to realize its ends. They immerse themselves
in this pursuit. Their single imperative is maximize enterprise through
Enterprise means industrious, systematic activity, directed toward
conceiving, developing, and completing commercial transactions that deliver
value as defined by customers in ways that benefit all stakeholders. Each instance
of enterprise is an instance of the creation and completion of a commercial
transaction—the exchange of resources between producer and customer that
benefits both and all others who participate in it. By focusing on enterprise
we mean that the people who power an HPLO approach all they do from this perspective.
They constantly ask this question, "How does this task, this decision,
this issue add value to our effort to conceive, develop, and complete commercial
transactions that deliver value as defined by customers and benefit all stakeholders?"
They think as owners, as entrepreneurs. Indeed, the entire company is a teaming
of entrepreneurs whose efforts are integrated, as we have said, by their common
purpose and recognition of each other as team members. Literally, from the mailroom
to the board room every performer thinks as a CEO. HPLOs enable this happening
by selecting the right people and providing them the information and opportunity
to exercise ownership responsibilities through orientation programs, business
education and training experiences, cross training, open-book information sharing,
and high-level involvement approaches to defining and accomplishing business
Learning from personal performance involves describing one's last
performance, uncovering the sources of its success or failure, extracting ideas
that reinforce the factors that contributed to success and remove those that
limited it, and using that knowledge to improve one's next performance. It requires
the use of personal and shared data, information, and knowledge and the application
of methods that accomplish its operations. It results in improvements that are
usually incremental but sometimes are transformational. Incremental learning
gradually improves one's next performance. Transformational learning creates
a new set point for performance. Its paradigm-breaking insights translate into
step-change advancements in the results one produces. The people who power HPLOs
engage in learning from personal performance reflexively and continuously. This
is the source of the excitement they experience. It is this personal disposition
that transforms each work station into a laboratory, renders each task an experiment,
and each performer an applied scientist. As well, they pursue transformational
learning with regular activities targeted to open thinking, stimulate creative
talent, and explore non-traditional arenas for ideas and perspectives. They
augment learning from personal performance with learning from others through
study and the regular exchange of ideas. What knits these efforts together is
their singular relationship to enterprise. The focus of all learning in an HPLO
is to refine, extend, elevate, and transform how it does business so that it
accomplishes its current business intent and is positioned to conceive its next
Principle 3: The "Right" Perspective
The third principle is that all elements other than high performing people
are optional. If they exist, it is on a "just-in-time" and "only-for-so-long-as-useful"
basis. Yes, all other elements are simply paraphernalia. Nothing is off limits!
There are no products we could ever "not produce" or delivery methods
we could ever "not use." There are no disciplines we will always maintain
or functions that must, of necessity, be present. Likewise, there are no roles,
structures, divisions of responsibilities that are givens. This is the beauty
of the HPLO concept. The "right" people immersed in enterprise and
learning and riveted on realizing a business intent sums up all its requirements.
This is not to say that these people will not create structure, strategy, or
systems. And, of course, they will always have a product or service to offer
in commerce. It is to say that these items will always be seen as instrumental,
never as ends in themselves. That is what paraphernalia means —"articles
used in a particular activity"; "things needed for a task, journey,
or other purpose."5
When the journey is over and the task complete, these items are set aside.
The HPLO literature does indicate that when strategy and structure are established,
they tend to have certain qualities. Specifically, if strategy exists explicitly
then it leverages people and knowledge to achieve the previously unachievable.
This means that an HPLO's market strategies, whatever their specific content,
leverage the quality of its people and their capabilities to provide offerings
that maximally satisfy customer values. They will encourage free, informed,
rational decision-making by customers by promoting full disclosure of information
about an offering's features and functionality.They will advocate for the removal
of all barriers to competition and their sales efforts will educate customers,
not manipulate them through persuasive communications.
Similarly, with regard to organizational strategy, HPLOs emphasize empowering
people and promoting, facilitating, and leveraging learning. They do not focus
on rote repetition of defined methods or the preservation of role hierarchies
and organizational turf.6
HPLOs go to the heart of the matter, not its periphery. They emphasize leveraging
knowledge by investing in the infrastructure that enables the rapid sharing
and updating of ideas and dissemination of new learning. High performers build
high speed highways that allow them to connect, communicate, and benefit from
association with each no matter where any of them are. And these highways extend
to their customers, suppliers, and communities as well. Organizational structure
is not the product of trying to find places for people or attempting to avoid
contact with people by layering others between you and them. It is designed
to focus energies on commerce and to support each performer's experience of
ownership by rationalizing the company into fully integrated constituent businesses
that provide each performer a line-of-sight to the marketplace and their customers.
It cross links these "businesses" to maximize synergy, leverage learning,
and ensure the collective pursuit of a single corporate intent. All its human
resource enabling systems (selection, development, appraisal, promotion, pay,
awards, and incentive systems) are designed to find, get, keep, develop, and
leverage the right people. Pay, recognition, and rewards celebrate contribution
to enterprise and do so equitably. Their are no separate benefits or rewards
packages geared to reflect a person's role and status as defined by hierarchies
of power. Training and development activities build people's capabilities to
contribute and help them realize the full measure of their potential. And, all
elements of these enabling systems are aligned and implement with full transparency.
Transforming to a High Performing
Learning Organization (HPLO)
Grasping the idea that people are the single source of an HPLO's success is
paramount to understanding how to become an HPLO. Capture it. Reflect on it.
Its singular, dramatic implication is straightforward—there is no escape
from the rule that the capabilities and limitations of its people determine
the success of any enterprise. Yet, as mentioned earlier, if there is one strange
oversight in the literature, it is in grasping fully this implication. Let me
be clear, there is not one author we encountered who disagrees that people are
the core of the HPLO. And most identify the same or similar critical features
as we have in defining the "right" people. However, as we pointed
out earlier, some authors consider it possible to build an HPLO by establishing
its paraphernalia. It is as though they imagine that if you build the artifacts
then the artifact builders will appear. In essence, these authors propose to
use external conditions to "shape" the "right" people into
being. This is self contradictory. The "right" people, as described
in the literature, are intrinsically motivated—not externally driven.
Further, there is no evidence that values can be embedded in people—at
least in adults. Adults acquire values by embracing them and working hard to
own them in their decisions and actions. We can assist each other in the process
of developing the "right" stuff but we cannot command it. We may model
values and otherwise encourage their incorporation. We can teach people skills
that enable them to act effectively on their values. But, ultimately, they are
a matter of personal choice. Some people will experience the qualities that
describe the people who power an HPLO as meaningful to them, as worth their
investment and sacrifice; others will not. And that is their right! Included
in the latter group will be some who will leave a company seeking to transform
itself into an HPLO and others who will attempt to blend in by being compliant
to the expectations of the people driving the transformation. Their compliance
will sustain only as long as the people driving the transformation remain dominant
in the business. However, these "compliant" individuals never contribute.
At best they are passive participants. They remain observers who are moved to
action only when prompted. In the end they consume rather than generate value
as defined in an HPLO.
These reflections are specifically relevant to the question of how a company
transitions into being an HPLO. In general, today's companies remain hierarchical
in structure with the performers in the higher-level roles holding the greater
responsibility and authority—indeed, the authority to create all artifacts
and to hire or fire all other performers. These performers commonly establish
compensation and reward systems that provide them differential pay and benefits.
Their roles accrue special status to them in other ways as well. This status
is conveyed by high sounding titles such as "President," "Chief
Executive Officer," "Vice President," "Senior Manager,"
among others. It is communicated by office location, size, and decor. It may
also be communicated by special places to meet, eat, and recreate. Typically,
this package of artifacts and material benefits played a significant role in
attracting and retaining the holders of these roles. Such performers are, in
general, externally motivated. They seek the reinforcements offered by the environment
in which they work. In essence, the people who make it to the top of such firms
were best at meeting the requirements of those people who selected them and
conferred on them the same benefits that they themselves enjoyed. In other words,
people like themselves. This judgment is reinforced by the recognition that
most leaders make selection decisions based on the perceived contribution of
the person being selected. Unfortunately, "perceived contribution"
has a consistently low7
relationship to objective measures of the results actually produced by a performer
(Heneman, 1986). Contribution, when judged this way, is a euphemism for something
else—perhaps how well the person has supported the selector's decisions
and actions or simply the degree of comfort the selector feels with the person.
This background paints the basic dilemma of any traditional company that wishes
to transition to an HPLO. How do people who have striven for the status and
rewards they hold and who have earned them by working within the boundaries
defined by those who last held them, change the rules of the game and, in that
act, place all that they have worked for in jeopardy? Let us look at a generic
model for transitioning to an HPLO and see how companies attempt to address
The Common Path to Becoming an HPLO
The assumed setting for transitioning is an existing company that has conducted
itself in a traditional manner. It is facing a new business environment that
is characterized by increasing competition, escalating customer requirements,
and rapid change. It seeks to succeed in such an environment and it chooses
to do this through excellence in performance, not the manipulation of customers
or the political, social, or economic levers of power. Commonly, this means
that it seeks to excel in providing value to customers by more deeply understanding
their needs and wants; fashioning offerings that best serve those ends; and
being flexible, speedy, responsive, and innovative in its actions. Essentially,
it seeks to be nimble and creative, yet globally consistent in maximizing value
to customers. These are qualities an HPLO exhibits. The path to establishing
an HPLO follows the dictates of its model. It begins with people, moves to establishing
the right focus for enterprise, removes artifacts that hinder and builds tools
that enable its pursuit, and immerses itself in maximizing enterprise through
learning. The path may be represented as having three milestones.
- Create a core leadership team.
- Focus the transformation.
- Changeover to an HPLO.
Milestone 1: Create a Core Leadership Team.
The common answer to the question posed at the end of the last section is
that people who have striven for the status and rewards they hold and who
have earned them by compliance with those who last held them do not change
the rules of the game and place all that they have worked for in jeopardy.
Thus, a company requires a single paramount leader who is different in kind
with respect to her or his source of satisfaction and who embraces personally,
substantively, and passionately the fundamental principles of a high performing
learning organization. This single leader8
becomes solidified in her or his commitment to the foundation knowledge of
an HPLO and prepares to sponsor change by mastering the competencies required
of every performer in such an enterprise (Exhibit 2). By this deed, s/he becomes
a model and agent for the acquiring the "right" people. Next, the
leader gathers a team of like-minded individuals. These people may come from
the outside the company or from anywhere in the current organization. They
may be front-line workers or people in the current CEO succession plan. Their
official roles are irrelevant. From wherever they are drawn, they all must
exhibit the qualities of striving for excellence in whatever they do and being
teamed, energized, capable, and pioneering. They become the embryonic new
enterprise with whom the leader teams as s/he moves to transition the company.
With the leader's personal preparation and the assembly of this core transition
support team, the first two steps of becoming an HPLO are accomplished. The
leader's attention turns to assessing her/his current business leadership
team to determine who will choose to embrace the new requirements and perform
in the new business context. These assessments are made in the context of
alignment and training sessions and through special assignments. All leaders
are provided the education, feedback, and assistance they need to ensure that
they fully understand the HPLO model and what the company needs of them to
become one. They are provided assistance to develop the "right"
stuff and supported in their initial use of these capabilities. However, the
change leader never compromises the basic principles of an HPLO or the insights
they generate. Fundamentally, what this assessment activity provides is an
opportunity for all leaders to determine the match between the future and
themselves. Those who find that match exciting remain; those who find it unexciting
move on. The bottom line is that the person leading a traditional company
to becoming an HPLO must de-select leadership unwilling or unable to develop
the necessary commitment and capabilities whether or not they de-select themselves.
This is the consensus of the literature. And this is why there is likely to
be many more simulated conversions to the gospel of HPLOs and selective adoption
of its artifacts than actual conversions. The true conversion requires a toughness
from which most will shrink.
Once the core leadership is in place, they focus on deepening their own preparation
so that they can act as models and agents for the new organization. Much of
the literature emphasizes that a period of credibility building follows during
which performers at all levels experience the new leadership and their commitment
and become convinced of its genuineness. During this period, the new leadership
demonstrates their conviction by involving all employees in assessing the
company's readiness to become an HPLO and developing ways to improve that
readiness by eliminating barriers to success and leveraging opportunities
to accelerate transformation. This process is assisted by the core transition
support team. In our experience, it works best when integrated with training
that educates all employees about the HPLO model and provides them the basic
skills (e.g., working with others and problem solving) needed to participate
in making it a reality. In essence, the transition has begun as employees
build understanding and act on it by working together to eliminate the company
artifacts that constitute barriers to becoming a high performing learning
organization. The fallout of this effort is credibility of the initiative,
ownership of it by employees, learning, progress toward the goal, and the
information needed to devise a sure path forward to success. The typical barriers
that people uncover are an existing business intent that in unaligned with
the principles of an HPLO; market strategies or practices that are inconsistent
with competing through excellence; silo-like organizational structures that
are process-focused, not business centric; missing, incomplete, or outdated
understanding of customer values or no means by which this information is
used in business decision making; a history of missed opportunities for learning
or the leveraging of learning across the business; restricted information
sharing; uneven involvement of performers in business decisions; and traditional
human resource enabling systems that reinforce roles, status, and privilege
(e.g., differential reward and incentive systems; subjective, often politically-motivated
appraisal and promotion decision-making).
||Exhibit 3. Milestone 2: Focus the Transformation
||Select a roll out strategy.
||Build the transformation plan.
Resource and schedule the transformation.
Milestone 2: Focus the Transformation.
With leadership in place, employees engaged, ownership and involvement elevated,
and assessment information gathered—it is time to decide how to rollout
the transformation across the company and structure the transformation process
The roll out decision is especially critical in single activity, multi-site
businesses and in multiactivity companies. The former implement one business
but at two or more geographically dispersed sites. The latter implement multiple
businesses. Three strategies are discussed in the literature:
|| "smart retrofit," and
The greenfields strategy proceeds by integrating the HPLO principles
into the design of a new business. It incorporates the HPLO qualities from
its start. When the new business is part of a multiactivity company then this
initial greenfields rollout may be followed by a smart retrofit rollout.9
This depends on whether the parent company seeks to keep the other businesses
or shed them. If it chooses to keep them, it uses the initial greenfields
site as a development environment from which it transfers people and learning
to the other existing businesses for use in transforming them.
The "smart retrofit" strategy integrates HPLO principles
into a component of a company where there are people eager to adopt the new
ideas and acquire and use the competencies their new performance requires.
The best candidates for smart retrofit meet the following criteria.
||The component is a whole business, not a business process.
This means it is responsible for a defined product or service offering targeted
to satisfy the needs of a customer. It also means that it incorporates under
one leader or one leadership team the full value chain needed to implement
||The leader is excited by the HPLO idea, sees its business potential, and
is ready to acquire and apply the knowledge and skills needed to make it
||The leader has a good relationship and reputation with the employees of
|| The leader has demonstrated in the current organization a commitment
to measurement, experimentation, and learning that places results over comfort
In single activity but multi-site companies, use only criteria 2 through
4 to decide which site to start with. To apply this criteria in a multiactivity
company, the company must have removed a common barrier to transformation.
This barrier relates to how the company structures itself and its accounting
systems. Most companies do not structure themselves along business lines.
Small companies frequently organize themselves by locations and large companies
around functions (e.g., production, maintenance, human resource management,
finance, marketing, and sales). In large multiactivity companies, each function
serves a number of businesses. We have found that even companies that create
“business units” do not encompass a whole business within each
unit. Rather, each so-called business unit is simply the marketing and sales
organization for one or more “whole businesses” and may not be
connected to the rest of the components that actually make each business happen.
Since companies are not organized by the businesses they implement, you need
to understand the different businesses that exist within your company in order
to apply the above criteria.
The opportunistic strategy integrates selected HPLO artifacts into
an existing workplace (e.g., 360o evaluations,
employee involvement, autonomous work teams, quality circles or the use of
workout teams) where circumstances permit. Authors of articles about HPLOs
do not recommend the opportunistic approach because, by their reporting and
our experience, incremental efforts have never culminated in large scale change
(see, for example, Neal, Tromley, Lopez & Russell, 1995). These changes
are tactical, not strategic. They remain compartmentalized and sustain for
only as long as the near-term goal driving them is a priority concern and
their champion remains in place. Once either changes, the instituted changes
are swallowed up by the remaining environment which reinstitutes the status
Building the transformation plan requires documenting the initiative's direction.
This document specifies the goal for the transformation, its general approach
to accomplishing it, criteria that will be used to gauge its progress and
achievement, and the roles and implementing structure that will be put in
place to guide the changeover. In addition to the direction statement, there
should be a statement describing how every employee will participate in making
the changeover happen and how the business will deal with the issue of job
reduction, should it occur. Using these resources a more detailed implementation
plan is generated with schedules for execution. Resources are assembled to
oversee that changeover and the transformation moves to its next milestone.
||Exhibit 4. Milestone 3: Changeover
to an HPLO
||Prepare the business setting. Skill and empower employees
||align business intent and strategy to the HPLO model
||ensure equitable and aligned human resource enabling systems,
||implement information-based decision-making
||acquire and use understanding of customer values in all decision making
||build standardized work processes and establish measurement and feedback
||establish a yearly planning, renewal, and policy deployment apparatus
to leverage learning into improved success
||Maximize enterprise through learning.
||Measure progress and achievement with respect to becoming
||Extract and use learning renewal to accelerate progress
and sustain success.
Milestone 3: Changeover to an HPLO.
The implementation of each changeover will vary based the business's initial
state at the startup of the transformation and the roll out strategy it selects.
However, there is a set of implementing tasks that every transformation will
accomplish (Exhibit 4). Every changeover must begin with preparing the business
setting. This means removing all barriers to transformation and leveraging
its accelerators. Typical tasks include:
||realigning the business's intent (purpose, values, and vision)
and its market strategies to be consistent with the HPLO model,11
||correcting human resource enabling systems (selection, development, appraisal,
promotion, pay, awards, and incentive systems) to ensure equity in sharing
the benefits accrued from becoming an HPLO across contributors and the alignment
of systems to finding, getting, keeping, developing, and leveraging the
|| introducing information-based, rather that "gut check,"
"seat of the pants," or "us too" decision making,
||acquiring insight into customer values and a means for deepening that
insight and maintaining it as current,
||creating mechanisms to incorporate customer values in all business decision
||defining work process standards and establishing measurement and feed-back
loops that gauge value creation and allow individuals, teams, process owners,
function heads, and the business as a whole to appreciate its achievement
and unique contribution, and
||establishing a yearly planning and renewal process that integrates vertically
and horizontally the learning and ideas generated from all business activities.
In the context of making these improvements, employees are prepared for their
expanded participant roles and empowered to implement them. They use their
skills, for example, to carry out the tasks of documenting work processes
and establishing and implementing measurement and feedback systems. These
feedback loops supply employees with the information needed to apply their
problem solving skills to uncover opportunities for improvement, generate
improvement ideas, select best alternatives, implement them, measure their
impact, extract learning, and share that learning across the business. This
"measure, improve, learn, and leverage" cycle is the main source
for maximizing enterprise through learning. It is enabled by the commitment
and skills of all employees and their empowerment to use those skills to advance
business success. It is enabled by a work setting that promotes, facilitates,
and leverages learning better ways for accomplishing every business activity.
It is also enabled by working in cross-functional teams. These contexts build-in
a sensitivity to the cross-linked nature of all operations, improve the effectiveness
of solutions, and facilitate the transfer of learning business wide. This
transfer of learning may also be facilitated by establishing knowledge centers
in core disciplines that cross cut the business (or multiactivity company)
and assume responsibility for organizing, integrating, and disseminating learning
and innovation related to their disciplines.
As the transformation unfolds, its progress and results are monitored, learning
is extracted, and its implementation enhanced. As it succeeds, it builds into
the business the capabilities needed for it to sustain itself as an HPLO.
Most critically, these are the "right" people whose expanded and
deepened involvement in the business enables them to participate in decision
making and meaningfully contribute their perspectives to improving the business
continuously. The yearly planning and renewal cycle and policy deployment
apparatus, fueled by employee participation at every level, guide the business
forward and transformation roles and implementing structures progressively
Summing Up: How It All Works
The beginning and end of an HPLO is people—people with the "right"
stuff. These aligned, teamed, energized, capable, and pioneering individuals
work collectively to conceive a business intent consistent with their personal
core values and cognizant of the dynamics that drives the industry, regions,
and markets within which they seek to do commerce. From this base, they construct
an enterprise and focus themselves singularly on maximizing its success through
learning. Together, they learn, achieve, and periodically renew their concept,
design, and execution of commerce and hone their enterprise into providing their
customers extraordinary value as defined by the customers and extraordinary
benefits to all their stakeholders. As a result of their efforts, they change
markets, impact industries, and transform how commerce is done. Their impact
becomes the benchmark others turn to for new ideas and new sources of success.
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1The roots of these ideas extend at least
to the work of Argyris & Schon (1978), Campbell (1969) and Carkhuff (1981,
1983, 1986, 1988), for example.
2Ghosal and Bartlett are one notable exception.
See Ghosal and Bartlett, 1995.
3Excelling may be understood as progressing
from above average, to best in class, to world class in every aspect of conducting
4In a multiactivity company, each worker anchors in the business s/he implements and teams across that business and each other business in the company's portfolio.
5American Heritage Dictionary, 3rd edition,
Wordstar International Incorporated, 1993.
6HPLOs do have work standards and expect
that performance is aligned with them. But the value of the standard is as a
reference point for improvement and the purpose of adherence is to be able to
extract usable learning that can improve the standard.
7These correlation coefficients are approximately
.27 on average. This means that the word of mouth judgment of others accounts
for less than 8% of their true variance in the results people produce as measured
by objective methods (Heneman, 1986).
8"Single" because it is more likely.
However, a team of like minded leaders is a better starting point.
9A greenfields approach is possible in a
single activity, multi-site business in which each site wholly replicates the
business including all its functions. This is not uncommon in a business that
operates in many geopolitical areas. In such a case, the greenfields site would
be a new region in which the business is being established. In such a case,
the greenfields rollout would be followed by a smart retrofit rollout.
10Consider your own company's experience with
various new initiatives. How many have been integrated into the company over
the long term and had significant impact on other aspects of how it operates?
How many have just passed away with new leadership?
11In a multiactivity company, realignment
also occurs at the parent entity level; otherwise, the transformed business
is not consistent with its parent's direction and approach to commerce.
Published October 2008
© 1996-2008 Vital Enterprises, Hope, Maine 04847
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