“How is it that some launch new, innovative products while others become stale? Why do customers love certain companies while others languish with poor customer service?” he asks.
And he asks what the real causes are for such differing levels of success among competitors who produce and deliver similar products and services in the same markets.
Resnick, based in Ponte Vedra Beach, is president of Work Systems Associates Inc. His 30 years in organizational development and training include work with EverBank, The Haskell Co., Lockheed Martin, Shell Oil and others. He produces a regular newsletter and posts it at his worksystems.com website.
Resnick focuses on what he calls “the essence of organizational effectiveness.”
Part of the answer is based on an organization's market position, he said.
The quality of its strategic direction, the competitiveness of its products and services, its financial strength and capital resources, its channels of distribution supported by its marketing and sales efforts and customer service all are factors, he said.
Those external factors typically are the most heavily analyzed elements in trying to determine why one company outperforms another, he said.
However, the defining factors are internal, he said. Internal factors can “make as much as a tenfold difference in organizational performance.”
“The difference is not direction, but execution,” he said.
He said there are three factors.
Organizational health is often ignored and frequently misunderstood, but it is profoundly important, he said.
Resnick quoted a book, “The Advantage,” by Patrick Lencioni, characterizing healthy organizations as those with minimal politics, clarity of direction, high morale and high productivity. Healthy organizations do the following:
• Build a healthy leadership team. It is virtually impossible to have a healthy organization if the individuals at the top are not fully aligned and if they do not work in unison with complete candor and openness. Any lack of alignment at this level is multiplied at each successive level of the organization, leading to confusion, internal strife and conflict.
• Provide clarity of direction and priority. Organizations cannot perform well if there is disagreement about the direction, or multiple priorities vying with each other for the limited resources available. Clarity of purpose, direction, core values, organizational measures and the definition of success is essential. When clarity is lacking, departments compete, creating internal dissonance and poor performance.
• Organizational alignment. Clarity of direction is essential but requires that the elements of the organization that drive behavior are fully aligned to that direction. Organizational goals, value systems, work processes and methods, measurement systems, reporting systems and compensation and reward systems must all be aligned to the purpose of the organization. Any misalignment erodes the clarity of purpose and direction.
Resnick writes that it is impossible to win a championship with a team of C-level players.
“A-level players raise the performance bar — they demand more of themselves and of others. The drive for competence is a self-fulfilling prophecy,” he said.
According to Resnick, A-level players only want to work with other A-level players.
B-level players may be more inclined to hire B- or C-level players, especially in a reporting relationship.
“C-level players will attempt to bring the entire organization down to their level of mediocrity,” he said.
“The most effective organizations attract more than their fair share of A-level players” and position them to work together, he said. Here’s how:
• They have clear definitions and specifications for what they want and the level of performance they expect. They do not fill open slots just to maintain a number. “They seek out and attract the finest, which includes their willingness to compensate at the level required to attract the best,” he wrote.
• They recognize that technical skills alone are not adequate. “Competence is the combination of technical skill and cultural fit. These individuals also demonstrate the values and behaviors desired by the organization,” Resnick said. ”Hiring the person who is already hard-wired with the desired values is much more effective than attempting to change a well-established behavioral style that doesn't fit.” He said matching cultural values, emotional intelligence and behavioral indicators are equally important to technical competence in the hiring process.
• They invest in development. “Training alone is not sufficient. Mentoring, stretch projects, rotational assignments and opportunities to grow are built into the organization's assessment and development models,” he said.
The most effective organizations demand and receive high performance.
• They set challenging yet attainable goals. Everyone has stretch goals embedded in the organization's performance management and reward systems.
• The performance bar is continuously raised. This year's performance — for the organization, for work teams and for individuals — is not acceptable next year. The organization challenges itself to continuously be better.
• Recognition and reward systems are well-known and widely used.
“Mediocre performance is not tolerated,” Resnick said.
“The C-level player is simply not a long-term player in this organization. It is not possible to merely ‘get by’ and hide. Poor performance is addressed with both performance improvement programs and with consequences implemented based on the outcomes,” he said.
Resnick asks, what about organizational culture? Isn't culture the greatest driver of behavior?
“Indeed it is. But culture is not an independent variable. It is the outcome of the articulated values, implicit assumptions, behavioral expectations and systems developed by the organization,” he wrote.
“The combination of organizational health, competence and performance creates a high-performing culture,” he said.
Resnick said when organizations are not achieving what they want, they tend to look outward.
“Senior leaders should also conduct an honest internal assessment. The real problem and the solution might be right under their noses,” he said.
Organizational consultant Hal Resnick asks why some companies perform so much better than others in the same markets and under the same business conditions.