How businesses treat their people has a
demonstrable effect on the bottom line. But few executives know how to
encourage the kind of high-performance work practices that will help employees
create value for their companies. A comprehensive new human-performance
framework can help organizations invest in their people so that
performance—and, ultimately, overall business value—will increase in a
consistent, predictable way. By Terence V. Neill and Martin H.
Borell Outlook Journal, June 1999
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Download this article (PDF, 646K)
PDF Help "People are critical," an executive told researchers at
Accenture during a recent survey. "They are the single most important reason
for the success or failure of our company. Motivated, educated, hardworking,
enthusiastic—with that we go forward. Without that, we stand still."
Yet if this widely echoed sentiment is true, why aren't
people managed more optimally in today's organizations? Why isn't human
performance directed more effectively toward overall business performance and
the bottom line? We talk about "strategic IT" all the time. Why not "strategic
human performance"?
Finding the right answers will be essential to the success
of every business in the next century. According to "Vision 2010: Designing
tomorrow's organization," a report co-written by Accenture and the Economist
Intelligence Unit, 75 percent of the executives surveyed globally ranked human
performance ahead of productivity and technology as a source of competitive
strength. 80 percent believed that "the ability to attract and retain the best
people" will be the primary force influencing business strategy by the year
2010.
Organizations today are moving from a state of workforce
surplus to workforce shortage, particularly of professionals, or "knowledge
workers." To remain competitive, they must not only create a work culture that
attracts good people, they must also design a human-performance environment
that, in spite of potential shortages, optimizes the productivity of their
workforce and its impact on the whole business.
Two major problems stand in the way. First, although
corporate executives are beginning to acknowledge the critical contributions of
their workforces to overall business performance, their actions often reflect a
much different, and much more deeply held, attitude: Labor is simply another
means of production to be secured as cheaply and used as efficiently as
possible—and then disposed of as quickly as possible when economic factors
dictate. When executives think workforce, they think human resources; when they
think workforce improvement, they think training. In other words, they think
costs.
But even if all business executives everywhere in the world
were true believers (and there are, in fact, signs of an increasing awareness
of workforce issues), there would still be the second problem: To date, there
has been no comprehensive way to show companies how human performance can be
integrated into the totality of their businesses.
Planetary Alignment How then does a company invest in human-performance
improvement, and how can it trace those investments to strategic and economic
benefit? The place to begin is with a framework that would give businesspeople
a common understanding of human performance. Implemented with wisdom and
compassion, this framework would create a common development structure for the
design of a human-performance environment linked directly to every part of the
business—to technological and business innovation, strategic goals and economic
success.
A convergence of a number of academic, economic and
workforce factors has created a kind of "alignment of the planets," making this
the right time for a new approach to human performance in the workplace. The
intellectual raw material is there. There is several decades' worth of
research—from fields such as education, psychology, sociology, contemporary
anthropology and organizational behavior—into what motivates people, what they
need to succeed and how they can be helped to work successfully within large
organizations, including businesses. Impetus has also come from earlier work in
the 1990s about the value of intangible assets, particularly knowledge and the
people who hold that knowledge. Moreover, these issues are gaining credibility
as executives hear the message about the centrality of the worker from business
gurus, academics and industry leaders.
A second factor is emerging. Companies have seen concrete
examples of what happens when corporate initiatives are launched without
properly taking people into consideration. A major oil company embarked on a
bold new strategy to move into different kinds of markets. Two years later, it
had to admit defeat and return to its traditional business because the
company's culture—its people—had not only resisted the strategy but actively
undermined it. A products company implemented new enterprise application
software. The technology worked, but after the conversion, the company
discovered it had given inadequate attention to how employees would actually
interact with the new technology. The business effectively shut down for almost
a week: No product left the company.
You have probably heard similar stories: "The strategies
were right, the processes were right, the technology was right. We forgot about
the people."
Understanding the Linkages The Human Performance Framework (see chart) is not the only
way to look at the structure of a business. It is, however, an intentionally
human-centric approach. It puts people—specifically the abilities and
motivations that drive human performance—at the center, and illustrates the
richness of the entire system of human performance. At the same time, the
framework strongly affirms that human performance cannot be understood in
isolation. Every business is a complex, adaptive system—like an ecosystem—and
no part of it can be understood without reference to all other parts.
In this way, the individual is surrounded by an
organization design that either enables or inhibits the link between
ability/motivation and the actual behaviors that form a part of overall
business performance. The organization layer of the framework includes a number
of components that we call "influencers." They are, for the most part,
well-known and well-documented sets of activities that influence performance:
structure, culture, recruiting, performance management and support, training,
leadership and communications.
In turn, those organizational influencers are themselves
influenced by the other layers: the operations layer of the company, especially
the processes and the enabling technologies; the strategy layer, which includes
the corporate and business unit strategy as well as the organization strategy;
and the external environment layer, where the influencers cannot be controlled
but must be accounted for in any performance design.
Human Performance Framework   The Human Performance
Framework provides a holistic approach for understanding all of the forces and
elements that impact an individual's abilities and motivations. It is only by
understanding those forces in their totality that an organization can optimize
human performance.
What does the framework tell us that
we didn't already know? In fact, there is nothing new in any isolated aspect of
the framework. What is new is the holistic approach it provides to the
challenge of optimizing human performance. No one piece by itself will
accomplish the goal. Just as an understanding of the whole human anatomy is
required for a physician to diagnose and treat ailments, so is an understanding
of the entire system of human performance necessary for an executive to
diagnose a company's condition and make it healthy.
The Human Performance Framework has a number of benefits:
Common Language and Understanding. The
Human Performance Framework provides a common language by which people in
different functions within a company can discuss the human dimension. The
common understanding of what human performance really means can lead to some
significant insights. Recently, when we produced a diagram of the framework
during a discussion with a senior government administrator, he immediately
reached out and put his finger on the "motivation" box. "There," he said, "is
our problem. We've been concentrating on helping people learn new skills to do
new things, but they're not motivated to do them. So we're not being
successful."
A Rigorous Organizing Principle. As
with any field in its infancy, the study of human and organizational
performance has sometimes been seen as more art than science: If approaches to
technology have been "hard," then approaches to people have been "soft." This
is often justified by a belief in the unpredictable nature of people, and in
the need to influence human performance not as engineers but as something more
like orchestra conductors or theater directors.
As it turns out, though, the field just hadn't yet acquired
the experience necessary to begin synthesizing repeatable frameworks for
solutions. Indeed, there is a great deal of science behind the Human
Performance Framework. To be sure, people are not inanimate "technology" boxes.
But we know a lot about what makes people tick, and the framework organizes
that knowledge into something we can apply with rigor.
Tracking the Interactions. The
framework ensures that complex interactions, or actions with multiple
consequences, are not ignored when designing a new performance environment. For
example, the chances that recently redesigned processes at the United States
Postal Service would succeed were increased by using the framework as a guide.
With this, managers could document where the effects of the process change were
going to be felt most strongly, and determine which management
interventions—based on the organization layer of the framework—would offer the
most benefits for the investment.
Similarly complex interactions came into play recently at
Continental Airlines, where President & Chief Operating Officer Greg
Brenneman has been overseeing a radical organization transformation and
turnaround. As Brenneman says in a Harvard Business Review article, when he
took over the ailing airline he "had never seen a company as dysfunctional as
Continental." Interestingly, he puts the problem in very human terms. Because
the company had been through so many changes in top leadership, the workforce
had adopted the tactic of doing nothing during the seemingly perpetual
management shake-up. "Managers were paralyzed by anxiety," he says.
The turnaround at Continental Airlines is a classic story
of tracking the interactions and influences, especially the human ones, within
the whole system of business performance. Straightforward corporate and
operational strategies were coupled with some very sensitive and powerful
actions to lead the people of Continental and to enable them to perform
optimally. Strategy had to be clear, but its implementation had to be even
clearer.
A Diagnostic Tool.
The framework acts as a "completeness check" for a human-performance
environment. It is being used in many organizations to assess or diagnose a
current situation to determine where a company should focus its initial
efforts, and where efforts should be directed in the future. At the United
States Postal Service, for example, the framework is being used to establish a
human-performance baseline for the organization, which will allow managers to
measure the effects of investments in new processes, technologies and
management influence programs.
Consistent, Standard Development. The
framework should not be thought of as a methodology for designing a
human-performance solution. It is, however, a framework to guide
development—again, serving as a completeness check, making sure that all
necessary and appropriate aspects of the entire system of performance are being
considered.
At a major health insurance organization, the Human
Performance Framework permitted the tracking and integration of the many and
varied pieces of organizational change. This company was facing both strategic
change and the need to update its aging technology. The framework allowed the
diagnosis of other problems that might have been overlooked. The corporate
culture represented one of the most significant barriers to change. This
company had dominated its market for many years. Success had only led to
further entrenchment of a culture that revered tradition, was fascinated by the
process of problem analysis and resisted change. Given the new strategy, the
framework helped identify the need for a new culture that encouraged action and
risk-taking rather than tradition and risk-aversion.
To move the workforce toward the future performance
environment, the company focused on all relevant aspects of the organization
layer of the framework. Organization structure and job design, for example,
were critically important to support the new business capability that was being
created in accordance with the strategic vision of the company. A focus on
resourcing and performance management led to new programs in
staffing/recruiting, rewards/compensation and development to support the new
jobs and the new organization. Training and performance support have also shown
dramatic returns on investment.
The bottom line for this company: In its current
performance environment, the typical amount of time required for people to
reach 80 percent proficiency on job tasks ranges from 9 to 12 months. The
company is now well on its way toward its target of lowering that time to three
months. All work focused on optimizing human performance has been conducted not
as single-point, haphazard steps, but rather in the context of the company's
strategic goals—and explicitly directed toward those goals.
What is the ultimate payoff of a rigorous and holistic
approach to human performance? Companies are only now discovering the economic
benefits. One research study looked at a broad range of organizational
practices, such as employee skills, organizational structures and employee
motivation. These "high-performance work practices" had a profound impact on
overall organizational success, according to the study. One standard deviation
increase in such practices could be traced to a 7.05 percent decrease in
turnover and, on a per employee basis, $27,044 more in sales, and $18,641 and
$3,814 more in market value and profits, respectively. Another related study
was even more dramatic, showing that one standard deviation increase in
high-performance work practices resulted in an increase in share-holder wealth
of more than $40,000 per employee. For companies with large workforces, those
are significant numbers.
Beyond these measurable benefits, however, are benefits
that relate more to altering the entire attitude with which people are viewed
and treated within organizations. The history of the human-performance field,
after all, has not always been exemplary. The Industrial Age, factory insights
of F. W. Taylor—where people were treated more like machines than humans—were
in too many cases transferred wholesale into the service industry and the
Information Age. Inevitably, people were considered too little or too late.
Recent history has shown us that technological and strategic initiatives fail
when they are placed in the center of a company's field of vision, to the
exclusion of the people who will operate that technology and carry out that
strategy. The biggest names in the reengineering movement of several years back
admitted, belatedly, that most reengineering initiatives failed because they
left out the people.
The Human Performance Framework takes the simple step of
placing people at the center, and then asking, "How can I enable these people
to succeed, not just for themselves, but for the entire organization?" If we
can—with both rigor and compassion–direct the performance of people toward the
strategic ends of the business, we will finally and truly tap into the value of
that most important asset.
This article is based on two studies: "Vision 2010:
Designing tomorrow's organization," written by the Economist
Intelligence Unit in cooperation with Accenture, and "Global human
performance study," written by Accenture.
Terence Neill is the managing partner
of the Accenture Change Management Competency. In that role, he is responsible
for developing the firm's global approaches for managing complex business
change and for building measurable human and organizational performance on a
large scale. Mr. Neill is based in London
.
Martin
Borell is a partner in the Accenture Change Management Competency.
With a background in adult learning and organizational development, Mr. Borell
has focused on change management at the firm, serving as a competency leader in
New York and Florida, and within the Utilities Industry Segment and Cross
Market Units. He is based in St. Petersburg, Florida.
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