What Do High Performance Organizations Have in Common?
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Published:
January 26, 2024
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5 minutes
Achieving sustainable high performance is one of the key goals of any business. While organizational and human capabilities are main drivers, there is no formula or one-fit-all solution to achieve high performance.
It is rather a result of the excellent combination of strong organizational design, structure, processes, technology, leadership, people and culture as well as the external factors that impact the firm.
According to BCG, there are 14 characteristics belonging to five categories that companies with high performance manifest. The five categories are:
It is rather a result of the excellent combination of strong organizational design, structure, processes, technology, leadership, people and culture as well as the external factors that impact the firm.
According to BCG, there are 14 characteristics belonging to five categories that companies with high performance manifest. The five categories are:
- Leadership: effective leadership within the organization. It refers to the ability of leaders to deal with complexity, volatility, and change and whether they possess skills that are matched to future needs.
- Design: high performers often have a lean structure that demonstrates the firm’s strategic focus. It refers to the allocation of structure and resources, the construction of accountabilities, decision rights and collaboration in a thoughtful way.
- People: companies with high performance can translate corporate strategy into powerful people strategy, well-defined employer brand and talent management.
- Change management: high performers are evolutionary and can make strategic adjustments to an increasingly volatile environment.
- Culture and engagement: high performers have corporate culture that facilitates strategic objectives of the firm.
KEY TAKEAWAYS
- High performance organizations have strong leadership, capable human resources, strong lean structure, ability to adapt to large-scale change and effective corporate culture.
- Tesla leads the world in the race to clean energy with its transformative management practices and innovative leadership. Walmart and IKEA enter the next era of their history with effective digital transformation strategies.
Tesla
Tesla is an American multinational automotive and clean energy company known as one of the world’s most innovative organizations. It designs, manufactures and sells electric vehicles, stationary battery energy storage devices and related products and services.
It defeats the wealthy, well-established and powerful firms in the auto industry with its innovative management and implementation of new technologies.
According to its latest data, in 2023, its vehicle deliveries totaled 1.81 million and production reached 1.85 million.
Tesla’s total revenue in the third quarter of 2023 hit $23.4 billion. The revenue was driven by growth in vehicle deliveries and other parts of the business and reduced average selling price.
It is planning to grow production quickly to achieve the 50% CAGR target set in early 2021.
Tesla drives exceptional performance and social impacts for its “revolutionary approach to management”, according to Forbes.
Its transformative management practices that are attributed to its success include the integration of mission, goal and workplace. Tesla’s mission to “save the planet” through the massive implementation of electric vehicles is key to everything it does, in terms of both goal and workplace.
This allows the company to operate with a leaner and less bureaucratic management style compared to traditional companies. This has resulted in a “cult-like” enthusiasm among its customers, enabling the company to attract the best talent.
Transformative management practices also help the firm facilitate exponential innovation and massive financing, according to the magazine.
At Tesla, all managers and staff are encouraged to work as entrepreneurs. They can use the budget on specific projects. CEO Elon Musk works very long hours and actively gets involved in solving problems in the factory with his staff.
The company also transformed Agile management by using “impromptu teams and mobs” assisted by algorithms and AI. This practice facilitates rapid adaptation to challenges and enhancing agility throughout the company.
Walmart has been working to accelerate growth by shifting to omnichannel. It delivers a seamless customer-centric experience that integrates e-commerce and retail stores. This helps customers save their time and improves their experience.
The company has implemented digital transformation by investing on ecommerce and supply chain technologies as well as supply chain infrastructure.
While adopting digital transformation, Walmart is still consistent with their low-cost strategy. It concentrates on creating an efficient supply chain to cut costs. In particular, it adopted the use of demand management, inventory optimization, and replenishment applications. It also spends money on automizing the warehouse management system.
The company has gone through a digital transformation to enter the new chapter of its history.
In an interview with Harvard Business Review in 2021, Barbara Martin Coppola, then Chief Digital Officer of Ingka Group, shared that IKEA was transforming its business.
One of its focuses was looking for new ways to deliver new offers to customers and new ways to run the business. To that end, digital was adopted in every aspect of IKEA.
“Digital is a way of working, making decisions, and managing the company,” she said.
First they revamped all interaction with customers, especially online channels. IKEA offered new and improved navigation and search functions to improve user experience online. This contributed to a growth in ecommerce revenues from 7% of revenue to 31% in 3 years.
The company also used data to modernize inventory management, logistics, fulfillment, and supply chain. While reinventing itself, IKEA still kept its DNA intact which includes culture, values and vision of “creating a better everyday life for the many people”.
IKEA also aimed to maintain its well-established trust with customers when it comes to the use of user data. It adopted the Customer Data Promise which it committed to “putting people first in all data-driven processes,” Coppola said.
With its digital transformation strategy, IKEA tripled ecommerce levels in three years.
It defeats the wealthy, well-established and powerful firms in the auto industry with its innovative management and implementation of new technologies.
According to its latest data, in 2023, its vehicle deliveries totaled 1.81 million and production reached 1.85 million.
Tesla’s total revenue in the third quarter of 2023 hit $23.4 billion. The revenue was driven by growth in vehicle deliveries and other parts of the business and reduced average selling price.
It is planning to grow production quickly to achieve the 50% CAGR target set in early 2021.
Tesla drives exceptional performance and social impacts for its “revolutionary approach to management”, according to Forbes.
Its transformative management practices that are attributed to its success include the integration of mission, goal and workplace. Tesla’s mission to “save the planet” through the massive implementation of electric vehicles is key to everything it does, in terms of both goal and workplace.
This allows the company to operate with a leaner and less bureaucratic management style compared to traditional companies. This has resulted in a “cult-like” enthusiasm among its customers, enabling the company to attract the best talent.
Transformative management practices also help the firm facilitate exponential innovation and massive financing, according to the magazine.
At Tesla, all managers and staff are encouraged to work as entrepreneurs. They can use the budget on specific projects. CEO Elon Musk works very long hours and actively gets involved in solving problems in the factory with his staff.
The company also transformed Agile management by using “impromptu teams and mobs” assisted by algorithms and AI. This practice facilitates rapid adaptation to challenges and enhancing agility throughout the company.
Walmart
With 11,500 stores operating in 28 countries, Walmart has projected sales of $611.3 billion in 2023. Though it is a legacy business, it does not use price gouging as a means to gain favor with investors. Instead, it leverages its own strengths with forward thinking and a customer-centric mindset.Walmart has been working to accelerate growth by shifting to omnichannel. It delivers a seamless customer-centric experience that integrates e-commerce and retail stores. This helps customers save their time and improves their experience.
The company has implemented digital transformation by investing on ecommerce and supply chain technologies as well as supply chain infrastructure.
While adopting digital transformation, Walmart is still consistent with their low-cost strategy. It concentrates on creating an efficient supply chain to cut costs. In particular, it adopted the use of demand management, inventory optimization, and replenishment applications. It also spends money on automizing the warehouse management system.
IKEA
IKEA is one of the world’s most renowned retailers selling distinct brands of home goods to customers. Originating from southern Sweden, the company’s values center around hard work, humbleness, being down to earth, and a strong entrepreneurial spirit.The company has gone through a digital transformation to enter the new chapter of its history.
In an interview with Harvard Business Review in 2021, Barbara Martin Coppola, then Chief Digital Officer of Ingka Group, shared that IKEA was transforming its business.
One of its focuses was looking for new ways to deliver new offers to customers and new ways to run the business. To that end, digital was adopted in every aspect of IKEA.
“Digital is a way of working, making decisions, and managing the company,” she said.
First they revamped all interaction with customers, especially online channels. IKEA offered new and improved navigation and search functions to improve user experience online. This contributed to a growth in ecommerce revenues from 7% of revenue to 31% in 3 years.
The company also used data to modernize inventory management, logistics, fulfillment, and supply chain. While reinventing itself, IKEA still kept its DNA intact which includes culture, values and vision of “creating a better everyday life for the many people”.
IKEA also aimed to maintain its well-established trust with customers when it comes to the use of user data. It adopted the Customer Data Promise which it committed to “putting people first in all data-driven processes,” Coppola said.
With its digital transformation strategy, IKEA tripled ecommerce levels in three years.
Final Thoughts
While there are many characteristics and elements that can be attributed to the high performance of an organization, human capabilities and strategy plays an important role.
The three case studies we picked show the importance of having innovative leadership and transformative management practices to adapt to changes in an increasingly competitive business landscape.
At Consultport, we take pride in our exceptional team of talented consultants who help firms elevate their performance to new heights. If you aspire to be part of our dynamic team and join exciting projects with leading organizations all over the world, don’t hesitate to contact us.
The three case studies we picked show the importance of having innovative leadership and transformative management practices to adapt to changes in an increasingly competitive business landscape.
At Consultport, we take pride in our exceptional team of talented consultants who help firms elevate their performance to new heights. If you aspire to be part of our dynamic team and join exciting projects with leading organizations all over the world, don’t hesitate to contact us.
