Becoming a High-Performance Organization

Alignment does not stop with the Goliaths. The senior management team exercises tremendous influence over the organization, but it cannot proceed alone. The Davids must also turn in a stellar performance.

How can your organization create and maintain high-performance teams ” teams that reach and remain in stage four ”on every level? As shown in Figure 4-2, to attain this goal, many organizations we know pass through five major steps, or phases.

Phase One:	Defining the Business Need
Phase Two:	Structuring the Teams
Phase Three:	Aligning the Teams The senior management team Business teams throughout the organization
Phase Four:	Moving the Message
Phase Five:	Maintaining the Momentum

Figure 4-2: The Five Phases to Becoming a High-Performance Organization.

Let's face it, almost every business book written by a management consultant proposes a process ”usually in five to seven steps ”that will help an unenlightened executive ascend some new stairway to heaven. While organizations headed toward high performance generally pass through the five phases previously outlined, this is not a rigid formula. For example, the phases do not come in neatly packaged modules; they often blend into one another or overlap. This book's aim in presenting this five-phase model is to convey the logic of the process, rather than to prescribe a lockstep solution.

Phase One: Defining the Business Need

High Performance and the Business Connection

An organization's journey to high performance begins with a business need ” specifically , the need to take performance to a new level. This is not some feel-good human-relations gimmick, nor an attempt to latch onto the latest fad du jour . The move from stage one to stage four represents a passionate , results-driven desire to win, continually and decisively, in the marketplace .

The journey around the wheel is not necessarily a rags-to-riches story. An organization does not need to be paralyzed by internal conflict or be an underachiever to aspire to higher performance. In fact, when Joe Campinell, president of L'Oral's consumer products division, decided to align his senior team, his operation was successful by standard financial measures, such as sales, growth, and earnings per share. The senior team worked reasonably well together, and their interactions were not characterized by in-fighting or turf wars. But Campinell realized that, as the division continued to grow, it was becoming increasingly difficult for the senior team to operate cohesively across functions. As he explains:

In the early days of my career, silos were considered positive. But as so many activities became cross-functional, the necessity of working not as individual pieces of a business, but as a totality, became more and more obvious to us. We were in a period of double-digit growth, but I still felt that it was time to start thinking about how we could reach the next level. I didn't want to wait until sales and share growth started to slow before beginning to improve our organizational ability.

Smart executives like Joe Campinell do not wait for tough times to look for ways to improve performance.

Phase Two: Structuring the Teams

Getting Started

Jean-Paul Rigaudeau, the president of Johnson & Johnson (J&J) Germany, is another smart executive who moved his organization around the team-development wheel and, in the process, went from good to far better.

J&J Germany is the largest of several J&J companies, each of which is responsible for all J&J operations in one European country. As at L'Oral, J&J Germany's business was healthy and growing. But, as part of J&J Europe, the issues the German company deals with transcend country boundaries. Increasingly, the German business teams must interface with their counterparts throughout Europe ”and with J&J's worldwide teams ”to ensure strategic compatibility and to leverage resources. And they must operate like a rapid-deployment force, providing quick and decisive responses to issues that arise in Germany and Europe. Rigaudeau believed the performance of his teams in a demanding environment could be improved by going through training in conflict resolution.

One of the first questions that Rigaudeau's team needed to think about was: "What would be the best way to structure your business teams in order to get the greatest leverage from scarce resources?" In other words, given its company strategy and the results it needed to achieve, how should the teams be organized? Around products? Brands? Markets? Specific customers?

In some companies ” especially those with an unclear strategy ”deciding how to structure business teams can be an agonizing process that inevitably leads to a full-scale review of the business strategy. However, this was not the case at J&J Germany. Its strategy was clear, and the three business champion teams ”one organized around the skin-care business, another around the baby-products business, and the third around the feminine sanitary protection business ”were already in place and reflected the product focus of the company's strategy.

Asking the Right Questions

At this point, most senior teams need to answer some basic questions about the business teams that are going to be formed , such as:

• How many members will be on each of the teams?

• Which individuals will be on the teams?

• Who will be the team leader of each team?

• What will the teams be accountable for?

• How will each team's success be measured?

• What will each team member be accountable for?

• How will each team member's success be measured?

• How will team members be rewarded for success?

In a company where new teams are being set up, getting answers to these questions usually requires a great deal of discussion before agreement is reached. These discussions generally involve the senior team and the two levels of management immediately beneath it ” anywhere from thirty to sixty people ”who clearly communicate objectives and ground rules and then brainstorm and evaluate alternatives. It is also a good idea to conduct focus groups with some of these players, because their input and commitment are likely to be key to the success of the effort.

Finding the Answers

In Germany, J&J teams had been operational for some time, so the senior team already knew the answers to most of these questions:

• Each business champion team was composed of six core members; each core member reported directly to the senior team.

• The members represented category management, marketing, sales, trade marketing, finance, and supply chain/operations. These permanent members were joined periodically by other company executives on an ad hoc basis.

• The senior team had already appointed a leader for each team, who was a high-performing individual who had been given responsibility for getting the team to reach closure on open issues.

• The mission of each team had been clearly defined: "The role of business champion teams in Germany is to define short- and mid- term integrated consumer and customer business plans for their business."

• Each team was responsible for the following deliverables: the identification of strategic objectives for its category; the development of strategies for product, innovation, packaging, placement, distribution, promotion, advertising, pricing, and resource allocation.

• Each team's success was measured against market share, profit, and return on investment (ROI).

• Each individual was expected to play a dual role: functional gatekeeper to his or her function and active member of the team, committed to helping it achieve business results. As the gatekeeper, each person was expected to represent the function to the team and the team to the function. This included gathering information about the function's point of view and sharing it with the team; bringing functional expertise to the team; informing the function of the team's decisions, both as a way of sharing information with and obtaining buy-in from their colleagues; and, in the case of disagreement between the function and the team, facilitating closure between the two. The second role was far more critical: In addition to their functional responsibilities, the team members were all accountable for helping the team to achieve the business results with which senior management had charged it.

• The team members' individual success was measured partly by how well they performed against their functional objectives and partly by how well they carried out their duties as a member of the team.

• J&J Germany already had a formula in place, by which a set percentage of each team member's compensation was tied to his or her performance on the team. In companies where new business teams are being created, a typical formula is 15 percent in the first year, 25 percent in the second, and 50 percent in the third year of the team's operation.

Once the ground rules for the J&J teams in Germany had been clearly thought through, it was time to move to Phase Three: Aligning the Teams.

Phase Three: Aligning the Teams

Cascading the Process

At this point, the focus shifted to the senior team to ensure that its goals, roles, protocols, and business relationships were consistent with high-performance requirements and congruent with the company strategy.

Jean-Paul Rigaudeau and his direct reports went through an alignment session similar to that of Art's senior R&D team. And, like Art's team, Rigaudeau's team was scheduled to go through a skill-development session within the next few weeks.

Once the senior team's alignment was complete, it was time to move to the next level ”the three business champion teams that had been set up to meet J&J Germany's business needs.

Selecting Prime Movers

Each individual on a team plays a dual role: that of gatekeeper to his or her function and that of team member. The leader of the team has an even trickier, triple role: In addition to the first two obligations, he or she must assume the role of impartial observer. This entails:

• Confronting the team with candid observations of collective and individual behavior and projecting diagnoses of cause and potential consequences to the team's performance.

• Soliciting team members' input to clarify their intentions and behavior.

• Guiding the team as it makes commitments to collaborate.

• Brokering and recording contracts that define under-standings and agreements about how the team will work together going forward.

• Modeling the cornerstone behaviors of effective interpersonal relationships: candid disclosure and openness to feedback.

An individual with special skills is needed to lead a team. Choosing the leader is the domain of the senior team, whose members need to carefully consider each person's qualifications and skills before appointing a team leader. Figure 4-3 summarizes the characteristics of an effective team leader. To ensure that team leaders possess all the requisite skills, we suggest that, before the teams are aligned, you provide the individuals who have been selected as leaders with formal training to hone their meeting-facilitation, issue-definition, issue-resolution, and other critical skills.

An Effective Team Leader:

Sets the tone:

• Encourages ”and practices ”candor.

• Creates an atmosphere of trust.

• Demonstrates assertive behavior.

• Displays tolerance and flexibility.

• Exhibits a willingness to change/develop.

• Treats team members with respect.

• Is fair and consistent.

Communicates:

• Gives the team the information it needs to do its job.

• Listens to feedback and asks questions.

• Criticizes constructively.

• Gives praise and recognition for success.

Is results-oriented:

• Sets goals and emphasizes them.

• Focuses on follow-up.

• Takes responsibility for getting closure on decisions.

• Facilitates the setting of protocols and holds the group to them.

• Keeps the team focused on how well it is managing conflict.

Represents the team to the organization:

• Speaks knowledgeably about the team's goals and progress.

• Demonstrates loyalty to the team.

• Advocates for the team when appropriate.

Figure 4-3: The Characteristics of an Effective Team Leader.

Moving the Process Down and Around

At J&J Germany, the next two days were spent aligning the three business champion teams. They went through the same process as the senior team, such as gathering data prior to the session, holding up the mirror (looking at the data in full group), depersonalizing the data and describing their team as if they were outside observers, and speaking candidly about the issues they had with one another. Next came the alignment around the four key alignment factors: goals, responsibilities, protocols, and business relationships.

At the end of this alignment, the three teams focused on the level beneath them: How should teams on that level be organized, who should lead them, how should their success be judged and rewarded?

They also devoted time and thought to the message they wanted to convey about the experience they had recently gone through. What should they tell their direct reports was the goal of the two-day session? What went on? What were some of the outcomes ? What differences would they be seeing in the behavior of the business teams? Before the end of the session they had to reach agreement on the amount and type of information they made public, so that the message they sent out was clear and consistent.

The process will continue, down through J&J Germany, until all its business teams are on the road to high performance. That means all cross-functional teams and all interfunctional ones as well. It is a lofty goal, but one that can be accomplished with the determination of senior management and the commitment of the organization. Achieving that commitment is the goal of Phase Four: Moving the Message.

Phase Four: Moving the Message

Opening Up the Dialogue

As with any major organizational change, the key to successfully creating high-performance teams lies in communicating the objectives and obtaining the buy-in of all employees . If you omit this step, you can forget high performance. Communication is not merely about talk, it involves explaining the transformation, testing for understanding, relating it back to everyone's job, and then answering the question: What's in it for me?

At J&J Germany, the communication process was set in motion prior to the alignment sessions, when the senior team met with the next two levels to discuss the business need and the structure of the teams. On Monday and Tuesday, the senior team was aligned; on Wednesday and Thursday, it was the turn of the three business teams. On Friday, all four teams met to share their experiences and to resolve any issues that had come up during the alignments.

The multiteam discussion centered around how much decision-making authority each team would actually have, how often the senior team wanted to meet with them to review results, and what would be the process for escalating conflict that could not be resolved within the team. The meeting served another important purpose: It reassured the teams that senior management was serious about empowering them to achieve business results.

At this point, all four teams scheduled skill-development sessions. The aim was to sharpen the teams' ability to confront issues ”and one another ”head-on and to manage conflict within and outside of the team. After attending a two-day skill development workshop, they possessed the tools necessary for carrying out the agreements they made with one another during the alignment session.

J&J Germany is a work in progress. We will check back with them in a few months, but all indications show that they are well on the way to stage four.

Phase Five: Maintaining the Momentum

Keeping Promises

Practice is over; it is now game time. To move from the "norming" of stage three to the "performing" of stage four, a team must practice what it explored during the alignment session. Promises that were made must be kept, such as letting go of destructive going-in stories, being candid and encouraging candor in others, refusing to play the triangulation game, and putting allegiance to the team above functional self-interest. The contracts that were made between and among individual team members regarding business relationships and responsibilities must become working documents.

An easy way out would be to charge the team's leader with the task of monitoring the group and administering warnings, punishments, and rewards ”in short, of acting as the group's conscience. This type of solution has no place in a stage-three or stage-four team. When beginning the journey around the team-development wheel, each team member made the commitment to serve as a majority of one. That is, each member would not only serve as his or own conscience and that of the team as a whole but each would also honestly and openly hold one another accountable.

The self-assessment protocol is among the most important. Although it is appropriate for the team leader to facilitate the self-assessment sessions, it is up to every team member, individually and collectively, to judge how well it is doing in keeping its promises. It is also incumbent on the team to take corrective action as soon as it realizes that a contract has been broken or a protocol ignored.

Working with a Mentor

One of the most important roles a manager plays is that of mentor. Most executives are accustomed to acting as a coach to their direct reports on an individual basis. But the notion of mentoring a team is often unfamiliar. At the risk of bureaucracy building, we recommend that each business team be assigned a mentor, or coach, from among the managers to which it reports.

The role of the team mentor is multifaceted, because it includes serving as an impartial third party to whom unresolved disputes are escalated, guiding the team through its periodic self-assessment sessions, explaining shifts in company strategy and goals, and assisting in the orientation of new team members. Perhaps most important, the mentor gives the team a feeling of being connected, reminding team members that they are not alone, that they are part of an important, organization-wide drive to excel.

Maintaining Critical Mass

Stage four is not utopia. Even within stage-four teams, some members may not have arrived. The stage-four team is only as strong as its weakest link.

The trick is to ensure that the majority of the team "gets it," so that the team experiences the maximum number of high-performance moments. Paul Michaels, regional president, America, for Masterfoods USA's Mars, Inc., explains how he has cultivated success in teams he has led over the years :

One of the best international teams I've ever worked on had seven players. The team was an incredible well of potential and passion; however, four of them were incredibly high performers and pulled the weight of the others. It's rare that you'll experience a team with all of its members in stage four simultaneously , but when a team has a critical mass who are high performers you can still be wildly successful.

Passing the Baton

It happens even in stage-four teams. Just when a team begins to function as a mini board of directors, management decides to make changes: "You're doing so well, let's put some of you on another team that's not doing as well." Or a team member is promoted. And yet another heads for greener pastures outside the organization. When replacements for these veterans join the team, it is highly unlikely that they'll be stage-four players. If they are completely new to the group, they may be back in stage one, merely trying to figure out whether or not they want to be there. Better to walk softly and carry a big smile!

Many companies have developed protocols for bringing new team members on board and making them contributors in record time. Stryker Corporation's How medica Osteonics Division, which makes orthopedic implants, is organized into teams according to the replacement body part each makes, such as the hip team, the shoulder team, the knee team, and several others. Each team is headed up by a steering team of three executives, and each steering team has a support group called a "Center of Excellence," which reports to it.

Whenever a member of the steering team or the Center of Excellence leaves , his or her replacement is taken by the rest of the group to an off-site orientation session. There, the veterans explain the way the team operates, the issues it deals with, the role the new person's predecessor played , and any other information that will facilitate the integration of the new player.

Similarly, when a member of one of the business teams moves on, the team leader conducts a similar orientation session for his or her replacement.

Clairol Canada is one of many companies that maintain a history, or "bible," for every team. At Clairol, each team document contains the team's charter, protocols or ground rules, relevant operating guidelines, the brand and/or account strategy, the annual operating plan, the minutes of all team meetings, a list of the team's accomplishments, and so on. Before his or her orientation meeting with the team leader, each new addition to the team is expected to read the entire document. He or she is also expected to meet with the person who is leaving and to call each team member to review the business relationships that have been agreed on between their functions.

Finally, to maintain the momentum and keep from backsliding, the newly aligned team needs to have a variety of conflict-resolution skills at its disposal. Those skills will be the subject of Chapter 5.

How Do You Know You've Arrived?

The sirens do not sound to signal a team's arrival in stage four. How, then, does it know that it has reached its maximum potential ”and is poised to continue the journey forward? L'Oral's Joe Campinell describes his feelings now that his team has arrived:

Whether it's in customer service, information services, manufacturing, or any other area ”within L'Oral our division is known for how well its teams work together. Things are out in the open, processes are in place, and people ”even those I once had doubts about ”have stepped out of their silo and become fully cross-functional team members. Especially at the end of the year, when we start thinking about people's performance, we can really point to an enormous change between now and several years ago. There's a feeling that we're moving together to conquer the next hill.