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In a high performing company, threats and challenges are discussed openly, with a sense of action rather than concern or despondency, says Vikram Bhalla.
A few years ago, I found myself working with two companies from the same industry.
They were of the same size and pursuing similar strategies. But the two companies could not have been more different.
One was a really high performing organisation which gave top quartile returns to its shareholders. The other was a really poor performer facing survival challenges.
Interestingly, you did not have to see the financial results of the two companies to know this divergence in performance - you could have just walked into the office and within a few minutes, you would be able to tell that these were two completely different organisations.
In the high performing company, things just felt simple - that's it. There is no better way to describe it. Everyone seemed to know what they were doing.
They could describe their strategy easily. Ideas got rolled out and implemented easily. It just felt simple. In the other company, everything took time and felt complicated. Supply chain felt like rocket science.
Decision making felt complex because everyone had a different interpretation. The strategy felt really complex to understand and describe.
Even just signing in to enter the corporate head office felt like a high security operation.
What made these two companies so vastly different? The answer is leadership.
In the high performing company, the leaders understood what it took to lead and outperform in turbulent times. In fact, there are five specific things that leaders in the high performing company did that made the difference:
Provide simplicity: In the high performing company, everyone could very simply describe what they did and how they created value. It was lucid.
On diving deeper, you could see that their business was as complicated as any other. But not to them.
In that company, the leaders fully appreciated the complexity of the business, but they saw it as their role to provide a simple narrative to their employees so that all the employees knew exactly what they were doing, how they contributed to the company and what excellence meant in their business.
Convey purpose, meaning and context: In the high performing company, I found the leaders seemed to repeat, many times, the same lines on why they were in business, what they were trying to achieve and how they were trying to achieve it.
They were relentless in providing context and purpose. Because of this, I found that employees felt empowered to take decisions without having to always check back with a senior or with a rule book.
They had a sense of what was right and what was needed.
Unchain people and organisations: Most organisations are dying with rules, KPIs, reporting matrixes, processes, meetings, systems, etc.
Many of these actually help serve the average employee - the large numbers - but they shackle the top performers, the game changers.
They create bureaucracies and disengagement. They often make it hard to get simple things done. But in the high performing organisation, the leaders would actively seek out things to stop doing, things that could be simplified, ways to unleash performance, and unchain people.
They allowed people to break the rules. They did not insist on safeguards to protect the organisation from the 1-3 per cent people who may cheat and cut corners, but in fact they designed the organisation to serve and free-up the 97 per cent who want to do good.
Connect the dots: Many companies over time develop internal silos and becoming inward looking.
But in the high performing company, people always seemed connected with each other, very aware of the external world, and effortlessly learning from everywhere.
Leaders in the company connected their people to the outside world, to each other, to facts and perspectives that matters, and then stepped back.
They made exchange of ideas, resources, perspectives a normal way of being, not the exception, and not the responsibility only of top management.
Confront reality, decisively: With the deluge of data and information, many companies can get overwhelmed and keep focusing on the same data and stories of the past.
They start believing things they have always told themselves, even at the risk of really overlooking major threats.
But in the high performing company, performance, threats, challenges were all discussed openly, with a sense of action rather than concern or despondency.
Leaders in this company put the hard facts and discussions on the table, in a matter-of-fact way, to create a sense of action rather than concern.
These five traits of leaders are critical for outperforming companies in the new world.
As evident, since then the high performing company has bought and sold several businesses continuing to create breakout returns for its shareholders.
The other company has been acquired for a fraction of its value.
Vikram Bhalla is senior partner & head, Leadership & Talent Enablement Centre, The Boston Consulting Group.
