What Makes a High-Performing Organization? Q&A with Julia Ritchie (Part I)
In recent blog posts, Susan Fairchild, director of applied research, has described our ongoing work to create an early-warning system that tracks student performance against a set of New York City graduation benchmarks. In order to graduate students ready for college and career, she argues, urban schools must be high-performing organizations, skilled at not merely "putting out small fires" but also working proactively to raise and maintain achievement of all students.
At New Visions, our goal is to help our network schools become high-performing. We recently asked Julia Ritchie, president of Ritchie | Tye Consulting, an organizational development firm, to explain the qualities of high-performing organizations (HPOs). In this post, Julia describes the characteristics common to all HPOs; in a subsequent post, she’ll explore how we might adapt the literature on HPOs to apply to the school environment.
At the most basic level, what constitutes a high-performing organization?
People have been studying what makes effective organizations for decades. For a quick and reliable read, LeaderSphere created a terrific anthology of the evolution of a number of these theoretical models. I have been particularly influenced by the Burke-Litwin Causal Model and by Peter Senge’s work on learning organizations. The Burke-Litwin model distinguishes between “transformational change” and “transactional” change. Senge's work really fostered the whole notion of evidence-based practice, and more importantly, the need for examination and reflection. Both models emphasize the importance of leadership in driving culture, strategy, practice, and effectiveness.
In a nutshell, a high-performing organization is able to learn and adapt by taking stock of how it is performing vis-à-vis the external environment. It must have the proper infrastructure and resources (funding, talent and time), and a culture that encourages reflection and learning. This can be particularly challenging for nonprofits, which are often inadequately resourced to be adaptive. This is a real paradox given that the mission of nonprofits is to address the most challenging social issues we face today.
What are the common traits that high-performing organizations share?
HPOs are able to cope with and exploit constantly changing circumstances inside and outside of the institution. They do so by executing on what I call the three A’s: alignment, adaptability, and agility.
HPOs align with the changes occurring outside of their organization, between their own strengths and the areas where their impacts can be felt most.
HPOs can adapt to changes outside the organization, including demographic changes, technological advancements, and changes in funding trends. Not only are HPOs able to adapt, but they are driving change through innovation and by developing alternative approaches that maximize their impact. They use real-time data to make changes on the front line as well as build a body of evidence-based practices that inform the field.
And finally, HPOs are agile. They can respond to these changes swiftly, effectively and in real time. They are nimble while remaining focused on their intended impact.
I believe HPOs need to manifest all three characteristics.
Can organizations assess how they are doing? What indicators should they be looking at?
Absolutely, in fact continuous assessment is a hallmark of a high-performing organization. The four dimensions of an HPO that include key performance indicators (and therefore can be assessed) are its strategy(s), adaptive leadership, evidence-based practices and resource capacity, as outlined in the graphic below.
Let me say a little bit about each of these dimensions. To help illustrate, let's imagine a nonprofit whose mission is to address homelessness in a particular city.
Strategy is the process of determining the optimal approaches to achieving the organization's long-term impact (in our example, reducing homelessness). It is about making a strategic choice about where to invest based on where the organization is best positioned to have an impact. Some think strategic planning limits an organization's ability to be adaptive, but I'd argue the contrary. Organizations that have a shared understanding of their intended impact and a blueprint for how that change occurs, an articulated "theory of change," are actually better positioned to assess their strategies and make choices about what they do and don't do.
For instance, an organization working to end homelessness may aspire to see the following transformation: a world where all people are able to live safely and independently. This complex social change relies on multiple conditions to be in place in order for this change to be realized, e.g., economic security, available/affordable housing, mental health care, to name just a few. The organization is one of many actors in this complex ecosystem trying to effect change. The challenge is that this organization needs to identify where and how it is best positioned to have an impact in that ecosystem.
A strategic plan is a short-term road map that articulates how the organization is going to advance its long-term objectives over the next three to five years. For instance, continuing with our example, this organization may choose to pilot a new transitional housing program or move into drug rehabilitation and/or job training program for homeless women.
But a strategy is only as good as it is understood throughout the organization. Does our nonprofit have a clearly articulated intended impact statement describing the outcomes it is seeking? Can everyone at the organization explain why it is pursuing this strategy? Are they assessing the effectiveness of this strategy in light of the changing environment? How equipped are they to modify or change their strategy if preliminary results show a lesser impact than they expected?
The second dimension of HPOs is adaptive leadership, which refers to the ability to model and implement change. By definition, adaptive leadership is perilous; the challenges it addresses require experimentation, the discovery of new knowledge, and various adjustments throughout the organization. For change to occur, participants sometimes have to be disloyal to their past and some of the constructs and relationships that shaped it. Therefore, leadership must be able to model this capacity.
Adaptive leadership – exemplified at all levels of the organization – requires people to examine what's at stake and be willing to let go of doing what is known or comfortable. Addressing entrenched social issues, such as homelessness, is difficult and challenging work where there are no easy answers, or we would have solved it already. Therefore, adaptive leaders must be skeptical of easy solutions while at the same time encourage innovation and risk-taking.
Evidence-based practice, our third dimension of the high-performance model, is found in adpative organizations that collect information about the external environment and their own internal effectiveness on an ongoing basis. Such organizations have the capacity and commitment to learn from data, to make decisions rooted in data, to tolerate experimentation, and to foster a learning culture.
For instance, our homelessness nonprofit would be regularly tracking the external conditions, e.g., available housing units, real estate values, community development, and even healthcare trends among others on an annual basis to determine whether the strategy it is utilizing will be effective.
Additionally, an HPO will have internal evaluation tools for collecting, monitoring and assessing the effectiveness of its programs and services, e.g., number of clients placed in housing, stability and retention rates, as well as, more sophisticated indicators about improvements in client's standard of living, employment, children's education outcomes as a result of stable and secure housing.
Most importantly, the HPO will have routinized practices for reflecting on the performance of the organization against these metrics that enable on-going learning, improved problem-solving, and real-time adaptation of strategy to improve organizational effectiveness.
The last characteristic of a high performing organization is its resource capacity, which refers to the organization’s infrastructure, its operational and administrative systems that are critical to enabling it to function effectively and efficiently to implement its work. We know the hazards of not paying attention to the infrastructure of nonprofit organizations. What I am referring to is whether the organization has sufficient financial resources, as well as whether it has a talented and agile work force, up-to-date technology, communication capability, and adequate facilities.
Resource capacity also refers to the systems, procedures, and practices of an organization, for instance, the recruitment and onboarding of employees, professional development and performance management systems that are aligned with the organization’s long-term objectives and enterprise strategies. Financial systems must be transparent and employees must understand how resource allocation is determined. And, of course, this allocation of resources should mirror the organization's espoused priorities. Finally, communication and technology must enable the organization to quickly, effectively share information and store information for easy retrieval that promotes collaboration, organization learning, and innovation.
Each dimension that I have described is necessary, but not sufficient in-and-by itself. These are emergent properties that must all be present in order for an organization to be high performing.
Julia Ritchie, M.A., Ed.M., LCSW is founder and president of Ritchie | Tye Consulting and an expert on organizational development, performance management and strategic planning.