Q #248: What is high commitment, high performance management?

Michael Beer

In a recent interview conducted by Martha Lagace for Harvard Business School’s Working Knowledge Web site, Michael Beer explains what differentiates high commitment, high performance (HCHP) firms and their leaders. He is the Cahners-Rabb Professor of Business Administration, Emeritus, at Harvard Business School and author of High Commitment, High Performance: How to Build a Resilient organization for Sustained Advantage, soon-to-be published by Jossey-Bass.

“The leaders manage with a multiple stakeholder perspective. Contrary to many CEOs, HCHP leaders—with support from their boards—define firm purpose as much more than shareholder value, though they all understand profit as an essential outcome.

HCHP firms are able to show sustained performance because they achieve the following three paradoxical goals:

1. Performance alignment: Managing with their head, leaders develop an organizational design, business processes, goals, and measures, and capabilities that are aligned with a focused, winning strategy.

2. Psychological alignment: Managing with their heart, leaders create a firm that provides employees at all levels with a sense of higher purpose, meaning, challenging work, and the capacity to make a difference, something that people desperately need and want but often do not get in organizational life. To accomplish this, HCHP firms establish and institutionalize human resource management policies and practices that look fairly similar.

3. Capacity for learning and change: By keeping their egos in check, leaders of HCHP firms are able to avoid defensiveness and resulting blindness. HCHP firms institutionalize what I call Learning and Governance Systems, a means for having honest, collective, and public conversations with key people at lower levels about what stands in the way of success.

Why do firms need a learning and governance system? Performance and psychological alignment that works for a period of time—sometimes many years—can create rigidities that require challenges. In the book I discuss what leaders must do, be, and know to lead a collective process of learning, and I provide specifications for a Learning and Governance System that can help leaders avoid destruction, their own or their firm.

These three goals are paradoxical. That is, leaders who focus on one often undermine the others. Consider how hardheaded performance alignment can undermine psychological alignment and commitment if the process is too top-down. Or consider how achieving high levels of dedication to the firm (a strong culture) can easily slip into an attitude that resists change. Only if learning and change become an equally valued outcome can the status quo be challenged.”

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To read the complete interview and check out other resources, please visit http://hbswk.hbs.edu/item/6119.html.