With the publication of What Makes a High Performance Organization?, André de Waal concludes his extensive research. This calls for a conversation about HPO pillars and characteristics, excelling versus muddling through, and the mistake of too much ambition: ‘Many organizations fail on the process side, mainly because they undertake too many projects.’

Curiosity. A burning, deep curiosity. That is the fuel that has driven André de Waal for years. Whether he is interviewing a CEO in the Netherlands, Thailand, the US, or Tanzania, he always wants to know exactly why their organization has been excelling for years, or why it hasn’t. Originally a physical chemist, André de Waal has, through his years of research into the High Performance Organization (HPO), never strayed far from his initial field of study. Just as a chemist examines the composition and properties of substances, De Waal studies the composition and properties of organizations that stand out, that perform better than their competitors over the years. He has published the results in 25 books and a few hundred articles. Together, they form an impressive body of literature, built around themes such as performance management, budgeting (abolish it, according to André de Waal), partnerships, and high-performing organizations and leaders. For the past ten years, he has focused mainly on the latter; this spring, he published How to Build a High Performance Organization? The Five Universal Factors of Excellent Performance. He regards this book, as he has said in previous publications, as his ‘HPO Bible.’

André de Waal’s HPO Bar is Set High

In brief, his method: André de Waal first studied hundreds of studies on excellently performing companies; from these, the chemist distilled 189 characteristics that could explain this success; he then tested these characteristics by having written questionnaires completed by managers and employees of thousands of organizations worldwide; after statistical analysis, 35 characteristics remained, which he clustered into five HPO pillars:

• Quality of management,
• Continuous improvement and renewal,
• Long-term focus,
• Openness and action orientation,
• Quality of employees.

You can recognize ‘quality of management’ by characteristics such as integrity, quick action, strong leadership, and internal trust. An organization may fly the HPO flag if it scores at least an 8.5 on each of these five factors for at least five years. That is quite something. And a 7 on one pillar cannot be compensated by a 10 on another. De Waal: ‘Sure, the bar is high. How many organizations in the Netherlands are HPOs? I estimate no more than two percent.’ That these figures are not given by an independent outsider but by the managers and employees themselves is not a problem, according to André de Waal: ‘Essentially, I conduct perception research. Personal grievances can naturally play a role in these assessments. But I rely on the law of large numbers, which corrects any deviations.’

Fierce discussions about scientific approaches and methodological gaps in leading journals and at conferences are part of the process and provide more clarity, De Waal believes. He smiles when we mention critics who said that André de Waal, with his search for ‘characteristics,’ did not uncover cause-and-effect relationships, might suffer from ‘selection bias,’ and might offer recommendations that are of limited use for management practice. He candidly calls classics by predecessors like Tom Peters and Robert Waterman (In Search of Excellence), Jim Collins and Jerry Porras (Good to Great, Built to Last) ‘a mess, scientifically speaking.’ Yet there has always been a high demand for those books, André de Waal agrees. ‘Simply because the question of why one organization excels and another does not fascinates people enormously. Understandable. I wanted to know more about it too.’

Fascinating Behavior

Whether an organization is successful or not largely depends on human behavior, says De Waal; he first explored this thesis in his PhD research, which delved into the behavioral aspects of performance management. ‘Honestly, I didn’t understand behavior, or organizational behavior, at first.’ In the 1980s, Peters and Waterman were almost the first to cautiously venture into the ‘soft’ behavioral component. At the time, the common opinion was that if managers and employees knew what the critical success factors or performance indicators were, they should know how to perform. But why did it often not or barely happen? ‘To explain that, you come directly to motivation, interest, behavior. Those factors still fascinate me to this day.’

After studying chemistry in Leiden and earning an MBA in Boston, André de Waal—‘I had no desire to sit in a lab or go into academia’—worked as a consultant at Arthur Andersen for fifteen years. After his PhD at the Free University of Amsterdam, he moved to the Holland Consulting Group, but did not stay long; in 2002, he was invited to give guest lectures at the University of Amsterdam and simultaneously joined the Maastricht School of Management, where he taught strategic performance management. He did this in many countries because MsM is internationally active with its MBA programs. Wherever André de Waal taught, from South Africa to Bangladesh, from Ecuador to China, he involved his students, often local managers, in his HPO research.

To his own surprise, he inspired others with his HPO work. ‘People came to me wanting to start a company with me. At first, I wasn’t interested at all. Being a boss, managing, that’s not for me. Know thyself, right? But after six months, I gave in. Working from a company, you reach more people. And it’s more powerful than doing everything alone.’ Thus, the HPO Center was born at the end of 2007. André de Waal emphasizes that he is ‘only the academic director’; his colleagues manage and handle commerce. Organizations can turn to the HPO Center for HPO diagnoses ‘that provide insight into the improvement potential of organizations.’ De Waal: ‘We expressly do not intend to second our own HPO consultants for months. We inspire people to want to become HPOs and train them to be HPO coaches so they can work on improvement from within the organization.’

Trust in the Boss

In recent years, he has increasingly focused on HPOs in emerging markets. Remarkably, given the famous culture model of organizational psychologist Geert Hofstede, which indicates the dimensions on which cultures differ, the five pillars of André de Waal prove to be universally valid and applicable (with the only difference being that Asian and African organizations focus significantly more on the long term than Anglo-Saxon organizations). According to De Waal, this generality can be partly explained by the fact that management techniques in organizations in emerging countries increasingly resemble those in Western countries. At most, there are differences in the ‘how’ question, i.e., the choice of improvement methods. When asked, André de Waal gives the example of ‘trust enjoyed by management within the organization,’ an important characteristic of the first HPO pillar, management quality. ‘Wherever you are in the world, trust in your boss is an important characteristic of HPOs. How a manager gains the trust of their people can vary from country to country.’ This could be seen as a limitation of his HPO framework: it indicates exactly where an organization needs to improve, but not how to do it, which depends on the local context.

Not only geographically but also over time, the five HPO pillars prove valid; De Waal compared the characteristics of HPO organizations before and after 1995, and there is little change: ninety percent match. André de Waal affectionately calls his quintet of HPO pillars the ‘evergreens of excellence.’

A Specialist is Not a Manager

In addition to emerging markets, André de Waal has also focused more on the High Performance Individual in recent years. How does he recognize an HPI? ‘For example, by whether they do what they say and by the fire in their eyes, the passion for their work. In 2010, I visited the American Archway Marketing, where the CEO could be found every Wednesday in the call center, wearing a headset. I made the mistake of asking if his people only forwarded calls from important customers to him. Angrily, he told me I didn’t understand HPO at all. It was about every customer. Then he told me he lost sleep over every complaint. He had 5,000 employees, and I said I couldn’t imagine that. That’s when he got really angry. You don’t get it, he snapped. ‘When someone becomes a customer of my organization, they put their trust in me. If they come with a complaint, I have betrayed that trust.’ And yes, he really did lose sleep over it. Such enormous involvement, that’s what true HPIs are.’

In 2010, André de Waal published the lighthearted Ten Rituals for Bad Management, in which he uses stories and cartoons to hold up a mirror to managers. Of the five HPO pillars, two are the most challenging, one of which is the quality of management. One of the rituals that leads to bad management, according to De Waal, is the strange habit of ‘promoting’ specialists to managers: ‘Many managers are not managers at all. A CFO has a broad view, a controller does not; don’t just make that controller a manager, because their capabilities don’t lie there a priori.’

Project Diarrhea

The other pillar many organizations struggle with is ‘continuous improvement and renewal,’ says André de Waal: ‘They mainly fail on the process side. Why is it so difficult to improve them? Because they undertake too many projects. They drown in them. Then everyone is busy, but they never finish those projects properly. If you do twenty projects at once, they all fizzle out; if you limit yourself to three projects, you can complete all three on time and within budget.’ He vividly explains this project diarrhea: ‘Think of a management team of ten people making the annual plan. Each person pushes forward their projects for the coming year. If you come up with one project, you’re not very ambitious. So you name three. Not naming any projects is not an option at all because then you’re a loser. So from that logical, commendable ambition, the MT comes up with thirty projects. A strong leader has the guts to say to his team: this is not a playground, we’ll fight among ourselves for the best project proposals. And I’ll choose the best three. The managers who are left empty-handed will have to come up with better project plans next year.’

Persevere

According to André de Waal, every organization should regularly ask itself: do I want to become an HPO? ‘You can build a strong internal organization that can support customers and other stakeholders well. An organization where it is enjoyable to work. Moreover, you demonstrably score higher profit and revenue figures than your peers; in government and non-profit organizations, you score higher quality with the same budget. After an initial HPO measurement, you see what’s wrong and can formulate improvement points. You don’t look at an absolute number but at the course of a graph that indicates multiple measurement moments. We measure every one and a half to two years, creating a climate where you continuously work on improvement.’ Not that it goes fast immediately; here too, the persistent wins: an HPO score improves by a maximum of half a point per year on average, says De Waal: ‘Indeed, that seems little. But if you persist for several years, you end up with a significant improvement. It’s not about a one-time big improvement but about continuous improvement that you can sustain as an organization.’

At Ballast Nedam, where they have been working on HPO for some time, André de Waal’s framework functions, according to an internal HPO coach, ‘as a kind of umbrella for all the improvement projects we are working on within Ballast Nedam.’ The builder does not call itself an HPO but a ‘BPO’: Better Performing Organization, ‘because better means a process that never stops.’

Keep It Fresh

What if the manager, better performing or not, needs to be replaced? Is it then time for a qualified outsider to come in and shake up the organization with a fresh perspective? Don’t do it, warns De Waal: ‘HPO research shows that one of the characteristics of an HPO organization is that new management is promoted from within. You also read that in American research: the chance that a CEO from outside is still there after three years is only thirty percent. Because they don’t know the organization, and because it is very demotivating for existing managers if someone from outside blocks their progression. And so they, consciously or not, dig in their heels.’ But still, don’t all those internal promotions create a complacent, inward-looking clique of managers? That danger certainly exists, says André de Waal: ‘But you can do something about it. Keep up with your professional literature, regularly attend conferences and seminars, hire external people for that fresh perspective. Years ago, I was asked by the Leiden Academic Hospital to come by. There I met my old boss from Arthur Andersen. He had been there for fifteen years, but his colleague managers had been there much longer. I asked him how they kept it fresh after all those years. ‘That’s exactly why we’re hiring you now,’ he told me then. That’s how they ensured they didn’t stagnate.’