Just as marketers use four Ps for business-marketing strategies -- price, product, place and promotion -- employers can, and should, adopt a different list of Ps to become high-performing organizations.
Is there a business-school graduate who can't recite the four Ps of the marketing mix in their sleep? Price, product, place and promotion remain as relevant today as they've always been, providing the framework that underlies organizational marketing strategies and programming.
But move over, marketing mix. A new survey reveals another set of four Ps -- a "performance mix" that turns up among the winning practices of standout business organizations.
The Seattle-based Institute for Corporate Productivity brings together a fast-growing network of high-performance organizations (defined by their five-year achievements in revenue growth, market share, profitability and customer satisfaction).
Focusing its cutting-edge research on identifying the traits that differentiate those consistently high market performers from their less-successful counterparts, i4cp identified domains that it calls the hallmarks of high-performing companies: strategies, leadership, talent, culture and market focus.
In its 2011 High-Performance Organizations Survey, completed by 914 business leaders from organizations representing companies of varied industries and sizes, i4cp took a deep dive into the domains that characterize high performers.
Responses to questions within each of those defining core elements led to greater insight into top companies and how they function. In fact, the survey, which was conducted in conjunction with Human Resource Executive, revealed interactions among the domains that can be described by four Ps -- a performance mix that high-performing organizations apply:
a) They take a proactive approach.
b) They strive to be predictive.
c) Their cultures are pervasive.
d) They reward performance.
Know Your Customers
Establishing a mutually rewarding and lasting relationship lies at the heart of good customer service and drives satisfaction and retention of those customers. Organizations that consistently perform well take a more assertive approach when it comes to getting to know the consumers of their good and services.
A number of survey inquiries underscore the differences in the ways high-performing organizations regard their customers and examine their needs. When compared with lower performers' responses, significant gaps revealed that the high performers are much more likely to say that they:
a) Organize their internal processes to best meet customer needs,
b) Organize their functions and departments to maximize value to customers,
c) Aspire to be the best providers of value for their customers,
d) Use highly developed strategies to determine customer's expectations, and
e) Communicate customer information internally so that employees can work more effectively.
Demonstrating that they take customer insight to the uppermost reaches of their firms, high performers also differ markedly from lower performers in describing their leaders as having in-depth knowledge of customers. Further, the top companies confirm that customer insights factor into their development of business strategy.
Look to the Future
High-performing organizations look ahead more than lower performers do, and they use predictive data to drive long-term orientations in multiple areas. They inform product and service design with predictive insights in order to meet customer needs over long time periods, and they identify and address future customer needs.
In fact, the survey respondents representing high performers told i4cp that they do a good job of assessing those future needs, and that their firms are committed to innovation and ready to meet new challenges.
The sense of organizations with workforces that are perpetually facing forward and determined to meet the future head-on is almost palpable in the survey results that separate the higher and lower performers. Top companies are far more likely to say they respond well to changes -- those that directly affect the market, as well as the business environment in general.
Further, they see their cultures as being adaptive to market changes, a key trait of a company that is able to look ahead and navigate the volatility of our risk-laden marketplace, making the kind of rapid shifts that turn potential perils into profits.
High-performing companies carry through that penchant for the predictive when it comes to process design, too. They are far more likely to say they craft organizational processes for flexibility, along with efficiency and effectiveness.
Certainly, designing for process flexibility requires prediction and anticipation of changes in technology, customer preferences, supply chains, talent capabilities, market circumstances and the many other factors that shape the business environment.
One Culture for All
What, exactly, is a pervasive culture? As they reviewed the survey data, researchers at i4cp discovered that high market performers differ from less-successful organizations in their answers to questions that, collectively, paint a clear picture: The top firms present the same face internally that they present externally. Their culture is porous. Their values permeate the organization.
Together, these are empowering characteristics because they mean that the brand identity the world sees is consistent with the employee value proposition and the strategies that define and achieve business objectives.
How do we know that high-performing organizations have such pervasive cultures? In the area of market focus, the trait is underscored by high performers' affirmation that their brand "accurately reflects how we operate as an organization." When the topic shifts to strategy, gaps in the responses of higher and lower performers offer even stronger signals. "Our organization's publicly stated philosophy is consistent with its strategy," say the top firms. They are also more likely to describe their strategies as "clear and well thought out."
They rest assured that their employees understand the strategy because it's clearly communicated to all levels of the organization. Further, workers have line-of-sight understanding of the ways strategy affects their individual roles. In a pervasive culture, everyone is on the same page. They know who they are, what they're about and where they're going.
A key facilitator of pervasive cultures is communication, and high performers' responses demonstrate that they get this. Leaders in the top companies deliver specific feedback to their employees, and they make sure it's done in a timely manner. They clearly communicate what the organization's goals are and encourage workers to maximize their productivity.
For their part, employees in high-performing organizations enjoy open communication with the managers and leaders who have decision-making authority. Workers feel free to talk about company policies, spending and strategies. High-performing companies make sure their employees get information they need about customers so that they can do their jobs better.
The top firms also are more likely to keep up with advances in technology, enabling faster and more flexible communication across their organizations and more efficient knowledge management. The powerful result is higher levels of employee engagement, a recognized component of individual and organizational performance.
Reward the Performers
In companies that make their strategies transparent and topics for open and ongoing discussion across all organizational levels, expectations and objectives become clear. Because workers in such high-performing organizations understand the connection between their jobs and business strategies, the behaviors needed to accomplish company objectives are more readily apparent, too. That makes it easier to ensure that workers are rewarded for their positive actions that contribute to organizational performance.
High-performing companies outstrip lower performers in their approaches to performance management, the survey results confirm. Top organizations have good systems in place for gauging workers' performance, and their appraisals are based on objective data instead of managers' judgments. Performance-management processes are consistent across the organization, too. Perhaps most importantly, high market performers go the extra mile and evaluate the quality of their performance appraisals to ensure that the system functions fairly and effectively.
Responses to the survey statement that "our compensation and rewards system supports employee performance" reflected one of the larger gaps noted between high- and low- performing organizations. The top firms understand that reinforcing desired behaviors in both monetary and non-monetary ways can generate powerful results, and they act on that knowledge.
High-performing organizations recognize that employees' capabilities drive performance. Those companies make sure that performance appraisals include plans for workers' development during the near term. They give employees specific goals for learning and skill-building, incorporating their progress toward those objectives into the next appraisal period. The short-term focus keeps development front of mind and ties it to performance.
Not only do the high-performing organizations have strong mechanisms in place to track and improve individual performance, but they also confirm that they track and assess overall organizational performance. That devotion to measurement and dedication to continuous improvement ultimately produce tangible results in revenue generation, profitability, customer satisfaction and market share.
Blending the Elements
The four Ps of the performance mix are not independent elements. Rather, they interact closely. For instance, it's easy to see that developing proficiencies in using predictive data combines effectively with high-performing organizations' keen interest in uncovering and anticipating customers' needs and preferences. The energy and synergy created by each feeding and driving the other makes for a powerful fusion of strategic actions that lead to strong outcomes for companies and customers, alike.
Obviously, some organizations will be better at rewarding performance, while others have more finely honed capabilities in gathering, analyzing and applying predictive data or in aligning rewards with performance. Within and across organizations, there will be fluctuations and differences in what constitutes the "best" blend of the four elements. Organizational values, business objectives, missions, leadership and other factors can shape the degree to which any of the four Ps is emphasized and leveraged at any given time.
But overall, top companies that achieve consistent success in the quest to reach the pinnacle of their industries demonstrate that high performance is driven, in part, by four potent ingredients: a proactive approach to understanding customers, an intense desire to predict and plan for future conditions, a pervasive culture that signals consistent values, and rewards systems that directly support and reinforce performance. Taking command of the four Ps and balancing them to achieve optimal organizational success across the high-performance domains -- of strategy, leadership, talent, culture and market focus -- becomes the challenge that tops leaders' agendas.