Strategies for Peak Performance
An address to the 30th Anniversary Dinner of the Strategic Planning Society in London. Kevin Roberts outlines the concept of the Peak Performing Organisation, and shows how a business should organize itself to sustain long term performance at the maximum of its potential.
Thank you for your generous invitation to address this event of the Strategic Planning Society. Congratulations and Happy Birthday.
Yes, your conference brochure is correct, I once did blast a Coke dispenser with a machine gun loaded with blanks at a Pepsi conference in Toronto a few years back. And yes, it did seem to motivate my people because we went on to outsell Coke as Canada’s favourite soft drink.
There is perhaps an expectation among you that I will do a repeat performance this evening, but out of respect for this awesome Diplodocus, I’ve left the Bren gun in the boot of the car tonight.
In this setting, it’s relevant to speculate on what the strategic plan of dinosaurs might have been. Achieve world domination for 150 million years? Oh no, that’s Bill Gates I’m thinking of! Was it in their grand strategic plan to go into hibernation for 65 million years and re-emerge as a leading entertainment icon of the late 20th century?
I’m sure that the boss T-Rex never thought to have an entertainment lawyer at his right paw to negotiate an intellectual property agreement with Stephen Spielberg.
I had been invited to speak this evening about position-based strategy, but I’m sure you don’t want me to simply rehash the Michael Porter you’ll all be familiar with over your coffee. In fact, the best sort of position-based strategy I know about is where All Black Christian Cullen takes an inside pass at speed from Jeff Wilson and sprints 40 metres to score under the goalposts.
What I’m really keen to do this evening, and I believe this honours the gravitas that supports the intellectual and economic seriousness of strategic management, is to premiere for you a number of brand new strategic metaphors. I have been working with colleagues at the Waikato Management School in New Zealand on a study of organisations which sustain long term strategic performance to the maximum of their potential.
We have defined the concept of Peak Performing Organisations.
This occasion is the very first outing for our study, which we believe represents fresh and stimulating thinking. I’m pumped about what we have learnt, and hope that you will be as intrigued and excited as we are.
Firstly though, I want to fire up a mosaic of thinking about the speed of change happening among us, and the challenges this poses for strategic management. In this context I’ll tell you about how Saatchi & Saatchi is changing its world.
It is my belief that a company’s success is inversely proportional to the amount of traditional strategic planning that its managers do.
The sheer speed of innovation and change today renders most strategic planning useless, because traditional processes applied to a life lived in the fast lane take too long, and produce outcomes devoid of passion.
Right now, we are still in the unfolding stages of the biggest idea of this century, the information technology revolution. Consider if you will, that the Internet missed everyone’s radar. Consider that the value of the information technology revolution is now measured in trillions of dollars.
And just consider that we never heard of Bill Gates or Steve Jobs 20 years ago. The amazing thing is, some of the biggest companies of the next 20 years still haven’t been invented. The response of many companies to lead in today’s markets is to operate in actual real time, not in the future.
A key global Saatchi & Saatchi client, for example, is Hewlett Packard, the 16th largest company in the USA and a company really built to last. They make 77 per cent of their revenue from new products introduced in the past two years. The autosales industry has many examples of how major shifts are occurring because of information technology. The site we created for another key Saatchi & Saatchi client, Toyota Motor Corporation, attracted seven million Web visitors last year, and has overtaken their 1-800 number as its best source of sales leads. We believe that within four years, 25% of their sales will be online, up from 1.5% last year.
The company at the centre of the faster-better-cheaper revolution that we’re inside is Intel, by far the world’s leading chip maker. Intel co-founder Gordon Moore defined a key law of our time which flouts the laws of scarcity and increasing costs that have prevailed in all previous economic thinking.
The thrust is that a crucial commodity for technical and economic progress – sheer computing power – becomes more and more available for less and less cost. This is Moore’s Law, and it flows through to every organisation and individual who encounters a computer network or device.
In 1997, observes Gordon Moore, the chip industry will produce about one quintillion of the tiny electronic connection machines we all know as transistors. If this figure causes you information anxiety, just consider that it’s about the same as the number of ants on the planet.
So how does Intel plan for its future? “Did Columbus have a business plan to reach the new world?” was the retort by CEO Andy Grove to a question about Intel’s business plan for the Internet.
Or, says the head of the Disney Imagineers, Bran Ferren, “trying to assess the true importance and function of the Internet now is like asking the Wright brothers at Kitty Hawk if they were aware of the potential of Delta’s Frequent Flyer programme.”
We are living our lives faster than ever before. We humans seem, however, to have a remarkable capacity to absorb and adopt information, change and speed.
We love the notions of convenience, ease of use and intuitive products, and we love our brains to be stimulated and extended. Just consider that while a normal fast-talker speaks at up to 150 words a minute, listeners can process speech at three to four times that speed. Can and, these days, want to. And consider that the average consumer in the year 2000 will comfortably devote 3,540 hours to media usage, across print, television, videos, games and online. That’s 10 hours a day.
We’re in an era where attention is the principal commodity of our time, and original ideas are the attention-getters. Ideas are now the primary ingredient of what we make, do, buy and sell.
The greatest economic task of individuals, corporations and even nations is now to find, grow, store, sell and share intellectual capital. That’s what Disney, Microsoft and Saatchi & Saatchi are totally about, the creation of ideas, knowledge and intellectual capital. This is fundamentally changing the daily job of wealth creation.
As Western economies have transformed from manufacturing to ideas, the mechanisms that determine economic behaviour have shifted from ones of diminishing returns, to ones of increasing returns to scale.
My job as CEO of Saatchi & Saatchi Worldwide, is to leverage our intellectual capital and to locate our organisation in an environment of increasing returns to scale.
We are in the business of transforming our clients’ brands, businesses and reputations. We need to define a new economic model for what we do, so that we participate in the volume and share growth our intellectual capital generates. Simply clipping the ticket on media placement is too crude a mechanism for us to genuinely earn from our ideas.
My response is to place Saatchi & Saatchi firmly in the world of ideas. Gary Hamel calls this, conservatively I believe, a “hierarchy of imagination”.
My vision is for Saatchi & Saatchi to be the “hottest ideas shop on the planet.” For the past six months I have been travelling the world to emotionalise my teams about ideas, and to reinvigorate the Saatchi bottom-line, our eleventh commandment, the “nothing is impossible” attitude.
I encourage you to check out www.saatchi.com to see why world-changing ideas are what strategic thinkers need to be infatuated about.
An idea that I’ve been searching for with my colleagues from the Waikato Management School at the University of Waikato, is a new model for high performance, strategically-driven organisations. We’re seeking to build a set of principles, practices and gameplans of sufficient richness, dynamism and creativity to guide knowledge-based companies into the 21st century.
My colleagues Dr Mike Pratt, Dean of the School, Professor Clive Gilson and Dr Ed Weymes are with me here tonight, nervously watching me disseminate our learned findings!
Over several sessions we fleshed out the concept of the Peak Performing Organisation, or PPO. A Peak Performing Organisation is one which is able to sustain long term performance to the maximum of its potential. This means always being in contention.
We asked the question: How do you organise for sustained peak performance?
This is the question that Peters and Waterman posed in their book In Search of Excellence. Unlike them however, we decided to look outside the mainstream of business for our models of sustainable peak performance.
We have all experienced a diet of military models and metaphors of management over our working lives. We have devised strategies to destroy the competition; launched pre-emptive strikes on rivals; deployed salesforces to capture customers; fired staff in reengineering, rightsizing and restructuring exercises and so on.
We think however, that today’s managers would prefer to go to work to have fun, rather than to wage war.
Like many of you I expect, our four man team are all sports nuts. I’m into rugby union. I’ve been a player, I’m a fan and I‘m now a Board member of the New Zealand Rugby Football Union, in charge of their global marketing strategy.
Our group really believe that the sport of business is a more attractive metaphor than business as battleground. In sport we constantly find peak performance and amazing talent, creativity and stamina. Our big question was however, will we find this grit, guts and genius in the sporting organisations themselves, beyond the actual sports arena? And will the lessons translate to business organisations?
The use of the sports metaphor is by no means new in business.
We identified many studies that seek to use the metaphor of sport to illuminate ideas of leadership, coaching and personal development. But we found very few attempts to use the metaphor of sport to illuminate business organisational effectiveness more generally. This path was the one we followed.
We identified sports that satisfied the following criteria:
- It must be team based and global;
- There must be a critical mass of competitors;
- There must be high participation rates in the general population in one or more countries.
- The team must have exhibited continuous championship contention for at least a decade;
- And the team must have a recognised leadership profile in the sport.
We found teams that had definitely maintained peak performance over several decades. What is it about their organisations that enables this? How is their magic sustained? These are the questions we are asking chief executives, directors, team managers, coaches and players.
In each sport we looked for male and female, national and international teams which had dominated their sports for at least a decade
For each sport we found such a team. At the top of the list in Basketball was Michael Jordan’s Chicago Bulls. In Gridiron we’ve chosen the San Francisco 49ers. Baseball is the Atlanta Braves. In motor racing the standout is Williams Formula One. Our soccer team is Bayern Munich. Australia has the world’s best cricket team, the best women’s netball team, the best women’s hockey team.
Mix these organisations with two teams I am personally involved with, the mighty New Zealand All Blacks and Team New Zealand, winners of the America’s Cup in yachting, and you have a study that will knock the socks off readers of the Harvard Business Review.
It’s been incredibly inspirational talking to these sports organisations, and the early results of our study are, I believe, equally inspirational.
Our findings are largely consistent with the results of the new paradigm management research, but we will contribute new language and new strategic metaphors for action and achievement.
In this brief account I can only provide you an overview of our results. The richness comes from the case studies themselves, the stories and anecdotes which illustrate peak performance in action. These will be in our book which will be published next year.
In making sense of the mass of data we accumulated, we asked ourselves the question:
If we walked through the front door of a sustained peak performer, what would we hear and observe and feel?
From this mental model, and induced from the research data, we developed ten observable practices which together profile the Peak Performing Organisation.
First and uppermost, we found a passion to win in all the organisations. Not just amongst the players but throughout the organisation.
People had a clear strategic vision of being the best, not just in corporate vision statements but deeply entrenched in the psyche of the organisation. This led to an intensity and will to win which was observable when we walked in the door. Participants had a deep passion and love for their game and for their team more specifically. Legends, history and tradition reinforced the organisation’s belief in itself and its destiny as championship contenders and winners.
This passion to win led to excitement. We found a contagious excitement in the organisations which we visited from the receptionist onwards. Winning, and the knowledge of always being in contention, induced this excitement which bordered on euphoria at times of important games.
We heard a great deal about exceeding personal best. There was deep personal commitment by team members to personal stretch – how each individual could improve their own personal performance. We found a committed work ethic, individual responsibility and discipline both on and off the field. We identified a deep commitment to education and technical skills.
At the same time creativity, doing things differently, risk-taking, flair and intuition, were regarded as vital to “find the edge”.
We were surprised that the most frequent comments related to the organisation as communities. New paradigm management literature points optimistically to this phenomenon, but can point to few examples in practice. We found lots.
We heard about the importance of trust, respect, friendship, bonding, pride, involvement, identity, belonging, family, tradition, ownership, loyalty, harmony, care, looking after each other. We heard about cohesion, consistency, stability, continuity and informality, and we wondered how this related to the perceived need for tension and diversity to create innovation.
We identified teams for all seasons, which embrace but also go well beyond creativity and innovation. Multiple teams must be infinitely flexible to adapt to changing conditions, and more importantly, to create new opportunities.
We heard too of the importance of discipline. More than one player must be able to cover each position, organisationally and on the field. We heard about increasing the size of the team to maximise choice, depth and skill; we heard little of downsizing. Team play was seen as of the essence; genuine team play where sacrificial plays on and off the ball, on and off the field/arena, and making space for others, are the accepted norm.
The team for all seasons will be diverse yet united, independent yet involved, harmonious yet of differing backgrounds, united yet complementary. Team members will be committed to their own and others intellectual and technical development.
We learnt of the importance of inspirational players – Peak Performing Players like my friend Sean Fitzpatrick, captain of one of the greatest sporting dynasties, the New Zealand All Blacks. Each of the PPOs had inspirational players on and off the field. They provided leadership, coaching and depth. Through their presence they did more than win games – they inspired the belief of the organisation in its own greatness. And this belief is an essential ingredient of sustainability.
A PPO needs at least a few inspirational players. But the essence of a PPO is permanently infatuated players. These people are not just the team on the field, include managers, medical staff, young players, fans, sponsors and the media.
PPOs are committed to paying attention to each and every last detail. Team members feel responsible, care for the organisation and its people, pitch in wherever required, and exhibit professionalism in all they do. Each organisational process, no matter how small, is seen as vital since it could make the difference between winning and losing.
A key insight we feel is the need for administrators who think like players – in business organisations, read managers who think like customers. What can the organisation do, at the last detail, that can make the difference between winning and losing – the game or customers.
As well as focusing on the next game, each PPO was committed to building for the future. The most strategically successful PPOs appeared to have a deep commitment to developing team members from the very young onwards. The game is seen as more than just the elite players since the first grade will be dependent on the quality of player progression.
While buying in top players was seen as an important element of overall strategy, teams we visited do not unduly rely on this since over-reliance can act against the earlier practice of community. The involvement of players in administration characterised many PPOs.
The lesson for organisations is obvious – bring into key administrative positions your technical and marketing people who understand your business. Expect these key players to act as coach for those less experienced. And provide built-in processes of organisational renewal.
Most of the organisations we spoke to had strategic plans but they did not seem to be vital ingredients of success. We heard much more discussion of gameplans, a metaphor we much prefer to the military-derived “strategy”. Gameplans focus directly on how to win the game.
Finally, we found that some (but not all) of our PPOs were changing the rules of the game. We found that to change the rules of the game you need to be a PPO; and that changing the rules of the game helped teams to achieve sustained sporting domination. The greatest PPOs play the game better than the competition, and develop a different game. The Australian Cricket Board spearheaded innovation around the one-day game, which enabled them to channel funds into the traditional Sheffield Shield first-class game, the proving for test cricket.
The success of the New Zealand All Blacks in Test Rugby reflects the overall health of the game. Grass-roots development is fed into the Provincial NPC tournament, the Super Twelve Tournament and the Tri-National Tournament. Resources are channelled into the development of the game as a whole from the success of the elite teams, and this includes the way in which the game itself is refereed.
Managing rather than policing the game is a concept which reflects one way in which the All Blacks have changed the way the game is played. In both Rugby and Cricket, the off-field organisations in New Zealand and Australia respectively crucially took key initiatives which changed the nature of their respective industries.
So to summarise, the ten action points for a Peak Performing Organisation are:
- A passion to win
- Exceeding personal bests
- Teams for all seasons
- Inspirational players
- Permanently infatuated players
- Every last detail
- Building for the future, and
- Changing the rules of the game.
The adoption of these ten practices releases organisational constraints and allows everyday people to achieve that which they are really capable of.
These ten practices explain the magic of sustainable peak performance. Apply them and why not tilt the playing field your way as well. As Constantinos Markides puts it:
“By breaking the rules of the game and thinking of new ways to compete, a company can strategically redesign its business and catch its biggest competitors off-guard. The trick is not to play the game better than the competition but to develop and play an altogether different game.”
Our intuition and experience suggest these strategic metaphors are directly applicable widely to business, and we’ll be working to hothouse these ideas in the workplace next year. We will apply them to the Saatchi & Saatchi game worldwide and I’m sure we’ll be living proof of what this new attitude to business will deliver.
Thank you very much, ladies and gentlemen, for this honour of addressing you on the occasion of the 30th birthday of the Strategic Planning Society.