companies (military and non-military), etc. The military is a more interesting example. To the extent that our military is becoming a “high-tech company,” it is experimenting with mak- ing lower-level decision makers much more autonomous. That’s a radical switch from what has worked for militaries since Roman times when the hierarchical organization was founded, and I think the jury is still out on its long-term survival as an organizational concept. That model also fits with the general
“learning organization” concept in the business world—another instance where the jury is still out.”
Although the rest of this chapter deals with the characteristics of the single organizations identified by each of the 126 respondents, it is important to note that RAND does not deal with just any organization or problem in its work. Given RAND’s history of questioning the questions, its client base tends to be composed of organizations that worry about the future. There- fore, the winnowing process described here is less about organizations in general, and more about the kind of organizations that RAND researchers get to know well.
Finally, I asked each participant 37 questions covering nine differ- ent areas of organizational performance: (1) demographics, including age, size, and sector; (2) strategy, including mission, funding, and measure- ment; (3) trajectory, including shocks, growth, and change; (4) environ- ment, including uncertainty, turbulence, and competition; (5) internal structure, including layering, delegation, and funding for new ideas; (6) leadership, including style, communication, and political skill; (7) manage- ment systems, including planning, budgeting, and evaluation; (8) resources, including information, technology, and training; and (9) incentives. Did the organization have a clear mission? Did it regularly survey its customers?
Had it been through a recent change in its mission? How turbulent was its environment? Did it delegate authority for routine decisions? Did it have charismatic leaders? Did it give employees enough information? And did it set strong incentives for performance?
It would have been easy to end the winnowing by simply asking how the high-performing organizations scored on each of the 37 questions.
However, as the following list suggests, the questions produced a long list of
“Mary Poppins–like,” “practically perfect” characteristics that reveal little about what matters most for high performance:
• 100 percent had a clear mission.
• 95 percent gave their staff authority to make routine decisions on their own.
• 92 percent always or often provided access to the information needed for high performance.
• 90 percent had few barriers between organizational subunits.
• 90 percent had very or somewhat strong incentives for high performance.
• 88 percent had sufficient revenue to achieve their mission.
• 88 percent always or often provided the technological equipment needed for high performance.
• 87 percent had very or somewhat clear incentives for high performance.
• 85 percent had leaders who fostered open communication.
• 84 percent had the budgetary flexibility to invest in new ideas.
• 84 percent had budgets under $500 million per year.
• 82 percent always or often had enough employees to achieve high performance.
• 82 percent had fewer than 10,000 employees.
• 81 percent measured the results of what they did.
• 79 percent had effective information technology.
• 77 percent had leaders who were charismatic.
• 77 percent had leaders with a participatory style of management.
• 77 percent always or often provided access to training for high performance.
• 76 percent had few layers of management between the top and the bottom of the organization.
• 75 percent had leaders with good political skills.
• 74 percent operated in a turbulent environment.
• 74 percent had an effective budget and accounting system.
• 71 percent operated in a competitive environment.
• 70 percent regularly surveyed their customers and clients about their performance.
• 69 percent operated in an uncertain environment.
• 69 percent were more than 30 years old.
• 66 percent had experienced significant growth in funding or staffing over the past five years.
• 66 percent had experienced significant growth in revenue or staffing.
• 66 percent had an effective planning system.
• 64 percent had effective information technology.
• 63 percent were nonprofit agencies.
• 60 percent had experienced a significant growth in demand.
• 58 percent had an effective program evaluation system.
• 37 percent had hit a significant shock or crisis, such as a budget cutback.
• 30 percent operated in a hostile environment.
• 23 percent had experienced a significant change in their mission.
The question, however, is not how high-performing organizations are alike, but whether and how they differ from poor performers, and what poor performers can do to improve. The answer involves three rounds of a statistical winnowing process designed to test the true strength of each characteristic in actually predicting high performance.
Before turning to the results, readers should note that several charac- teristics were left out of the competition. For starters, there was no character- istic describing the organizations’ products or industries. The problem here was that a nuanced product or industry measure would divide the sample into such tiny parts that statistical comparisons would be useless.
In addition, there was no separate characteristic describing the quality of the workforce. Such a characteristic would be useless unless it was divided by levels of the organization—for example, board, senior leadership, middle- level managers, middle-level employees, and frontline employees—and this would have added enormous length to an already formidable survey. More- over, the quality of the workforce is covered indirectly through a number of other characteristics, including delegation of authority; barriers between units; leadership style; access to information, training, and technology; and incentives for high performance, all of which measure how the workforce is managed regardless of where it begins.
Finally, there was no measure of public support, reputation, or profit against which to assess the performance ratings. It is entirely possible, for example, that public support for organizations such as NASA, the University of Minnesota Medical School, or RAND itself might influence their perfor- mance. It is also possible that high performers are much better at managing change than their peers. Given the range of characteristics already in the field, the difficulties of assessing public support and change management from a distance, and the need to keep the survey to a manageable length, these characteristics were left on the cutting room floor.