June 27, 2024

So What is Total Performance Leadership Part 2 (TPL Insights #228)

By Rob Andrews

This post is Part 2 of last week’s blog titled “So What is Total Performance Leadership,” diving deeper into the principles and practices of TPL. Make sure to read Part 1 to grasp the foundational concepts discussed earlier.

Despite these compelling benefits, many CEOs, board members, and senior business leaders still see profit optimization and maximizing shareholder value as the primary purpose of their organizations. Most of their time and energy is spent focusing on strategy, tactical metrics, and financial statements. This is no surprise – it makes perfect sense because this is precisely what is taught in most business schools.

Given the overwhelming evidence supporting the value of TPL, why are these principles not taught in mainstream business schools? In a 2014 interview on his radio show, aired on Business Radio Powered by the Wharton School, Stew Friedman, who leads the Work-Life Integration Project at the Wharton Business School, asked Barry Schwartz the same question. Barry Schwartz, a 1971 Wharton Ph.D. and organizational psychologist specializing in workplace research, stated that “the mainstream business community has been heavily influenced by two individuals – Adam Smith and Frederick Winslow Taylor.” Schwartz’s research asserts that as much as 90% of the world’s workforce is disengaged, thanks in part to what Adam Smith wrote in Wealth of Nations in 1776 and Frederick Winslow Taylor during the early 1900s, seen by most as the founder of modern hierarchy and business processes. Both have had a profound effect on global business.

John Maynard Keynes once said, “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.”

We reject the notion that people work only for pay and extrinsic rewards, or that they need close monitoring, constant supervision, and confining policies. Through our research, observation, and study, we know that when organizations share a purpose greater than just making money and engaging their entire workforce, they produce substantially better results, they produce substantially higher returns for their shareholders, and have a lot more fun doing it.

TPL organizations place their customers and employees first, and shareholders next. They lead with values and standards, not rules and policy manuals. They measure things that matter and lead to superior shareholder returns: Leadership, Employee Engagement, Customer Delight, Strategic Clarity, and Execution Excellence.

TPL organizations look and feel good; the deeper you look, the better the view. Beyond exceptional returns, you’ll see trust, smiling faces, exceptionally low turnover, spirited and healthy debate, systems that are driven by purpose, frontline employees who sound like company spokespersons, and delighted evangelistic customers. TPL organizations have frontline employees and customers who tell stories about them and are, in fact, their most effective salesman.

Helping companies large and small, private and publicly owned, discover their purpose, vision, mission, values, and strategy is something we’ve done for a while. We go a step further and stick around to help them implement and execute their strategies and fill key leadership roles within their organizations.

So far, we’ve interviewed and examined extraordinary leaders for inclusion in this work, including Gary Kelly, CEO of Southwest Airlines; Drayton McLane, former Chairman & CEO of McLane Co.; Charles Butt, Chairman & CEO of H-E-B; Ron Mittlestaedt, Founder, Chairman & CEO of Waste Connections; Chet Cadieux, Chairman & CEO of QuikTrip; John Gibson, Chairman of ONEOK; Gary Miller, Chairman & CEO of Cannon Design; Vice Admiral (Ret.) Ann Rondeau; Don Benson, former CAO of Aetna and Cigna; and Pattye Moore, Chairman of Red Robin & Former President of Sonic. We will soon be interviewing Steve Carley, President & CEO of Red Robin; Gary Luquette, President & CEO of Frank’s International and retired President of Chevron North America; Tom Ryan, Chairman & CEO of SCI; and Paul Brown, President & CEO of Arby’s Restaurant Group, just to name a few.

Join the movement and learn to employ the power of Total Performance disciplines, which are:

  1. High-Performance Mindset: Think without limitation, accomplish what most consider impossible, maintain healthy paranoia, never take success for granted, and always push for improvement. 88% of the Fortune 500 companies in 1955 were extinct. Arrogance, inaction, and unawareness are three of the biggest killers of modern-day Once an organization’s leaders think they’ve arrived, they’ve begun their decline. Global business is moving and changing at a dizzying rate, and all who don’t pay close attention run the risk of extinction.
  2. Purpose-Driven Approach: Harness the power of purpose, inspire stakeholders, and deliver exceptional While some may call it a mission, the purpose is separate and overarching in most TPL companies. Less than 5% of organizations overall operate with a clear sense of purpose. TPL companies like QuikTrip, Southwest Airlines, Koch Industries, and Nordstrom engage their workforces, especially millennials and Gen Zers, with a purpose greater than just making money. Purpose-driven organizations outperform their peers. The data is irrefutable.
  3. Unified Leadership: Foster a high-performing team where trust, healthy debate, shared vision, accountability, and results orientation exist. Most leadership teams are not teams at all, but rather a collection of individuals who often compete for position, airtime, and resources. Transforming a group of talented individuals into a unified team takes process, patience, and commitment. The results are well worth the As Dr. Jerry Harvey says, having unified leadership of this ilk avoids unnecessary trips to Abilene.
  4. Disciplined Human Capital Practices: Use disciplined hiring practices and employment brand building to identify, attract, engage, and retain top talent. This is key to an organization’s ability to assess cultural fit and deliver exceptional results. Following proven, time and battle-tested TPL Foresight hiring processes at every level ensures screening out B and C players in favor of A players, and aligns the right candidates around cultural fit, personal and professional attributes, and performance expectations.
  5. Stakeholder Engagement: Ensure fulfilled, collaborative employees who are committed to the company’s objectives. According to Gallup, the American and global workforces are 70% and 90% disengaged, The best-performing organizations in the world have substantially all their employees working hard toward the organization’s objectives. The right values, vision, mission, strategy, and big, hairy audacious goals are necessary for workforce engagement. Acknowledge performance, build team spirit, and enable shared learning. Ultimate success is not a linear process. Individuals and teams benefit by celebrating the first downs, not just the touchdowns.
  6. Clarity in Everything: Ensure all stakeholders, including shareholders, employees, and providers, understand the company’s strategy, know where the organization is going, how it will get there, and their role in making it Clarity is necessary to perform at optimal levels. In organizations with great clarity, communications are delivered so that constituents believe that their leaders know where they are going, believe what they are saying, and are connecting effectively with their needs and desires.
  7. Customer Experience: Maintaining relentless customer commitment, anticipating needs, and creating raving fans who tell great stories about Optimal performance requires a relentless focus on the total customer experience, not just reducing defects. Branding is about how your customer feels about you. Experience is about how they feel about themselves as they interact with you. Strategies that don’t begin with the customer in mind tend to underperform. Those that lose sight of the customer will likely cease to exist.
  8. Measure What Matters: Focus on financial performance, leadership effectiveness, employee engagement, cultural health, climate, employee net promoter score, collective and individual mindset, and customer delight. Maximizing profitability requires more than reading financial statements, which are largely backward-looking. Measuring what matters requires assessing all the critical elements of TPL organizations. The quantitative bias promoted by modern-day business methods and schools often misses the most important metrics.
  9. Cost Leadership: Remove costs where the customer can’t feel TPL organizations remove as much cost as possible, being very careful not to affect the customer experience. Southwest Airlines, H-E-B, Quick Trip, and Koch Industries do extremely well by removing costs from the supply chain, building costs, and employee turnover. Top-performing companies do not take cost out of the business by removing services and benefits from customers and stakeholders.

A full explanation of the power of TPL is beyond the scope of this piece, so stay tuned for updates and real-time examples of companies that are experiencing the power of TPL. If the notion of TPL resonates with you, we encourage you to become involved in this powerful, growing movement.