Quite a bold statement, isn’t it? But it is made in earnest because with this article, Investigating the causal link between a management improvement technique and organizational performance: the case of the HPO framework, I address and ‘solve’ an issue which has haunted me ever since I started my high performance organisation’s research. This issue has to do with the important question that every researcher in the organisational improvement field has to deal with: does the management practice I am currently researching cause better performance or do better performing organizations find it easier to adopt this particular management practice I am researching? Many researchers who study the connections between organizations practicing certain management techniques and performance find positive relations between the two. However, evidence of a positive relation is not sufficient to establish with certainty that certain management practices will lead to improved performance, and not the other way around.
Now, this might not seem to be an important or even relevant issue for the casual observers, i.e. managers who are busy improving their organisation. After all, if it doesn’t help it won’t harm either, right? However, these managers would be wrong not to pay attention to this issue of causality. After all, they are always struggling to choose and then allocate scarce resources to those management practices which will hopefully help them, at least with a certain degree of certainty, to improve their organization. And when it is not know with certainty that a certain management technique is actually effective, these managers and their organisations run an enormous risk to waste valuable resources and time on “miracle cures” that have, at best, a short-lasting positive effect.
The question of causality is of particular relevance when applying it to the workings of the high performance organization (HPO) framework, which is a scientifically validated technique designed to achieve and sustain a high level of performance. In essence, when the HPO framework is effective it provides managers with a powerful tool to improve their organisations to sustainable higher performance levels. The many research studies I have done so far with the HPO framework do correlate the framework with improved organizational performance. However, these studies do not explicitly look at the causal relationship. Thus, although there were strong indications that strengthening the HPO factors will lead to better organisational performance, I did not have conclusive empirical evidence of causality. Until now.
Sometimes you have to be just lucky that a research opportunity falls in your lap. In my case this didn’t happen once but twice! I was able to conduct longitudinal research with the HPO framework at two companies with units which had the same starting position but achieved completely different results using the HPO framework. An HPO diagnosis was conducted at each company, after which the company’s management implemented the HPO framework. Data were collected, using the HPO Questionnaire and interviews, at the beginning and after 18 months, when the HPO diagnosis was repeated. It turned out that, despite exposure to the same HPO framework, the two organizational units at each company achieved significantly different outcomes. In each company, one unit achieved a higher HPO score and higher organizational results; while the other unit had no change, or a lower HPO score and lower organizational results.
Let’s take one of the companies as an example to discuss what had happened. The starting positions for the two units at this company, departments D1 and D2, were identical. The only improvement initiative in the time period evaluated was implementing the HPO framework. At the company, developments in the organizational environment affected both departments equally. The only difference was the dedication with which management addressed the HPO attention points. In fact, this difference was crucial to the outcome. Interviews with managers and employees of both departments revealed this attitudinal difference toward the HPO framework. In D1, the newly appointed management team took all HPO attention points seriously and worked with dedication on improving these. As a result, D1’s results showed a considerable improvement: higher employee satisfaction, higher turnover, higher profitability and a higher share in the company’s revenues. In contrast, from the interviews conducted at D2, it became clear that D2’s management did not focus on the HPO attention points whatsoever. This created frustration among employees and resentment of management and its style of leadership. This frustration was exacerbated by the fact that promises made after the first HPO diagnosis were not fulfilled. As a result, performance of D2 deteriorated, resulting in decreased client satisfaction and an atmosphere of general resignation among D2 employees.
Causality was proven: the HPO framework causes better organisational performance and not the other way around!
Because of the fact that the circumstances in both departments were the same and the only difference was the vigour and seriousness with which the HPO framework was applied at the departments, it became very clear that the degree of application of the HPO framework caused the differences in organisational performance. Causality was proven: the HPO framework causes better organisational performance and not the other way around! And in the process of proving causality another valuable lesson was learned: optimal effectiveness of the HPO framework occurs when management incorporates the HPO factors into the workplace and strives diligently to improve performance. Thus, the research described in “Investigating the causal link between a management improvement technique and organizational performance: the case of the HPO framework” does not only show the importance of the HPO framework but also gives managers a better understanding of what is required from them as leaders when they choose the HPO framework as a means to transform their organizations into high performing ones. Now, it that doesn’t constitute the most important article I ever wrote, I don’t know what does 😉
More information in English:
André de Waal and Robert Goedegebuure (2017), “Investigating the causal link between a management improvement technique and organizational performance: the case of the HPO framework”, Management Research Review, Vol. 40 Issue 4, pp. 429-450
More information in Dutch:
André de Waal and Robert Goedegebuure (2017), “Het HPO-raamwerk en betere prestaties: correlatie of causaliteit”, Holland Management Review, No. 173, pp. 27-34