A New Look at High Performance, from Perspectives on Business and Global Changes by Joel Barker

The World Business Academy Journal: Perspectives on Business and Global Change
Joel Arthur Barker, the author of
Paradigms: The Business of Discovering the Future and a futurist who authored and hosted a best-selling set of business films, has been tracking new paradigms that he thinks will have profound effect on the next century. He is very impressed with the new work that Tor Dahl is doing in productivity and agreed to interview Tor about his theories for Perspectives on Business and Global Change.

A New Look at High Performance

Tor Dahl

Tor Dahl is an economist, consultant, and associate professor of economics at the University of Minnesota. A Fulbright STor Dahlcholar in Economics, he is the Chairman of the Governing Council of the World Confederation of Productivity Science and has served as the Governor’s Representative on the Minnesota Coalition on Health Care Costs and on the blue ribbon task force on State Health Priorities. He has written extensively in professional journals.

Barker: Tor, today we are going to talk about your ground-breaking work in productivity. We first met one another when your major focus was on health care and wellness back in the late 1970s. How did you move from that topic to the focus on your present work in peak performance and productivity?

Dahl: I was director of research for a “think tank” on health in Minnesota - the Systems Development Project at the University of Minnesota. And health care was the think tank focus. We were monitoring the outcomes data on hundreds of thousands of children going through a comprehensive health care program.

Every year cost per registrant went down and favorable measures such as the well child ratio went up. And it seemed logical to me that the techniques we used to cause these improvement would work in business as well.

Here’s what we did: We held health professionals accountable for outcomes that were measurable. We operated with multifunctional health care teams. But what forever change my focus on pure productivity was a breakthrough from Sweden that caused me to form an organization solely devoted to the improvement of performance. It was a device that let us measure behavior, attitude, judgment, and subjective productivity at work. So, for the first time, we could enter into the minds of people and test any number of dimensions that might explain what makes people productive and not productive.

Then there was another influence on my thinking. I was teaching a course on the structure and dynamics of poverty in the 1960s and became intimately familiar with the systems that kept people in poverty, through the systems of welfare in the United States. The system created dependence instead of lifting them out of poverty. Today, that fact is fairly well accepted. I became convinced the only way to solve the poverty problem is to have each man, woman, and child create value that is sufficient to lift them out of poverty.

And how did you connect this to productivity?

Let’s take a global perspective. There are only two ways a person, a corporation, a country can create maximal value: either becoming more cost-effective than anyone else or offering an advantage that nobody else has, a monopoly advantage.

There are no other ways. None. Zero! Of course, creating a specific monopoly advantage does not last long, but, while you have it, you are handsomely rewarded by the marketplace. Once your competitors catch up to you, then you can fall back on cost-effectiveness to continue to survive.

So when you are earning those handsome profits, you invest them to create more monopoly advantage or even more cost-effectiveness, and that creates the upward spiral of positive change. Since productivity is linked to pay one-to-one, performance improvement is the only way to pay for greater salaries and the creation of new jobs for those in poverty over the long run.

How does this fit with the Total Quality Movement?

Look at it this way: Quality and productivity are essentially opposites, yet they are yin and yang - so closely connected that one requires the other. The quality approach takes the variation out of a product or a process. Productivity, on the other hand, introduces variation in products and processes.

So, quality freezes an organization where it is; productivity unfreezes it! You need both to have a successful long-term enterprise.

The greatest problem we have had in America the last 15 years is that we froze before we unfroze. The result is that productivity only increases incrementally, because we won’t allow the substantial variations necessary to increase productivity dramatically.

Can you give us a model to illustrate that statement?

Joel, do you think that the quality of your marriage would improve if you took out all the variation in it?

The research we did proves to me that there are only five ways resources can be freed to unfreeze an organization:

First, by reducing waiting time; second, by screening those tasks you shouldn’t be doing; third, by delegating those tasks to the ideal person; fourth, by planning better use of your time; and, fifth, by executing the tasks you should be doing better.

If you look at those ways for yourself, you could easily free up 30% of your time and resources without harming your current production in any way.

Are you telling me that I have 30% of my day that is savable and that I can still get everything done?

Yes! And not only that, but if you had access to all the information that other people in your profession use to be more productive, you could probably free up at least another 30%! Now, if you take the freed resources and redeploy them where they have the highest returns for you, you can now produce three times as much before because you do 100% of the old stuff in 30% of the time and you have another 70% to use for producing more of what you are already doing.

But here is the interesting question: Is what you are doing right now the best use of your time and talents? As you begin to gain wisdom in the best use of your time and talents, then your productivity grows enormously. This is what we call the theory of quantum change on the individual level.

Can you take it up to the organization level?

When you take it to the organizational level, you gather the performance experience of every one of the key people at every level of the organization, plus the crucial information from your customers and suppliers, plus the latest techniques and tools of your field. Using this organizational information, the result is individual improvement plans of the quantum kind - huge steps that would have looked impossible until you made them. Then you check off those changes you cannot do by yourself and those become the structural changes that the organization must do if it is to gain quantum performance increases. Those needed structural changes form interlocking obstacles that are between the organization and its extremely ambitious goals.

What do you mean by “interlocking”?

It is like a logjam of five to seven logs, held together, jammed together, by a key log that prevents the others from being resolved.

So, if you don’t get the key log, you can’t get the rest?

Precisely right. Every organization has different logjams. No two have ever been the same. Which is why copying another organization’s strategy is doomed to failure. And by the way, we have found only 27 different logs. All logjams seem to be combinations of these logs. It has a biological feel to it, doesn’t it?

Give me an example of a key log.

We identified the logjam for the country of Norway. The key log turned out to be that in Norway high performers are penalized: first through the “Law of Jante,” which applies social sanctions toward those who stick out as performers of note. They only had one exception to the rule: athletes. So we created a national strategy to deal with high performers: treat them like athletes. Once that key log was removed then other logs could be dealt with much more easily.

How about another example that is not tied so strongly to cultural rules?

King County Medical Blue Shield in Seattle, Washington, is a good example. They couldn’t get to all of the other important logs in their logjam until they addressed their backlog of medical claims, which was their key log. It consumed huge amounts of time and resources. So we put the focus on the key log and developed a “high performance mode” to deal with it. Within one week this backlog problem, which had been an intractable problem, entered into a free-fall reduction! At the end we had achieved a three-day backlog target, which is an industry model. All this took about five weeks. And, keep in mind, when the goal for the three-day processing target was set, it was perceived as impossible. Now that the claim log is under control, we can move to the rest of the logs to improve productivity on a much broader level.

You mentioned “High Performance Mode.” What is that?

The single most important insight that our new paradigm has produced is the following: change happens in the affective domain - the domain of emotion, engagement, enthusiasm, commitment, dedication - all feelings. The economists of old used to maximize “satisfaction,” which was a feeling. And so far in this interview, what we have talked about is only in the cognitive domain - reason, deduction, problem-solving, projection.

Stress - Satisfaction - Control ModelHannah Arendt defined the cognitive domain as one where all cognitive actions could be plotted on three axes: thinking, judging, willing. Albert Mehrabian of UCLA defined the affective domain as also consisting of three axes: dominance/submissiveness, which can also be explained as control/non-control; arousal, which could be labeled as stress; and pleasure/displeasure or satisfaction/dissatisfaction. The arrangement of these three axes are shown in the diagram below.

The principles that rule the control and satisfaction axes will have opposites while the principles that rule stress will be a matter of degree.

This discovery of the change/emotion connection was surprising to us because we found when studying the obstacles to performance improvement that most of these obstacles could be positioned precisely on the three-dimensional graph.

For instance, when people told us a significant potential for productivity improvement could not be realized, they felt stressed, dissatisfied, and without a sense of control. What we realized was that if you can create domains where people feel satisfied, are experiencing positive control, and the stress is sensed as a challenge rather than as discomfort, performance can be increased by a factor of 20 compared to being in a low-performance domain. And by creating such a positive domain, you move a group of people into a “high performance mode.”

Are you saying that there is a way of running an organization so that it can be 20 times better than if it was run poorly?

That is exactly what our data indicate. And that may account for the superproductivity of the so-called skunk works or start-ups with phenomenal growth rates.

But what about the mature organization?

When the high performance domains were created at King County Medical Blue Shield, the existing teams, which really weren’t operating very well, underwent dramatic transformation as the story I related earlier illustrates. Suddenly there were smiles everywhere in the workplace, colorful graphics all around, sharing and cooperation with other teams, and that “impossible” backlog just simply disappeared.

This is sounding like the classic “too good to be true!”

Well, it is true. This quantum performance theory pulls together a number of findings that have rarely been put together before.

For instance, the ten control mechanisms - positive and negative - that emerged from our research were also extolled in the field of management. The six principles for increasing or decreasing job satisfaction have their roots in experimental psychology. And the connection between stress and proper function or dysfunction has many ancestors, most importantly Hans Selye and Mihaly Csikszentmihaly. We know now that you can create a high performance domain almost instantaneously by applying one or more of the six satisfaction principles, because all the high performance domains are located around the top end of the satisfaction axis. But unless people work on the right thing, which is cognitively defined, the affective domain cannot work its magic.

You have some powerful environments for high productivity but what is the role of leadership in all this?

Leadership has everything to do with change. And, as I have just said, change happens in the affective domain. If leadership is in the affective domain then it must be in those areas of the three-dimensional graph and, in turn, those four areas represent four different leadership types. We have studied the emotions, the obstacles, the goals, and the behaviors that leaders exhibit in these four domains. And these four leadership types are very different from each other and are clearly identifiable.

The leadership domains that wrap around high levels of satisfaction are those of the “charismatic leader” and the “monastic leader.” The charismatic leader is enthusiastic and engaging. Jan Carlzon, formerly of SAS, is such a leader. The monastic leader is that of a quiet, reflective type, such as Dale Francis of King County Medical Blue Shield. He is a Mormon bishop - how much more monastic can you get!

Charismatic leaders generate engaged followers who, just like their leader, are highly productive. Monastic leaders generate comfortable followers, also extraordinarily productive. The nonproductive leaders’ domains wrap around the low levels of satisfaction. They comprise the domain of the bureaucratic leader who generates powerless followers and the domain of the bully leader who generates frustrated followers - the least productive group of all.

When you compare the highest productivity domains with the lowest productivity domains, you will find obstacles that produce 20 times more wasted times than that which is found in the domain of the highly productive leaders or followers.

So are you saying that most of the obstacles in the way of high productivity of followers are generated by the leader?

That is what the data indicate. Think about a typical American hospital: It has 700 job descriptions with water-tight separations between the professions. So too many times people just wait to do something useful. Think about the effect of dropping that list to 12, for instance! And that is what a leader could do.

How does all of this match up with the re-engineering school of productivity?

Let me share a quote I brought along, from B. Ettore in Management Review in 1995: “Seventy percent of re-engineering projects fail.” And even Michael Hammer, the father of re-engineering, cites a failure rate of two-thirds. Why would any executive take his corporation into a process that has a 70% failure rate? Would you voluntarily enter an airplane that has a 70% chance of incurring a major failure? The reason why re-engineering projects fail has been much discussed in the literature. The reasons I feel are important are the reactions people have to the enormousness of the projected change and the consequences for them. Many of them feel that they are being asked to dig their own professional graves by assisting them in the transformation. But apart from the human dimension, I feel that re-engineering projects focused almost exclusively on cost-cutting or input reduction rather than revenue growth or business expansion. And that causes the organization to lose the optimism it needs to succeed.

Studies of companies that have re-engineered have shown that they compare unfavorably with those who have pursued profitable growth.

So does your high performance model emphasize growth as well as increased productivity?

That is a very tricky question. Our model generates maximal contributions - whether this is the job satisfaction of an artist who realizes his or her dreams by playing Carnegie Hall, or the farmer in a developing country who triples his or her production with better methods of agriculture.

There is a point in time when satiation sets in with money or material goods. And when that happens, we enter other domains of growth and development such as insight and wisdom and caring for a cause greater than ourselves. But I think, fundamentally, the ethics of our approach is that it abhors waste.

However, there are problems beyond the simple corporate and individual models we have stated here. These models are set in a system that affects performance from without. For example: Why are Cubans productive everywhere in the world except Cuba? And there is a macro systems architecture that fosters and nurtures the realization of human potential. That architecture must produce freedom more than it produces constraints, opportunity rather than closure, diversity instead of discrimination.

I have noticed that when I walk into a truly productive organization there is a spirit in the place that is almost tangible. You see it in successful athletes, football teams, symphony orchestras, and theater troupes. High performance work is a kind of performance where everyone knows his or her role, delights in the execution, and strives to satisfy customers. I believe that this spirit is the human spirit unleashed. And that the greatest contribution of the theory of Quantum Performance Change is the unfolding and the unleashing of the human spirit.

So you are saying that this is not just about the profit sector but it can be applied to any sector of human endeavor?

Yes! Yes! Henrik Ibsen, the Norwegian playwright, said that everyone is born with sealed marching orders. But when they are opened, they all say the same thing: You are here in this world to realize yourself. That realization of the athlete or musician within you or the leader or follower within you is the “invisible drawing” that you have to make visible.

The implications for schools and universities is that beyond the common core of subjects that teach you about the human condition, you should have the opportunity to bring your most value-adding qualities to life and expression.

Have you seen any other work recently that correlates with your work?

Last year a group of economists were studying “soft” variables, for instance, the degree of freedom experienced in a number of countries throughout the world. This simple variable explained more of the growth differential among different countries than any study of traditional variables has done in the past - such as capital/labor ratios, innovation rates, or amount of education.

This has pointed out the importance of measuring the “unmeasurable.” A sense of freedom is a feeling. That is in our affective domain, isn’t it? And this soft variable apparently has a profound effect on hard data and performance! We are just beginning to explore the relationship between soft variables and hard data. Already we have findings that surprise and delight us: By looking at high performance managers, we found that the most important lesson learned was that they made the decision that needed to be made when it needed to be made. And that made sense to us. I am sure that all of us can think of times when frustrations became unendurable because someone wasn’t moving on something that was in everyone else’s way. And good leaders can learn that lesson and apply it well.

Another finding was the importance of attitude: The attitude of a group of people working together explained a large amount of the difference in effectiveness between two groups. Even variables such as lifestyle show that people who are physically fit are more productive than those who are not. And it brings to expression that there is a body-mind link in high performance individuals.

Another study was done by our sister organization in Norway, the Performance Group. Their interview data from 40 high performers worldwide showed that these people had a number of differences from average performers. A striking one was that they tended to have more humility than lesser-performing colleagues.

When you put all of this together, Tor, what do you see for the future of your work?

We believe that organizations have formed patterns of excellence or patterns of dysfunction. And these patters can be identified and dealt with through the tools that our process provides. We have seen that high performance teams that we train to take the process throughout the organization - such as the one in ICI Films North America - actually do a better job than outside consultants. So that tells me we can propagate this theory rapidly. And that opens up the possibility for quicker diagnosis and intervention than what has been available till now.

I believe that the next wave of research will focus on the development of the “inner” leader, for lack of a better term: the values, self-understanding, and behaviors that create harmony both in the leader and his or her followers. As we come to clearer understanding about those issues, we will increase, even more dramatically, our capacity for high performance. And that can only bode well for the next hundred years. Not just for the rich countries but all the countries and all the citizens of the world.

The knowledge of what creates and sustains high performance is just beginning to enter schools, workplaces, and government. It is analogous to the time just before the Industrial Revolution. Until then, earnings had grown by about 1% per year. Suddenly the growth rate tripled, to 3% per year. That was an increase in growth of 200%, and the compound interest from this achievement laid the basis for our current level of wealth in the industrialized nations of the world.

Imagine if the doubling or tripling in total output, not just in growth rate, could be realized beyond what we do in our projects. It would signal a revolution of unprecedented effect on the world, and on humanity. Just think about it: Today 60% of the people on this earth live on less than U.S. $2.00 per day. Each year 13 to 18 million people, mostly children, die of hunger and poverty-related causes. That works out to be 1,700 human beings per hour - with only 10-15% caused by emergencies.

Our approach reduces waste dramatically, multiplies contribution by a factor of twice or more, increases job satisfaction, reduces job stress, and improves health and longevity. It is the one known strategy that will simultaneously increase income, reduce inflation, reduce taxes, and increase employment. We have waited for too long to apply this knowledge to a world where hunger and starvation have led to endless wars and conflicts.

The World Confederation of Productivity Science, where I am Chairman of the International Advisors Council, has a very simple motto: “Peace and Prosperity through Productivity.” I believe in this simple motto. Let us make it so.

Tor Dahl can be reached at: Tor Dahl & Associates Inc., 2202 Fifth Street, Suite 1240, White Bear Lake, MN 55110

Phone: 651-429-3112

E-mail: tor@tordahl.com