Success beyond success: the “golden triangle” of continuous performance improvement

Abstract

PurposeThe main subject of the article is continuous performance improvement (CPI). More specifically, the author seeks to understand the most important management challenges under that heading. An extensive empirical study determines companies' most important continuous performance improvement roots.Design/methodology/approachThe study was conducted from January to September 2008. The author conducted 48 interviews with senior executives of well‐known global companies. The companies cover a wide range of industries.FindingsThree categories of performance roots are undeniably the chief variables of company and management effectiveness: leadership, business models, and people, i.e. the “golden triangle” of continuous performance improvement. CPI at world‐class levels will only occur if all of these levers are focused upon on an ongoing basis.Research limitations/implicationsThe study is embedded in qualitative research, i.e. mainly open‐ended interviews.Practical implicationsContinuous performance improvement means constantly searching for a “better practice”, implementing that practice, and then searching for another “better practice”. Without the emphasis on continuous improvement, one‐time gains are unlikely to lead to further improvements. The competitive squeeze provides the main rationale for executives to build a continuous performance improvement mindset. In doing so, they preserve margins and vitality. A continuous performance improvement approach must be developed that minimizes both perceived and actual risk while ensuring that the benefits from the changes are captured quickly.Originality/valueEach industry faces a regular, predictable and persistent erosion of competitive positions as a result of competitive pressure, technological progress and changes in industry dynamics. While the dynamics of industries are not easy to understand, the real challenge is how to build a continuous performance improvement mindset and how to roll it out at a pace that will be sufficiently fast to stay ahead of the pack. This article is about the main components of a continuous performance improvement approach (the golden triangle of CPI).