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Maturity Models

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Introduction

An organizational maturity model is a relatively new (1990s) tool to evaluate whether or not a human organization can reliably and predictably accomplish its' objectives. Models typically have 3 to 5 levels of maturity. As with humans, age is not closely tied to maturity level.

Level 1 relies mostly on individual, sometimes even heroic, effort to accomplish objectives or good results; that is, success is not an integrated, systematic, repeatable, organizational process. This level goes by many names including initial, immature, ad hoc, or chaos. Many small and medium size businesses have aspects in level one, even some surprisingly large and profitable enterprises are run using this "genius with helpers" model. The trouble is when the genius or geniuses go missing or the business grows too large for the genius to quality check everything.

Level 5 is a mature, world-class, optimized, self-optimizing, and continuously improving system, capable of accomplishing the organization’s objectives every time, virtually defect free. The Level 5 organization has healthy leadership at all levels; a culture of trust and accountability. They measure, manage, and quality check all key processes and outputs, never letting defects run down-stream. Their processes are well documented and continuously improved and their tools and technology are advanced, fully integrated, and accelerate performance. Their training is such that they are often considered "university organizations," and a disproportionate number of leaders in their industry once worked in this organization and their results are superior, often achieving greater than two-times the profit or effect per unit of input.

Levels 2 to 4 are the stages on the journey from friction, confusion, and underperformance, to world-class.

The assessable and (usually) measurable "aspects of maturity" include (1.) leadership, (2.) a culture of trust and accountability, (3.) measurement, (4.) process orientation (this is where Lean Six Sigma and other Quality tools come in), (5.) tools & technology, (6.) training, and (7.) results. A Maturity Model can be applied to any human organization, at any level including large corporations, business units, departments, charitable or non-profit organizations, governmental organizations, etc.

SIMPLE LEVEL 5 MATURITY MODEL

Level 1 - Heroes: Few processes. Ad hoc. Tribal knowledge. Friction, confusion, and underperformance.

Level 2 - Defined: Key processes are defined but not applied by 100% of the people 100% of the time. Less friction.

Level 3 - Managed: People are enthusiastic and proud. Processes are defined and managed. Performance is good.

Level 4 - Quantitatively Managed: All processes have KPIs. All units have scoreboards.

Level 5 - World Class: Zero defects. Continuous improvement. Agile. Fewer people, doing more, paid highest in the industry. Greater than 2X industry average performance.

Background

I’ve had the privilege, and the amazing education, of running my own business for more than 20 years now. From the beginning I wrote good business plans; because that's what I am good at. To my surprise, I was unable to grow a large, “mature” business. For a long time it frustrated me. But then it intrigued me. I wished someone could teach me why my business could not grow the way I expected it to. Experience and studying maturity models has, I believe, taught me the reason. I just was not the leader a larger enterprise needed, and I did not build a culture of trust and accountability. But that was then :-)

We were going to send our Operations Manager off to a full week of Lean Six Sigma training; but I felt something was missing. So, like I sometimes do, I started researching obsessively.

Even before I began my research, there were a handful of beliefs I had, from my experience and study: I believe organizational culture trumps virtually anything else in the success of an organization. I know that just having process documentation is not the answer because we had processes documented for more than 15 years, but they were adhered to unevenly. I observed that having the right managers in place to nurture and guide the staff has magical effects on results. I believe the book The Goal correctly observes and explains that there is always one bottleneck in any system; when the one bottleneck is removed, automatically some other aspect of the organization becomes the bottleneck, so working on anything other than the one current bottleneck is silly.

In my research I found maturity models and it turns out that we needed an organizational evaluation, to identify the bottlenecks between where we are and where we want our organization to be. Then, we can learn and apply the right tools to open those bottlenecks. Often these tools include those in the Lean Six Sigma portfolio, but not always.

Aspects of Maturity

The list of the aspects of maturity are in the order they are for a reason; weaknesses at the top need to be addressed first.

Aspects of Maturity

  1. Leadership Maturity

  2. Culture of Trust and Accountability Maturity

  3. Measurement Maturity

  4. Process Orientation Maturity

  5. Tools and Technology Maturity

  6. Training Maturity

  7. Results Orientation Maturity


1. Leadership Maturity

“Only three things happen naturally in organizations: friction, confusion, and underperformance. Everything else requires leadership.”
— Peter Drucker

It's been known since before humans started writing things down that group success is primarily based on the quality of the leadership. But a "quality" leader is largely misunderstood. The most accessible research, thought, and writing on the subject I have found is by Jim Collins, of Good to Great fame:

"Level 5 Leadership is a concept developed in the book Good to Great. Level 5 leaders display a powerful mixture of personal humility and indomitable will. They're incredibly ambitious, but their ambition is first and foremost for the cause, for the organization and its' purpose, not themselves. While Level 5 leaders can come in many personality packages, they are often self-effacing, quiet, reserved, and even shy. Every good-to-great transition in our research began with a Level 5 leader who motivated the enterprise more with inspired standards than inspiring personality."

Leadership Maturity Continuum

  • Level 1: No process orientation. Often the #1 hero making results happen by the force of genius rather than process and effective delegation to a competent team of dedicated team members.

  • Level 2: Leaders know they need to increase process orientation, but have only taken initial steps in the direction of increased process orientation. Leaders realize that the culture and health of the management team is closely related to a healthy company culture.

  • Level 3: Top leaders are fully invested and dedicated to increasing process orientation throughout the organization. They are getting their direct reports excited about increasing the effectiveness of the processes, increasing quality, and decreasing drama. These leaders are in sync with and supportive of the other members of the management team.

  • Level 4: Leaders feel like they work for the people "below" them in the organization. The leaders feel like it's their job to serve the direct reports and make their ability to do excellent work easier and easier over time.

  • Level 5: Leaders are evangelists for the organization and how awesome their people are. They give all the credit to the people doing the work and to the managers who support the people doing the great work of the organization.

Resources

  • Good to Great by Jim Collins

  • Steve Jobs 1990 interview video about Joseph Juran and Quality. The first 11 minutes 10 seconds (not the full 19 minutes) are key. When watching this, I am not surprised that he changed the world with technology and created in his own lifetime the most valuable company in the world.


2. Culture of Trust and Accountability Maturity

“Culture Eats Strategy for Breakfast.”
— Peter Drucker

A culture of trust and accountability is the only known lubrication for the friction, confusion, and underperformance that happen naturally in all organizations. As discussed above, leadership is an absolutely necessary precursor and a culture of trust and accountability is the result. Leaders who can not develop it need to be coached and trained until they can, or removed. Individuals who sour it need the same. Ultimately, the response of a group with a strong and well established culture of trust and accountability (Levels 4-5) to an individual trying to sour this culture will be to "barf them up like a bad piece of fish." Sorry for the graphic analogy; but the reaction will be strong. And in that trusting culture, the leader will take immediate action. Hence a virtuous cycle upward to higher and better accountability, trust, and performance.

We all know about "peer pressure." Usually it's thought of negatively. But it should be considered an aspect of human behavior that is entirely neutral. If a group is mostly mediocre, then most of the performance in the group will be close to that average (or mean). If the group performs poorly, most of the performance will be poor. But high performing groups, with high expectations, due to leadership and culture, will bring out the best in people. The peer pressure encourages everyone to do their best. Positive reinforcement is the only way to get people to run past their goals. And cultures that are constantly patting one another on the back, high-fiving, and celebrating great work, actually bring more great work out of the people in the group. The old adage "The beatings will continue until morale improves" is funny because it's SO dumb; it's the opposite of how humans are wired. So we need to create a culture that celebrates every day.

Culture of Trust and Accountability Maturity Continuum

  • Level 1: Drama, blame, finger-pointing; resigned to the idea that they work in a messy place.

  • Level 2: Less drama; some are excited about the new processes; a divide between process oriented and the "old guard" emerges.

  • Level 3: Low drama; staff are enthusiastic; teamwork; victories are often celebrated; everyone knows the organizations objectives; unaccountable people leave.

  • Level 4: Virtually zero drama; the staff love the work and each other; everyone knows exactly why their job is important in accomplishing the organizational objectives; they recommend that their smartest friends join the team.

  • Level 5: SEAL Team; 100% trust; 100% accountable; fewer people doing more and better work for the highest pay in the industry.

Resources


3. Measurement Maturity

”Feedback is the breakfast of champions.”
— Ken Blanchard

We would not watch sports if it weren’t for the scoreboard. It's just plain interesting, for most people, to see the consequences of performance quantitatively. In organizations the consequences of performance, or results, can be quantified in Key Performance Indicators (KPIs). In the most mature organizations everyone has KPIs, everyone knows how their KPIs lead to the organization's success, and individual KPIs roll up to the organization's KPIs.

World-class performance, whether at the individual or organizational level, comes from years of “deliberate practice.” That is "effortful activities designed to optimize improvement." What separates the best performers is simply a disciplined cycling endlessly through (1.) performance, (2.) analysis of the performance, and (3.) modification of performance with the explicit intention of improving. So when we use KPIs to do the "analysis of the performance," we can easily apply judgement or Lean Six Sigma tools to decide what our "modification of performance with the explicit intention of improving" will be. If it works to improve performance, we will keep the modification. If it does not improve performance, then we won't.

A word of warning: Incentivizing the right things is often not intuitive and it’s easy to incentivize the wrong behaviors.

Measurement Maturity Continuum

  • Level 1: Feedback only comes from complaints. Financial and other reporting does not exist, is inaccurate, not shared, or so delayed that it does not aide in decision making.

  • Level 2: Basic financial measures are available after close of periods: P&L, balance sheet, cash flow.

  • Level 3: KPIs exist for all operational units and aid in decision making. Clients are surveyed periodically.

  • Level 4: Leading KPIs are connected to organizational success and roll up from bottom to top. All individuals have a dashboard. All units have scoreboards. Clients are surveyed often.

  • Level 5: Industry leading. Everyone knows how they are contributing every day. Everyone enjoys contributing to the organization's success.

Resources


4. Process Orientation Maturity

“If you can’t describe what you’re doing as a process, you don’t know what you’re doing.”
— W. Edwards Deming

For a human organization to be able to reliably and predictably accomplish its' objectives in a cost effective way, it must have processes, including processes to quality check the work before completion or delivery. The better defined these processes, the more mature the organization. Once the processes are defined, the organization can then work to improve the processes, increase the quality, decrease costs, speed the time for processing, etc. When we normally talk about quality management, this process orientation is usually what we are talking about. The godfathers of process improvement are Deming and Juran, who taught the Japanese about quality manufacturing after WWII, which lead to Japan dominating the world of manufacturing for decades and almost decimating the U.S. auto business in the 1970s and ‘80s.

Process orientation and continuous improvement involves identifying the best way to do the work of the organization, documenting those best practices as standard operating procedures and standardized outputs, training all of the people who touch the process in these standards, and continuously monitoring the processes and outputs of those processes to continuously decrease the variation from the established standard. Over time, a tool kit for deciding where to start, how to document, and how to improve processes has been developed and refined, and have been collected and named Lean Six Sigma. Broadly, Lean tools eliminate waste, and Six Sigma tools decrease variation to produce virtually defect-free output. These standard operating procedures need to serve as is the "single source of truth" for everyone in the organization for all key processes.

We must never forget that process orientation begins with the organization's leadership, and no amount of process can overcome a culture that is not healthy and not focused on doing quality work. An organization with mature leadership at all levels and a culture of trust and accountability but zero process documentation, will outperform an organization with poor leadership and poor culture but excellent process documentation.

Process Orientation Maturity Continuum

  • Level 1: Tribal knowledge.

  • Level 2: Key processes are documented. Less than 100% adherence. Limited management.

  • Level 3: All processes are documented and managed.

  • Level 4: All processes quantitatively managed with measures of quality and quantity. Continuous improvement.

  • Level 5: Industry leading. Staff are industry leading experts. Were, will be, or could be specialty consultants in process management.

Resources


5. Tools and Technology Maturity

This is not what makes organizations great. Tools and technology have never turned a mediocre, or worse, organization into a good or great one. But tools and technology can turn a great organization into one that dominates it's competition. Jim Collins (in Good To Great) calls these “technology accelerators.“

A woodsman was once asked, “What would you do if you had just five minutes to chop down a tree?”

He answered, “I would spend the first two and a half minutes sharpening my axe.”

The tools and technology for a construction business are profoundly different than those for a charitable organization trying to address kindergarten readiness in at-risk communities, so we won't spend much time on specifics here, other than to say investments in (1.) leadership, (2.) a culture of trust and accountability, (3.) measurement, and (4.) process orientation (especially Lean Six Sigma and other Quality tools) are often money well spent.

Tools and Technology Maturity Continuum

  • Level 1: Ad hoc. Cobbled together.

  • Level 2: Basic functionality. 5S Method.

  • Level 3: Lean. Advanced functionality. Good integration.

  • Level 4: Six Sigma. Fully integrated and continuously improving.

  • Level 5: Industry leading, proprietary "technology accelerators"

Resources


6. Training Maturity

“When we deal in generalities, we shall never succeed. When we deal in specifics, we shall rarely have a failure. When performance is measured, performance improves. When performance is measured and reported, the rate of performance accelerates.”
— Thomas S. Monson

Of course people need to possess the skills necessary to do the work. Carpenters need to know how to measure and cut. Basketball players need to know how to dribble, pass, and shoot. Lawyers need to know the law and be able to write. Our training systems need to train in the fundamental skills and/or verify they are in the possession of the people performing the work.

But when it comes to business processes things are different. I used to think that lots of training had to come before excellent process performance. But I learned The ABC Model of Behavior from Ken Blanchard's books that the antecedent (or activator) that comes before a behavior is only a small portion of what drives that behavior. It's the consequences that drive behavior; to the tune of 80% or more. I also learned that negative consequences can only stop behaviors, and the only way to get people to "go the extra mile" is with positive consequences. So we are better off spending 80% of our energy giving positive reinforcement for doing the behaviors that we hope for, rather than spending a ton of time in training (since training is an antecedent that takes place before the behavior we want).

In my business there are thousands of skills required to be an A-Player. And everyone we hire shows up with many, but not all of them. So really it's better for us to just put them to work, and see where they run into trouble; just like the Theory of Constraints and identifying bottlenecks discussed above. It does not matter if it's an individual or an organization, if they intend to improve performance, there is only one bottleneck between where they are and improvement. Add that is where we should focus our energy.

So world-class training is awesome, but it's not technically necessary for world-class organizational performance. And that's why this is the last of the aspects of the maturity in the model before results. If all of the other aspects are entirely mature then everyone in the organization will get trained on the job or just figure out the right things to do based on leadership, culture, measurement (feedback), etc...

Training Maturity Continuum

  • Level 1: Basic on-the-job training (OTJ). Inconsistent.

  • Level 2: Basic functional training. Inconsistent. Skills verification is limited.

  • Level 3: Documented, delivered professionally, and skills mastery is verified.

  • Level 4: Continuously improving.

  • Level 5: "University Organization"

Resources


7. Results Orientation Maturity

“The main thing is to keep the main thing the main thing.”
— Stephen Covey

Results are why humans organize into groups and concentrate their attention to accomplish something that is not possible alone. So no matter what your organization's purpose (even if it's purely focused on fun), staying focused on that objective is job No. 1. In most organizations there are numerous KPIs that can measure success. Obviously in business, profits are certainly one of them. In many organizations today they consider the "triple bottom line" that includes social, environmental (or ecological) and financial.

“I have a PhD in results.”
— Trent Northcutt, Aurora Spine CEO

Results Orientation Maturity Continuum

  • Level 1: Friction, confusion, and underperformance.

  • Level 2: Below average.

  • Level 3: Good

  • Level 4: Great

  • Level 5: Awesome. Greater than 2X industry average.

“Put all your eggs in one basket and then watch that basket.”
— Andrew Carnegie

Organizational Maturity Matrix


A Lesson from an Organizational Maturity Failure

A New York Times investigation found that doctors at UNC Children’s Hospital suspected that children with complex heart conditions had been dying at higher-than-expected rates, and even children with low-risk conditions seemed to do poorly. Secret recordings shared with our colleague reveal what was happening inside the hospital. Guest: Ellen Gabler, an investigative reporter for The New York Times. For more information on this episode, visit nytimes.com/thedaily.

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