1. Introduction

Building a high-performance organization should be every executive's top priority -- as important as formulating brilliant strategies, hiring and inspiring the right people, and making tough decisions.

Effective leaders build organizations that tap every bright mind, such that everybody thinks creatively about business strategies, makes sound business decisions, and coordinates their work with their peers.

The visions these enlightened leaders put forward are not limited to business strategies. They also envision and create work environments and governance processes that maximize everyone's performance. In other words, great leaders build high-performance organizations.

What is a high-performance organization? By far the most powerful model for a high-performance organization is that of a business within a business.

The business-within-a-business (BWB) paradigm is not outsourcing or divestiture; it doesn't mean chargebacks, nor operating internal service functions as profit centers; and it doesn't imply an arm's-length relationship where support staff don't care about the well-being of the corporation.

The BWB paradigm simply means running internal service functions in an entrepreneurial fashion, and respecting clients' rights as internal customers.

The BWB paradigm brings out the best in people: customer focus, empowerment, teamwork, quality, judicious risk-taking, innovation, efficiency -- all traits of successful entrepreneurs.

When people learn to think like entrepreneurs in an internal marketplace, they make better decisions. On any issue, when in doubt, ask yourself what an arm's-length business would do, and you'll find the BWB paradigm leads you to the right answer.

This monograph defines and explores the implications of the BWB paradigm, and suggests practical, systemic methods to implement it.