Think about your favorite football team. Imagine they have:
- The best play book
- The most talented players
- A great coaching staff
- Wildly enthusiastic fans
A sure bet that this team is bound for glory -- and even Super-Bowl rings? Not necessarily. It's a scenario all too familiar not just in sports, but in business organizations as well. Companies with good strategies, strong managers, and talented employees often end up losing to sharper-edged rivals.
Here's the secret: It's nearly impossible to win without teams and the entire organization moving together fluidly and relentlessly toward a common set of goals. High organizational effectiveness is the breakfast of champions.
Companies with high organizational effectiveness:- Align their HR and operational systems
- Work through high performance teams that deliver results
- Develop critical skills and encourage their use
- Communicate up, down, and across the organization
- Motivate employees to reach beyond even the most ambitious goals
- Measure results continuously
These companies stand apart from their competitors, as illustrated in this comparison:
| High Organizational Effectiveness | Low Organizational Effectiveness |
|
|
High organizational effectiveness gives companies the ability to react quickly, minimize costs, leverage employee talent, and outperform the marketplace.
Organizations are integrated -- "organic" -- entities consisting of four major categories:
1. Strategy and Leadership
2. Operational Effectiveness and Efficiency
3. Capabilities and Ownership
4. Trust and Motivation
Each of these categories contains systems, subsystems, and drivers. For example, Capabilities and Ownership include: accountability, skills development and opportunities for skills use, and delegated decision making, among other elements. Strategy and Leadership include: vision, strategic communication, and alignment, among others. Each category and the related elements must be measurable so they can be improved upon.
Each element above has specific drivers that influence performance on those elements. Understanding performance on each of these drivers, and how to leverage them is key to increasing organizational effectiveness, customer performance, and financial results.
Here is an illustration of the model:
Companies that perform in the middle of the accompanying matrix generally are solid business performers, year after year. These organizations manage change not as a series of ad hoc initiatives but as an integrated process where initiatives and related benefits reinforce one another synergistically. Any organizational improvement can yield at least some benefits. But when it is linked and aligned organizationally, there is the potential for a multiplying effect to set in. For example, let's examine the impact of effectively linking and leveraging just four organizational effectiveness benefits in a company:
|
Effects ->
Organizational Effectiveness Benefits: |
Cut Costs | Create Focus | Improve Quality | Improve Morale | Increase Customer Focus | Improve Bottom Line Results |
| Reduce Initiative Overload | X | X | X | X | X | |
| Improve Communications | X | X | X | X | ||
| Highlight Improvement Possibilities | X | X | X | |||
| Streamline Operations | X | X | X | X | X | X |
Metrus Group has found that these actions help clients to move ahead:
1) Identify the root causes of organizational ineffectiveness. Ask: What are the primary contributing factors -- processes, structures, systems capabilities and/or culture?
2) Determine the leverage points for addressing the root causes. Ask: What are the impacts, benefits, pitfalls, and lasting changes that would result by eliminating these causes?
3) Formulate a plan and make it logical, realistic and actionable. Be specific and include key results, resources, timelines, and milestones.
4) Create buy-in and ownership of the plan.
5) Implement and measure, implement and manage, implement and reward.
A large business unit of a Fortune 500 energy corporation was having difficulty with consistently achieving annual performance objectives and strategic goals. A review of the unit based on the four Metrus Organizational Effectiveness Quadrants yielded the following results:
- Strategy and Leadership — they had viable and achievable strategies, but were not effectively translating strategic goals, so there was no clear line-of-sight for employees.
- Trust and Motivation — Employees were highly motivated, but a history of poor communications and a few mediocre but high placed managers had greatly damaged the employees— trust in Business Unit leadership.
- Capabilities and Ownership — The organization had strong capabilitie and a good understanding of how they could be applied, but a sense of futility in making a difference. There was little perception of influence over business results and no concept of ownership over key outcomes.
- Operational Effectiveness — The company's processes were good but not adequately documented, greatly limiting their ability to improve and maximize them.
Based on assessment results, Metrus consultants facilitated discussions between business unit leaders and staff, generating prioritized goals, objectives, and actions to address their areas of organizational weakness.
Our consultants applied the Metrus Organizational Effectiveness model to align their efforts around three themes:
- Building Clear Line-of-Sight to Strategy,
- Strengthening the Staff/Management Relationship, and
- Establishing a Better Business Process Improvement Environment.
These themes became the linkage points for a set of integrated action plans and clearly defined objectives. Each target area was supported by a staff/leadership team and directed by a ‘champion— responsible for coordination, tracking, and maintaining visibility within the unit.
This business unit realized dramatic improvements in a very short time. They began to make positive immediate progress on their current year performance metrics and ended the year with results that were higher than any of the prior five years:
- 18% reduction in operating expenses.
- 20% increase in customer satisfaction.
- 15% increase in employee satisfaction.
- 17% increase in leadership effectiveness survey scores.
By using the Metrus diagnostic results as a base for its actions and objectives, this Business Unit maintained a clear focus while addressing a complex series of root causes for its problems.
Start with the Metrus Organizational Effectiveness Self Assessment.
- Sixteen core questions that will get you on the road. How does your team / unit / company rate on Organizational Effectiveness? (Clicking on the above link will provide you with a PDF file which you can print from your computer.)
The Metrus Group Organizational Performance Audit
The following articles are available at our Recommended Reading page:
Managing Costs Through Strategic Measurement, by William Schiemann
Using Strategic Measurement to Turn Vision Into Reality, by Carolyn Ott & William Schiemann, Journal of Strategic Performance Measurement
Measuring People and Performance: Closing the Gaps by Brian S. Morgan and William A. Schiemann, Quality Progress
Strategic Employee Surveys: People Measures That Make a Difference by Brian S. Morgan and William A. Schiemann, Journal of Strategic Performance Measurement
Internal Service Quality: Winning from the Inside Out by Mary Azzolini and James Schillaber, Quality Progress
We also recommend:
- Using Employee Surveys to Increase Organizational Effectiveness, by William A. Schiemann, in Applying Psychology in Business: The Handbook for Managers and HR Professionals, 1991
- Internal Service Performance by Mary Cronin Azzolini and John H. Lingle, Quality Progress, pp. 38-40.
- Becoming Measurement-Managed: Strategic Focus and Business Metrics at Monsanto’s IFS, by Richard B. Clark and Brian S. Morgan, Strategy & Leadership
- How is your Work Life/Personal Life Balance?, by Richard B. Clark and Brian S. Morgan, Strategy & Leadership
We also recommend the critically acclaimed Bullseye! Hitting your strategic targets through high-impact measurement, available through Amazon.com and other fine resellers.
Metrus can tailor an Organizational Effectiveness Program for your company.
Start with the Metrus Organizational Effectiveness Self Assessment.- Sixteen core questions that will get you on the road. How does your team / unit / company rate on Organizational Effectiveness?
- Identify key issues and drivers
- Determine organizational leverage points
- Evaluate current initiatives, programs, and systems
- Conduct an Organizational Effectiveness Audit
- Consult on root causes /intervention / results strategies
- Develop an Organizational Effectiveness Growth Plan
- Provide implementation support
- Improved product/service quality
- Improved customer satisfaction
- Better operational efficiency
- More effective cost management
- Improved staff morale
- Better bottom-line financial results
