Organizational effectiveness approaches make a big difference when it comes to business performance.
How you model organizational effectiveness, after all, affects:
- Business process design
- Organizational strategy
- Policies and procedures
- Workforce culture and the workplace climate
Among many other things.
Ultimately, these factors all contribute to an organization’s key performance metrics – such as profitability, growth, market share, and how well it achieves its objectives.
Below, we will look at a few of the most common approaches to organizational effectiveness, so you can decide which one is right for your business … or use them as resources to create your own model of organizational effectiveness.
Organizational Effectiveness Approaches
There are quite a few perspectives on how to model and measure organizational effectiveness.
Here are some of the most common:
A Goal-Based Approach
This perspective uses organizational objectives as the main criteria for success.
- Whether or not an organization meets its stated goals
- How efficiently those goals are met
- Key organizational aims, such as profits, innovation, growth, market share, and so forth
The goal-based approach is relatively straightforward and easy to understand.
However, strictly focusing on goals leaves out many other business areas that contribute to organizational effectiveness, such as those covered below.
Each business is composed of a set of functions, such as marketing, sales, IT, finance, human resources, and so on.
The efficiency of each individual unit – as well as their alignment and synchronicity – can act as a measure for organizational performance.
This approach has its advantages. But, like the goal-focused approach mentioned above, it also comes with its own drawbacks.
It tends to leave out other systems that affect business productivity, such as leadership, communication, and delivery.
For this reason, some approaches to organizational effectiveness measure effectiveness with a disparate set of business systems.
Some academics and business professionals prefer to evaluate organizational performance based on multiple dimensions.
One approach, for instance, evaluates four key elements:
- Production and output
- Workforce commitment
- Leadership ability
- Interpersonal conflicts between supervisors and subordinates
The Leadership Circle evaluates organizational effectiveness according to six systems:
Regardless of the approach or model that an organization chooses, it is important to take a systematic, goal-oriented approach to improvement.
In almost all cases, improving organizational effectiveness involves change, which is why effective change management is so important.
A Roadmap for Improving Organizational Effectiveness
Below is a straightforward roadmap that you can follow to initiate organizational change and improve organizational performance.
Define Your Model of Organizational Effectiveness
Above, we covered several models.
Whether you choose one of those – or design one of your own – it is important to have a model to build from.
That model will provide the guiding principles that can inform your strategies and tactics.
Define Problems and Define Solutions
Problems may emerge of their own accord, through customer complaints, analytics, and so forth.
Regardless of how the problem gets noticed, what is most important is understanding the problem:
- Its causes
- Potential solutions
- Strategies for achieving those solutions
- Potential obstacles and risks
Clearly defining the problem, its cause, and its potential solutions will help a business implement the correct solution that gets the best results.
Assessments help managers design the right change management strategy for their individual circumstances.
An assessment offers a snapshot of several areas, such as:
- Organizational capabilities
- Workforce skills and culture
- Change readiness
- Maturity of business systems and functions
Understanding areas such as these are fundamental to developing sophisticated, well-structured change management plans.
A roadmap for change is stage-based project schedule.
To successfully drive change, managers should focus on employees.
In the beginning, change management plans should:
- Build awareness and a sense of urgency
- Provide employees with the necessary skills, abilities, and knowledge to change
- Lead, not just manage
Once the project has begun, of course, it must be managed and maintained.
Implement, Manage, and Optimize
Rather than sticking to a pre-defined schedule, organizations should be flexible and adaptable.
If data indicates deficiencies in a particular process, for example, that process should be fixed.
Here are a few tips for optimizing organizational improvement projects during implementation:
- Measure and analyze performance
- Optimize and make corrections as necessary
In today’s fast-paced economy, agility and adaptability are valuable traits for any business process – including change management.
The more effectively an organization can adapt in real-time, the more relevant and valuable its solutions will be.
Finally, it is important to note that organizational changes don’t always stick.
Unless changes are instituted and actively reinforced, employees can very easily revert to old habits and workflows.
Even after a project is completed, changes should be reinforced to ensure that they remain permanent.
A few reinforcement techniques include:
- Employee Training
- Contests or other gamification techniques
Effective reinforcement – as well as the effective execution of every other step covered above – can help an organization make significant performance gains and meet its organizational change objectives.