Is there such a thing as “the best” organizational effectiveness model?
Yes and no.
The best model for any organization will depend on a few things:
- The organizational structure
- Its culture, people, and values
- As well as more typical organizational effectiveness metrics, such as employee performance, delivery systems, and leadership
Let’s discover what organizational effectiveness means for your organization.
What’s the “Best” Organizational Effectiveness Model?
One major factor that affects organizational effectiveness is the organizational structure.
There are a few ways to view organizational structure:
- Functional organizational structures divide the business into different functions, such as marketing, finance, IT, and so on.
- Divisional structures are used by large enterprises. Each business unit is essentially treated as a separate company.
- Flat structures, unlike the top-down hierarchy that is most common today, reduces or removes middle management. Employees have more decision-making power and independence.
Each of these organizational structures operates differently.
An organizational effectiveness model that works for one structure may not work for another. In fact, it may be counterproductive.
For instance, an organization that is more democratic would be most effective with a model that facilitates employee autonomy.
An autocratic organization, however, should be built in nearly the opposite fashion.
Such an organization would be most effective when leaders have nearly absolute control and workers can follow orders quickly and efficiently.
Every organizational structure has its pros and cons.
And one is not necessarily better than the other.
However, it should be clear that the “best” organizational effectiveness model will depend on how the organization operates.
Business Areas to Improve
That being said, there are certainly ways to improve organizational effectiveness.
Regardless of the structure, improvements to any business function will improve organizational effectiveness.
Here are a few examples:
- Processes – Every business process can be improved upon. The reduction of waste can be accomplished through decreased bureaucratic processes, improved workplace behavior, a better corporate culture, better tools, and so on.
- People, behaviors, and cultures – The climate of a company has a direct impact on organizational effectiveness. Organizational cultures that are founded on a strong, forward-thinking vision, for example, will be more effective than those that lack vision.
- Tools – Naturally, the tools and technology that a business uses will affect the organization itself. Though technology is not technically a model, it enables many new business models and approaches, as we’ll see below.
- Skills – Systems should be set up to enable and enhance worker productivity. This is especially true today, when digital literacy has become so critical. The right digital training programs will improve efficiency, effectiveness, and bottom-line results.
- Strategy – Strategy that stagnates will produce stagnant organizations. To stay relevant and competitive, organizations should continually adopt new strategies to meet the circumstances of the ever-changing economy.
Improvements to any of these areas will enhance the organization’s overall efficiency, effectiveness, and profitability.
Modern Models that Are Efficient and Effective
In recent years, new business approaches have become popular – and to many, these approaches are more effective and efficient than traditional bureaucratic models.
- Agile – Agile is a business approach that prioritizes collaboration, communication, and user-driven product development. This business style can be applied within individual departments or across entire organizations.
- Lean – Lean focuses on reducing waste by using customer feedback to develop products and services. Feedback collection is built into the fabric of the product development cycle, which helps products stay more relevant and useful.
- Kaizen – Kaizen is a Japanese term that means “improvement.” In business, it refers to continual improvement. This business approach began in manufacturing, but has spread to many other areas of business.
- Zero-Based Mindset – A zero-based mindset attempts to restore a startup mentality even to large organizations. The goal is to align organizational culture with top-level strategic priorities.
Though such models may seem foreign to some, they have become the standard operating procedure in many organizations.
Characteristics to Foster
Regardless of your business structure or the business model you adopt, there are certain organizational characteristics that are more profitable in the digital age.
When designing – or redesigning – your organization, consider building an organizational structure that is…
- Innovative – Innovative business processes can improve effectiveness across every area of an organization. Creative thinking can improve everything from product development to customer service to the employee experience.
- Fast – Speed is another area to focus on. Through some of the approaches mentioned here, it is possible to develop a unique organizational effectiveness model that delivers processes quickly and efficiently.
- Forward-thinking – A vision of the future should be built into the organization’s mission, strategy, and culture. By keeping an eye on the future, organizations can help keep their structures aligned with their people.
- Human-centered – Another hallmark of today’s most successful companies is human-centricity. Businesses focusing on customer success and the customer experience, for example, will improve customers’ lifetime value, the brand image, and more.
Today’s business environment moves faster than ever.
Building a business model around characteristics such as these will help your organization stay more efficient, effective, and profitable in the years to come.