When organizations are small it is fairly easy to maintain organizational effectiveness as the business is usually less complex and the work force is more manageable. At this point, there is a surplus of what we would call “organizational margin” or “organizational capacity” that enables a company to absorb minimal growth and not overtax the functional areas. As organizations grow, the business tends to become more complex, systems are required, and the people dimension is more difficult to manage.
The natural tendency is to leverage the work force to absorb the growth. Often, companies do not recognize the pain the work force is experiencing within the organization until it is too late. Pain such as disgruntle workers, disengaged workers, turnover, drop in customer sentiment, all these elements start to increase until eventually there is a stall or even worse a reduction from the previous growth levels. When the symptoms related to a reduction in organizational margin start to surface, there is often an executive bias that is created. How many times have you heard an executive say “what, nothing is wrong, look at our sales?” This is when the leadership should take a hard look at the organization and begin asking the hard questions.
The six areas of the organization to begin asking the hard questions (hint: I save the best one for last!) are as follows:
Leadership– are we developing and training leaders within the organization to support and grow with the brand? Have we properly communicated our “why”, our core values and behaviors? Are the core values and behaviors of leadership being monitored, measured, exhibited, and rewarded? Are they celebrated?
Finance– are we investing in the right things to further the organizations growth? Do we understand our true cost? Are we aligned with operations and human resources?
Operations– are the operations aligned with the business development, finance, and strategy of the organization? Are we too complex in our business model? Does human resources/talent acquisition have a clear understanding to our future people needs? Skills?
Infrastructure– is the infrastructure stable? Is it set-up to foster the right kind of dialog across functional areas as well as support the contextual work environments of our employees? Do our systems provide the right data? Are we able to get to the data in an insightful and meaningful way?
Business Development– are our efforts supportive of the agreed upon strategy? Is operations and finance aligned on supporting and delivering our efforts? Do we measure the right activities?
People– do we have the right people in the right positions and developed to be successful? Do we understand the behavioral typography for success in our key positions? Are there career paths for the employees to understand their opportunities? Are we managing our people as carefully as we are managing our other assets? How are we actively dialoging with our people? Does every person understand what we do, why we do it and where we are going? Does compensation and benefits support what is important to the organization’s future along with what is important for our people? What’s our turnover? Do we know the cost of our turnover? How deep is our bench strength? Do we have the right people metrics, and can we accurately measure them? Etc. etc. etc.
Increasing a company’s organizational effectiveness can seem like a difficult prospect. To not address the effectiveness, is a much more daunting reality. But having a plan and being intentional, you can increase your organizational effectiveness.