Organizational Effectiveness is a term often overused in modern corporate boardrooms. More than just another buzzword, it has become the primary measure of 21st century leadership.
At the most elementary level, organizational effectiveness measures how thoroughly and efficiently a company achieves its goal.
It is the difference between companies that run like well-oiled machines, or those that grow, but do not scale. And it begins in the initial acquisition of employees, is nurtured by executive coaching, and ultimately results in an organizational culture of leaders creating leaders.
What are some common organizational frustrations?
"The only things that evolve by themselves in an organization are disorder, friction and malperformance." - Peter Drucker (1909 - 2005)
LinkedIn partnered with Harris Poll to survey more than 5,000 employees over the age of 18 who are employed full-time, part-time, or self-employed across the United States.
These are the top 10 challenges for U.S. employees, according to LinkedIn:
1. Finding a work-life balance (38%)
2. Managing workloads (31%)
3. Dealing with coworkers (26%)
4. Workplace politics (25%)
5. Dealing with managers (23%)
6. Growing their careers (22%)
7. Being passionate about what they do (19%)
8. Not having somebody to turn to for help (16%)
9. Equal pay and negotiating salaries (15%)
10. Answering all of their emails (13%)
As far as the company itself is concerned, the frustrations are different, but no less affecting:
1. A change-resistant environment (38%)
2. Employee negative interactions (28%)
3. Lack of middle level feedback (27%)
4. Inefficiencies of process (16%)
5. The need to satisfy stakeholders (12%)
What is organizational effectiveness?
"Quality is the result of a carefully constructed cultural environment. It has to be the fabric of the organization, not part of the fabric." - Philip Crosby
Organizational effectiveness is the degree to which an organization achieves the goals it set out to achieve.
These goals can be a certain output (productivity or service quality), efficiency goals, expansion plans, innovations, or any other goal, but also the degree to which its internal processes are aligned, and the degree to which it has secured the resources required to create a competitive advantage.
Organizational Effectiveness is a very complex puzzle. Different models offer differing viewpoints to assessing efficiencies.
Measuring organizational effectiveness is not a matter of either/or. Rather, it is about taking multiple perspectives and seeing if the organization is reaching goals, as well as its full potential.
There are 7 common organizational effectiveness models
Goal model – the traditional model, measures effectiveness by goals attained
Measures output, but no info about input or process
Internal process model – assesses smooth functioning of operations
Focuses more on efficiency than effectiveness, internal without external
Resource-based model – exploits valuable or rare resource
Imitators weaken brand, advantage lost means loss of business
Strategic constituency model – measures satisfaction of interested groups
Identifying strategic constituencies is key to success
Stakeholder model – This approach includes those directly and indirectly affected
May not always have power over those affected
Competing values model – the ability of a business to reconcile competing goals & values
Differing metrics, incompatible systems, friction
Abundance model – equates effectiveness with unleashing employee potential.
Cannot have positives without negatives
What are some reasons employees would be burnt out or overwhelmed in the workplace?
"Pleasure in the job puts perfection in the work." - Aristotle (384 BC - 322 BC)
There are as many reasons for employee dissatisfaction as there are employees. The complexity of employees and how they view their workplace issues are legion, but they do share some similarities.
“Burn out” is not a medical term, although it can be linked to many different physical expressions, such as depression, insomnia, even high blood pressure. It is a special kind of work-related stress that affects over 23 million Americans.
Work-related in that most of the aggravating factors that contribute to burn out take place on the job, and take many forms:
Lack of Control/Clarity
Dysfunctional Dynamics
Extremes of Activity
Monotony
Work-life Imbalance
Lack of Social Support
Unclear Expectations
Lack of Recognition/Reward
Isolation
Lack of Upward Mobility
Bad Communication
If you find yourself feeling burnt out at work, there are some specific steps you can take to feel better:
Evaluate your options – Discuss your concerns with your supervisor, try to set goals that tackle important issues first, and relieve pressure from those items that can wait.
Seek Support – your family, friends, and especially co-workers can help, support, and collaborate to help you cope.
Get some exercise – Regular physical activity can not only help take your mind off work, but can also help you manage stress.
Get some sleep – Sleep is the natural cure for most stress-related issues and can help restore your well-being.
How can organizational effectiveness influence product and service quality?
"The people who are doing the work are the moving force behind the Macintosh. My job is to create a space for them, to clear out the rest of the organization and keep it at bay." - Steve Jobs (1955 - 2011)
There is significant influence between the effectiveness of organizations and service quality or company performance.
Focusing on behaviors rather than philosophies allows companies to translate concepts into actions, providing better differentiation from the competition, improved performance, and more engaged employees, which changes workplace culture.
The notion that organizational culture impacts on service quality, which in turn influences customer satisfaction and organizational performance, has gained widespread acceptance in both academia and organizational practices.
When companies better control their internal systems, they provide confidence to customers that the organization will consistently be able to meet customers needs and is striving to exceed them.
An efficient organization is one in which employees are very clear about what is expected of them, what customer requirements are, and how to achieve those goals.
What are some ways organizational culture can help your business thrive?
"Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results." - Andrew Carnegie (1835 - 1919)
When organizations develop positive, virtuous cultures they achieve significantly higher levels of organizational effectiveness — including financial performance, customer satisfaction, productivity, leaders creating leaders, and employee engagement.
Although there’s an assumption that stress and pressure push employees to perform more, better, and faster, what cutthroat organizations fail to recognize is the hidden costs incurred.
First, health care expenditures at high-pressure companies are nearly 50% greater than at other organizations. The American Psychological Association estimates that more than $500 billion is siphoned off from the U.S. economy because of workplace stress, and 550 million workdays are lost each year due to stress on the job.
So, the negative effects are clear. The positive effects, however, go far beyond merely avoiding the negatives:
Increased employee performance
Decreased turnover
Strong brand identity
Revenue gains
Elevated productivity
Transformational power
Top performers
Effective onboarding
Happier, healthy team environment
Better reputation
Talent Attraction
These benefits are just a few of the advantages establishing and fostering a strong and efficient corporate culture can give your organization. The time and effort you expend on this endeavor will pay off in significant dividends.
What are some traits of good leaders and happy employees?
"An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organizational success." - Stephen Covey
All too often, people who are very good at their job impress their superiors, who promote them into management. Management, however, requires an entirely different skill set than the job they were just promoted out of.
Just as teaching is a different skill than what is being taught, managing is a different skill than the action being managed. Leadership is a talent, one that must be coached, and it expresses itself in many ways:
Communicating effectively - Both top-down, as well as bottom-up
Empathy – Caring about employees, listening to them, involving them
Strong convictions, but continually striving to learn
Responsible – fully accountable
Strategic risk taker – daring but never reckless
Authentic and transparent – builds trust and commitment
Understands a multigenerational workplace – differing needs and motivations
Understands and articulates the vision – shared enthusiasm
Strives to be a good example, acts strategically
Self-awareness – strengths and weaknesses, others’ perceptions
Shows gratitude and respect – contagious positivity
Delegates tasks effectively keeping employee development foremost
Enthusiasm that equals focus
A willingness to have the hard conversations
The ability to pivot when circumstances dictate
These traits are common to the best leaders today, and can be coached to fine tune the talent within every potential leader. The better your leadership talent, the happier your employees will be, and they in turn will show you how much happier they are by:
Socializing
Asking questions
Volunteering for new tasks
Caring about their appearance
Punctuality
Putting effort into their own work
Offering assistance to project team members
Interest in growing with the company
But even more important than that, they will begin to see problems as opportunities, rather than inconveniences. They will express gratitude themselves, and be more positive generally. They stay busy, but never overwhelmed. They accept things that cannot be changed, and are honest about things they want to change. Their interactions, both with customers and each other, will improve. Their employee performance evaluations will be more positive.
What are some traits of a well-functioning work culture?
"Jingshen is the Mandarin word for spirit and vivacity. It is an important word for those who would lead, because above all things, spirit and vivacity set effective organizations apart from those that will decline and die." - James L. Hayes
There are some companies that EVERYONE wants to work for. Places where those who are cultivating their careers hover like honeybees over every job opening, where the cachet of the company name alone can give polish to a resume.
What makes these companies so special? Why do they enjoy the reputation they do?
A culture is considered strong when there is cohesion around beliefs, behavioral rules, traditions, and rituals. Just as individual leaders share certain traits, corporate leaders share elements in common as well:
Multiple opportunities for growth
A culture of collaboration
Strong Purpose/Core Values/Pride
Reward Systems
Long-term employees
Strong workplace friendships and camaraderie
Diversity
Transparency
Leadership visible and accessible
Lack of office politics
Celebration of wins
Extreme flexibility
Organizational Commitment
Actively people-oriented
Emphasis on Achievement and Excellence
Fairness and consistency is the rule, not the exception
It is probably safe to say that the most exceptional companies, the ones with the strongest organizational effectiveness, have strong individual leaders in place as well.
Can you give some examples of an aligned work culture?
3M: 3M is known for their creation of the Post-it®, Scotch™ tape, and countless medical devices. They are consistently in Fortune’s List of the World’s Most Admired Companies. It was even chosen as the third most innovative company in the world in a 2016 study.
Here’s how they built their culture of innovation. They allow employees to spend 15% of their time working on an innovative project of their own choosing. Each division within the company is required to generate 30% of their revenue from products created within the past four years. Therefore, the pressure is on to keep launching.
Also, dual career tracks allow employees to continue to grow and be promoted within the company. They are able to do this without becoming managers. This way, 3M doesn’t lose great scientists and gain mediocre managers.
Publix: Publix is actually the largest employee-owned company in the U.S. Considering each of the workers actually owns a piece of the business, it’s easy to see why Publix’s customer service shines.
Managers conduct performance reviews for feedback every six months. Employees are eligible for raises at those times, too. So, the opportunity for an employee to increase their salary occurs twice every year.
Zappos: Another company that aligns their employees with their core customer service value is Zappos. This online shoe retailer’s CEO, Tony Hsieh, believes that when people are comfortable, they do their best work. Zappos believes work should be one part of your life. Instead of focusing on work/life balance, the focus is on “work/life integration”.
Potential employees undergo two rounds of interviews. The first is about skill and experience. The second is all about personality. Even if they have a stellar resume, they will not be hired if they are not the right fit for the culture. In fact, after a one-month training period, Zappos even offers a $4,000 check to someone if they choose to walk away from the job. Only 2% of new hires have taken the offer and left.
According to the career website Comparably, the top ten businesses with the best internal culture were:
10. Farmers Insurance
9. Boston Consulting Group (BCG)
8. Qualtrix
7. Credit Karma
6. Microsoft
5. Ring Central
4. Zoom Video Communications
3. HubSpot
2. Adobe
Google
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