Organizational Effectiveness – Definition,

Meaning and Six systems

October 26, 2020 By Hitesh Bhasin Tagged With: Management

https://www.marketing91.com/organizational-effectiveness/

Definition
Organizational effectiveness is defined as a concept to measure
the efficiency of an organization in meeting its objectives with the help of given
resources without putting undue strain on its employees. It is about how the
company can produce the target quota of products, how efficient its process
is, and how much waste is produced.

Meaning

It is a fact that performance automatically improves when the leadership

system is at its best. The function of leadership includes defining the future,
setting direction, becoming organized, creating strategies, implementing them
effectively, clarity in directions, clear communication, alignment of goals,
developing talent, building accountability, allocating resources and delivering
results.

An organization needs to have a clear mission and vision that can deal with
the ever-changing industry and side-by-side to meet its goals. Remember it is
human resources that prove advantageous, and it should be the priority of a
business entity to retain, motivate and develop them to achieve organizational
effectiveness.

Approaches to organizational efficiencies

The various approaches to organizational effectiveness are

 Goal approach – The goal approach refers to optimal profit by

offering the best service that will lead to high productivity. The
limitation of the goal approach is that it is a bit difficult to identify
the real goal and not the ideal goal
  System-resource approach – The system resource approach
puts its onus on the interdependency of processes that align the
organization with its environment. It takes the form of input-output
transactions and includes human, economic and physical
resources. The limitation of this approach is that acquisition of
resources from the environment becomes aligned with the goal of
the organization and thus it becomes quite similar to the goal-
oriented approach
 Functional approach – The functional approach assumes that the
organization has already identified its goals, and now the focus
should be upon attainment of these goals and how to serve
society. The limitation of this approach is that the organization has
the autonomy to take independent action for attaining its goals and
so why will it accept serving society as its ultimate goal.

Factors affecting organizational effectiveness

The factors that influence organizational efficiencies are

 Casual variables – These are independent variables that can be

altered by the organization and its management, for instance, its
policies, skills and behavior and leadership and business
strategies. The casual variables can determine the course
of development within an organization
 Intervening variables – These are motivation, performance goals,
attitude, loyalty and perception of the employees and their capacity
for efficient decision-making, communication, and interaction. The
intervening variables show the health of an organization.
 End-result variables – These are loss, costs, earnings, and
productivity. The end-result variables reflect the achievements of
an organization.
The six systems set up conditions necessary to create a high-performing
organization, It includes

1. Leadership

One of the critical steps in organization effectiveness is developing leadership

within the company. It is leaders who create a vision for their company, define,
refine and execute critical processes, translate values into strategies, take
action and be accountable. A leader has to answer three things

1. Value – What is the value he is offering to the customers to gain

a competitive advantage in the market
2. Approach – How is he fulfilling the unique needs of his
stakeholders and which strategy is going to support the vision for
achieving competitive advantage
3. Alignment – What is the designed alignment of processes,
practices, strategy, structure culture, etc and will they be able to
create maximum conditions for achieving company vision

2. Communication

Every organization needs an effective communication system so that the flow

of information is smooth. Leaders can be successful when they can
communicate their message to other people in a precise manner. Everything
happens in a company because of the exchange of information, and this is
why strategic communication is considered a critical element in the success
chain.

It makes sure that the impact of the message is in alignment with the intention
so that it will lead to a better and complete understanding. What, where,
when, how everything matters hence keep track of your words and
communicate effectually. An essential way for organizational effectiveness is
by making sure that the leader is aligning with the people around him and
teaching regularly.

This transparent communication strategy will keep the focus on a common

cause, minimize uncertainty, prevent excuses and give weight to the decisions
of the leadership to shape the behavior and belief of the employees

3. Accountability

Organizational effectiveness is to a great extent dependent on the concept of

accountability. A company should build an environment where
every individual, as well as a group, is accountable for the tasks he
participates in.

It is the accountability that determines how effectively the people perform the
given functions. The organizations must make sure that there are
performance accountability systems in place to clarify the expectations of the
company and align the rewards as well as consequences with actual
accomplishments.

4. Delivery Efficiency Strategy

The next step in the six systems of organizational effectiveness is the delivery
of products and services. It is a fact that consumers and markets are ever-
changing, and this means that a company should be prepared to shift and
make adjustments to accommodate these changes as well as changes
caused by advancements in technology. A straightforward delivery process
will ensure the delivery to the right customers and their engagement in full.

This is why business entities try to create simple procedures that are
adaptable, responsive. There is no scope for complexity because the onus is
on satisfying customer experience. When organizations align initiative
and operations with strategy using the best technique, they can pursue
breakthroughs in critical areas and build future capability.

5. Performance

Human resources are the most valuable asset of a company, and this is why
the proper emphasis is given on hiring and retaining the best of the best. It is
essential to find the right fit for the job and develop their skills and know-how
through training and other learning methods to increase organizational
effectiveness.

Business entities are particular about rewarding knowledge, talent, and

expertise to boost employee performances so that they can ultimately have a
positive impact on organizational effectiveness.

6. Measurement

It is imperative to measure organizational effectiveness. A business entity

must set a standard set of metrics and develop a system of reviews and
parameters to analyze and measure tasks, projects, productivity, behavior,
processes, and results.

It is leaders who establish and maintain the measurement system to track

progress and review status regularly.

Thank you for reading our article about organization leadership and performance effectiveness
development.

Becoming More Effective

The key to becoming more effective, then, is to invest in management
capabilities—in short, to move to a place where the nonprofit is not only
strongly led, but also strongly managed. As noted, our research suggests that
nonprofits need to take a holistic approach towards improving effectiveness,
shoring up management capabilities across the board. A good place to start is
with the areas our research has shown to be most prone to weakness. The
following five sets of questions can help an organization's leadership team
assess those areas and set a purposeful course towards improvement. Given
that many of the issues illuminated by our survey data link to unclear or
poorly communicated strategic priorities, we recommend beginning with that
challenge.
1. Are we clear on the strategic priorities that will enable our
organization to achieve our desired impact over the next
several years? Have we communicated our strategy clearly
enough that everyone within the organization understands
where we are going, why, and how we will get there?

Clear priorities are the "north star" against which an organization can align its
people, structure, and processes, and build its culture. When an organization's
leader has established clear priorities, he or she has essentially defined what
"success" will look like. Against that goal, it becomes easier to determine
which programs or initiatives are essential, and which are not, and to allocate
resources accordingly.

Take, for example, an organization that serves students who are at-risk for
dropping out of high school. Where does that organization draw the line in
terms of serving these young people? What if an opportunity arises to help
recent dropouts get back into school? Or to help younger students move out of
the "at-risk" category before they enter high school? Or to strengthen the
home lives of these students? Unless the leadership team has established and
communicated what matters most it can be difficult to chart a course in the
face of such options.

One way to determine if your organization has clear priorities is to ask each
member of the senior management team to make a list of its top five priorities
for the next one to three years. Once you've compared the lists, you'll be able
to see whether the team members are on the same page. If they are, you'll next
want to determine whether the priorities are well communicated throughout
the organization. To begin to find out, ask a representative sample of
managers at the next level down to engage in the same exercise. These simple
exercises will help you determine if your challenge is clarifying priorities or if
you need to work to on communicating the priorities to enable alignment to
them.

2. Given the organization's priorities, what decisions are truly

critical? Is it clear who is responsible (and who has the
authority) to make those decisions?

With clearly communicated priorities come more consistent decisions, given

that decision makers throughout the organization are guiding their choices
with the same compass. That said, ample room often remains for refinement
of the decision-making process itself. A well-defined decision-making process
leads to more efficient, responsive, and transparent decisions, with less role
confusion and therefore less conflict.

Establishing and implementing a strong decision-making process is a complex

endeavor—one that is hard to do well. So it may be valuable to use a
management tool specifically designed to help an organization's leaders
unravel the decision-making process, clarify roles and responsibilities, and set
clear expectations for decision making going forward. The process of using
such a tool can help leaders get past preconceived notions of structure and
more fully engage in a holistic approach to their organization.

The national leadership team at Omaha, Nebraska-based Boys Town, for

example, used a tool called RAPID® to clarify decision making between the
national headquarters and site-based program leaders. [4] Historically,
decision making had been highly centralized, with a small group of people at
the national headquarters making many decisions about local operations—
from hiring, to merit-pay increases, to purchasing furniture. As Boys Town
continued to expand its services, though, that approach no longer worked well.

With input from managers throughout the organization, an internal project

team worked with national office management to draft a matrix that classified
the types of decisions Boys Town site-based leaders faced, and set boundaries
of authority and responsibility for decision making going forward. This
process helped the organization push decision making down to the right level
and clarify when and how the national office should be involved.

3. Who in our organization must work closely together to

achieve these priorities, and does our structure enable them
to do so?

Identifying the work that's critical to achieving the organization's priorities,

who does that work, and how it delivers the desired outcomes helps reveal
which people need to work together and, ultimately, whether the current
structure facilitates their work.

Organizational design experts in the for-profit and nonprofit sectors alike talk
about the "grouping and linking" of work. They find that most leadership
teams pay a lot of attention to how work is grouped: around geographies, for
example, or product lines or functional areas such as finance or human
resources. Most, however, pay less attention to how people need to work
together across these groups, and thus fail to put in place the kinds of
structural mechanisms that can make such coordination easier. Without these
mechanisms, people end up working in their own silos. The fallout ranges
from wasted time (as people try to find information that isn't readily available
to them), to poor quality work (when the right input isn't incorporated), to
poor execution (because stakeholders critical to implementation fail to buy
in).

To help people work together more effectively across departments or groups,

start by identifying critical areas where such work takes place. Then narrow
that list to the areas that link back to the organization's top priorities. Armed
with this information, creating explicit linking mechanisms becomes a more
manageable endeavor. Some organizations use cross-functional working
teams. Others tap staff members to serve as liaisons between departments—
for example, asking a finance manager to work with a specific program.

4. Do we have the right people and capabilities to achieve our

priorities, and do our people feel that their goals and measures
align with these priorities?

One way to assess and improve the effectiveness of your people is to determine
how they are aligned against the organization's priorities. For each priority,
identify who is working on it and compare it to items that are of lower priority.
Ask yourself, do I have enough people against things that matter? Are my best
people allocated against the things that matter the most? Have I taken lower
priority work away from these people so that I am sure they will succeed?
Doing this can be especially critical in times of change, be it regrouping after
layoffs or embarking on a growth trajectory. These are the times when
management team members tend to take on new responsibilities, sometimes
overextending themselves and under-resourcing critically important areas.

It's also important to maintain the connection to the organization's high-level

priorities when setting individual performance goals and assessing staff
performance. Too often, performance reviews are "check-the-box" activities.
It's easier for participants to take reviews seriously—and feel that the process
is valuable—when individual goals are clearly linked to the organization's
overall goals. Performance reviews also should lead to action, influencing skill
development plans, future job assignments, promotions, and rewards.
Consider an example from another nonprofit that offers mentoring services.
Leaders had told staff members that the organization's priorities included
increasing the number of mentoring matches each staff member set up,
maintaining the quality of the matches, and balancing matches across easy-
and hard-to-serve communities. During performance reviews, however, staff
were assessed and rewarded only on the number of matches—the easily
quantifiable metric. As one middle manager put it, "Staff members are
routinely put in a position where they have to make a choice between actually
doing their jobs well and appearing to do their jobs well." When this feedback
was shared with senior leaders, they redesigned the process to include data
and qualitative feedback on these other dimensions. They also began to
reward employees who had performed well against all of the organization's
priorities. This change has contributed to improved employee morale, and it is
expected to drive more balanced performance across the organization's
priorities.

5. Have we defined the work processes and tools to enable

our people to be effective as they address our top priorities?

Time spent clarifying and honing work processes, and making them explicit
and accessible to employees can reduce rework and reinvention. The effort can
also contribute to consistency and improving levels of quality. This is gold to
any nonprofit, but it's particularly valuable when an organization is struggling
to increase impact on a tight budget or embarking on an expansion plan.

Consider the experience of KIPP, a charter management organization

currently operating schools in 19 states and the District of Columbia. In 2000,
when KIPP had only two schools (both high performing), the organization
received a large grant to replicate its efforts across the country. KIPP's small
leadership team recognized that in order to grow successfully, they would
need to articulate the work processes—both programmatic and administrative
—that had made the model so effective in the first place. These processes
included, for example, how to build a strong local board, budget for a new
school, and hire the right teachers. To codify these processes, the
organization's leaders documented the steps they had taken to set up their
first two schools. By doing this, they ensured that the principals in each new
KIPP school did not have to spend time reinventing the fundamentals of the
model and could, therefore, spend more time focusing on educating the
students.

In addition to getting the processes right, deploying tools and technology can
also increase organizational effectiveness. With limited funds available, many
nonprofits are hesitant to make these kinds of investments, but they can have
a huge payoff. Consider one large youth-serving organization whose leaders
discovered that completing essential documentation after each case
interaction was a major source of stress for staff members. The process was
labor intensive and time sensitive. As a first step towards addressing the
problem, the organization tested voice-recognition software that allowed staff
to dictate their notes, which were then automatically transcribed. Not only did
the software cut documentation time in half, but staff members also began to
find the task much less onerous. In fact, the organization's leaders believe that
adopting this technology has been a major contributor to improved staff
retention, increasing quality while reducing hiring and training costs.

Progress towards becoming a more effective organization means progress towards

increasing your impact. Whatever your organization's strengths and weaknesses, a
purposeful and holistic effort to improve effectiveness will be worthwhile—not only for
your employees and volunteers but, above all, for those your organization seeks to serve.
https://www.bridgespan.org/insights/library/organizational-effectiveness/the-effective-
organization-five-questions

WHAT IS EFFECTIVE ORGANIZATIONAL CHANGE

MANAGEMENT?
A change management plan can support a smooth transition and ensure your employees are
guided through the change journey. The harsh fact is that approximately 70 percent of change
initiatives fail due to negative employee attitudes and unproductive management behavior. Using
the services of a professional change management consultant could ensure you are in the winning
30 percent.

In this article, PulseLearning presents six key steps to effective organizational change
management.

1. Clearly define the change and align it to business goals.

It might seem obvious but many organizations miss this first vital step. It’s one thing to articulate
the change required and entirely another to conduct a critical review against organizational
objectives and performance goals to ensure the change will carry your business in the right
direction strategically, financially, and ethically. This step can also assist you to determine the
value of the change, which will quantify the effort and inputs you should invest.

Key questions:
• What do we need to change?
• Why is this change required?
2. Determine impacts and those affected.

Once you know exactly what you wish to achieve and why, you should then determine the
impacts of the change at various organizational levels. Review the effect on each business unit
and how it cascades through the organizational structure to the individual. This information will
start to form the blueprint for where training and support is needed the most to mitigate the
impacts.

Key questions:
• What are the impacts of the change?
• Who will the change affect the most?
• How will the change be received?

3. Develop a communication strategy.

Although all employees should be taken on the change journey, the first two steps will have
highlighted those employees you absolutely must communicate the change to. Determine the
most effective means of communication for the group or individual that will bring them on
board. The communication strategy should include a timeline for how the change will be
incrementally communicated, key messages, and the communication channels and mediums you
plan to use.

Key questions:
• How will the change be communicated?
• How will feedback be managed?

4. Provide effective training.

With the change message out in the open, it’s important that your people know they will receive
training, structured or informal, to teach the skills and knowledge required to operate efficiently
as the change is rolled out. Training could include a suite of micro-learning online modules, or a
blended learning approach incorporating face-to-face training sessions or on-the-job coaching
and mentoring.

Key questions:
• What behaviors and skills are required to achieve business results?
• What training delivery methods will be most effective?

5. Implement a support structure.

Providing a support structure is essential to assist employees to emotionally and practically

adjust to the change and to build proficiency of behaviors and technical skills needed to achieve
desired business results. Some change can result in redundancies or restructures, so you could
consider providing support such as counseling services to help people navigate the situation. To
help employees adjust to changes to how a role is performed, a mentorship or an open-door
policy with management to ask questions as they arise could be set up.

Key questions:
• Where is support most required?
• What types of support will be most effective?

6. Measure the change process.

Throughout the change management process, a structure should be put in place to measure the
business impact of the changes and ensure that continued reinforcement opportunities exist to
build proficiencies. You should also evaluate your change management plan to determine its
effectiveness and document any lessons learned.

Key questions:
• Did the change assist in achieving business goals?
• Was the change management process successful?
• What could have been done differently?

Is your business going through a period of organizational change? PulseLearning can assist in
managing the change process to meet business goals and minimize the associated
impacts. PulseLearning is an award-winning global learning provider experienced in change
management consultancy and developing engaging and innovative eLearning and blended
training solutions.

References:
1. Torbenrick – Change Management

Five steps to improving

organizational effectiveness
by Tim Reimer
in Management

While there have been numerous attempts to define organizational effectiveness over
the years, in general, the collaboration of resources, people, and processes to achieve
certain objectives is what makes up organizational effectiveness. This is particularly true
in a municipal setting that is not profit focused. The complexity in delivering a service or
product lies in coordinating resources, people, and processes in such a way that the
highest possible output in quality and quantity can be achieved at the lowest cost.
In many cases, organizations do not perform to the best of their abilities. Within local
government, one reason for this may be that organizational effectiveness is not
considered in a holistic assessment of the functionality of a municipality. It is by
grasping an appreciation for municipal effectiveness, however, that council and the
administration will gain a holistic view of the overall performance of their municipality.

1. Appreciate Resources, People, Processes

The first step in improving the effectiveness of a municipality is to appreciate the
interrelationship of resources, people, and processes. The awareness of a general
process flow from resource consumption to the delivery of services is considered the
value chain of the municipality. Therefore, it is important to identify which of these
process chains are supportive and which ones are core processes. In addition, each
department will have their own set of core processes that define their ultimate purpose
and contribution to the whole of the municipality. Assimilating this process information
will help to ensure that there is alignment between departments and that each
department executes effectively as a cog in the whole of the organization.

2. Address Organization Strategy and Objectives

Once there is a good understanding of the value chains, the second step will address
strategy and objectives of the organization. The identified core process must align to the
strategy and objectives. But, which one needs to be done first: strategy or value chain?
The presented methodology should not be considered in sequence. Until an equilibrium
is achieved, there is a back and forth between strategy and objectives and the definition
of the value chain. The definition of strategy and objectives through the strategic plan
will have an impact on the design of the value chain that might require adjustments. The
strategic plan therefore plays an integral part in working to achieve higher organizational
effectiveness.

3. Align Organizational Structure to the Strategy

The final step is to align the organizational structure to the strategy. By reviewing a
strategic plan, one will find some noble objectives and initiatives. However, when
mapping these objectives with the organizational structure, one can identify
discrepancies. Often, different organizational units don’t map to the strategy or are not
affected by the strategic plan. In many cases, each organizational unit picks what it
deems its main concern out of the overall strategic plan.A differentiator of an effective
organization is the capability to engage all organizational units to participate and
contribute in making the municipality the best it can be.
4. Measuring Results against Strategy
To ensure ongoing success, organizational effectiveness needs to be measured, and
there are different techniques that can be used. The most popular one is the balanced
scorecard, which measures customer-facing internal organizational performance
through learning and improvement, and uses financial criteria in order to establish a
holistic view that indicates how effectively the municipality is functioning. To ensure that
management stays on track according to its strategic plan, the balanced scorecard must
be linked to strategy.

5. Continuous Improvement
Finally, to achieve organizational effectiveness, the organization must demonstrate a
willingness to continuously improve its processes. This will require feedback techniques,
internal and external communication channels, and that suggestions for improvement
are taken seriously. If nothing ever changes, people will develop apathy toward the
organization, leading to stagnation and ineffectiveness.

Organizations that have a good strategic plan and are able to communicate it to the
organization, monitor progress, and evaluate their processes for continued improvement
will achieve a high level of effectiveness. MW

https://www.municipalworld.com/feature-story/improving-organizational-effectiveness/