Learn what it takes to go beyond the buzzword and get your organization into fighting shape
Organizational effectiveness” may sound like an empty corporate buzzword, but more and more it’s become a measurement for company success. In fact, it’s become such a hot-button concept recently that some universities are offering certificate programs toward its implementation.
At the most elemental level, organizational effectiveness is a concept that measures how thoroughly and efficiently a company achieves its business goals. An effective organization runs like a well-designed, well-oiled machine. Its moving parts function smoothly to produce the results the business set out to achieve, with minimal wasted resources or time.
Read on to find out why organizational effectiveness is worth the hype, and what steps leaders can take to position their company for more efficient performance.
What is organizational effectiveness?
Organizational effectiveness refers to how an organization has achieved full self-awareness due in part to:
Leaders setting well-defined goals for employees and outlining ways to efficiently execute those goals
Management implementing clear decision-making processes and communication pipelines
Engaged employees—who are carefully selected and fairly compensated—producing work that prioritizes results
Why does organizational effectiveness matter?
The more effective an organization, the more likely it will survive and flourish over the long term. It’s worth noting that organizational effectiveness cannot be achieved, as one Bain & Company study put it, by “a cycle of recurring initiatives” to make your company more efficient. The behavior must be learned and baked into the day-to-day functioning and ongoing evaluation of the business.
The study goes on to describe the difference between an ongoing commitment to organizational effectiveness and a series of one-time initiatives that might cut costs. The former is comparable to a healthy routine of eating good food and getting regular exercise, while the latter is akin to extreme dieting. Although the latter might work in the short term, it doesn’t “build the muscles to sustain long-term change.”
Prioritizing effectiveness shouldn’t discourage company health or customer satisfaction, either. According to the same Bain & Company study, “Companies that embrace an efficiency mindset are four times more likely to say their cost efforts enabled growth rather than hindered it. They also are four and a half times more likely to report improved customer experience.”
5 ways leaders can produce long-term organizational effectiveness
The Bain & Company study maps out five key areas where successful companies made adjustments to achieve organizational effectiveness:
Strategy
Metrics
Commitment
Behaviors
Culture
“Tenacity and a sustained investment in these areas create the best chance of success,” the study asserts.
