For the majority of us, we are in business having one objective: profitability. That’s the bottomline. That’s the very reason for a business’ existence. But as times get tougher, how do we ensure the sustained profitability of the business we’re in? The answer lies in ‘Organisational Effectiveness’, a much debated topic having approximately 1.3 million Google citings and probably just as many definitions!
But seriously now, much has been written on the topic, yet, research still suggests that many business leaders are struggling with exactly what it entails, let alone how to achieve it. And it’s mainly because it’s easier said than done. It’s not a smoothly paved road with clear markers. Instead, one can liken it to a 4x4 bush track, which is bumpy, have many twists and turns, and sometimes is barely distinguishable from its immediate surrounds.
Some define the term as the alignment of a business’ strategy, its people, and its operations management to achieve success. But in short, business effectiveness is having the ability and the necessary means to do what you have undertaken, and being good at it. It’s about the tangibles and the intangibles that make up a business and work in unity to steer it towards realising its strategic goals. It’s about having all the gears in place and having them oiled thoroughly that eventually lead to the machine purring away smoothly at full torque.
Business effectiveness is the fundamental element enabling businesses – irrespective of industry and size – to meet their strategic objectives and ensure sustained business growth.
At the foundation thereof lays a clearly articulated business strategic plan, the seemless execution of which is made possible by the structural components of the business to ensure effective work and information flow. However, that is less than half the story. Of much more importance are the intangible and often vague ‘rules of the game’, which are the mortar holding together the bricks. Or as Marian Bradshaw-Knapton (President, Avocet Organisational Performance Inc.) puts it:
Some define the term as the alignment of a business’ strategy, its people, and its operations management to achieve success. But in short, business effectiveness is having the ability and the necessary means to do what you have undertaken, and being good at it. It’s about the tangibles and the intangibles that make up a business and work in unity to steer it towards realising its strategic goals. It’s about having all the gears in place and having them oiled thoroughly that eventually lead to the machine purring away smoothly at full torque.
Business effectiveness is the fundamental element enabling businesses – irrespective of industry and size – to meet their strategic objectives and ensure sustained business growth.
At the foundation thereof lays a clearly articulated business strategic plan, the seemless execution of which is made possible by the structural components of the business to ensure effective work and information flow. However, that is less than half the story. Of much more importance are the intangible and often vague ‘rules of the game’, which are the mortar holding together the bricks. Or as Marian Bradshaw-Knapton (President, Avocet Organisational Performance Inc.) puts it:
“The main driver for an effective organisation is what’s happening in those ‘white spaces’ between the boxes on your organisation chart.”
Business leaders who realise this and make an effort to engage these elements from a holistic perspective, are more effective and their business is more successful than those who neglect it.
Research identified a number of critical universal organisational elements needed to drive business effectiveness, which can be illustrated as follows:
Research identified a number of critical universal organisational elements needed to drive business effectiveness, which can be illustrated as follows:
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| Click on image to enlarge |
Key drivers of business effectiveness
Although no set parameters exist for business effectiveness and it follows no definitive mathematical formula, it is driven by a holistic, coordinated effort to align the key drivers of a clearly articulated business strategy as illustrated in the figure above.
- Business strategy:
- The clarity that exists across the business as to its strategic direction and objectives, and the degree people are allowed to take ownership thereof.
- Business structure and capability:
- Alignment of the business structure, work processes and role accountabilities across the business with the strategic direction and objectives.
- Leadership capacity:
- Leadership capacity in the business (top management to supervisory) to drive sustainable business success.
- Business systems and procedures:
- Existence of clear and appropriate systems and procedures and their alignment with, and driving of the business strategy and objectives to ensure continued competitive advantage.
- Business development strategy:
- Strategies for attracting and managing customers from a variety of sources.
- Business values and culture:
- Existence of a business culture aligned with clearly written and communicated values depicting its “heartbeat” and what it stands for.
- People engagement:
- Existence of clear and effective strategies to ensure the engagement of all people in the business involving their hearts and their minds.
- Customer service and satisfaction:
- The business and its people’s regard of the needs of internal and external customers.
The first question to be answered is: “How does our business measure up with regards to its effectiveness in meeting our strategic objectives?”
You might already have some business performance metrics in place, which suggest that the business is achieving its objectives. If so, great! However, your mission is to continue with what you are doing right. Thus it’s not only about the victory of the moment, but you need to gear up, because it’s a continuous process of improvement. Continue to evaluate the business’ effectiveness focusing on the key drivers above. Identify what you are doing that irritates your people and your customers – and fix them. Consider what you are doing that delights your people and your customers and embed them in the business.
On the other hand, you might be aware that things are not completely right and that the business is not performing as well as it could. Maybe it’s time to regroup and consider the road ahead. Start with your business strategy and describe what it means for the business to be effective, i.e. What are the objectives?; What would success look like? What would it take for the business to achieve this? Reflect on each of the key elements above. It would be wise to consider the use of a business effectiveness survey and have all people in the business (including yourself) complete it. There are a number of diagnostic tools available on the Web that you can use.
Our Organisational Effectiveness Matrix has been developed to give you a sense of where your business is on the journey with regards to each of the key elements above. Being a flexible instrument, it can be customised to fit any specific business and their requirements.
However, to get you on the road, there are a number of questions you can consider:
- Are you and your people clear on the strategic direction and business objectives of the business?
- Is the work flow and information flow throughout the business conducive to its success?
- How does the leadership across the business stack up with what is required to engage your people and drive the business strategic direction?
- What does your business development strategy look like? Do you engage the best inbound and outbound strategies to ensure potential customers to easily find the business and its products/services?
- Does the business have a set of clearly written and communicated values that depicts its “heartbeat” and what it stands for? Is your business culture aligned with it?
- How well is the business doing at engaging its people and retaining them?
- Are you “wow-ing” your customers (internal and external) with a blow-away service?
A final word
Effective strategy execution is paramount to business success. It takes a combination of the business operations and the effective engagement of its people and their alignment with a clear business strategy to achieve success. There are challenges, but knowledge, focus, and an integrated approach will ensure your business survives and thrives under all economic conditions.
Embarking on this road, always keep the words of Dee Hock (founder and previous CEO of the Visa credit card association) in mind:
“An organisation [or business for that matter ], no matter how well designed, is only as good as the people who live and work in it.”
Until next time!
HEIN ROTH Principal Consultant
ROTH ASSOCIATES
heinr@rothassociates.com.au
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