How To Use Organizational Effectiveness To Build Company Success

How To Use Organizational Effectiveness To Build Company Success

How effective is your company’s current system of processes?

How a company creates their business strategy, and how well that strategy performs, can have a range of benefits for the company and its employees. In a survey completed by Deloitte, they found that 57% of employees felt that a workplace with a “clearly defined business strategy” helped to create a positive workplace culture. This can be achieved by successfully implementing and measuring the company’s organizational effectiveness.

What Is Organizational Effectiveness?

Organizational Effectiveness is more than simply being organized at work. Organizational effectiveness is a concept that measures “the efficiency of an organization in meeting its objectives with the help of given resources without putting undue strain on its employees.” It relies heavily on pairing the objectives a company sets to accomplish with the right resources in a way that allows the goal to be met in the most efficient way.

Organizational effectiveness is a system that many companies have begun implementing to build more success for their companies. In the process, they have discovered it’s an essential aspect in specific stages of project development. The team at Salesforce implemented organizational effectiveness and stated “execution, particularly at scale, requires organizational effectiveness” and explained that their structured processes promote it as well.

4 Main Approaches For Organizational Effectiveness

There are a number of approaches and models of organizational effectiveness, allowing for individual companies to implement it in a way that corresponds with their unique structure. The four most common include:

1. The Goal Approach

This approach is one of the most utilized options. It places the main focus of the process on the end result and works by breaking down the essential objectives such as profit, product quality, innovation and societal impact, but can vary depending on the company’s individual goals. Though it’s widely used, it does present a barrier to the company as it only measures the output but fails to include information on the process or inputs.

2. The Resource Approach

This approach focuses on the input more than the output. It considers the effectiveness based on the access to resources the company has in alignment with the needs of the project. It also takes into consideration the amount each resource was used. Larger companies that require an advantage over their competitors often align themselves with this approach, as exploiting rare or hard-to-imitate resources provides them with a strategic advantage to elevate their company above the others.

3. The Internal Functioning Approach

This function measures effectiveness based on the internal workings of the organization. It considers the stress or strain employees are under, the strength of leadership, team dynamics and employee morale. This is an approach often used by companies that are highly focused on creating a healthy work environment, providing efficient systems and minimizing conflict within the workplace, allowing for high rates of employee satisfaction.

4. The Strategic Constituencies Approach

This approach bases measurement on the satisfaction of those interested parties that have control over the survival of the company. This can include workers, stakeholders, consumers, and communities. Companies with a high reliance on demands will often utilize this approach, however, it does take a higher level of attention as the determining aspects can change quickly and can become widely diverse, posing additional barriers for the company to monitor and overcome.

Factors That Influence Organizational Effectiveness

There are a variety of factors that have a direct effect on a company’s success and measuring organizational effectiveness offers insights into areas that require additional attention and prompt potential future training to employees.

1. Leadership

Leadership is the largest influencing factor in any workplace. Leaders have the opportunity to create a culture that thrives, setting employees up to find success within the assigned projects, and the company as a whole. Leaders that create a work environment that allows employees to find balance, continue learning, collaborate with colleagues, and provide a clear sense of direction will find higher rates of success within any project.

Leaders must also bear enough knowledge on any given project as well as the consumer audience to lead the team with confidence, setting expectations and providing a clear outline of the project strategy and goals, while also assigning each individual to work in their strengths.

2. Workplace Culture

By maintaining a healthy workplace culture that aligns with the values of the employees, companies will find the productivity of their employees will increase, and interest in their company will also rise. In a study done by Jobvite, they found 46% of people actively looking for jobs claimed work culture was very important to them.

Workplace organizational culture also has a large effect on employee engagement, with studies showing that companies with a high value on organizational cultures report having 72% higher employee engagement ratings.

3. Talent

Forbes lists talent as an organizational design element that should be included in any system. When creating a team, it is essential that members are assigned to work within their strongest field. When a team takes individual talents into account, it allows for a balanced team that can excel at every aspect of the project.

4. Communication

Communication is essential in any workplace because it allows for employees to have a clear direction for their role, while also creating an environment that values understanding and accountability. In a workplace where communication is utilized in an open and respectful manner, employees are much more likely to learn from experiences, leverage the power of their leadership, and prevent excuses—allowing for issues to be resolved quickly and focus to be returned to the assigned task.