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Organizational Effectiveness Model

Office of State Personnel, North Carolina

An organization is composed of many parts. In order for the organization to be effective it is essential that each part be in good working order. Each part must fit and work conjointly with other parts in order for the total organization to perform optimally. In an organization recognized for excellence those parts are aligned so that the whole is actually more effective than the sum of the parts.

The model presented here identifies the key parts of an effective organization. It provides a simple framework to view and assess any part or the entirety of an organization. This model is a tool that can help any organization, regardless of its size, to move toward organizational excellence. The model can help you align resources; improve communication, productivity and effectiveness; and achieve strategic goals.

1. Customer Service and Performance Results.

Attending to the customer’s needs and a focus on maximizing performance results are at the heart of any effective organization. Serving customers and producing a quality product occupies the place of central importance because without this target the organization is aimless.

Highly effective organizations place great emphasis on customer relations and customer satisfaction. These organizations know who their customers and stakeholders are. They make a concerted effort to determine and exceed the customers’ and stakeholders’ expectations. Highly effective organizations respond quickly to the changing needs of their customers and stakeholders. Serious attention is given to the degree of customer and stakeholder satisfaction.

Performance results direct attention to individual and corporate productivity and efficiency. Highly effective organizations have a clearly defined bottom line and every employee knows how they contribute to the success of the organization. Employees are routinely informed about the organization’s progress toward established goals and objectives. Results are identified and measured in key business areas—customer satisfaction, product and service performance, financial performance, human resource results, and operational performance.

2. Leadership.

Long accepted practices are being called into question as the companies grapple with ways to survive in a sea of persistent change. One such paradigm challenge involves the distinction between leadership and management. One expert expresses it this way, “Managers are people who do things right, while leaders are people who do the right thing.” – Warren Bennis, “On Becoming a Leader.”

As the argument goes, leaders and managers serve two different purposes and make two distinctly different contributions to the success of the organization. There is no debate that effective leaders can make a substantial difference in an organization’s ability to thrive in an environment of persistent change. Contemporary thinking on the subject describes leadership as determining an organizational direction and then influencing other people to follow that direction.

The model suggests that leadership is a key element in an excellent organization. This simple definition of leadership implies that leadership can come from anyplace in the organization and not just from one or two top management positions. In fact, in highly effective organizations leaders involve all employees in creating and sustaining organizational values, organizational vision, organizational direction, performance expectations, customer focus, and a management system that promotes performance excellence. Leaders integrate values and expectations into the organization’s leadership and management systems, including how the organization continuously learns and improves and how it addresses its responsibilities to its customers, stakeholders, and employees.

3. Strategic Planning.

Strategic planning refers to the organization’s approach (both formal and informal) to preparing for some future state. The strategic plan describes the path the organization will follow in order to reach the desired future described in its vision statement. A clear strategic plan is important because it helps to align the efforts of departments and individuals. It establishes priorities and determines how the organization’s resources are allocated. A strategic plan defines goals and objectives that will assist management in assessing progress toward the desired future state described in the vision.

4. Structure.

Structure is another one of the key factors that significantly influences organizational efficiency. The optimal organizational structure involves a wide variety of considerations that range from the physical layout of the company to the policies that steer the operation. An effective organization is structured so that it is able to do such things as: (a) respond quickly to an environment of rapid change, (b) efficiently meet its mission, © wisely use the knowledge, skills and abilities of its employees, (d) promote good communication and the flow of information necessary for every employee to do a good job, (e) encourage decision-making at the most appropriate level in the organization, and (f) link departments and work units so that that they support each other.

5. Human Resources Development and Management.

Effective organizations make a concerted effort to recruit, develop, and utilize a workforce that is aligned with the organization’s mission, vision and objectives. The organization builds and maintains an environment that encourages performance excellence, full participation, meaningful work, and personal and organizational growth.

6. Process Management.

A variety of unique processes determine how products are developed, marketed, and how customers are served. Highly effective organizations continually study these processes in order to improve them. There may be one or more processes associated with any given product or service. Process management areas that might be considered for improvement include such things as:

-Product or Service Development Processes: Those processes that are directly related to creating products and services.

-Service Delivery Processes: Those processes involved in delivering products and services to customers and stakeholders.

-Marketing Processes: Those processes that are involved in marketing products or services to customers and stakeholders.

7. Information and Data Analysis.

An organization that seeks to be effective and to meet the needs of its customers in a rapidly changing environment must rely on accurate data to monitor customer satisfaction and to measure progress toward goals and objectives outlined by the strategic plan. Effective organizations determine what data is vital to these efforts and carefully determine how it will be collected, analyzed, and reported throughout the organization. This information is critical to decision-making and is used to support key organization processes and the organization’s performance management system.