Organizational Effectiveness

Organizational effectiveness can be defined as the efficiency with which an association can meet its objectives. This means an organization that produces the desired effect or an organization that is productive without waste. Organizational effectiveness is about each individual doing everything they know how to do and doing it well; in other words, organizational efficiency is the capacity of an organization to produce the desired results with a minimum expenditure of energy, time, money, and human and material resources. The desired effect will depend on the goals of the organization, which could be, for example, making a profit by producing and selling a product. An organization, if it operates efficiently, will produce a product without waste. If the organization has both organizational effectiveness and efficiency, it will achieve its goal of making a profit by producing and selling a product without waste. In economics and the business world, this may be referred to as maximizing profits.

Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce. Organizational Effectiveness groups in organizations directly concern themselves with several key areas. They are talent management, leadership development, organization design and structure, design of measurements and scorecards, implementation of change and transformation, deploying smart processes and smart technology to manage the firms’ human capital and the formulation of the broader Human Resources agenda. If an organization has practices and programs in the areas above, the OE group does many or all of the following roles

• Examines alignment between the areas and improves them
• Improves trade-offs between reliability, speed, and quality in the above areas
• Strategizes for higher adoption rates in these areas
• Facilitates/initiates/catalyzes capability building: structure, process, and people

Rapid advances in social sciences and technology aided by clever experimentation and observation are bringing several truths to the light of society. There are several disciplines of social sciences that help the OE Practitioner be successful.

Four of them are outlined below

• Decision-Making – Ways in which real people make decisions, enabling them real-time to make good decisions, improving quality of decisions by leveraging adjacent disciplines ( for example- Behavioral economics) and replicating relevant experiments, creating new ones and implementing their results to make organizations effective
• Change & Learning – Ways in which real people learn, change, adapt and align, get “affected” by dynamics in the environment and leveraging this knowledge to create effective organizations that are pioneers of change and learning
• Group Effectiveness – Ways in which real people work well together, especially in bringing new ideas and innovation, working of people to people protocols, the impact of digitization and virtualization in organizations on these protocols
• Self-Organizing & Adaptive Systems– Ways in which self-organizing systems and highly networked systems work, learnings from them and the tangible ways by which they can be put to play to make organizations more effective

The Six Steps of Organization Effectiveness

1. Leadership

The first step in organization effectiveness is ‘Leadership’. In this step, management and project leaders set forth the overall vision of the organization. What goals they hope to accomplish with this project, how to carry them out, and what results they must strive for are in Leadership.

 2. Communication

Of course, Leadership is only as effective as the group’s overall communication. In the second step, Communication focuses on evenly spreading the goals, guidelines, and aspirations that derive in Leadership. Furthermore, project managers must focus on strategic communication, relation information in the forms that other project members need to complete their tasks.

3. Accountability

In the third step, Accountability, project managers and leaders must uphold other employees to their tasks and responsibilities. Typically, project team members receive awards or consequences, based on their performance. As a result, Accountability greatly determines how smoothly and effectively a project performs.

4. Delivery

Your products and services are only successful if customers can receive them. At the next step, Delivery focuses on ensuring an effective delivery system is in place. When your organization has a long, complex delivery process, errors will occur and efficiency is at risk. With smaller, more concise processes, your end products can be delivered on time to the right people.

5. Performance

As a project manager, you must hire the right people for the correct jobs. Of course, not everyone fits in the same position. At the ‘Performance’ step, the goal is to hire, train, and retain the perfect applicants for the processes and tasks you have.

6. Measurement

A business process is only effective if you can measure it. At the final stage of organizational effectiveness, you must measure and analyze your project, process, or other systems. Likewise, you must measure your organization with the correct metrics. Failing to do so will result in inaccurate or non-usable data.

Effective (adj.) – Adequate to accomplish a purpose; producing the intended or expected result.

Efficient (adj.) – Performing or functioning in the best possible manner with the least waste of time and effort.

The difference between effectiveness and efficiency can be summed up shortly, sweetly and succinctly – Being effective is about doing the right things while being efficient is about doing things right.

Another way to illustrate efficiency vs. effectiveness is with the 2×2 grid below. By referring to this chart, CEOs and sales leaders can find an optimal balance between effectiveness and efficiency: