jim.shamlin.com

9 - Organizational Effectiveness

A quick rundown of the "ingredients" of an organization:

• It exists within a given environment, over which it has little control
• It pursues a given set of goals, which it can choose or modify
• It has a certain strategy, which considers the way in which it will achieve its goals within the environment.
• It possess certain assets, which it may increase or decrease
• It uses those assets to pursue its strategy

The effective organization is one that accomplishes its goals - applying its assets in pursuit of a strategy that succeeds in achieving outcomes. All of these elements are subject to constant change - and all of them can be controlled by the company, with the exception of the environment

(EN: To split hairs, a company can change its "environment" by relocating to a different one. It cannot create an environment of its choosing. It is not entirely helpless, but has limited ability to influence the way in which its environment changes [such as lobbying politicians to change the regulatory environment, advertising to convince consumers to change their behavior] - but environmental changes are far more difficult than internal ones, such as changing goals, acquiring assets, and managing activities.)

The role of the manager is to optimize the elements that are subject to internal control, and to react to changes in elements that are not subject to control, in a manner to ensure the efficient and effective achievement of the company's stated goals.

Gaining Perspective

The adage about seeing the forest or the trees reflects the need for perspective - and ideally one should see both. A manager should not become so focused on the day-to-day details that he neglects to consider the grander scale of the organization, not so focused on the grand scale that he neglects the details of daily operations. The devil may be in the details, but the details are irrelevant except in the context of the broader system of the firm and the market.

Organizations are a complex system of people, with structures and substructures that perform various functions with internal dependencies and connections as well as external ones. The organization chart attempts to schematize and explain the structure, but is often oversimplified in that it does not express the full scope of interactions or the relationships between units. Workflow diagrams also attempt to follow the carious processes and activities that contribute to the completing of a given function.

The manager's task in running his business unit is ensuring its effectiveness in playing its part in the larger system as well as internal efficiency. This requires representing his until and coordinating with other managers to ensure the interaction of their departments contributes to the health and success of the organization.

Employees, meanwhile, tend to focus on the narrow scope of their role. The manager must help them understand the organizational context of their work, but at the same time ensure that the arrangement is acceptable to the employees such that their personal goals align with those of the organization. The greatest difficulty in managing employees is convincing them that what is best for all is not always what's best for them.

Hypothetical Example: A Bank

The author presents a "case study" that is more of a hypothetical example of a bank, in which the problems of the system become clear to customers: employees speak in industry jargon rather than plain English, the computer system requires even simple tasks to take a long time and a great deal of fussiness, tellers regularly have to call a manager to authorize transactions, etc.

Problems such as these, which are common to many commercial operations and particularly pronounced in government "service" offices, reflect poor operational design and management: the organization is focused on its own processes rather than the customer's needs, business units are in conflict with one another, employees do not have sufficient authority to execute their tasks, etc.

The net result is a stressful service environment in which neither employees nor customers are particularly happy, and the cause of their discomfort derives from policies, procedures, and practices that have become dysfunctional or were poorly designed in the first place, such that there is a devotion to needless ritual and a great deal of activity to work around the inefficiencies of the system.

Your Role in Shaping the Work Environment

An organization is a system of people who work to achieve certain goals. The degree to which their behavior contributes to those goals determines the organization's effectiveness and efficiency. The degree to which behavior is required that is not necessary to the achievement of those goals, or which is even counterproductive, undermines or destroys the organization's effectiveness and efficiency.

(EN: most commonly, the fact that the organization is able to succeed in spite of these inefficiencies often leads the management and employees to accept them - or to assume that because the machine does not break down completely, all must be well. And it's likely "good enough" until it makes the firm uncompetitive.)

Front-line managers are seldom in a position to make systemic changes, but must instead work within their sphere of influence to guide the behavior of their staff to work within the structure while attending to the more long-term task of campaigning for the necessary changes. There is a passing mention of "hard" elements (that cannot be easily altered) and "soft" ones (that can) - that draws the same basic conclusion: it is easier to alter the soft ones in the short term, but it is ultimately necessary to alter the hard ones.

Whatever the situation, a manager should seek to recognize and understand the impact that the organizational environment has on the employees in his unit - the degree to which it helps or hinders their work, and the corresponding way in which they feel engaged or disengaged from the rest of the organization. Where employees are hindered and disengaged, the manager's task is to seek changes to the system and provide solutions that will mitigate the issue in the meantime.

Organizational rigidity is a problem for management as well: where there is sufficient latitude and flexibility for a manager to address or mitigate the negative impact of the organizational environment on his staff, inefficiencies can be mitigated. Where the manager, himself, is disempowered his ability to manage is compromised.

The author considers the failure of Digital Equipment Company as an example of the problems of organizational rigidity: the management of the organization was very much a top-down bureaucracy where employees and managers were constrained to tightly-defined roles and given no latitude to adjust. As such the firm was unable to respond to shifts in the market, fell behind their competition, and eventually failed.

Organizational Culture

The culture of an organization provides meaning and direction for its members an provides the foundational principles for interaction. In that way, it is similar to an individual's personality: it constitutes a core of beliefs and values that guide motivation and behavior, and it is often vaguely perceived and unspoken. Employees and managers must understand their organization's culture to know how they can work within it effectively.

Some of the function of organizational culture are:

• It helps define the identity of the organization
• It is an "unobservable force" behind organizational activities
• It provides social cohesion that leads members to collaborate
• It provides meaning, direction, and motivation
• It informally encourages or deters certain behaviors
• It helps members make sense of events
• It is passed on to new members through socialization

Of chief importance is that the organization's true culture is the one that is expressed through actions. An organization may lay claim to a culture, and management may wish to mandate a culture, but real culture is practiced and is not responsive to direct control.

Why Bother with Organizational Culture?

Culture gives organization an identity to which people can relate. It is possible for there to exist an organization without a culture, but its members will not perceive the organization as an entity of which they are a part: they will contribute the work of their hands, but not of "their head, heart, and spirit."

Like any culture, organizational cultures define its boundaries - chiefly in determining who is "inside" or "outside" of the culture. Insiders are integral members of the group - others within the organization value their participation, and they feel accepted and safe within the group.

On the other hand, organizational culture becomes a sort of clique: those who do not think or behave in the "right" way are not tolerated and may be forced out of the organization or leave of their own accord because they are a poor fit for the organization. (EN: Provided it is a healthy culture with functional and productive values, this may not be a bad thing.) More likely, a candidate whose values do not align with the organizational culture will not be selected for employment.

Culture stabilizes an organization and enables it to operate efficiently by defining a core of common values that all employees understand and agree to promote. They have a sense of what actions are right or wrong for the organization, as a result of their agreement or disagreement with the organizational culture.

The author suggests that culture is not permanent, but is flexible and ready for change. He then suggests that being open to change can be part of a culture, and in the present world it must be - in order for the firm to be nimble, it must have a "change culture" that can rapidly adapt.

(EN: I'm not in agreement here: my sense is that culture is long-lived. An organization can maintain a consistent culture while its activities change readily, and often changes in activities are made to preserve the culture in response to external changes. Innovation and adaptability, themselves, are cultural values. My sense is that an organization that changes its culture frequency is likened to a person who changes their personality frequently - doing so means having no firm commitment to values, no real culture, and no integrity.)

Definitions and Elements of Organizational Culture

Cultures emerge within organizations, even if the members do not overtly discuss or even acknowledge that they have a culture. Where people interact regularly, they form shared assumptions and beliefs about their interactions that become common, and which are taught to new members.

The first level of culture is one that is easily noticed, as it pertains to observable behaviors. The layout of the office and the way it is furnished and decorated makes a statement about its culture. The way in which people dress and behave toward one another (formal versus informal) are also cultural. The language people use, the jokes and stories that they tell, the myths they share, and the ceremonies they participate are also hallmarks of culture.

Consider that many high-tech firms go to great lengths to create an informal campus-type workplace: with open workspaces, lounges with games, casual dress codes, and individualized work areas. These are all expressions of the company's culture, which stand in stark contrast to the office environments of banks and accounting firms.

Symbols are another first-level element of culture. A symbol is an object or sign that represents an abstract concept. Consider the amount of deliberation put into the name and logo of a company - both of these suggests the cultural identity of the firm. If something (a building, an award, etc.) is named after a person, this indicates the respect for certain qualities of that individual's character. The founder of a firm is often remembered and spoken of with reverence for certain of his characteristics.

The author suggests that the second level of culture is an organization's stated beliefs and values. (EN: I suggest "practiced" rather than "stated"). Little explanations is offered before this bulleted list of definitions:

• Beliefs - A belief is the confidence that something is true or real, even without tangible knowledge or proof. Behaviors are predicated upon beliefs more often than actual facts.
• Values - Values are the principles or standards that people cause people to alter their behavior or demand others to behave in certain ways. In many instances they are emotional rather than rational.
• Myths - Idealized stories about past events convey a sense of values, even when the facts of the story are not entirely accurate. A myth is used to encourage or discourage behavior without further explanation.
• Norms - Norms are standards of behavior that establish what is appropriate or correct, and serve to create a sense of unity in action. A dress code, for example, is a norm - even when it is not documented, people have the sense they must dress a certain way to fit in.
• Rituals - Rituals are a pattern of behavior that is followed in order to perpetuate the organization's culture. Routine meetings, such as quarterly speeches from the CEO, are a sort of ritual. Hazing new employees is also a ritual.

The author's third level of culture consists of an organization's system of underlying assumptions. An assumption is something that is presumed to be true, whether or not there is any evidence of its truth, and are expected to be common among participants in any action. When assumptions are widely and explicitly held by many employees, they become the beliefs and values of the organization.

Influencing Culture

Culture cannot be dictated - but it can be influenced, largely by the same methods by which it was developed in the first place. Generally, people adopt certain beliefs because they appear to be true, and the follow specific patterns because they appear to be efficient. Supporting or complying with a culture creates a level of comfort and confidence in achieving the desired outcomes by adhering to practices that have been successful in the past.

That said, not all elements of culture are in fact productive - some can be obstacles to success - but members of a culture cling to them for various reasons: because that's the way they have always done things, because they presume there's a benefit to following established practices, or because they are afraid of doing things differently. These are parts of culture that management should seek to identify and change by substituting and building support for a replacement practice (or simply to desist from a previous one).

An aside: one way to identify parts of a culture that are dysfunctional is to observe the reaction of people who are new to the organization - recent hires or contractors - to determine what elements of culture they find uncomfortable or objectionable.

The author suggests that changing a culture is done in the same way you change an organization's procedures and processes - with a targeted effort that convinces all involved in the benefits of doing things differently than in the past. This requires "a combination of the motivation, teambuilding, and change management strategies we have already covered in this text."

He then offers up a succotash of random ideas that would seem to be more effective at reinforcing rather than altering organizational culture:

• Include cultural training in the onboarding process for new employees and new managers
• Formalized teambuilding and training programs that develop methods for interacting with other employees
• Mentoring programs that allow mentees to learn organizational idiosyncrasies from more experienced employees
• Ensure elements of culture (beliefs and values) are part of communication from management, especially from senior management
• Use social events that help employees get to know one another and strengthen social ties outside of formal working relationships
• Encourage managers to act as role models in behaving according to the desired elements of organizational culture

Identifying Subcultures

Within any large organization, there are often smaller organizations that tend to develop their own cultures that may be distinctly different to that of the rest of the organization. In many instances, cultures develop within business units: the culture of the Marketing department is likely different to the culture of the Maintenance department. It may be even more granular than that - as within the Marketing department, there may be different cultures between the promotions, sales, and customer support groups. There are often different cultures in different regional offices of a firm. (EN: To go a step further, I observed a distinct difference in culture between a day shift and the night shift workers who perform the same tasks in the same facility.)

Subcultures are not necessarily harmful or undesirable so long as they are supportive of the organizational culture in all the required functional ways, and differ in largely inconsequential ways. It is much the same as the culture of individual employees: each person is likely unique in his personality, but if he can collaborate with others and support the organization, then the ways in which he is different are inconsequential. The same is true of any office or unit subculture.

The author provides a magazine quiz of characteristics that can be used to assess the strength of a subculture, which includes:

• Having stories, tales, or jokes that are routinely told.
• Have slogans, language, or jargon specific to a group
• Have ritual events to welcome new employees
• Have awards and recognitions only for group members
• Have a distinct mission, vision, and purpose statement
• Refer to people outside the group as "them" and those within it as "us"
• Encourage or discourage specific behaviors for non-functional reasons
• Attempt to resolve issues within the group rather than engaging external resources, particularly when it would be proper to do so

In the scoring section, the author's remarks imply that having a strong subculture may be very positive for employees within your department, but it may be detrimental to their working relationships with members of other departments within the company.

Influencing Culture on the Front Lines

Managers are often treated as the stewards of culture, and are responsible for promoting the organizational culture within their department - but seem to have very little power to change the organization's culture.

Where the organization's culture is questionable, the manager can leverage the subculture within his area of responsibility, but does so at the risk of being perceived as a maverick, nonconformist, and non-team player.

Culture is valued because it is presumed that following culture is a method of achieving desirable results. Perhaps the best way for a manager to influence the organizational culture is conducting an "experimental" program within his own business unit - and, if the results his unit achieves are in fact superior, using the results as a method for advocating similar changes in culture on a larger scale.

(EN: In many organizations, the manager won't need to do much campaigning - those higher-ups who see the results he's getting will encourage others to learn from his example.)

(EN: At the same time, challenging organizational culture is risky business. If the organizational culture doesn't value innovation and punishes those who try new things and fail, it may not be worth the risk to attempt to pioneer change alone, but instead work through various alliances and committees.)

Organizational Development

The author uses "organizational development" to loosely describe techniques and tools that are used as a means to alter the effectiveness of an organization, then provides a handful of insights:

• Selection and Promotion - The kind of people you hire and promote within an organization suggest the values that you find desirable, and serves as a cue to others what behaviors to model.
• Process Design - Documenting the manner in which work is done trumps assumptions about the way things ought to be done, particularly when the design describes benefits and provides metrics to reinforce the value of the process.
• Role Modeling - When a manager's behavior differs from his words, employees notice, and take his actions to be the better indicator of the organization's values.
• Workplace Design - The layout of the workspace creates and divides groups of people and can in some instances connote status of certain individuals.
• Rewards and Reinforcement - When special recognition is given to some employees, others should see a clear connection between the reward and the behavior that earned it.
• Inspirational Stories - Translating values into narratives enable employees to better understand the values and the reason those values matter to the organization.

Effective organizational development efforts seek to make long-term improvements in individuals, groups, and teams. These tactics are used to develop, reinforce, or change the existing culture. The precise techniques to be used depend on the nature and scope of your developmental goals.

As with any program, this involves the phases of planned change as discussed in chapter seven: diagnosis, planning, implementation, and evaluation.

Metrics For Effectiveness

The success of an organization can be defined in a number of different ways, but very often the definition is vague and yields no specific measures, or employees are unable to recognize the way in which their effort contributes to the success of their organization.

Managers must define the goals of the organization, including the conditions for success or effectiveness at achieving them, and communicate this to employees in meaningful and relevant terms. Productivity, profitability, growth, turnover, market share, and other factors may be quantified, but they must also be correlated to employee performance.

Another theorist (Jones 2004) identifies three categories of performance metrics:

1. External - Such as the price of the company's stock, the economy of the market, the performance of competitors
2. Internal - Increasing the rate of production, decreasing time to market
3. Technical - Reducing process times, increasing output quality

Each of these measures can provide important and worthwhile goals to pursue, though chasing too many at once tends to blur their meaningfulness, so you must focus the organization's effort on metrics that have the greatest impact. This does not mean you cannot have a dashboard of various metrics, just that you cannot effectively coach to all at once.