Organizational Effectiveness and Development

Gaps in Required Knowledge and Skills

A gap analysis must be performed between the skill set needed now or in the near future and the skill set as defined in current job descriptions. These problems may be addressed through different types of training, coaching, and mentoring. Job descriptions must be revised to align with current needs. For example, an OED intervention may identify a strategic need for a deeper pool of supervisory/managerial talent. High-potential employees may be identified and provided with the knowledge and skills needed to fill this organizational need (e.g., mentored job experience; training in leadership, relationship management, and communication skills.)

Mechanistic and Organic Organizations

A mechanistic organization tends to be highly specialized, hierarchical, and formal, while in an organic organization job boundaries are less distinct and there are fewer levels of decision makers and a more flexible approach to structures and rules.

OED Interventions

An OED intervention can be seen as stepping in to interrupt the status quo or the current state in order to examine a situation more closely and make changes that could improve outcomes. Interventions are often described as "structured activities," in the sense that an intervention may involve multiple actions that are each focused on the same objective, organizational performance improvement.

Organizational Culture Requirements

As a result of organizational evolution or a change in strategic focus, the organization's culture may no longer support the organization's vision of its future and its values.

Whether the strategic goal is increasing output, engagement, or market responsiveness, organizational performance metrics focus on an organization's:

Efficiency in using resources to create value. A common metric here is the ratio of revenue or income to cost of sales and goods. It could also be measured by the number of hours or the number of full-time employees it takes to produce a good or service. A not-for-profit organization may consider the number of clients it serves. Effectiveness in achieving its strategic goals

Strategically Aligned

Helps ensure that plans reinforce, complement, and eachother and support overall organizational goals and strategioes

Improving Organization Performance

Improving organizational performance often involves aligning structure, roles and responsibilities, process, and culture with new strategic goals.

Improving Team Performance

Improving team performance often involves improving team formation and function. Interventions may help teams reach levels of productivity more quickly or help dysfunctional teams revise roles and behaviors.

Technology Requirements

Inadequate technology can prevent employees from performing efficiently. These issues may be addressed through new or expanded technology—for example, new digital tools that reduce errors or expanded knowledge management systems that put information into the hands of those who need it when they need it.

Forming

Individuals come together around common activity and shared goals. Members are polite, but there is little sense of trust, shared experience, or common values.

Storming

Individuals move past politeness, and there may be higher levels of discord as perspectives, styles, and agendas clash. This may be painful, but valuable communication is occurring.

Organizational interventions are required when an organization:

Is failing to meet its strategic objectives because its structure is inefficient and/or ineffective. The organization's structure no longer meets its needs. A common example of this situation is the progression of an organization through its early stages of growth. The organization's design must be aligned with its new realities. Has changed its competitive strategies and needs to develop new skills and traits—for example, skills needed to respond to market changes quickly. The organizational design must be focused in a new direction.

Aligning Roles and Responsibilities in New Organizational Structures

Lack of clarity about authority and coordination of communication can cause highly integrated structures, such as matrix structures, to fail. This is often addressed simply by better defining the roles and responsibilities of each member in the structure.

Common targets for team interventions include:

New groups that must develop a team identity. Dysfunctional groups that must identify and resolve conflicts that are hurting productivity. Existing groups that must redefine processes and relationships to be more productive or to align with the needs of a new strategic direction. Virtual teams that must learn to trust each other and communicate and collaborate over distances and sometimes across different languages and cultures.

Norming

Over time, effective groups build trust and establish relationships. They create rules that guide behavior. They begin to establish a group identity and to identify "outsiders." This can sometimes take a negative form. "Groupthink" can impel members to adopt the same positions and reject outside views; this can dampen innovation and creative problem solving.

Process Requirements

Over time, work processes can become detached from customer needs, changing technology, or changed work conditions. Obstacles that cause serious delays can develop. Work can be duplicated by multiple groups. Separate groups may work with different objectives. The resulting conflicts may not be apparent until late in the process. Processes must be routinely audited for efficiency and the need for updating and then redesigned and tested.

Proactive Interventions

Proactive OED interventions identify and correct potential problems before they begin affecting performance. They may also prepare the organization to take advantage of anticipated opportunities. For example, OED can help organizations that must compete in a rapidly changing marketplace to develop:

HR's roles and responsibilities in organizational design should include:

Providing leaders with a structural diagnosis by identifying the root causes of organizational performance issues. Helping leaders evaluate a range of clear design options. Ensuring that leaders align organizational design decisions with short- and long-term strategic goals by identifying critical activities, strengths, and weaknesses. Helping leaders understand their roles and responsibilities that ensure that the structure is properly implemented. Continually monitoring the structure for alignment with the organization's business strategy and highlighting challenges as needed. Planning for internal or external resources to deliver appropriate short- or long-term development interventions and activities and ensuring that those resources have the appropriate subject matter expertise and credibility to be effective or have the appropriate background, relationship-building skills, and cultural familiarity to quickly build credibility.

Managing group dynamics requires:

Recognizing the need for both task and social roles. Quickly identifying and correcting dysfunctional roles, perhaps through behavioral assessments, offline discussions, and/or coaching. Understanding the usefulness of certain roles at certain points in the group process and making sure that these roles are present when needed and managed when they obstruct progress. For example, team members adept at improving social connections contribute greatly at the beginning of the project, but when the group is focused on work, they may find a social focus distracting.

Remedial Interventions

Remedial interventions make changes that bring an organization back on course toward its strategic goals. For example, during economic downturns, organizations can adopt a "do more with less" operating style that reaps some short-term benefits due to cost savings.

Why OEDs Fail

Some interventions fail because they never get started. Those involved may be afraid of the effect of change on the organization and may hold back. They collect data, they analyze it, they discuss possible actions, but in the end they fail to act. This is often called "analysis paralysis," but the analysis is not the problem. The real issue is a reluctance to take reasonable risks.

The major organizational elements that must be aligned with strategy include:

Structure—the way the organization separates and connects its pieces. Systems—the policies that guide behavior and work, the processes that define how tasks will be performed, and the technology or tools used to support that work. Culture—the set of beliefs, attitudes, values, and behaviors shared by members of the organization and passed on to new members. Values—principles that the organization and its leaders have explicitly selected as a guide for decisions and actions. Leadership—the model of behavior that leaders set for the rest of the organization.

Group Dynamics

Task roles help get the work done. Those performing this role propose solutions or collaborate in group problem solving. They share task information and perform their assigned tasks. Social roles help maintain relationships and positive group function. This role recognizes the importance of social and interpersonal ties within a group. Group members playing a social role promote harmony, conflict resolution, and involvement of all group members. Dysfunctional roles weaken the group and reduce its productivity. In a dysfunctional role, a group member may attack others, dominate discussions, resist others' ideas, or damage group focus and energy through negativity.

Team Building

Team building involves a series of activities designed to help team members examine how they function now and how they could function better. This includes both the nature of their work (what they do or create together) and how they coordinate and collaborate on their efforts (how they work together). Emphasis is on early identification and solution of problems that stand in the way of group effectiveness. The purpose of a team-building intervention is to facilitate the alignment of the management team with the team's mission and goals and to develop effective team dynamics for working together to accomplish these goals.

Performing

The group becomes fully productive, collaborative, and mutually supportive. The group leader plays an important role in facilitating this evolution. During the early stages, the group leader can provide opportunities for communication and relationship building and can enforce ground rules that prevent permanent animosity between some group members.

Layers of Hierarchy

The hierarchical layers of an organization range from the chief executive officer to the employee in a function. The trend in organizational structure has been to reduce the number of layers and waste within organizations. The result is flatter and, leaders hope, more efficient organizations with fewer staff support positions. The ratio of direct to indirect employees (people doing the work as opposed to people supporting those doing the work) is a key metric of organizational efficiency. Global organizations often value nimbleness or agility since their interconnectedness and global exposure may call for rapid organizational response.

The way these elements are implemented and aligned can affect:

The motivation employees apply to their work. Employees' engagement or identification with their work and the organization's goals. Performance levels and results—i.e., the effectiveness and efficiency in reaching goals—for the entire organization, for its structural pieces (e.g., divisions, functions, teams), and for individual employees. Governance—the organization's ethical and legal compliance and its approach to managing risk.

Organizational design refers to elements that support an organization's functioning. These elements include structure but other factors as well, including:

The organization's mission and vision and the strategies it is pursuing to achieve its goals. The way decisions are made. The way information is communicated. The processes used to perform work and the degree to which those processes connect parts of the organization's structure and the way in which those linkages are managed. The systems used to align the organization's needs with the resources required to fill those needs. This, of course, includes human resources and all the systems HR uses to fulfill its responsibilities, from recruitment through talent management and exit. It can also include physical and financial assets (e.g., equipment, facilities, budgets) and organizational knowledge and expertise.

Effective OED interventions share the following characteristics:

They are strategically aligned and have top management support. They are evidence-based and avoid assumptions and generalizations. They aim for sustainable results and continuous improvement. Solutions focus on systemic changes rather than patches. They use the shared language and tools of organizational development so that everyone involved in the intervention understands the goals and processes. They are collaborative, inviting input and feedback from all those affected. They are flexible and dynamic; solutions are revised based on results and feedback.

Decision-Making Authority

This principle describes how decisions are made within the organization. Authority relates to the scope of responsibilities that define the area in which a manager or supervisor is empowered to make decisions. The organization determines which decisions can be made at each level of the organization and within each function in order to ensure that the best decisions are made in the most timely manner. In a global organization, decisions may be made at headquarters (centralized) or delegated to other parts of the organization (decentralized).

Assessing OED

To demonstrate the value of an intervention, HR professionals must measure and report to their internal clients the effects of the intervention. The most important measure of success is the degree to which the intervention has improved the organization's ability to attain its strategic goals. HR and the client should identify reasonable change or improvement goals when planning the intervention.

Work Specialization

Work specialization refers to the degree to which tasks are performed as separate jobs. While work specialization is seen as increasing efficiency and quality, it can also result in boredom and lack of quality. And in complex and technology-driven enterprises, specialization can also hamper collaboration and innovation.

Staff units

assist the line units by performing specialized services for the organization, such as accounting or HR.

matrix structure

combines departmentalization by division or program and function to gain the benefits of both. An organization may use a matrix structure when the vertical hierarchy begins to obstruct value activities—when silos get in the way of collaboration. A matrix structure includes cross-functional teams who may work together to design, develop, and market products.

functional structure,

departments are defined by the services they contribute to the organization's overall mission, such as marketing and sales, operations, and HR. Traditionally, this has been the most common organizational structure.

Organizational effectiveness and development (OED)

focuses on the structure and functionality of the organization to increase the long- and short-term effectiveness of people and processes. The term organizational development (OD) refers to an organizational management discipline used to maintain and grow organizational effectiveness and efficiency through planned interventions.

RACI stands

for responsible (R), accountable (A), consult (C), and inform (I). For any given activity, individuals will be assigned a certain role.

A certain amount of conflict and dysfunction is inevitable as teams form. Bruce Tuckman defined four stages of group or team development (see Figure 16):

forming, storming, norming, performing

product structure

functional departments are grouped under major product divisions. A consumer electronics company, for example, may have separate divisions for home appliances, mobile devices, and televisions. Each division will have its own marketing, sales, manufacturing, and finance functions. More employees are required to staff this type of organization, but presumably this is offset by accumulated experience and expertise.

Supported by top management

helps reduce resistance to eventual change

geographic structure

is very similar to a product structure, with the exception that geographic regions or countries—rather than products—define the organizational chart. A purely domestic organization may be structured around regions within the country. Global organizations may be organized by, for example, continents or countries. Each region or country has its own complete and self-sufficient set of functions. More employees are required to staff this type of organization than in a purely functional enterprise, but value is achieved because each division can be more responsive to local markets.

Formalization

refers to the extent to which rules, policies, and procedures govern the behavior of employees in the organization. The more formal the organization, the greater the written documentation, rules, and regulations. Some organizations are more loosely structured than others. Formalization may serve an organization well when uniformity is an imperative—for example, when there is low tolerance for variations in parts or when it is critical that, for reasons of compliance, a process be conducted in a precise manner. It can, however, restrict employees' abilities to respond to unusual situations or customer needs as well as stifle creativity and innovation.

Chain of command

refers to the line of authority within an organization. Traditionally, a subordinate reported to only one superior. This eliminated the confusion, loss of productivity, and stress that could result from an employee trying to follow the directions of two separate managers. Today the chain of command is growing less distinct in many organizations. As organizations push decision-making authority downward or become matrixed, and as ad hoc or permanent work teams become more common, the line of authority can appear lateral or web-like.

Span of control

refers to the number of individuals who report to a supervisor. Executives, managers, supervisors, and subordinates are hierarchically connected through the chain of command. Organizations in which many subordinates report to a few supervisors are referred to as "flat." There are many factors that drive an organization toward a wider span of control, including the desire for subordinates to communicate directly with their ultimate supervisor and decision maker. However, spans of control that are too large can slow an organization, making it difficult for supervisors to make decisions quickly. Many decisions must flow to the top, and the decision queue can become crowded. Flat organizations can be nimbler. When decisions are made, they can be communicated and implemented quickly.

Departmentalization

refers to the way an organization groups its jobs and aligns effort. Four commonly seen structures are discussed here (functional, product, geographic, and matrix), but you may encounter other, less common types of structures in your work. New business models may require different structural approaches.