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Why measure Organizational Effectiveness ??
- Organizational effectiveness is essential to an organization’s ability to implement its strategy and create impact
- Building on Mckinsey’s & Bain’s research, The Brew has found that effective organizations demonstrate strengths in five essential areas: 1) Leadership & Clarity of Mission 2) Structure & Decision-Making 3) Capability & Capacity 4) Systems & Work Processes and 5) Culture.
- Identifying an organization’s strengths and weaknesses in these areas through an organizational effectiveness diagnostic enables managers to maximize impact by developing action plans to strengthen weaknesses and maximize strengths
- Measuring OE is extremely important and critical for organizations, especially those who are envisaging steep growth trajectory, witnessing challenging times from competition, experiencing sub-optimal results from strategy execution or who are on the cusp of critical change management / transformation
- An organizational effectiveness diagnostic is a survey-based tool used to rigorously and systematically assess an organization’s relative strengths and weaknesses in each area central to organizational effectiveness.
About the Client Organization
An Ecommerce organization that provides an online model offering consumer goods & lifestyle collection. Operates as a Marketplace model, enabling sellers to set up virtual stores / boutiques and showcase their merchandise to a wide audience over the web. In top 3 players across the country, in terms of market share, revenues & employee strength.
The Pain Points
The e-commerce firm has been operating for 12 years and served as a key platform for its customers on both the sides, Merchants & Consumers. However, as the organization grew, the internal operating structure did not. A lack of clarity around roles and responsibilities made it difficult for teams to react, grow, and scale from both a business and a personal development perspective. Without structured accountability (See 2 critical tools that gauge this at system level – Alignment Index & Ownership – Accountability Index), existing business metrics, scaling up plans & changes in business strategy, all of them were at risk.
The organization needed to rethink their current structure and ways of working and shift their operating model squarely towards how customers shop in the digital space. They needed to also build in a culture ready and able to support this work. They embarked on an organizational redesign affecting hundreds of employees with a specific emphasis on creating strategic alignment and mapping roles directly to the customer experience.
Overall, this was a classic case of many things done right at a micro level, however, with a progressive & steeper context as mandate, not only the micro elements needed a re-alignment, but also the need for a strong overall glue, that can channelizes the organizational effort spend in to one, i.e. up the Organizational Effectiveness quotient, improving yield manifolds. (Also see, the secret of successful strategy execution – HBR 2008)
The Brew’s Approach
Post ascertaining the need for improving overall Organizational Effectiveness, we deep partnered with the Leadership & Management to redefine organizational macros (Organizational Structure, Re-defined Industry Gold standard of Consumer Experience, Identified redundancies, and determined which elements would best serve the strategic direction of the company and support its growth moving forward. Post this, we implemented the transformational strategy to improve the company’s connection to online customers.
The Impact
Organizational redesign ensured more than 30 roles mapped directly to the customer experience, higher collaboration between the functional units, direct alignment of ownership & accountability of overall consumer experience across cross functional units, and higher clarity & visibility with respect to objectives & strategy.
The Outcome
After the organizational redesign & operational re calibration, the team had more focused roles with clear ownership of work and execution resulting in greater job efficiency and productivity. Working on the business is just as important as working in the business. You have to make time to grow the capabilities of your team or you risk stagnation.