It has been eleven (11) months since we wrote the first blog of the Effective organisation – organisational vitals and bionic balance series. We have written over forty (40) blogs on the subject.
We set out to answer the question: what makes an organisation effective and how does one measure an organisation’s effectiveness?
The Effectiveness lab created a framework that articulates a model of this so-called effective and SMART organisation. It has been a fascinating and rewarding process and from it, has come many lessons for us all at the Effectiveness lab.
The ODX framework:
Effectiveness means: doing the right things. Effectiveness is different from efficiency which is about doing things in the right manner. Efficiency is a resource-deployment matter and should be treated as such. It’s possible to achieve a state of effectiveness but inefficiently.
Efficacy, on the other hand, is the extent to which the desired result is achieved – efficacy is, therefore, an outcome-effect related issue.
People may be effective and efficient plus achieve the desired outcome. They may also be effective and inefficient, but still, achieve the desired result.
Clearly, effectiveness cannot be looked at in isolation. It is a system of ‘things’ that in the ideal world, should end in a state of efficacy.
At the Effectiveness lab, we appreciate the fact that it’s systemic-effectiveness that results in efficacy and therefore smart outcomes. The latter is only possible when a significant level of effectiveness’s twin, efficiency, is attained.
If an effective organisation is systemic as outlined above, then it’s also bionic in nature. We consider the effective organisation bionic because, like living organisms, the finer and interconnected elements of such an organisation present in the form of an intertwined system. Indeed, the whole is greater than the sum of the parts.
The bionic organisation, like the human body, functions well when all the vital elements (vitals in humans) are operating optimally.
The Effectiveness lab has outlined in this series four organisation-vitals (OV’s) that are required for the bionic organisation to function optimally:
3. Design (Architecture)
All the four OV’s need various levels of orchestration, moreover from a universal pedestal, for them to support the attainment of the ideal state of bionic-balance (BB) at the organisation. The appropriate orchestration is a function of sustained and effective leadership and OV systems management.
A systemic approach manipulates the organisational vitals (OV’s) and processes, before the outcome. It’s assumed that when the OV’s and their interconnections are right, the end result from such organisational bionic-balance is positive – be it high profit or impact on people.
The main job of the owners, boards and their managers is to continuously evaluate and tinker with the interconnections between the OV’s, to derive the best outcomes and attain the bionically balanced and SMART organisation status
Key takeaways from the effective organisation series:
- The subtle shades of an effective organisation:
There are two sides to an organisation’s OD health. The first being the external manifestations that we all see and judge. For example, a company’s products and services, staff behaviour and how they engage with customers, marketing campaigns, organisational charts, written strategy, the stature of leaders, etc. These external OD factors are visible and tangible. The world wants us to believe that we can easily put them on a scale and determine if an organisation is performing well or not
On the other hand are the internal manifestations of the organisation’s OD health. The internal factors have been named OV’s by the effectiveness lab. They are leadership, strategy, design, and people. The defining characteristic of the internals is that they are mostly invisible. They are brought about by the manner in which we intrinsically run the business. A leader can on the outside appear charismatic and solid, but may lack the innate skills to oversee the complex mechanics of delivering an effective organisation.
Effectiveness organisations aren’t created from technocratic excellence per se. They are built from innate skills that instinctively perceive and understand intertwined OV networks. A key determinant of the latter is the seamless subtility with which the leader goes about integrating all the four vitals.
Leaders that succeed at the so-called SMART organisation look at the organisation in its entirety through a ‘soft’ as opposed to a ‘hard’ lens. They are hardwired to do so.
Let us apply the strategy OV as an example. An organisation may have grande strategy meetings and at the end of it all glossy strategy papers plus an action plan. However, the manner in which strategy is executed by the leader and those under the leader, as well as the OD architecture ultimately determines the success or failure of such strategy ambitions.
We are dealing with soft matters, intangible by nature, that the so-called technocratic manager rarely understands
- The nuance of measuring the effectiveness of an organisation – the OD X-ray (ODX) and ODX-Index (ODXI)
Clearly, we need to define a way to measure an organisation’s effectiveness. The Effectiveness lab recommends that you apply its ODX tool to derive an institution’s ODX index. In straightforward terms, the ODX is a rating mechanism that applies the four OV’s to specific organisational eco-systems. There are different ODX tools for various organisations. For example, a not-for-profit entity will have a slightly different ODX tool from a for-profit entity. The ODX tool for a small business will differ from that of a corporate
Organisations get a rating on the ODX Index above. Effective organisations will want all their ODXI markers in the top half of the ODX
The trick is to ensure that the ODX is assessing not quantitative factors like ‘do you have a strategic plan?’ but the quality of execution of the strategic plan and how it’s intertwined with the peer OV’s.
- People are the lynchpin of an effective organisation:
We have learnt one crucial thing in this series. People management is a deep organisational culture matter and one that impacts all the other three OV’s. The people and leadership OV are the glue that binds together all the OV’s and ultimately the effective organisation. Organisations that have mastered the art of keeping people motivated have excelled in what they do. The opposite is also true – organisations that focus all their attention on the hard elements of the organisation have lost value
In conclusion, we hope that the ODX and ODXI will help you make your organisation effective and SMART