Understanding Organisational Performance

Organisations (and individuals) must eventually consider their results. Not in a one-dimensional utilitarian mindset but in the context of their existence and contribution.

This provides everyone – inside and outside the organisation – an understanding of how time and valuable resources are used and managed.

In our management paradigm, people and the organisations they work in, must have an aligned purpose. They also need to be engaged in a far more meaningful way than ever before.

We no longer follow orders!

Organisations have to genuinely understand its people’s strengths and employ them optimally. People want to work in a safe, supportive, learning environment and most importantly understand how their efforts contribute to the organisation’s success.

What are our objectives? Who are we? What are our results?

After considering purpose and people, the natural progression is evaluating peformance.

Almost 25 years ago, Sumantra Ghoshal (LBS) and Christopher A. Bartlett (HBS) intelligently argued the case for management to move beyond Structure to Processes.

In the ensuing time, the changing work environment requires a re-think.

We must now shift from Processes to Performance.

In order to perform, people and purpose need to work harmoniously together.The following three key areas are critical for this.

Appropriate Information

People need information. Not data, but knowledge that is relevant to their work. They need appropriate information to help them learn, make informed decisions, and exploit their strengths to contribute to the organisation’s purpose.

Regardless of how large an organisation is, it can always be grouped into functioning teams. Whilst these team sizes may vary and there may be different teams based on the work to be done or their roles, there is nothing more powerful than information exchange at two fundamental levels – the team and the individual.

All available research suggests frequency is critical. Notwithstanding unique environments – a weekly team meeting and a weekly individual meeting is ideal.

What’s interesting here is that they can be quite short and succinct – in fact, the alternative is likely to be counter productive.

Execution Empowerment

Execution Empowerment refers to understanding the person well-enough to empower them to the level of their ability, so they can execute their roles optimally.

Disengagement and powerlessness are significant contributors to non-performance.

Instead when we are entrusted to act and make decisions to the best of our ability we feel far more engaged and empowered. We simply perform better.

Yes, we will make mistakes! Managers may well misjudge the ability of a person and likewise individuals may make the occasional error. Limiting the affects of these is necessary but how else shall we learn and grow?

Avoiding mistakes is the ideal, particularly expensive ones, and whilst there will be a cost for every mistake, each one is a lesson for all involved – and together the people and the organisation will be better off.

Meaningful Controls

Peter Drucker in his 1973 book Management: Tasks, Responsibilities, Practices first delineated the power of controls vs control.

The former offers information on performance whilst the latter is concerned with direction.

According to Drucker ‘controls’ must be economical, meaningful, appropriate, congruent, timely, simple and operational.

Controls are a means to an end, and interestingly the fewer controls the more effective they are. Critically, controls need to focus on results and how they are accomplished.

Controls are indicators, targets, measurements that individuals and organisations use to understand performance.

Controls need to cater for the quantitative and qualitative. In recent times, we’ve witnessed how one-dimensional quantitative controls, particularly in the banking and finance sector, have resulted in widespread unethical behaviours.

It is just as important to evaluate how things are done as to whether they are done at all.

To best understand performance, managers must have the mindset of a willing coalition between an organisation and its people. An interdependent relationship where purpose is shared, people are encouraged and empowered to reach their potential and their strengths are utilised to achieve performance and by that, the organisation’s ultimate objectives.