ORGANIZATIONAL EFFICIENCY

The measure for organizational efficiency goes far beyond the profit margin for organizations; it is integrally linked with the empowerment and capacity-building of all who belong. 

I will, of course, not deny that a healthy profit margin is essential for survival, continuity and growth. But that by itself cannot be the central determinant of the well-being of the organization and (more importantly) of all who serve there.

However, in the now outmoded mindset of managing organizations (refer to left column in the diagram included in this article – please right click on the picture and "open in a new tab" for the full diagram), there are scarcely any options but to submit to the money god, and there are no greater mechanisms to feed that submission than to be instituting a meaningless hierarchy where control is supreme. It also includes, and depends on, restrictive planning and the control of information (which feeds into, seamlessly, the silos that prevent the communication flow between relevant units and impacts productivity and growth). This scheme rewards incompetency, particularly for middle-management, creates stagnancy of operational staff capacities, prevents optimal efficiency for the organization, but is also the safest bet for worshipping the money god. The net worth of the owners and senior stakeholders increase with time, while the average employee has to be thankful that they have an income. The latter does end up feeling undervalued and which is correlated with loss of productivity.

Does it have to be this way? Is this the best we can do? Absolutely not! The beauty of the newer scheme (right column of the diagram) is that it does not impact the profit margin adversely, but it does enhance the capacity and productivity of all employees and, by extension, of the organization. Only that, roles and responsibilities are distributed in a way where decision-making no longer resides solely in the hands of the owners, and I imagine that can be pretty unnerving for them. We all know that, in the outmoded scheme, the owners will not shy away from all kinds of lip service that motivate people and give them a false impression of “belonging” (even a “calling”), but they will rarely do anything substantive to actually make it happen. Rather, they will strengthen their relations with other owners and do all to gain political leverage. 

In today’s scenario, the choice, beyond any doubt, is to enhance the social and emotional intelligence of all employees, and to ensure that engagement factors are in place. This is a hefty order, and requires a fair investment of resources and time; but, in the long run, everyone benefits. There are very specific activities and processes that need to be implemented to achieve this target (another story, another day), but at this time, let me simply compare the two schemes at a very cursory level. 

Today’s organizations are expected to be different; and, if they are not, they ought to be. There are some organizations which have transitioned into the new scheme, but most have not.

?            Profit versus Purpose

In the outmoded scheme, what matters most is the financial bottom line. There are lip services to being employee-centered and such, but when it comes down to the crunch, money wins. Organizations defend such activities by citing survivability issues and being able to properly serve its constituents. Today’s high-performing organizations across the world thrive on focusing on a very deliberate purpose (usually specified in the mission and vision statements) and by taking actions that link closely to, and align with, those statements.

?            Hierarchies versus Networks

The realization is that authority and power alone cannot accomplish much; teamwork does. As a matter of fact, a hierarchical structure creates bureaucratic silos of operations and management styles that prevent efficiency and effectiveness. It pretends to mimic homeostasis, but ends up in a crises management mode. Networks remove barriers, allow collaboration and create outcomes that are otherwise not possible; and this comes with optimal costs to benefits ratio.  

?            Controlling versus Empowering

In the outmoded scheme, the idea of controlling operations very closely (and in extreme cases, resembling autocratic structures) is not to be compromised. This is done with the idea of managing homeostasis; but ends up in employees lacking creativity, losing morale, and ultimately impacts the overall well-being of both the organization and the employee. Today’s high-performing organizations spend resources in empowering employees to do their best and to reach their highest potential in any given position at any given time. Each person is fully aware of their job responsibilities and owns those; they are the leaders of their pieces of the operation and not merely followers of what the manager would like to see. They create and thrive. They are also part of a team. Together, the team tends toward the organizational targets in a much better way than what we find in hierarchies. 

?            Planning versus Experimentation

Even though it sounds good as a strategy, acute planning stunts growth; guided experimentation allows for traveling in potentially beneficial directions. Without experimentation, true innovation cannot be achieved. 

?            Privacy versus Transparency

Barriers to communication flow, and therefore to optimal productivity, are a very common outcome of restricting information via unsupported principles. Organizational silos are created and hamper productivity. Transparency is no longer an option; it is a requirement.

Take a close look at the organization where you belong. Does it resemble the left or the right column? An awareness of your role and position in the broader scheme is the starting point of being able to serve the organization, and your own goals and targets, in a much better way.

Owners, you do have a better option. Please consider.