How Do I Improve Organizational Performance?

If only there was a simple, easy way to ensure positive organizational performance…

There are books, seminars, CDs, DVDs, articles, blogs about: Career Management, Interviewing Skills, Individual Development Plans, Performance Consulting, Employee Engagement, Leadership Training, Management Training, etc.  They are all aimed at helping us improve the management of our organizational performance. The problem with a fair number of these concepts is that they make a key assumption that tends to prove false.  Read on for more.

In a recently published chart from McKinsey’s “The McKinsey Chart Focus Newsletter” (subscription required), a McKinsey team analyzed “upward of 100,000 questionnaires to uncover the practices of 400 business units in 230 companies around the world.”

Here is a chart of a global energy company detailing the correlation of financial performance and organizational performance:

The Chart (click on chart for a better view)


Build The Basics  According to McKinsey, (emphasis is mine) “the team eventually arrived at one winning combination: clear roles for employees (accountability), a compelling vision of change (direction), and an environment that encourages openness, trust, and challenge (culture). Nothing else came close in improving organizational performance.”

Huh.  Tell people exactly what they need to accomplish (note: not how, just what), point them in the right direction (Change 101), and give them the latitude to do it.  That sounds so simple, so basic, so “101″! Easy analogy: don’t spend so much time picking out paint and appliances for your new house when you haven’t looked into pouring a stable foundation.

Accountability: hold people accountable to the goals you set for them.  You do set goals for your teams, right?

Direction: give clear direction for change.  You do set a vision and create that sense of urgency, right?

Culture: give people what they need to accomplish their goals and accelerate change.  You don’t micromanage, do you?

If This Is So Easy…

…why aren’t businesses doing this?  Because this isn’t the fun work, the sexy work, the work you want to do each day.  Career Management, Leadership Development, seminars, workshops.  All the interesting work that actually relies on one assumption:  you’ve taken care to establish the accountability, direction, and culture as a foundation for success. 

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