Five components of organizational effectiveness

John C. Maxwell once said that “a leader is one who knows the way, goes the way, and shows the way.” Yet, even the greatest leader won’t make your organization perfect and most effective. Even an exceptional leader can know the way and go the way, but she or he needs a team to show the way.

A skillful leader is indeed crucial to an organization’s success and a key component that needs to be in the right place. Only then can the organization not only survive but operate seamlessly. A skilled leader is the main factor in achieving a goal, i.e., highly effective organization.

As with everything in life, here, too, are particular requirements you must meet to reap the same benefits as highly effective organizations.

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What does an organization need to be effective?

1. A talented staff

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People were, are, and will be important to any organization, because they build it. It’s crystal clear that a more talented team will outperform the less talented and it all starts with a good leader that brings in the talent to the organization. Good leaders, for example, chose accurate selection methods during recruitment processes.

2. A motivated staff

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People with a willpower are more likely to exceed their performance abilities. Appreciated, active, and motivated employees will benefit your organization more than you imagine. It’s also clear that the motivated team will outperform the demotivated one. Team motivation is directly related to the higher-level management performance. Their good or bad decisions have an impact on lower organization levels. People need to have a role model within the organization to follow and to visualize their own career path based on analyzing, for example, a higher-level manager.

3. A talented management team

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A talent can be defined in terms of the domain model presented in Who we are is how we lead

4. An effective strategy for outperforming and competition

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This is not an easy one. Many organizations find strategy difficult to keep effective because most of the times it’s based on a systematic research and profound knowledge of industry trends. It’s a common thing that business managers do not enjoy research but, on the other hand, researchers don’t keep very good relations with business managers. As a result, the organizational strategy is very often based on ad hoc decisions made by the top management with no open discussion with other departments. Now, think about the organization you work in, does this situation sound familiar to you?

5. Monitoring systems

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The final effectiveness factor. A set of tools that will enable the senior management to keep track of other factors: a talent level of the staff,  their motivation level, the management performance, and the condition of the business strategy. Putting all these factors in place is the top-level management’s core responsibility, as they’re the ones motivating others. “Anyone can hold the helm when the sea is calm,” as Publilius Syrus once said, but only a wise CEO with bright top-level executives can safely weather the storm. Then and only then an organization led by such senior leaders may be called highly effective.

“As Pericles said to the elders of Athens on the eve of their cataclysmic war with Sparta, ‘I care less about the Spartans’ strategy that I do about our mistakes.’”¹

You see, every organization makes mistakes in its internal processes, for example, hiring new employees. All organizations have managers that are good and bad, experienced and inexperienced. Some organizations hire third parties to develop their business strategies for them. Some underestimate or overestimate their own performance in the key areas listed above.

A reasonable conclusion is that there’s no such thing as the perfect organization. Each and every one has its inefficiencies. The key is to notice this, realize that a continuous improvement is a must, and to try change things for the better. Keep in mind that only those who never try—lose.

¹Hogan, Robert, and Kaiser, Robert B. Kaiser What We Know About Leadership.

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