Is Organisational Effectiveness relevant to the small organisation?

Author: Eric Thompson

Eric Thompson considers whether the organisational improvement techniques that have been developed for large organisations have any relevance to the small organisation

The very word “organisation” makes you think big, and somehow when we put the two words “organisational effectiveness” together the mind focuses only on the very biggest organisations. It is true that the thinking that lies behind the methods of making organisations more effective was developed for, and is used predominantly by, large organisations. Much of the approach was developed in the automobile industry during the 20th century, and today governments the world over are beginning to try to use the approach to ensure that the services that they offer to their citizens are affordable. The question here, however, is whether organisational effectiveness is an issue for the very large only, or can much smaller organisations benefit from the same thinking and approach?

Why should a small organisation invest in organisational effectiveness?

There is ample case study evidence to suggest that attention to organisational effectiveness can deliver a range of benefits to any organisation.

• Cost benefit analysis shows that there are savings to be made.
• Consistent quality of delivery to your customers.
• Customer led – your customers may insist on it.
• Benchmarking – your competition may be doing it better.
• Staff engagement – provides a legitimate vehicle to motivate staff.
• Industry recognition – your efforts may be newsworthy.
• Recognition –contributes to achievement against industry standards such as ISO.

If your organisation doesn’t need to make an improvement in any of these areas then clearly you don’t need to read on. If one or more of these topics could be important to you then perhaps it is worth finding out how you could achieve that benefit?

Organisational Effectiveness

Let’s start by reminding ourselves what organisational effectiveness is all about. In a large organisation the way that things are done often owes more to history than to the logic of what is simply required to deliver the products or services to the customer.  It can be expensive and time consuming to make changes to the way things are done in these organisations, so that can tend not to happen, and as a result some processes end up being less than optimal.  As an example, let’s think about a simple manufacturing process.

“…case studies routinely report savings of around 20%-25%...”

Let’s assume that we had developed the process and that all the machines that were needed were the right size and they were all lined up in the right order and the product the customer wanted got produced without a problem. But then one day the customer asked for a larger size. One of our machines wasn’t big enough, but that wasn’t a problem, we could send it to the factory in the next town that had a bigger machine and then bring it back to finish it. Time moved on. The customer liked the bigger product and now we have to send all of our items to the next factory to use the bigger machine. Suddenly, into a simple process, we have introduced a whole lot of new stages. We have to gather enough items together to make a lorry load, and we need somewhere to store them in the mean time. The whole process takes longer…and so forth. The journey and the storage are additional steps in the process and they mean additional cost. Our process is no longer as effective or as efficient as it was.

Continuous Improvement

Bit by bit these additional steps creep into all processes until we find that our competitors can make an item a lot cheaper than we can, or our services are getting more expensive to deliver. If we are going to prosper, we need to sort out all of those bits of ineffectiveness and make our process effective again. Methods such as “Lean” and the training and empowerment of improvement teams selected from within the organisation can result in huge improvements. There is a cost in time and effort, but case studies routinely report savings of around 20%-25%. With a philosophy of continuous improvement, large organisations can keep on top of their effectiveness and efficiency.

In addition to that continuous improvement philosophy, there are a number of things that need to be in place for organisations to be able to address organisational effectiveness. Importantly there needs to be visible support from senior management for that improvement to be made. Improvement teams need to be identified and staff trained in appropriate improvement methods and tools, and those individuals that are involved need to be motivated and empowered to make the improvement happen.

Is it different in a small organisation?

Ineffectiveness in a small organisation can occur for many reasons, but key amongst those is the very nature of the small organisation. By definition there are fewer people, who have to be more flexible about what they do, and that very flexibility can lead to ineffectiveness, especially in the absence of defined processes and if different individuals do a task on different occasions.

“…establish a culture of continuous improvement and to get everyone to do things effectively the first time...”

A recent example that I came across illustrates the point. A small organisation, because of demand for its services had taken on additional staff, all located in different places. Each did their best to satisfy their customers, but they all did it differently, and none of then did it the way that the original individual had done it before they came. Customer feedback was not as good as before. Fortunately the organisation realised that what it needed to do was to define a single process that drew on their best experience that all the individuals would follow once they were trained to use it. The organisation needed to become effective again.

So ineffectiveness can occur in small organisations and their very informality means that it is sometimes difficult to get rid of. A focus on organisational effectiveness is therefore just as valuable in the small organisation, and if introduced early enough can lead to a culture in the organisation that plans to get things right from the outset, rather than letting things drift and then having to address them.

The approach to organisational effectiveness in the small organisation

To make organisational effectiveness work in small organisation many of the same factors need to be in place that need to be present in large organisations; the philosophy, the method of improvement, tools to aid the process, senior support, the motivation to want to improve all have to be present. Perhaps, however, some things need to be different. Finding dedicated resource in a small organisation to resource improvement teams is perhaps an optimistic notion. On the plus side however it will generally be easier to identify the issues and to agree and make the required changes.

The approach to organisational effectiveness in a small organisation is therefore to address the whole organisation rather than representatives of it, to establish a culture of continuous improvement and to get everyone to do things effectively the first time. By getting it right as we develop, we avoid the need for rework later. It’s not therefore about setting up teams and correcting what has gone wrong, it’s about giving everyone the mindset and the support and tools that enable them to keep the organisation effective as it develops.

Making it happen

If you are in a small organisation what do you need to do to make it happen?

Here’s a quick check list to get you started:

• If you are the leader, nail your colours to the mast, and get everyone on board with the philosophy.
• Commit as a team to doing things effectively.
• Import some simple methods and tools that you can all use to help you to develop effective processes.
• Make sure that everyone is trained to use the methods and tools, and empowered to use them.
• Learn from the experience of others. You don’t need to reinvent the wheel. 
• Monitor what you do, measure the impact, and work at it continuously.

If you adopt this approach consistently, you will find that it is your products and services that are amongst the most competitive in the market place.

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