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Organizational Effectiveness Can Improve Efficiencies, Reduce Costs

Many aspiring entrepreneurs, when planning a venture, think in terms of ideas, financing, hiring, creating business plans, marketing, and more. Those are all essential parts of the pie. But one area to which you should also give considerable attention is organizational effectiveness.

Let’s skip a long, convoluted definition and get right to the core. Organizational effectiveness basically means how efficiently your company can meet its goals. This can include how you produce your products, how much waste you produce, and how efficient your processes are.

Perhaps the most popular methodology used by companies for improving business processes is Six Sigma, which uses statistical analysis to improve the quality of a process’ output. It accomplishes this by identifying and removing whatever might be causing defects, while also minimizing variability in manufacturing and business processes.

For each Six Sigma project undertaken, there is a defined sequence of steps that are assigned specific value targets based on predetermined objectives; for example, increasing output or reducing costs. Ultimately, it increases operational efficiency within a company.

So why is organizational effectiveness so important?

In the big picture it means that your company is operating as productively as possible with as little waste as possible, and producing the results you want without expending any more time, energy, money, and human and material resources than are needed.

In an effective and efficient company, if each employee is doing his or her job well, the company should be able to maximize its profits because it’s producing and selling a product without waste. Another way of saying this is that your company is clicking on all cylinders.

As someone who works with many companies to improve organizational effectiveness, it’s my job to help them rethink and rework their processes to improve inefficiencies and eliminate waste as much as possible. Of course, I run into numerous inefficiencies that need to be addressed. One important issue is employee morale.

Frankly, it’s human nature to be resistant to change, and any time a company starts looking at correcting process problems, employees are likely to be concerned. After all, implementation of any organizational or process changes usually means that employees will need to modify existing patterns of behavior. They’ll have to think differently and work differently.

For this reason, we sometimes recommend what’s called “pride building.” This is when leaders identify a few or several employees who are regarded as influential by their peers. These employees are asked to recommend ideas that improve how work takes place. Some of the common suggestions these “pride builders” often communicate to leadership are the need for line employees to have more autonomy, for leadership to communicate clearly to staff members why their work is important, and for employees to be recognized for their contributions.

To create and maintain a high level of morale, leaders who communicate and interact with employees clearly and effectively can build a groundswell of support among their workforce. When employees are supportive of organizational change, they’re more likely to be cooperative and even become champions of new, more efficient ways of doing things. This will turn them into living examples of how organizational effectiveness is practiced.