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#10. What are The Eight EOC Dimensions of Organizational Performance? Making Sense of the Data:
The Eight EOC Dimensions of Organizational Performance
The point of the diagnostic is to focus dialogue. In a typical survey, there will be hundreds of responses to the questions. We make sense of them by mapping responses into a number of logical themes, which can be thought of as categories or dimensions of organizational performance. The software analysis points to those dimensions where improvements are apt to have the greatest impact. Somewhat coincidentally, or perhaps because there is some sort of natural order at work in organizations, our survey responses map nicely into the eight dimensions reported in current OD research (see HBR, "What Really Works," Nohria, Nitin, Joyce, William, Roberson, Bruce, Harvard Business Review, Jul 2003, Vol. 81, Issue 7). Brief explanations of those dimensions:
Strategy refers both to what the organization is trying to do (its overarching purpose, beyond making money) and how it proposes to do it. If the purpose of your airline is to compete with surface travel; one of your strategies might be to attract top crews, negotiate for inexpensive gates, avoid delay-prone airports, and standardize the fleet. Clear strategies are easy to remember and offer compelling and sustainable advantages. New strategies need to be tested against objective criteria, as opposed to executive intuition.
Leadership is a measure of how well-led people feel. The leader's primary task is to put the organization in touch with reality. Associates in effective organizations know where the leader is taking them and the values with which decisions are made. They believe the leadership walks its talk.
Culture is "the way we do things around here." Strong cultures tend to outperform weak cultures. Low cynicism, high and clear expectations, frequent recognition, and mutual respect typify effective cultures.
Execution refers to how well the organization implements its strategy, often indicated by dependable results, minimal waste, front-line empowerment, and constant improvement. Consensus building and dialogue may lead to more effective execution. Good managers clarify what and let subordinates determine how, providing reasonable assistance and resources.
People issues revolve around selecting, developing, challenging, recognizing, and rewarding the workers who make up the organization. Effective organizations have great systems to recruit and select from within as well as from without; regular means of developing and training; good recognition systems; clarity around what's expected; frequent and precise feedback (not necessarily an annual performance review!); and felt-fair pay for the work performed.
Hierarchy refers to how well strategy and execution are supported by the arrangement of who reports to whom. Effective organizations are fairly flat, promote cooperation, and are organized around the core deliverables of the business.
Innovation is the process of identifying and implementing new ideas. Regular innovation can be encouraged at a cultural level -- in effective organizations, many ideas come from those involved in the core processes. Innovation is particularly important in organizations with shorter product life-cycles: in those cases, we like to see a fairly formal process of R&D coupled with clear expectations. Effective organizations experiment with disruptive technologies.
Alliances are those partnerships made with other firms, sometimes leading to an acquisition. In some fast-growth industries, acquisitions have been a successful method of gaining market power. For most companies, acquisitions have been a disappointment. Effective organizations have rigorous processes for identifying and selecting partners, followed up by solid methodology for integration.
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