What Is Organizational Effectiveness?

Table of Contents:

• Steps From Leadership
• How to Measure Organizational Effectiveness
• Benefits of Organizational Effectiveness to the Business
• Examples of Organizations That Implemented This Strategy
• Improve Organizational Effectiveness

The efficiency of your manufacturing processes depends on your organizational effectiveness. Starting or growing a manufacturing business can be highly competitive — to be successful, you need to improve your methods. Organizational effectiveness examples include a clear plan and outlined goals, employee training and evaluation, as well as streamlined processes.

Fine-tune your marketing strategies, whether you’re defining your company’s vision or planning a new product launch. Implement systems that minimize waste. Keep up with technological advancements. Keep your workforce engaged for high morale and low turnover. When it comes to manufacturing, it’s impossible to overestimate the importance of organizational effectiveness.

Action Steps For Leadership to Improve Organizational Effectiveness

Organizational effectiveness starts with leadership. Company leaders need to establish the “why” — what is the company’s mission statement? What are the company values? With a clear purpose and identity defined, you’ll be able to establish means toward achieving your goals.

Implement leadership training programs to make sure leadership is on the same page about your company’s mission, focus and values. Upper-level employees should regularly attend public training events. At these events, leadership will learn how to gain employee trust and respect, as well as how to promote cooperation and practical skills like how to read blueprints effectively.

A company’s leadership should help design employee onboarding, evaluation and training. Every employee, from entry-level to upper management, should have access to skills assessments and in-house training. This will ensure that each individual on your team is able to fulfill their potential and nurture their unique skills.

Motivate your employees to continually improve and upgrade their skillsets, and encourage them to self-assess. Celebrate — and record — employee milestones. With an environment supporting continued growth in employees, you’ll have the most effective possible workforce. What’s more, you’ll be able to keep morale high and retain the best team members. Employee retention saves on onboarding and initial training costs and leads to a more knowledgeable and cooperative workforce.

Leadership should also know when and how to upgrade technology in your production processes. Some of the latest manufacturing technology can help simplify production processes and generate revenue. Some technological advancements you may want to incorporate include augmented reality, 3D printing and modeling and the industrial internet of things.

How to Measure Organizational Effectiveness

Measuring organizational effectiveness is not always straightforward or simple. It may not be obvious how your strategies are impacting your company’s performance. How you decide to measure success will depend on your goals and processes. Several data figures can help you determine your organizational effectiveness, including:

Insurance Premiums

With a cultural emphasis on safety, you may see a decrease in insurance premiums. Calculate insurance claims before and after implementing new safety strategies. Improved safety can save you money, but it is also vital to employee retention and morale. You invest in your employees — invest in keeping them healthy and safe.

Design Time 

You can measure how much time is spent on design before and after implementing new Computer-Aided Design (CAD) or Computer-Aided Manufacturing (CAM) systems. With the latest technology and LEAN manufacturing processes, you should be able to cut the time spent on the design phase. Measure the time spent on various stages of manufacturing before and after investing in the latest technology.

Domain Authority

Improving Search Engine Optimization (SEO) can boost a brand’s visibility and recognition. You can measure both domain authority improvements and increases in organic search results to see if your SEO strategies are making a difference. When people search terms related to your business, it’s important to carve out your place as an authority. This can boost trust and help to attract new customers.

Sales 

Of course, the most important element for a product or service-based company is sales. Measure sales differentials before and after implementing organizational effectiveness strategies. Are you making more sales? Are you winning more repeat customers? Are you winning more new customers? Measuring your sales can provide a good indication of your business’s success.

Return on Investment (ROI) 

Measure your increase in sales against the costs associated with organizational effectiveness strategies to determine your return on investment. Effective strategies may come with high initial costs but prove worth the investment.

Employee and Customer Satisfaction

In more abstract terms, you can measure the impacts of your effectiveness strategies by implementing employee and customer surveys. Ask employees about new skills they’re developing and how they feel about their everyday tasks. Ask them where further streamlining might be useful. Keep an anonymous feedback system and check it regularly.

Ask customers about their satisfaction with both your products and the overall experience you provide. Allow both employees and customers to supply numeric ratings, so you can measure aggregate rating scores.

Benefits of Organizational Effectiveness to the Business

Advantages of organizational effectiveness are both numerical and abstract. Your company is likely to see benefits in one form or another. Some areas that are likely to advance when you implement strategies to improve organizational effectiveness are:

Employee Retention

When employees feel their company of employment values them, they will be less likely to leave. You can have better employee retention with improved effectiveness strategies.

Employees need to respect their companies — mismanagement or a lack of organization will result in lost employee respect and retention. Employees also need adequate human resources support to feel safe and appreciated.

Employee Mobility

Continuous leadership training and team-building will allow employees to grow, learn and improve within your organization. As a result, you’ll be able to save on expenses and cultivate a strong company culture by promoting from within.

More Sales and Increased Profits

With streamlined and improved processes, as well as high employee morale and retention, you’ll likely see an increase in sales and profits. Organizational effectiveness can help boost your business past competitors.

Product or Service Enhancement

It’s important to make sure your product or service is the best it can be — with constant technological advancements, this means supporting continuous improvement. The effectiveness of your organization will determine the quality of the product or service you provide.

Examples of Organizations That Implemented This Strategy

Many manufacturing professionals have implemented an organizational effectiveness model and found improvement and success. Businesses have seen improvements in areas such as reducing insurance premiums, increasing brand visibility and improving leadership. Some notable case studies include the following.

Henry H. Ross & Son, Inc.

With new training and safety resources, this countertop manufacturer was able to reduce insurance premiums by $10,000. They also improved employee morale and reduced turnover.

Conestoga Log Cabins and Homes

SEO improvements increased brand visibility and captured new clients. Sales increased by 50%. They were able to snag the top ranking for their most popular search term.

Polyvisions, Inc.

Updated human resource policies improved leadership and increased jobs by 20% for this thermoplastic supplier.

La Crosse Technical Consultants, Inc.

By incorporating the latest CAD technology and adding on a new vendor partner, this steel detailing firm was able to cut back on design time by 50%.

Improve Organizational Effectiveness With MANTEC

When it comes to implementing organizational effectiveness, trust a non-profit group with a staff full of manufacturing professionals. For expert advice and high, long-lasting ROI, learn more about MANTEC today. Contact our expert advisors and join a network of manufacturing businesses that have seen improvement through organizational effectiveness.