GUEST POST: The 12 elements of effective organizations — circa 1985

Copyright ©1985-2011, William P. Densmore, All Rights Reserved


The organization’s broad aims, and its guiding values and beliefs, are clear to employees and various publics as a result of top management’s words, deeds, and symbols.

People understand the nature and scope of the business, and where it hopes to be in the future. There are common under‑ standings about customers, employees, operations, business ethics, and community responsibility.

These understandings are a source of pride for employees, and help to generate teamwork and mutual respect. They provide a sense of purpose and commitment for all, and a basis for testing decisions. This is accomplished without stifling people with regimentation as to “the way we do things around here”.

In the communities in which it operates, the organization is admired and respected, and known as “a good place to work”.


In management emphasis and interest and in reward systems, there is appropriate balance between short term results and long term investments. In addition to generating short term goals for sales, earnings, market share, asset ratios, etc., the strategic planning process allocates resources and establishes checkpoints for future oriented programs in human resource development, technological development in products, processes and information systems, and facilities modernization.

In multi‑business organizations, the short term/long term balance is different for different businesses. These differences depend on the mission and strategy of each business, and this is understood and accepted by those involved.

Management people at all levels, especially top management, demonstrate interest in what is being done for the future in their day to day interactions and inquiries as well as in formal procla­mations. When business conditions require a temporary shift to short term emphasis, full explanations are provided so that it does not appear that the future is being abandoned.

Job descriptions, annual objectives, performance reviews, salary administra­tion, and incentive plans reflect a short term/long term balance that is appropriate to the nature and level of the job.


At all levels, superior customer satisfaction through total quality is recognized as a winning strategy, and there is commitment and attention to customer satisfying products and services.

Extensive information networks and contacts provide current knowledge of customer needs and wants, and competitors’ offerings. These needs and wants are met in product design and mix, in “fit for use” product quality, in sales efforts, in order handling and sales service, in lead times and delivery reliability, and in attitudes towards and relationships with customers. For all of these elements of superior customer satisfaction, there are goals and measures of progress with continuing improvement expected.

Each person feels part of a customer satisfying team, and understands how he or she contributes. Improving quality is viewed as contribut­ing to productivity improvement, and not as an either/or trade off.


All are aware that profits, or satisfactory economic performance, are a requirement for long term business success; and that only a successful business can provide sustained customer satisfaction, job satisfaction, job security, and opportunities for growth.

People at all levels realize that such satisfactory economic performance requires effective use of resources and continually improving productivity in management, marketing, research, administration and manufactur­ing.

Productivity improvement is an expectation for all, there are goals and measures of progress at all levels, and fixed and variable budgets are an effective and accepted tool.

Sales and marketing people meet the challenge of obtaining prices that are competitive yet fully reflect the value offered. The mix of products offered meets the needs of customers and of distribu­tion channels, but avoids unwarranted clutter.


A strategic management process defines the unit’s mission and values, and creatively analyzes the business and its product/market segments to arrive at strategic guidelines, results expected, and resource allocations. For large and/or diversified organizations, “businesses within the business” are defined and the process is carried out for each of these divisions or strategic business units.

As appropriate, the process reaches out to world opportunities and world competitive threats. The line organization takes the lead. Full use is made of the authority of knowledge at all levels; it is bottom up and top down. Realistic assessments are made of:

  • The external situation and trends and the future opportuni­ties and threats affecting the unit and its product/market segments, or potential segments.
    • The attractiveness of these segments, considering growth, profitabili­ty, risks, strategic fit.
    • The key success factors in these segments.
    • The present and potential competitor’s capabilities and strategies.
    • The unit’s strengths and weaknesses as related to competi­tion and  key success factors.

These assessments are the basis for creative development of winning strategies, which focus resources on attractive opportunities where the unit has or can achieve relative strength.

Strategy is linked to operations through strategic guidelines and integrated business plans for all functions and levels. Develop­mental needs in technology and human resources are defined. The process is understood and accepted at all managerial and profes­sional levels.

There is flexibility, and opportunity for recycling as conditions change, or as new information or ideas are put forth.


In this unit, focus on results rather than activities is a dominant theme that creates effectiveness and job satisfaction. “I’ll get it done” has replaced “I’m working on it.”

Integrated, cross functional business planning and participative goal setting produce a pyramid of goals which define the “significant few” objectives ‑ or key results expected ‑ at each level of the unit, consistent with the unit’s mission and strategy.

A resource matching process assures a reasonable fit between resources required and resources available. There is review and revision as new ideas are brought forth or as external conditions change. As a result of this process, people at all levels under­stand and are committed to expectations which they believe are challenging but achievable.

Responsibility is clear as to the who‑what‑when for each key result. Committees are used for sharing ideas and information, not for buckpassing. Appropriate progress indicators or measures provide “how am I doing” feedback for individuals and groups, and are the starting point for performance reviews. The focus on results encourages teamwork and discourages makework, procrasti­nation and lethargy.


People are a valued and respected resource. This is demonstrated by honesty, trust, openness, and equitable policies and treatment, and by good work environments and support services. Equal employment opportunity is recog­nized as a good business practice as well as a legal and ethical obligation. There is a lot of “manage­ment by walking around” and “catching people doing something right”.

Information about the unit is freely shared; people feel in on things and know what’s going on. Managers are good listeners; questions and concerns are handled quickly and courteously, and improvement suggestions from all levels are encour­aged and acted upon. People feel that they can speak up about an idea or a concern or a criticism. There are multiple ways of providing recognition and appreciation for accomplish­ment, including gain sharing where feasible.

These people‑oriented values and behaviors are reinforced by modern and effective personnel practices for:

  • Selection for hiring.
  • Initial orientation and continuing training .
  • Participative definition of performance expectations.
  • Performance review and help with personal growth.
  • Equitable salary administration linked to performance.
  • Seeking candidates and selecting for promotion.


Managers at all levels provide as much freedom as each person’s experience and capabilities permit, within broad bounds that they work out together. Not traditional order givers and super decision makers, managers serve as guides, coaches and mentors to their subordinates.

Decisions are made on the basis of the authority of knowl­edge rather than the authority of position, with monitoring to assure that delegation does not become abdication.

Job descriptions and objectives emphasize “what” rather than “how”, in an open‑ended fashion that leaves room for innovation. People are encouraged to “do what’s right” when conditions change or opportunities appear.


There is an atmosphere and an expectation of competence and high perfor­mance. After appropri­ate counseling and assis­tance, people who are not meeting reasonable expectations move to a more appropriate assignment in or out of the organization.

These difficult actions are infrequent because of careful selection for hiring and promotion, appropriate orienta­tion and training and supportive supervision.

Decisions to make a move are based on results achieved, as individual performer and as team member, as compared to agreed upon expecta­tions. Seniority is given appropriate consideration. People trust management and the system. Non-conformity in personality or life style is a factor only to the extent that such issues influence getting the job done.


The top management of the unit operates as a business team. To the extent appropriate for the size and complexity of the unit, business teams are formed for product/market segments and for major projects. These may be autonomous with team members reporting to a leader. Or the members may be assigned (full time or part time) from their functional unit with account­ability to their functional boss retained, but also with some account­ability to the business team leader. Whatever the structure, there is a respected and accepted leader who sees to all the requirements for the success of the product/market segment or the project.

Each team’s members are committed to common objectives, values, and beliefs. The focus is on serving customers and out-perform­ing the business’ competitors. All members have the same understanding of roles and relationships; and of who is responsi­ble for what. Enthusiastic teamwork integrates diverse functions. Power plays and jurisdictional disputes are rare. Information is freely shared. There is a feeling of working together with mutual trust and support.

Top management makes sure that expectations are clear and monitors performance on key results, but doesn’t meddle. Staff supports rather than polices the line. Reward systems reinforce the “common fate” team climate.


The power of informal networks and relationships is recognized and used effectively. Projects and problems are often handled by temporary task forces that work informally across organization lines.

Managers have extensive mutual support relationships across the organization and at various levels. These relationships are an important source of information, and a primary means of getting things done. Managers also have good external contacts ‑ they know the industry, the market, the competition, their profession, etc.

There is concern for organization channels and protocols, but only to the extent needed for effectiveness. Much communication is by telephone or by “catching someone for a minute”. Meetings are small, short, informal and efficient. Letters and reports are produced only when needed, and are brief and to the point, with common sense decisions on who gets copies.


A climate for change prevails at all levels, with full awareness that lasting success requires continuous improvement in all facets of the unit. Change is seen as a source of opportunity and security. Innovation is highly valued, risk‑taking is encouraged, and defending the status quo is questioned; this is reflected in reward systems.

Suggestions are solicited and welcomed from all levels, recognizing that the “authority of knowledge” often resides with those who are doing the work. New ideas are nurtured, with emphasis on “how can we make it work” rather than “how can we kill it”.

Unbudgeted “bootlegging” in order to explore new ideas is encouraged to an appropriate degree; this is balanced by a disciplined process for selecting projects for major investment. “Champions” for new products or processes emerge and are supported. Small innovative teams are used effectively.

To the extent required by strategy, leadership is achieved in product technology, process technology and informa­tion systems technology.

Copyright ©1985-2011, William P. Densmore, All Rights Reserved

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