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Organizational Effectiveness – Top CEO Issues to Drive Organizational Effectiveness

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Organizational Effectiveness is the efficiency with which an organization is able to meet its objectives.  This necessarily means that all executive level management will concern themselves with the drivers of Organizational Effectiveness, and will want to understand what these drivers are, and how to optimize them.

In late 2012, The Conference Board, an organization that advises members on a wide range of corporate leadership issues, conducted a global survey of top CEO concerns for their businesses.   Over 700 senior executives were asked to identify and rank the most pressing challenges they face, and their strategies for addressing each one.  The results surprised even the survey consultants.

“The results of this year’s survey are quite illuminating,” said Bart van Ark, Executive Vice President and Chief Economist, The Conference Board, and a co-author of the report. “Since 2008, we had seen CEOs express extreme concern about external pressures on the business environment, especially in those regions hardest hit by the economic crisis.  Last year, we saw ‘global political/economic risk’ and ‘government regulation’ both ranked as top-four challenges worldwide. In CEO Challenge 2013, leaders seem to be turning away from macro factors outside their control to look hard at their own organizations, employees, customers, level of efficiency, and capacity for innovation.”

Controlling the Controllable

Significantly, world business leaders all included the same four among their top-five challenges.  The convergence globally toward “controlling the controllable” in a tough environment can be seen in each of the top challenges and strategies named:

Human Capital — how best to develop, engage, manage, and retain talent — was named the leading challenge (out of ten choices).  And CEOs’ top strategies for addressing human capital are:

Growing talent internally – career path development

Provide employee training and development

Raising employee engagement.

Operational Excellence – encompasses strategies for creating a more efficient, cost-effective organization.  Top strategies for addressing Operational Excellence include:

Raising employee engagement and productivity

Investing more in key technologies

Reducing baseline costs.

Innovation – the process of translating an idea or invention into a good or service that creates value or for which customers will pay.  Six of the top ten global strategies for innovation draw on Human Capital, including:

Creating a culture of innovation

Develop innovation skills for all employees

Find, engage and incentivize innovative staff

Engage in strategic alliances with customers, suppliers, and/or business partners

Invest in new technologies.

Customer Relationships  – a model for managing a company’s interactions with current and future customers.  The top-two strategies reveal a mutually supportive two-pronged approach to the challenge:

Enhance quality of products/services, and

Sharpen understanding of customer/client needs.

People-Driven Strategy

A conclusion can be drawn that among the many strategies that CEOs are investing in to tackle their main challenges, the focus on using the organization’s Human Capital is predominant.  And this focus is also much broader than just developing the organization’s leaders.

On a global basis there is a clear shift toward internal talent development as opposed to strategies focused on management or the senior team.  In times of uncertainty, this appears to be a long-term approach that will assure the right talent is in place to take advantage of the next boom – whenever it comes.

As these results show, Human Capital is not only a critical business function in itself, but is also intimately connected with innovation, operational excellence, and other challenges.

Now is the time for organizations to focus on the strategic elements of Human Capital Management – namely, their Workforce Architecture that puts in place systems and data for the integration of Talent Management processes, and Workforce Intelligence that measures the outcomes in financial terms and that can be used to predict future Financial Success of the organisation.

To learn more about both Workforce Architecture and Workforce Intelligence, contact us today!  You really want to get started as soon as you can and be ready for the next boom.

Contact us Now!