Organizational analysis is a first step in the performance analysis process. It looks into the heart of the organization—its vision, mission, values, goals, strategies, and critical issues—because all organizational elements should be strategically aligned. Just as tires need to be aligned for better vehicle operation, an organization's people, processes, and culture benefit from aligning with the organization structure. Figure 5.1 is a high-level summary of the organizational analysis component of the Performance Improvement/HPT Model.
Organizational analysis is an examination of the components that strategic plans are made of. This phase of performance analysis analyzes the organization's vision, mission, values, goals, strategies, and critical business issues.
vision The vision is the organization's long-term view of its desired end state; it is what the organization wants to be. Vision is a description of the core values and principles that make the organization unique.
Mission. The mission is the organization's reason for being, in effect, why it exists. The mission as expressed in the mission statement gives direction and purpose and is driven by such forces as market needs, production capability, natural resources, regulatory action, technology, methods of distribution, products and services offered, and the like.
Values. Values are enduring core beliefs. Values envision compelling futures and deepen foresight. They have intrinsic value for the organization and they need to make sense in terms of brand, marketing, and financial assessment.
Goals. Goals represent targets for accomplishment. They must be aligned with the organization's vision, mission, and values. They also need to be clearly defined, relevant, understandable, realistic, and reflect the organization's cultural dynamics.
Strategies. Strategies are the organization's plan for growing the business. Strategies are needed to determine a market position, identify and nurture customers, compete in the global environment, focus on competitive advantage, achieve broad goals and objectives, and so on.
Critical Issues. Critical issues are problems or opportunities that determine an organization's success and may represent a gap in results that must be closed. Some call them critical business issues, others call them critical success issues, but no matter what they are called they all affect the business in terms of success or failure. Typical examples may include increasing customer satisfaction and, ultimately, employee or customer retention; increasing market share; reducing or eliminating excessive waste; and so on.
Individual members of any organization may vary in how they define the words that the organization has selected. For example, three strategic planners were asked to define vision, mission, and goals.1 Their responses are listed below in Table 5.1.
The purpose of organizational analysis is to seek directions—“the performance and perspectives that the organization and its leaders are trying to put in place.”2 Directions need to be identified early during the performance analysis because they set the expectations for desired or optimal performance.
The major factors that set the direction for the organization are vision, mission, values, goals, strategies, and critical issues. These factors are found in the organization's strategic plan. The plan represents where the organization should be heading and sets forth an action plan for achieving the goals that have been identified. Heracleous says that “the real purpose of strategic planning is to improve strategic thinking.”3 Both planning and thinking are necessary for successful strategizing; strategic planning refers to a programmatic, analytic thinking process and strategic thinking is creative and divergent. Eckel and Witmer liken a strategic plan to a budget that constantly needs tweaking as the organization's goals and priorities influenced by economic factors change.4
As part of an organizational analysis, the performance improvement practitioner examines the customer's current or future needs and expectations. The HPT practitioner analyzes such factors as:
The performance improvement practitioner begins an organizational analysis by reviewing existing documents such as the organization's strategic plan, history, by-laws, board meeting minutes, annual reports, new employee orientation material, project management data, payroll reports, benchmarking data, talent management databases, customer satisfaction data, dashboards, and others.6 Then the performance improvement practitioner gathers feelings and opinions from as many internal and external stakeholders as possible.
For example, one major but often ignored stakeholder is the customer: what the customer thinks, feels, and why the customer keeps coming back. Fitz-enz says that a satisfied customer is “pleasant, content, grateful, satiated, and safe”; whereas, an engaged customer is “passionate, energized, involved, committed, and trusting.”7 These feelings lead to desirable behaviors. Leaders of successful organizations use information on present and future customer requirements and expectations to help them set the course or direction for their organizations. Figure 5.2 illustrates how input from the customer helps to establish the desired performance state as a foundation for performance gap analysis.
Adapted from D.A. Grant and J.L. Moseley (1999, July). Conducting a customer-focused performance analysis. Performance Improvement, 36(10), 25. Copyright ISPI. Used with permission.
Time, cost, the culture of the organization, and the availability of resources are prime considerations when selecting tools for conducting an organizational analysis. Since it is extremely important to gather both facts and perceptions, the major analysis techniques are extant data analysis, interviews, surveys, and group processes. These may be conducted in real time or virtually using online or mobile technologies.
Interviews. Conducting one-on-one or group interviews is probably the most helpful tool for accessing both fact and perception. The following three strategies are particularly appropriate for interviews:
Group Processes. Brainstorming sessions, focus groups, consensus activities, and other group processes are also helpful for generating or prioritizing ideas from stakeholders.9 Brainstorming is honest group dialogue in which everyone participates equally. Focus groups members are asked about their opinions, perceptions, and attitudes relative to an issue. Consensus activities ask for agreement from participants to reach a common decision.
Surveys. Surveys are more anonymous than interviews. Surveys can generate both facts and perceptions about the directions established by the organization.
Record Critical Behavior. The critical incident technique, case studies, and even storytelling are techniques for observing and reporting on behavior that may have a critical positive or negative impact on an organization. Once the behavior or incident is recorded it may be used to help solve performance problems or take advantage of performance improvement.
EXAMPLE
Vince Araujo, manager of performance delivery at Sprint, developed an Organizational Scan Model that documents improved performance. “At its core, the SCAN is the basic input/output system model complete with dual loops for formative and evaluative feedback. Structured to show the conditions or the three levels of the organization on the left side, and the receivers on the right, the organizational scan provides a snapshot of any aspect of performance at whatever level of detail is required.”10
Tosti and Jackson also developed a set of questions that provide structure for a thorough organizational scan.11 Performance Support Tool 5.1 suggests typical questions for planning an organizational scan.
PERFORMANCE SUPPORT TOOL 5.1. TYPICAL QUESTIONS FOR AN ORGANIZATIONAL SCAN
CONDITIONS, ORGANIZATIONAL LEVEL: STRATEGY, STRUCTURE
CONDITIONS, PEOPLE LEVEL: CLIMATE, PRACTICES
CONDITIONS, WORK LEVEL: ENVIRONMENT, RESOURCES
PROCESS, ORGANIZATION LEVEL: SYSTEMS
PROCESS, PEOPLE LEVEL: PERFORMANCE REQUIREMENTS
PROCESS, WORK LEVEL: METHODS
OUTCOMES, ORGANIZATIONAL LEVEL: ORGANIZATIONAL RESULTS
OUTCOMES, PEOPLE LEVEL: MIVATION, FEEDBACK
OUTCOMES, WORK LEVEL: PRODUCTS, SERVICES
PERFORMANCE SUPPORT TOOL 5.2. ORGANIZATIONAL ANALYSIS SURVEY
Directions: Select the terms or sections of this performance support tool that are appropriate for the organization being analyzed. Use the selected sections as a survey instrument or a group discussion guide. The target audience should include all levels of management, workers, and internal or external stakeholders, including competitors or customers. The goal is to identify both facts and perceptions from a broad range of internal and external stakeholders, and to help determine whether the organization's vision, mission, values, goals, strategies or critical issues are aligned with the desired and actual performance state. There are no wrong or right answers and there is no answer key.
Pick the definition from Column A that best matches the term in Column B and write the number in the parentheses next to the term in Column B. Remember that there is no correct or incorrect answer.
Mission/Vision/Goal
Column A Definitions | Column B: Terms |
1. The reasons for making the plan | A.( )Vision |
2. Our principles and standards | B.( )Mission |
3. Our reason for existing | C.( )Values |
4. What we do | D.( )Goals |
5. The end state to be achieved | E. ( )Objectives |
6. Our notion of success | F. ( )Strategies |
7. Milestones along the way | G. ( )Critical Issue(s) |
8. The means to be used | H. ( )Strategic Thinking |
9. The path to be taken | |
10. Who we are | |
11. Increase in products and services | |
12. Precedes strategic planning |
Vision
What is the organization's vision?
What is the organization's mission?
Values
What are the organization's values?
Goals
List the organization's goals for each category:
Consider the organization's strategies for meeting its goals in each of the following categories:
Critical Issues
What is (are) the organization's critical issue(s)?
How have the critical issues been influenced by the organization's history, its traditions and culture, market share, brand?
Adapted from G.A. Rummler and A.P. Brache, 1990. Improving performance: How to manage the white space on the organization chart, p. 19. San Francisco: Jossey-Bass and F. Nickols (1996). The mission/vision thing. Retrieved from [email protected] and G.A. Rummler (2007). Serious performance consulting: According to Rummler, p. 21. San Francisco: Pfeiffer. Fundamentals
1. Nichols, 1996
2. Heracleous, 1998, p. 482
3. Heracleous, 1998, p. 485
4. Eckel & Witmer, 2010, pp. 32-35
5. Tosti & Jackson, 1997, p. 23
6. Phillips & Phillips, 2007, pp. 51; 218
7. Fitz-enz, 2009, p. 118
8. Brethower, 1997, p. 21
9. Zemke & Kramlinger, 1982, pp. 83-84; 141-142
10. Haig, 2010, pp. 2-3
11. Tosti & Jackson, 1997
Brethower, D.M. (1997b). Rapid analysis: Matching solutions to changing situations. Performance Improvement, 36(10), 16-21.
Eckel, N., & Witmer, P.N. (2010, September). Strategic planning simplifies. Training + Development, 64(9), 32-35.
Fitz-enz, J. (2009). The ROI of human capital: Measuring the economic value of employee performance (2nd ed.). New York: AMACOM.
Haig, C. (2010, June). The organizational scan (pp. 2-3). Retrieved from www.performanccexpress.org/
Heracleous, L. (1998). Strategic thinking or strategic planning? Long Range Planning, 31(3), 482-485.
Nickols, F. (1996). The mission/vision thing. Retrieved from [email protected].
Phillips, P.P., & Phillips, J.J. (2007). The values of learning: How organizations capture value and ROI and translate them into support, improvement, and funds. San Francisco: Pfeiffer.
Rummler, G.A. (2007). Serious performance consulting: According to Rummler. San Francisco: Pfeiffer.
Rummler, G.A., & Brache, A.P. (1990). Improving performance: How to manage the white space on the organization chart. San Francisco: Jossey-Bass.
Tosti, D., & Jackson, S.D. (1997). The organizational scan. Performance Improvement, 36(10), 22-26.
Zemke, R., & Kramlinger, T. (1982). Figuring things out: A trainer's guide to needs and task analysis. Reading, MA: Addison-Wesley.
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