Maximum Performance – Different Things to
Different People
Despite the recent attention to achieving maximum performance, there is no standard interpretation
of what that means or what it takes to get it. Still, you should be aware of the various views and be
able to choose your own. Information in this subsection will orient you to what people are
suggesting that it takes for organizations to achieve maximum performance.
Exploring Organizational Effectiveness
The phrase, “organizational effectiveness,” is commonly referred to when discussing organizations
that have achieved maximum performance. Perhaps one of the best overviews of the concept of
organizational effectiveness is provided by Herman and Renz (2002). The authors identify nine
fundamental propositions about organizational effectiveness. Their propositions were written about
nonprofit organizations. However, they also apply to organizations in general and, thus, their
descriptions are modified in the following paragraphs to apply to organizations in general.
1. Organizational effectiveness is always a matter of comparison.
When determining the effectiveness of an organization, to what are you comparing the
organization to conclude whether it is effective or not? For example, are you comparing to a
certain set of best practices or to another highly respected organization?
2. Organizational effectiveness is multi-dimensional.
Organizational effectiveness cannot be measured by one indicator. For example, a budget
surplus or a strong product outcome does not guarantee that the organization has achieved
overall maximum organizational effectiveness.
3. Boards make a difference in organizational effectiveness, but how is not clear.
There is a correlation between effective Boards and effective organizations. However, it is
not clear that one necessarily causes the other.
4. Organizational effectiveness is a social construction.
The concept of organizational effectiveness is “in the eye of the beholder.” One person
might have a completely different interpretation than another person.
5. More effective organizations are more likely to use correct management practices. /
The authors are careful to point out that the reverse is not necessarily true – that
organizations that use correct management practices will be judged as being effective. (The
correct practices were identified during focus groups in various studies.)
6. Claims about “best practices” warrant critical evaluation.
The authors explain that the results of their study do not agree with the wide assertion that
certain practices, for example, automatically produce the best Boards.
7. Measures of responsiveness may offer solutions to differing judgments.
This proposition reframes the concept of effectiveness for an organization to be about how
well that organization is doing in responding to whatever is currently important.
8. It can be important to distinguish different types of organizations.
This is true to make progress in understanding the practices, tactics and strategies that may
lead to organizational effectiveness.
9. Network effectiveness is as important to study as organizational effectiveness.
This proposition recognizes that the effectiveness of an organization might depend to a great
extent on the effectiveness of the wide network of organizations in which the particular
organization operates.
Suggested Capacities for Organizational Effectiveness
Letts, Ryan and Grossman (1998) suggest four key capacities for organizational effectiveness. These
capacities were suggested for nonprofit organizations. However, they also apply to organizations in
general and, thus, their descriptions are modified in the following paragraphs to apply to
organizations in general.
1. Adaptive capacity
is the ability of an organization to maintain focus on the external environment of the
organization, particularly on “performing” (meeting the needs of customers), while
continually adjusting and aligning itself to respond to those needs and influences. Adaptive
capacity is cultivated through attention to assessments, collaborating and networking,
assessments and planning.
2. Leadership capacity
is the ability to set direction for the organization and its resources and also guide activities to
follow that direction. Leadership capacity is cultivated through attention to visioning,
establishing goals, directing, motivating, making decisions and solving problems.
3. Management capacity
is the ability to ensure effective and efficient use of the resources in the organization.
Management capacity is accomplished through careful development and coordination of
resources, including people (their time and expertise), money and facilities.
4. Technical capacity
is the ability to design and operate products and services to effectively and efficiently deliver
services to customers. The nature of that technical capacity depends on the particular type of
products and services provided by the organization.
In addition, a fifth key capacity has been mentioned.
5. Generative capacity
is the ability of the organization to positively change its external environment. This capacity
is exercised by engaging in activities to inform, educate and persuade policy makers,
community leaders and other stakeholders.
Suggested Aspects for Performance
Blumenthal (2003) suggests improved performance might result from improvements in one or more
of the following four aspects:
1. Organizational stability
is in regard to whether services are consistently delivered and the organization survives.
2. Financial stability
is based especially on short-term survival, for example, the ability to pay its bills. Financial
stability is often ignored as an area of importance during capacity building.
3. Program quality (products and services)
is based on indicators of impact, including adequate research about effective programs and
an outcomes management system. This aspect also is often ignored.
4. Organizational growth
is based on attracting resources and providing more services. Blumenthal adds that growth
alone is not an indicator of performance.
Putting Best Practices into Perspective
While working to improve the effectiveness of organizations, consultants often refer to various
performance standards as conveyed in “best practices” and “standards of excellence.” The
performance standards correspond to the levels of quality in certain organizations that are widely
viewed by others as being high performing organizations. Those views usually reflect conventional
wisdom, but not necessarily findings from research. Consultants often use the standards to assess the
quality of practices in their client’s organization and then what must be done to improve that quality.
Although the practices and standards can be somewhat useful in getting some quick perspective on
the quality of a particular function, you need to be careful about how you choose them and about
how you draw conclusions from any comparisons. The best use of best practices for an organization
depends on a variety of factors, including the culture of the organization, nature of the products and
services that the organization provides, expectations of major stakeholders, and effects of change in
the environments of the organization. The open systems concept of equifinality suggests there is no
one right way, or best practice, for leading, managing or guiding organizations and change.
If you are working in a highly collaborative approach with your clients, you are much more likely to
work toward best practices in a manner that aligns those best practices with the nature and needs of
your client’s organization.
