6 Steps to Improve Your Organization’s Performance

How to improve your organization’s performance

When assessing your organization’s performance, start with your business’s most critical areas. For example, if you’re a service business, focus first on your team, including your employee training programs, employee engagement level and total compensation structure. For a manufacturing company, look first at manufacturing processes, equipment and suppliers.

Regardless of where you start, the following six best practices will help you grow and improve your business from within.

1. Engage your people to improve organizational performance.

Employee engagement is one of the most discussed issues in business today. Business owners can take concrete steps to improve employee engagement and help team members feel passionate about their work, deliver their best performance and strengthen their commitment to their employer. 

To improve employee engagement, consider the following tips:

• Share your business strategy with your team: Build a comprehensive understanding of your business strategy throughout your workforce. Ensure everyone can answer the following questions: Why do customers buy from us? Who are our key competitors and why do their customers buy from them? How do I contribute to our unique differentiation and help our business stand out from the competition?
• Build trust with your team: Employees must know their managers and executives care about them as people and are committed to their success.
• Empower your team: Empower your staff so they understand how essential they are to the business. Ensure every employee uses their preferred skills and has an effective degree of autonomy.
• Implement improvements by department: Focus each department on improving its procedures and targeting its specific activities. Every department is crucial to operations; overall improvement results when every facet of the business focuses on progress.  

2. Communicate better to improve organizational performance.

Communication is critical in today’s organizations. However, leaders often face communication challenges and many companies experience communication issues. 

Focus on communicating clearly with straightforward language when discussing core business subjects like the following:

• Performance targets (departmental and organizational)
• Progress on business goals and projects
• Obstacles and solutions
• Competitor issues
• Customer successes
• Current organizational initiatives

In addition to external communication, let employees know you’re open to hearing from them. Encourage employees to take initiative, suggest improvements and pass along market feedback to help leadership teams make better decisions.

Interdepartmental communication is often a specific area where challenges arise. Philip La Duke, a safety consultant and author, explained that these challenges can stem from conflicting goals and departmental roles. “Having been an in-house organizational development (i.e., performance improvement) professional, I found that I was often at odds with human resources,” La Duke recalled. “I was in the change business while human resources was in the ‘let’s keep everything the same business.'”

This conflict highlights a common organizational struggle: Performance improvement thrives on flexibility and change, while traditional human resources (HR) practices prioritize consistency and fairness. “Human resources establishes rules so that everyone can be treated the same and, therefore, it eliminates or greatly reduces the danger of favoritism or illegal discrimination,” La Duke explained. “Performance improvement is by definition a change and, since people are individuals and the performance will differ widely from person to person, strict adherence to often arbitrary policies runs counteractive to change and, therefore, inhibits performance improvement.”

Leaders can address these tensions by encouraging collaboration between departments actively. For example, businesses can tweak HR policies to better align with performance improvement goals, ensuring rules leave space for change and innovation while still keeping things fair and consistent. Open communication between teams and directly addressing conflicting priorities can help build a strong company culture where fairness and performance go hand in hand.

3. Identify and remove internal roadblocks to improve organizational performance.

Are your company’s policies, procedures and structures aligned with your competitive differentiation strategy? Look for misalignment indicators, including the following:

• Do employees have to work around policies, technology tools and work procedures to get things done?
• Do your policies and work procedures help people get the right things done quickly?
• Are inter-departmental relationships, such as manufacturing and sales, positive?
• Are workplace conflicts and frustrations routine?

It’s essential to streamline your processes to make them more accurate and efficient. Additionally, break down communication silos between departments or functions so everyone works toward the same goals. 

Michael Taylor, CEO of SchellingPoint, shared a striking observation about roadblocks in decision-making, noting that leaders often underestimate how many obstacles exist and the unintended consequences of their decisions. “When asked how a strategic decision could trigger negative side effects, the advocates, on average, express one, whereas those required to implement the decision express 11,” Taylor explained. “When asked what will prevent the decision from being implemented successfully, leaders express five, whereas those needing to carry it out express 44, on average.”

In other words, the people on the ground — those responsible for carrying out decisions — are much more aware of the real challenges and risks than the leaders making the decisions. To tackle this disconnect, involve employees in the business decision-making process early on, especially those who will be directly affected. Their input can help you identify and remove roadblocks before they derail progress.

4. Align your metrics to improve organizational performance.

For metrics to be truly valuable, your team must have access to them and understand how to use them effectively. Here’s how metrics can help each department contribute to your company’s goals:

• Metrics guide decisions: Valuable metrics serve as decision-making guides and ways to prioritize work.
• Metrics set your strategic direction: Nonfinancial metrics that relate directly to your competitive differentiation can help keep everyone aligned in a similar strategic direction.
• Metrics should be tailored to each department: Explain to each department how metrics are chosen and measured. Tailor metrics to each department so team members understand how they impact the company’s performance.
• Metrics guide goal-setting and rewards: Let each department know how it’s doing on key metrics and reward team members when goals are met.

Darrin Murriner, CEO and co-founder of Cloverleaf.me, emphasized the importance of aligning metrics with overall goals while still tailoring them to fit each team’s workflow. “The clearest [way to measure success] is overall company goal achievement, which always includes revenue growth and other key strategic initiatives,” Murriner explained. “Growth of employees is equally as telling — promotions, raises and how long employees stay at the company.” 

Murriner highlighted how different teams can operate with varying metric timelines: “Each team then sets their goals at the cadence that works best for them. For example, sales has quarterly goals, whereas our tech department has a few key annual goals and two- to eight-week projects that each pod sets with a goal that ladders up to those annual goals.” 

This approach ensures metrics match up with company goals while still being tailored enough to adapt to each department’s unique needs. It’s a great way to create a framework that’s both flexible and aligned. When metrics are meaningful and actionable for all organizational teams, they can drive better performance and keep everyone on the same page.

5. Use training and development strategies to improve organizational performance.

Many organizations have a workforce approaching ― or past ― traditional retirement age. Additionally, employees quit for various reasons, including pursuing better opportunities. Are you prepared to train employees to perform essential work when other team members leave? Are you providing your team with the business skills they need to keep your organization competitive? 

Here are ways to ensure your employees are trained optimally:

• Create a workforce hiring plan: Develop a workforce plan to ensure a sufficient hiring process timeline to develop people to perform the necessary duties.
• Focus on comprehensive training: All employees should receive training that applies to their current duties and potential future responsibilities.
• Develop career paths for your team: Focus on professional development by creating career paths for your team so they can progress to necessary future roles. Know your people and their future goals. Support them in channeling their paths to the future within your company.

6. Focus on your business strategy to improve organizational performance.

There are three types of value propositions ― or competitive differentiation strategies ― in business. While you should do a good job on all of them, consider focusing on one area where your company can excel. 

The three value proposition types are:

• Customer intimacy: Customer intimacy involves customizing your offerings to meet each customer’s individual needs. The goal is to provide a great customer experience and build strong, long-term customer relationships.
• Operational efficiency: Operational efficiency involves providing a universal set of products and services designed to be cost-effective for customers. This isn’t about competing on price — it’s about providing value to customers to save them money. Do your products make customer processes more efficient? Do they reduce downtime or improve quality?
• Leading edge: This value proposition involves providing new, innovative products and services based on the latest technologies and practices. You must have robust research resources and frequently introduce new and improved products and services that are different and effectively meet customer needs.

Types of organizational improvements

Organizational improvements are an ongoing process and every organization has specific needs. However, most organizations need continuous improvement in the following areas: 

• Strategy and mission: Changes in strategy and mission are often challenging to map. However, business owners must continually monitor how well ― or if ― their organization is meeting its mission. If necessary, you must be prepared to change strategies.
• Organizational structure: Organizational structure concerns the roles, objectives and responsibilities of individuals, departments and teams. Structures can change; some are relatively minor, while some, such as mergers and acquisitions, are considered extreme and intense.
• People: Personnel-related organizational improvements can include employee turnover, hiring, training and other changes beneficial for the organization.
• Knowledge: Changes and improvements to an organization’s knowledge are critical for processes, progress and initiatives.
• Process: How you do things can significantly impact productivity. How easily can your team accomplish fundamental tasks? Instituting intuitive, efficient and communicative processes will get products out the door quicker, reduce errors and minimize employee frustration.