EAE News
"Focused organizations pursue the criteria of efficacy and efficiency"
19 de November de 2018
'Focused organizations: reducing organizational complexity' was the title of the webinar given by Marc Sansó, a lecturer on the MIB at EAE Business School.
Marc Sansó described organizational complexity as one of the diseases of large companies and tried to analyse it from three perspectives on which companies have to work internally: structure, leadership and decision-making processes because "when they lose focus on the employees, processes that could be simple are tremendously complicated and generate very little added value for the end customer".
As far as the lecturer on the Master of International Business is concerned, organizational complexity is an inherent factor in the growth of companies that "end up extremely focused on the internal customer, a value agent who does not directly participate in the organization's money flow". The alarm bells start ringing to warn of organizational complexity when there is a scaling up of internal processes, an excessive number of meetings, disconnected people and inefficient or lengthy decision-making. "There are processes that would work far better if they were not so normalized", he explained.
Marc went on to list the differences between unfocused and focused organizations. The former are extremely complex and disperse, and require a very high consumption of resources to get anything done. Ineffectiveness and inefficiency. A focused organization pursues criteria of efficacy (maximizing the results of the process while minimizing the resources consumed) and efficiency (optimizing the relationship between output and input).
Marc Sansó identified three broad areas in which we can make an impact in terms of organizational complexity: reducing the symptoms of complexity in processes, identifying the problem, working on areas for improvement and overcoming the departmentalization that naturally tends to occur in companies. "We have a tendency to group areas or departments together that work in a verticalized way". Moreover, he emphasized the importance of the customer as one of the organization's essential value agents. "We have to create processes that generate value for the customer".
The lecturer on EAE's MIB discussed the need to make the information flows transversal in the decision-making process, recommending a structure in which functions and processes take joint responsibility, thereby creating a dual transversal and vertical system. He went on to define the three key aspects of the culture of a complex organization: being focused on the internal customer, prioritizing the process over the objective (inefficacy) and not considering the essential costs (inefficient).
In Sansó's opinion, leadership applied to the management of complexity is a challenging task. "Managing a team is the most complex task there is in an organization. On many occasions, we are not equipped or trained to manage leadership. There is a certain deficit that translates into ineffective leadership models". The lecturer advocated that teams have to be measured by objectives and they must be formed by members with different capacities and needs. "The idea is to achieve a high degree of qualification and projection".
Marc Sansó also mentioned the importance of cost management in companies because "failing to understand the cost structure associated to projects leads us to generate a significant degree of complexity". He drew a comparison between focused and complex organizations on four different levels: leadership, culture, market behaviour and the employees' internal perception.
Leadership in focused organizations is structured into teams. They encompass horizontal and vertical promotions, while taking a facilitating approach. The culture is result-focused and supportive, establishing a control structure based on cost-benefit analysis and sustainability. The market behaviour is flexible in this multi-connected 360? organization. The internal perception employees in focused organizations is that they are fair, demanding and personalized depending on their degree of involvement. Complex organizations are more individualized. They tend to focus on vertical promotions. They are process-focused, slower, ineffective, inefficient and demotivating, while demanding commitment and loyalty from their employees.