Results: Keep What's Good, Fix What's Wrong, and Unlock Great Performance

Being made of the 'right stuff' is often seen as essential to career success. But could it apply to companies too?

Gary L. Neilson and Bruce A. Pasternack, senior executives at international management consultants, Booz Allen Hamilton argue that the key to understanding how an organization performs depends on what they call its organizational DNA.

Based on an analysis of over 50,000 surveys and long experience as consultants in the field, the authors arrive at four building blocks, which they say are fundamental to the success or failure of any organisation.

These are:

  • Decision Rights – how well and efficiently decisions are made
  • Information – the degree to which it is accurate and available
  • Motivators – the level to which staff are incentivized
  • Structure – the extent to which it serves the needs of the other three elements

None of these building blocks stands alone, say the authors: they are interdependent, and making changes to any one element is likely to affect the other three, and the organization as a whole.

Dysfunctional organizations suffer from a misalignment of these four basic building blocks, they argue.

Using this model, Neilson and Pasternack identify seven basic types of organization, according to 'personality' types. These range from the healthiest (resilient) to the least healthy (passive-aggressive).

Applying this analysis to the results of the survey, the authors argue that 54 per cent of organizations are unhealthy, with passive-aggressive (27 per cent of the sample) being the most common.

Congenial and seemingly conflict free, these organizations achieve consensus easily, but struggle to implement what has been agreed. In contrast, only 17 per cent of companies are resilient.

The chapter on passive-aggressive organizations is re-produced in the October 2005 issue of Harvard Business Review (see link, below).

Using case studies, from companies such as Symantec, and 7-Eleven, the authors show how this model can be used as a valuable diagnostic tool to first understand, and ultimately to transform ailing companies.