Engineering your organization

More literature and advice is piling up on leadership effectiveness and organizational performance. It’s no surprise. We are at an inflection point between the industrial age and the knowledge-based information age.

Value is created by teams collectively connecting the dots on innovations that improve performance and implement before the competition. This unspoken truth is the secret behind today’s value growth champions across industries including Apple, Netflix, Amazon, Tesla, and Walmart. They cracked the code before competitors on better products, applying new technologies to old problems, and better ways of organizing and working. But why isn’t there a unifying theory on how to organize people so that groups and firms are able to connect the dots better and implement faster?

There are plenty of silver-bullet solutions being pushed by flocks of advisors in areas including culture, coaching, remuneration, talent management and countless other specializations. But, on their own, each of these improvement areas risks over-simplification and missing the key lever to improve organizational effectiveness.

Knowledge-based organizations are exceedingly complex networked systems in which a large number of diverse and subtle factors can drive performance. But just because organizational systems are complex, doesn’t mean we have to over-simplify. System analysis, control theory, and signal processing provide proven scientific frameworks which help to understand the functioning of knowledge-based organizations.

Humatica has identified 37 drivers of organizational performance ranging from clarity of purpose, to an adequate IT infrastructure. Failing on just one of them can impair the entire system’s ability to execute and implement the value creation plan. So identifying and resolving the weakest link is the fastest way to improve organizational performance. And, a holistic, fact-based assessment of all organizational performance drivers in the context of the value creation plan is the starting spot for targeted improvements.

Humatica’s Align & Activate structured service sets the standard for rigorous organizational assessment in private equity. Building on work with more than 35 funds and hundreds of portfolio companies over the last 20 years, Humatica enables PE sponsors and portfolio company leaders to align on the key bottlenecks and activate their organisations to accelerate performance improvements and value growth.

This article was originally published as the Humatica Corner in Real Deals magazine.