At first glance, the answer to this question is extremely simple: an organisational performance evaluation consists of evaluating an organisation.
But the scope of the organisation is so vast (strategy, governance, functions, leadership, business processes, tools and information systems...), and the objective of the evaluation is so varied that no two diagnoses are the same.
Nevertheless, we have identified nine types of diagnoses that we have categorized according to two key criteria on the approach used and the skills required to conduct these diagnoses.
These two criteria are the functional or organisational scope and the level of commitment of the necessary personnel from the diagnostic phase.
Is the scope of the organisation evaluation relatively small, such as a simple work process, a work tool or a particular production machine, and are the issues more related to people or technology? Or is it the whole company or one of its relatively large subgroups (subsidiary, production site...) or an integrated information system such as ERP covering many functions, with problems also related to the complexity of the organisation (human and technical ones still exist!)?
Depending on the size and complexity, expertise or generalist skills will be required.
To simplify, there are two reasons for involving staff in the organisation evaluation. The first is obvious because it is a matter of interacting with people who know the scope of analysis and can therefore provide useful information, both in identifying the causes of problems or levers for improvement and in identifying solutions. This is what we call the "rational" reason.
The second reason is less obvious and is often underestimated. The aim is to involve people to facilitate their adherence to the solutions that will be implemented to accelerate the deployment phase. This commitment allows more than just acceleration, as it is often a necessary condition for successful and sustainable implementation. This is what we call the "commitment" reason.
This involvement is often understood for the implementation phase but not for the diagnostic phase. This is a major error, because it is precisely during the evaluation that the foundations of staff engagement are laid; it is because it has contributed to the evaluation, the identification of levers for improvement, and even the definition and acceptance of the transformation plan that staff will later accept more precise solutions and face the difficulties of change better.
The purpose of this document is not to detail the reasons for involving staff at the diagnostic phase, but it is an important element in organisational diagnostic approaches.
The nine types of evaluation are shown in the figure below.
We will focus on diagnoses that concern a relatively large or complex scope, which we consider here as "organisational".
This consideration does not detract from the other types because although their scope is narrower, they can also be very complicated, requiring very high levels of expertise; because they are also often part of broader diagnoses. We will also detail them in some detail.
It is the analysis of the performance of a machine, often a production machine, or a workstation held by an employee with the frequent objective of improving the productivity or quality of the process performed by the machine and/or the employee.
The analysis methods used generally combine observations, time measurements of the different operations and data analysis (actual production time, execution speed, quality, etc.). Workshops with employees and their managers can be conducted to identify causes of performance loss and also to define solutions.
This is a privileged field of application of the six-sigma and Lean methodologies; six-sigma for the power of the statistical tools that compose it to identify the most important causes of performance losses; Lean for the identification of value losses (muda).
We include here work processes involving several actors to go beyond the previous scope of activities carried out by a machine or an individual alone.
The evaluation of a process can also, as before, include the analysis of certain activities (machines or workstations) but it will also include the analyses of:
The methods can also be observations, measurements or data analysis, and will most often include workshops with the main actors acting throughout the process to map it as it exists and jointly identify problems and levers for improvement.
Here again, six sigma and Lean methodologies can be used; a frequently used tool is the Value Stream Map to describe the process and identify areas of value creation or loss.
Some processes are quite simple, but others can be very cross-functional and involve many different departments across the organisation. We also see that we are beginning to deal with more organisational issues (roles and responsibilities between actors). As a result, the functional and organisational scope is positioned in the middle of the matrix. Similarly, solutions can be a source of significant change for many people, hence the need to involve individuals not only for the "rational" reason but also for the "engagement" reason.
Leadership is often defined as the ability of a leader to positively influence team members, or even beyond, to carry out activities that achieve the organisation's objectives with all the necessary motivation. It does not generally include systems for governance or management of the organisation's performance (dashboards, decision-making meetings, etc.).
The evaluation of Leadership can be done at different levels of the company, at the top as well as at intermediate levels of the organisation. It will be very different from previous diagnoses because it will be based mainly on individual interviews with managers, specific tests (psychological profiles, leadership styles, etc.) and potentially surveys of the professional entourage of each targeted manager (employees, colleagues, superiors).
Although a significant number of people may be involved, the scope remains quite specific. We believe that although the involvement of individuals is important, since it is about themselves, the "commitment" required from the analysis phase remains quite average because the evaluation must provide a very important external perspective; on the other hand, the definition of solutions and the Leadership Development Program must demonstrate a very important part of "commitment".
Diagnostics concerning information systems are mainly carried out during the installation of a new system or a major evolution having a significant impact on working methods.
The objective of the Information System evaluation may vary between two extremes:
These two objectives often stem from the general approach to IS implementation, which can be oriented or "driven" by the IS or oriented or "driven" by the business lines.
In both cases, the evaluation consists mainly of a mapping of the current processes "without IS" and a gap analysis with the process "with IS"; depending on the approach or objectives, the solutions will be different.
We do not generally classify IS evaluation as a company evaluation. However, when the IS covers a large area, such as an ERP (Enterprise Resource Planning) that covers several functional fields (e.g. management control, sales forecasting, planning and production management) and the approach is very "business driven" until it becomes an integrated approach with a "transformational" approach, it becomes an organisational evaluation, or at least part of it.
We keep in our definition of organisational evaluation those who have a sufficiently broad or complex scope.
These five types of diagnoses may appear to be similar or even have similar names; in addition, an evaluation may be a combination of several of these types. We were differentiating them here, in a way that might seem artificial or caricatural, but which we hope allows us to understand the differences that may exist.
More precisely categorize these five types of organisational evaluation by adding the "Level of involvement" dimension, which represents the type of population involved in the evaluation, ranging from "operational" to senior management, as indicated below.
Definition and objectives
The "Operational Excellence" evaluation is carried out as part of a project to significantly improve a significant part of an organisation. At Wevalgo we consider that the main objective of the evaluation is not only to identify WHAT to implement in the project phase (post-evaluation) but to launch this second phase with the maximum chances of success. This objective is generally broken down into four detailed objectives:
Our experience at Wevalgo is that this last point is essential to get the implementation phase off to a good start and that it is the one that differentiates this type of evaluation most from the other four. These can all include the first three objectives to varying degrees, but not the last, or at least much less so.
Level of involvement
All levels of the company are involved:
The process is also made visible through important communication.
Approach and types of analyses carried out
The approach generally has the following characteristics:
Definition and objectives
As its name suggests, scoping is an initial or preliminary organisation evaluation to help management define or specify a direction to take. Most of the time, this framework is carried out as part of an Operational Excellence improvement project; it will make it possible to specify the scope, priorities and level of challenge and expected efforts. However, it may also lead to the inclusion of solutions of the type included in "restructuring / Cost Killing".
Level of involvement
As this organisation evaluation is in fact a preliminary step, the level of commitment is much lower than in a complete "Operational Excellence" evaluation; nevertheless, there must remain a good level of involvement, even commitment at the management level because this evaluation gives structuring directions for the future.
Approach and types of analyses carried out
The approach generally has the following characteristics:
Definition and objectives
There are multiple forms of audit; we limit ourselves to organisational audits, which do not include, for example, financial and accounting audits.
An organisational audit is an assessment of an organisation's practices against a pre-defined standard. This standard can be a recognized standard, such as ISO 9001 for quality, or an auditor's own standard. The auditor may be called by the organisation that wishes to be audited or imposed on it, such as a client who wishes to certify or qualify its subcontractor.
The main objective is therefore to identify deviations from this standard, either to be qualified or certified, or to define actions to be certified.
Level of involvement
Even if the stakes of an audit can sometimes be very high (e. g. ISO 9001 certification can lead to customer contracts), staff involvement is often lower than for an Operational Excellence evaluation because:
Approach and types of analyses carried out
The approach generally has the following characteristics:
The analyses will focus mainly on:
Definition and objectives
Due diligence is a special form of audit. We reserve the term here only for audits carried out as part of an investment project in a third party company such as a merger or acquisition or an equity investment, and on the operational (or organisational) aspect and not only on the financial aspect.
It is therefore never a evaluation carried out in one's own company, unless it is a preparation for a Due Diligence that is planned.
The main objective is to evaluate the level of performance of a company, the synergies or possible consolidations between the two parties in order to better value the company; this may also include estimates of the potential for improvement, the level of cultural or managerial compatibility, as well as scenarios for the sale of activities.
Level of involvement
Due Diligence" is very often, if not always, very confidential and therefore involves only a very limited number of people: the general management, and a few more operational people who usually sign a confidentiality agreement.
There is very little involvement in change management, given the confidentiality of this type of organisation evaluation.
Approach and types of analyses carried out
The approach and analyses carried out generally have the following characteristics:
Definition and objectives
The main objective is to identify opportunities for cost reduction, which must generally be significant in order to meet a business imperative such as a loss of competitiveness or a significant deficit, or even to ensure the company's survival. The solutions sought are often quite radical: reorganisation, restructuring, downsizing, cessation or disposal of activities. These types of solutions are generally not very compatible with operational improvement solutions, at least initially. Nevertheless, these are possible, if not necessary, to successfully implement the envisaged reductions, but this is done in a very sudden manner.
Level of involvement
Given the type of objectives, which can have significant impacts on employees, the level of confidentiality is often very high, particularly to avoid risks with trade unions or employee representatives. The level of commitment is therefore generally low, the implementation of solutions is more of an imperative.
Approach and types of analyses carried out
The approach and analyses carried out are quite similar to those of a "Due Diligence", except that this is done by the company itself without a third party company (except for possible consultants):
- “dark room" data and document analysis with high use of external benchmarks
- modelling of restructuring or reorganisation scenarios, divestiture or cessation of activities
- targeted interviews to identify the level of operational practices compared to industry best practices, including workshops with authorized persons and management
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