BOSTON, MA--(Marketwire - Jan 31, 2012) - Organizational capabilities greatly affect long-term corporate success, and none more so than behavioral aspects. But behavioral attributes have high impact only when they're backed by strong structural capabilities. Efforts to develop robust organizational capabilities are likely to pay off in performance that outstrips that of competitors.
Those are the key findings of "Organization of the Future -- Designed to Win: Organizational Capabilities Matter," a new Focus report by The Boston Consulting Group (BCG). The study, conducted in partnership with 12 management organizations worldwide, surveyed approximately 1,600 senior managers, seeking their input on a framework of 20 organizational capabilities -- both structural and behavioral. This framework encompassed a wide range of structural capabilities -- from the organization's spans of control to project management and business analytics -- and many behavioral capabilities, such as adeptness with change management and employee performance management.
All Capabilities Matter to Success, but Some Matter More Than Others
The correlations showed that all 20 types of organizational capabilities have an impact on overall performance -- though clearly some have much more influence than others. "There's a definite bias toward behavioral factors -- in particular, leadership, employee engagement, and cross-functional collaboration," said research leader Fabrice Roghé, a Duesseldorf-based partner at BCG. "But the best performance comes when those traits are backed by structural capabilities, such as a strong organization design and rigorous business processes and controls."
Christopher Kinsella, Acting Chief Executive of Chartered Management Institute, said, "This research confirms the importance of strong leadership, high employee engagement, and a collaborative approach to work within an organization -- all of which depend on key leadership behaviors. The report highlights how the 'softer' behaviors and values can often make more of an impact to productivity and performance than the structural capabilities within a company. It is significant that there is such a gap between best practice and the day-to-day experiences in companies. This is where the role of management training and enhancing leadership skills is critical to ensure behavioral development, effective delivery of strategy, and the consequent success of an organization."
The BCG publication recommends three priorities that can lead to big gains in performance. The first entails paying particular attention to leadership, employee engagement, and collaboration as key performance dimensions. The second priority is to align and improve people practices. The third is about organization design -- ensuring that the company's structure is aligned not only with its business strategy but also with its cultural goals and target behaviors, and is complemented by clarity in roles and cross-functional processes.
This BCG Focus contains many insights that can help companies gauge the impact of their organizational performance. A follow-on Focus will explore the transformation journey that most companies need to take if they want to close the gap between their current organizational capabilities and those that constitute best practice today.
A copy of the report can be downloaded at www.bcgperspectives.com.
For more information or to arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.
Partner Organizations
BCG worked with 12 partner organizations worldwide who distributed the online survey to many of their members in more than 35 countries. The partner organizations are:
The Conference Board
Asia Academy of Management
American Management Association
Confederation of Indian Industry
Chartered Management Institute
German Society for Organizational Topics
The Brazilian Institute of Corporate Governance
Austrian Society for Organization and Management
Swiss Association for Organization and Management
The Institute of Organization in Business
Russian Managers Association
Japan Management Association
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit bcg.com.
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About the Chartered Management Institute
The Chartered Management Institute (CMI) is the only chartered professional body in the UK dedicated to promoting the highest standards of management and leadership excellence. CMI is the founder of the National Occupational Standards for Management and Leadership and sets the standards that others follow. As a membership organisation, CMI has been providing forward-thinking advice and support to individuals and businesses, for more than 50 years, and continues to give managers and leaders, and the organisations they work in, the tools they need to improve their performance and make an impact.
As the only organisation to offer qualifications from Level 2 (GCSE) to Level 8 (PhD), CMI is committed to equipping individuals with the skills and knowledge to be exceptional managers and leaders. Qualifications and accreditations such as Chartered Manager, combined with products such as CMI's Continuous Professional Development scheme and the online support resource, ManagementDirect, support the development of management and leadership excellence across the UK. Through in-depth research and policy surveys of its 90,000 individual and 450 corporate members, CMI maintains its position as the premier authority on key management and leadership issues.