Being effective can mean a variety of different things, especially when you’re asking different people. These differences in perspective aren't just occurring at an individual or employee level, but also at the organizational level.
The effectiveness of an organization or business is argued to be the center stone of organizational behavior (OB) - the study of what people think, feel and do in an organization. For the purpose of this blog, we’ll be mainly talking about businesses, and how you achieve an effective business.
So how do you measure if your business is being effective? What does being effective mean?
That’s a question you need to ask yourself when you’re starting out a business. It should be tied in with your goals building – both long and short term. What do you think makes a business useful, and how can you get there?
Some answers I hear are:
· High productivity, low cost.
· A good and healthy work culture.
· Business-Environment fit.
· A solid foundation of Human Capital.
These are just a few out of many different measures of effectiveness. The key is to be able to define what makes your business run efficiently in your eyes, and how best to reach success. Now, don’t confuse this with your goals, effectiveness is at a higher level than your goals. Your goals should be developed in order to achieve effectiveness within your business. For example, if one of my measures of effectiveness was a good and healthy work culture, my goal should be more specific and help to achieve that measure e.g. team huddles every week, 1 team building exercise or activity outside work a month etc.
Although you can choose whichever measure works best for your business, I will be focusing on one that is often overlooked – Business-Environment Fit.
The Business-Market fit is a theory that is based on the Open-Systems perspective. I won’t go into Open-Systems, but if you’re curious I definitely recommend reading it.This theory of effectiveness states that businesses are effective when they achieve/maintain a good fit with their external environment.
Let’s break that down.
Your business is effective, when the inputs (the efforts, and items, and people going into your business), the processes (how you run your business), and outputs (your products and services) match and align with the needs and expectations of the environment/community your in.
For example, your soap company isn’t going to be effective in a small town environment that was built on a well-established soap factory and store. You would be competing with tradition, culture, and history. However, all isn’t lost if your business doesn’t align with the environment it’s in. There are 3 different strategies to change this.
1) Change Your Products
Change your outputs, or the company’s products in order to align with the market’s needs. Take a look at Zara, a fashion company and the main brand of the world’s largest retailer Inditex changes its products by continuously adapting the design of its clothes to maintain a good fit with the market within a highly volatile fashion environment. This Spanish company receives feedback from over 6,000 stores in order to rapidly design, manufacture and deliver new styles. The result? There is never an overstock of products that people don’t want to by.
2) Manage Your Environment
You might be thinking that maintaining an aligned business environment fit is mainly going to be focused changes made on the business but this isn’t the case. You can actively manage the environment or market that you’re in, and the way to do this is through marketing.
What is marketing but a company’s attempting to psychologically manipulate the environment it is in an attempt to increase demand. You can also influence the environment by restricting your products to certain retailers or just your own store. Or the more aggressive way of restricting your competitors access from valuable resources.
3) Change Your Market Location
The third way to maintain a healthy fit is to change up your location. Aim at different demographics, revise your targeted buyer or even market to an entirely different location. If the environment you’re in is too challenging, you should move to a different market or environment that can sustain you.
There are three strategies you can use in order to achieve a good business-market fit. If you have any questions or comments e-mail us at email@example.com!