Based on analyzing over 220,000 organizational surveys over 10 years, the authors have identified 10 principles of organizational DNA that determine a company's ability to execute strategy effectively. They found that companies generally fall into 7 archetypes, from least to most effective: passive-aggressive, overmanaged, outgrown, fits-and-starts, just-in-time, military-precision, and resilient. While structure is often seen as the solution, decision rights and information flows are actually twice as important to performance. Both tangible and intangible elements like norms and commitments must be addressed to build a high-performing organization.
By David F. Larcker and Brian Tayan, Stanford Research Spotlight Series, September 1, 2016
This Research Spotlight provides a summary of the academic literature on the influence that CEOs have on company outcomes (performance and risk). It reviews the evidence of:
• The contribution of the CEO to overall company performance
• The relation between previous managerial experience and future performance
• The relation between personal attributes and performance
• The relation between personality and performance
• Factors that might influence risk tolerance
This Research Spotlight expands upon issues introduced in the Quick Guide “CEO Succession Planning.”
Faculty & Research › Publications › 2015 Survey on Board of Directors of Nonprofit Organizations
2015 Survey on Board of Directors of Nonprofit Organizations
By David F. Larcker, Nicholas Donatiello, Bill Meehan, Brian Tayan
Stanford GSB, Rock Center for Corporate Governance, BoardSource, and GuideStar. April 2015
Accounting, Corporate Governance
In fall 2014, the Stanford Graduate School of Business, in collaboration with BoardSource and GuideStar, surveyed 924 directors of nonprofit organizations about the composition, structure, and practices of their boards.
Business Impacts of Flexibility: An Imperative for Expansion draws on internal organizational research and information from 28 American firms, providing evidence that employers can gain tremendous benefit from providing flexibility in when and how work gets done. Study published in 2005 by Corporate Voices for Working Families and WFD Consulting.
The Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important.
By David F. Larcker and Brian Tayan, Stanford Research Spotlight Series, September 1, 2016
This Research Spotlight provides a summary of the academic literature on the influence that CEOs have on company outcomes (performance and risk). It reviews the evidence of:
• The contribution of the CEO to overall company performance
• The relation between previous managerial experience and future performance
• The relation between personal attributes and performance
• The relation between personality and performance
• Factors that might influence risk tolerance
This Research Spotlight expands upon issues introduced in the Quick Guide “CEO Succession Planning.”
Faculty & Research › Publications › 2015 Survey on Board of Directors of Nonprofit Organizations
2015 Survey on Board of Directors of Nonprofit Organizations
By David F. Larcker, Nicholas Donatiello, Bill Meehan, Brian Tayan
Stanford GSB, Rock Center for Corporate Governance, BoardSource, and GuideStar. April 2015
Accounting, Corporate Governance
In fall 2014, the Stanford Graduate School of Business, in collaboration with BoardSource and GuideStar, surveyed 924 directors of nonprofit organizations about the composition, structure, and practices of their boards.
Business Impacts of Flexibility: An Imperative for Expansion draws on internal organizational research and information from 28 American firms, providing evidence that employers can gain tremendous benefit from providing flexibility in when and how work gets done. Study published in 2005 by Corporate Voices for Working Families and WFD Consulting.
The Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important.
Most of the efforts aimed at improving corporate reputation today are focused on the impact that reputation has on business, gauging this impact and obtaining the information necessary for defining reputational strategy and placing intangibles in the centre of the overall business strategy, overcoming divisional barriers.
Currently, brand experiences are related to different stakeholders: customers, employees, investors, shareholders, etc. Thus, it is useful to develop a detailed segmentation of these groups to be able to capture the demands of each one and effectively answer their needs.
Another important aspect of reputation management in companies that are developing reputational strategies and corporate intangibles management is the need to develop an internal culture based on reputation, considering the directions and the obstacles for building reputation.
Iberdrola, for example, defines five axes of its process: product, culture, segmentation, experience and feedback. It also takes into account non-financial indicators, which place highlight those aspects that have to do with the company’s behaviour towards its stakeholders and how they response to it.
Vestas, a company who works in the power generating sector, organized its business strategy around a clear goal: becoming the world’s most recognized company by contribution to the positive environmental change achieved though intelligent use of the wind energy.
Vestas defines four key stakeholders, whose cooperation is fundamental for creation of shared value, strengthening the company’s competitive position and achieving better business results.
.
After passing the initial stages of its journey (preliminary analysis aiming to define the strategy), reputation arrived to the next stage, characterized by measurement and showing its true impact on the business.
Kasper Nielsen from Reputation Institute believes that there are several features that characterize best companies in the area of reputation management and that determine the key challenges that companies will face in the near future. Those are classified in four groups: business logic, intelligence and analysis, management and control and implementation.
Companies willing to make progress in the reputation journey need to relate to their stakeholders and be aware of their reputation at every point of their strategic decision-making process.
This document was prepared by Corporate Excellence – Centre for Reputation Leadership and among other sources contains references to the statements made by Carlos Martínez Lozoya, Iberdrola’s Director for Corporate Reputation, Morten Albaek, Vestas Global Vice President for Marketing, Communication and Corporate Relations and Kasper Nielsen, Partner and Director of Reputation Institute Denmark, made during the 17th International Conference on Corporate Reputation, Identity and Brand Competitiveness: The Reputation Journey, organized by Reputation Institute in
Have You Heard About "Win Win Selection" !Nicole Payne
The importance of viewing the selection and interviewing process as a basic precursor to establishing trust and positive identification with a company's objectives. Using the LIFO Method, it illustrates how shared information between a candidate and company can provide a good first step towards building a mutually rewarding relationship for future OD efforts. Contact us for more info!
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Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...IJASRD Journal
All of the organizations, before choosing of alternatives for improve of company performance, proposed for test and evaluation of the pattern of this research, and if they could not receive of suitable results from perform of it, in that case will be free for choosing and selecting another alternative. The term behavioral approach to leadership boundary spanning transaction relationship have declared that risk taking capability of the boundary spanning transaction relationship is the major factor for making distinguish between boundary spanning transaction relationship and workers. Since then, risk taking taken as one of behavioral approach to leadership boundary spanning transaction relationship's component into consideration. For these reasons, after determination of boundary spanning transaction relationship places for manufacturing organizations, the find of alternatives for perform of it is very important.
Organizational citizenship Behavior as Attitude Integrity in Measurement of I...IOSR Journals
Quality of Human Resource represent one of the factor which to increase performance productivity an institution or organization. Therefore, needed Human Resource having high interest because interest or membership will be able to support the make-up of employees performance achievement. During the time at generally in governance institution not yet had officer with adequate interest, proved with still lower officer productivity and is difficult measure officer performance [in] governance institution scope. Performance Management System in a modern concept of human resource management is an objective and transparent performance measurement model of Organizational Citizenship Behavior in giving reward to individual’s sacrifice for organization. Three main elements of individual’s sacrifice performed in Organizational Citizenship Behavior (OCB) are compliance, loyality, and participation.The organization shoud appreciate these attitudes by giving clear job description and brief rewardsystemcriteriato encourage the individual’s job motivation. Combined with theindividual assessment of job description, job grading is used to compile a correct Key Performance Indexand a precise salary component. The aim of this action research is to give a comprehensive solution for Hospital X, in order to determine a Key Performance Indexsmodel, in response to some problems such as jobmotivation, work stress and performance. An interviews with hospital’s director and Human Resources section was conducted to compile the KPI. The results of this research can be recommended to the hospital to make a comprehensive performance assessment consist of the review of employee's job descriptions, Key Performance Indicator (KPI), job grading, specifying fundamental salary based on work,Bonus Scame and score summary
Most of the efforts aimed at improving corporate reputation today are focused on the impact that reputation has on business, gauging this impact and obtaining the information necessary for defining reputational strategy and placing intangibles in the centre of the overall business strategy, overcoming divisional barriers.
Currently, brand experiences are related to different stakeholders: customers, employees, investors, shareholders, etc. Thus, it is useful to develop a detailed segmentation of these groups to be able to capture the demands of each one and effectively answer their needs.
Another important aspect of reputation management in companies that are developing reputational strategies and corporate intangibles management is the need to develop an internal culture based on reputation, considering the directions and the obstacles for building reputation.
Iberdrola, for example, defines five axes of its process: product, culture, segmentation, experience and feedback. It also takes into account non-financial indicators, which place highlight those aspects that have to do with the company’s behaviour towards its stakeholders and how they response to it.
Vestas, a company who works in the power generating sector, organized its business strategy around a clear goal: becoming the world’s most recognized company by contribution to the positive environmental change achieved though intelligent use of the wind energy.
Vestas defines four key stakeholders, whose cooperation is fundamental for creation of shared value, strengthening the company’s competitive position and achieving better business results.
.
After passing the initial stages of its journey (preliminary analysis aiming to define the strategy), reputation arrived to the next stage, characterized by measurement and showing its true impact on the business.
Kasper Nielsen from Reputation Institute believes that there are several features that characterize best companies in the area of reputation management and that determine the key challenges that companies will face in the near future. Those are classified in four groups: business logic, intelligence and analysis, management and control and implementation.
Companies willing to make progress in the reputation journey need to relate to their stakeholders and be aware of their reputation at every point of their strategic decision-making process.
This document was prepared by Corporate Excellence – Centre for Reputation Leadership and among other sources contains references to the statements made by Carlos Martínez Lozoya, Iberdrola’s Director for Corporate Reputation, Morten Albaek, Vestas Global Vice President for Marketing, Communication and Corporate Relations and Kasper Nielsen, Partner and Director of Reputation Institute Denmark, made during the 17th International Conference on Corporate Reputation, Identity and Brand Competitiveness: The Reputation Journey, organized by Reputation Institute in
Have You Heard About "Win Win Selection" !Nicole Payne
The importance of viewing the selection and interviewing process as a basic precursor to establishing trust and positive identification with a company's objectives. Using the LIFO Method, it illustrates how shared information between a candidate and company can provide a good first step towards building a mutually rewarding relationship for future OD efforts. Contact us for more info!
Boardroom agenda for FY16-17: priorities and actionsBrowne & Mohan
Boardrooms are witnessing breakdown of business models in their industries and high unpredictability than what they are used to. Weak Chinese economic data, plunging commodity prices, rise and spread of Islamic state group (IS) and its attacks are posing new business challenges. In this presentation, Browne & Mohan consultants discuss what should be the priorities of the Board for the FY16-17 and how must they go about it to sustain the growth and relevance of the organization.
Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...IJASRD Journal
All of the organizations, before choosing of alternatives for improve of company performance, proposed for test and evaluation of the pattern of this research, and if they could not receive of suitable results from perform of it, in that case will be free for choosing and selecting another alternative. The term behavioral approach to leadership boundary spanning transaction relationship have declared that risk taking capability of the boundary spanning transaction relationship is the major factor for making distinguish between boundary spanning transaction relationship and workers. Since then, risk taking taken as one of behavioral approach to leadership boundary spanning transaction relationship's component into consideration. For these reasons, after determination of boundary spanning transaction relationship places for manufacturing organizations, the find of alternatives for perform of it is very important.
Organizational citizenship Behavior as Attitude Integrity in Measurement of I...IOSR Journals
Quality of Human Resource represent one of the factor which to increase performance productivity an institution or organization. Therefore, needed Human Resource having high interest because interest or membership will be able to support the make-up of employees performance achievement. During the time at generally in governance institution not yet had officer with adequate interest, proved with still lower officer productivity and is difficult measure officer performance [in] governance institution scope. Performance Management System in a modern concept of human resource management is an objective and transparent performance measurement model of Organizational Citizenship Behavior in giving reward to individual’s sacrifice for organization. Three main elements of individual’s sacrifice performed in Organizational Citizenship Behavior (OCB) are compliance, loyality, and participation.The organization shoud appreciate these attitudes by giving clear job description and brief rewardsystemcriteriato encourage the individual’s job motivation. Combined with theindividual assessment of job description, job grading is used to compile a correct Key Performance Indexand a precise salary component. The aim of this action research is to give a comprehensive solution for Hospital X, in order to determine a Key Performance Indexsmodel, in response to some problems such as jobmotivation, work stress and performance. An interviews with hospital’s director and Human Resources section was conducted to compile the KPI. The results of this research can be recommended to the hospital to make a comprehensive performance assessment consist of the review of employee's job descriptions, Key Performance Indicator (KPI), job grading, specifying fundamental salary based on work,Bonus Scame and score summary
What is in your Organizational DNA?
1. There are only a few organizational personality TYPES (even though each organization is unique).
2. Companies are mosaics of personalities (AND so are teams ;-).
3. High performance can’t be isolated (Think collaboration and teamwork – organization-wide).
This article is based on Booz & Company's long-standing work on organizational DNA. It describes how to select the right mix of organizational design elements--both formal structures and informal aspects of organizational culture--to advance your company's strategy.
Anna Taylor (Speaker) West Coast DEI Lead, VMLY&R
Demographic transference within organizations is shifting and there will continue to be an upsurge of more diverse and inclusive organizations as they outperform homogeneous organizations. But this is a slow progression, where can we start making organizational transformation now? We can start from the bottom; employees have more power than they may realize, to affect change. And although this may seem like a daunting call-to-action, employees have the power irrespective of budget or team size, to make an indelible impact on organizational change. Like many effectual grassroots movements, employees have the ability to create a new model that renders the existing model obsolete and lead the evolution of organizational transformation.
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Advanced data literacy makes an organization faster, smarter, and better prepared to succeed in a data-driven environment. However, many organizations struggle to create a data-literate workforce.
In this webinar, Alissa Schneider, Sense Corp data governance leader, will examine the fundamentals of data literacy, why it’s important in today’s marketplace, and share the 10 steps you can take to enhance the data literacy in your organization.
Contact us for more information: https://sensecorp.com/business-consulting-contact/
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Listen to the our replay on the 10-steps to building a data-literate organization, and how data virtualization can help implement the underpinning processes.
Sense Corp and Denodo have partnered to combine state-of-the art professional services with the industry’s most advanced data virtualization platform to streamline data access in support of the most critical business needs.
Watch the replay to learn:
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- How to use data virtualization as the foundation to implementing data literacy processes.
- Examples of companies that have achieved high levels of data literacy.
Download the Sense Corp 10 Steps to Data Literacy eBook to learn more.
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10 principles of organizational DNA
1. www.strategy-business.com
strategy+business
ONLINE OCTOBER 27, 2014
The 10 Principles of
Organizational DNA
Based on 10 years of organizational design research and
220,000 diagnostic surveys, here’s what we’ve learned about
building high-performance companies.
BY JAIME ESTUPIÑÁN AND GARY L. NEILSON
2. www.strategy-business.com
1
The 10 Principles of
Organizational DNA
Based on 10 years of organizational design research and
220,000 diagnostic surveys, here’s what we’ve learned about
building high-performance companies.
silient. People who take our online survey (the Org
DNA Profiler®) continue to identify their company as
one of these archetypes, regardless of industry and geog-raphy.
That means that, no matter how pernicious a
performance problem may seem, other companies have
undoubtedly faced it before—and some have prevailed,
often by changing their organizational personality.
2. Companies are mosaics of personalities. Most
companies contain a mix of personalities—having two
or three, or more business units that fall under differ-ent
archetypes. This is especially true of companies
that have made major acquisitions. For example, a
20-year-old technology powerhouse might be a resil-ient
organization. But its newly acquired health-tech
division matches the fits-and-starts profile, character-ized
by smart entrepreneurial talent but a lack of collec-tive
discipline.
3. Weak execution is prevalent. The connection
between the organization’s personality type and how
well the organization executes on strategy is always
strong. When we analyzed our most recent data set
(more than 20,000 respondents), we discovered that a
whopping 48 percent fit a profile distinguished by weak
execution. And 11 percent fit into the most vexing of
those profiles: the passive-aggressive organization, in
which people pay lip service to results but consistently
undermine the necessary efforts.
by Jaime Estupiñán and Gary L. Neilson
Anyone who’s celebrated a significant work an-niversary
knows just how a company can
change over the years—who has a seat at the
table, what customers expect, the most coveted skills.
But there’s just as much that stays the same: what your
brand stands for, the shared lexicon, your unique cul-ture.
We use the term organizational DNA as a meta-phor
for the underlying organizational and cultural de-sign
factors that define an organization’s personality and
determine whether it is strong or weak in executing
strategy. (See Exhibit 1.)
This year marks the 10th anniversary of our work
on organizational DNA. Since our first article in 2004
(“The 7 Types of Organizational DNA,” by Gary L.
Neilson, Bruce A. Pasternack, and Decio Mendes, s+b,
Summer 2004), we’ve analyzed more than 220,000 on-line
surveys in which people describe their company’s
personality and performance. Amid the turbulence of
changing business environments and personnel, 10 pre-cepts
have remained useful, for empowering people and
unlocking any organization’s potential.
1. There are only a few organizational personality
types. Every company may seem unique, but in their
enterprise-wide behavior, they fall into just seven behav-ioral
patterns (in order from the least to most effective at
execution): passive-aggressive, overmanaged, outgrown,
fits-and-starts, just-in-time, military-precision, and re-
3. www.strategy-business.com
2
lessly seek feedback from those closest to the market,
encouraging and acting on criticism from customers
and front-line employees, and taking action to address
minor issues before they become bigger problems.
5. Performance is based on interdependent factors.
Your organization’s DNA is made up of four pairs of
Jaime Estupiñán
jaime.estupinan@strategyand
.pwc.com
is a partner with Strategy&
based in New York. He focuses
on organization and change
leadership for the healthcare
industry.
Gary L. Neilson
gary.neilson@strategyand
.pwc.com
is a senior partner with
Strategy& based in Chicago.
He focuses on operating
models and organizational
transformation.
4. Strong execution is not self-sustaining. The 52
percent of respondents with a strong-execution arche-type
can’t afford to be complacent. In our experience,
even a company with the most desirable profile, the re-silient
organization, must continually work to stay at the
top of its game. For example, its leaders should relent-
For more on organizational
DNA, see “How to Design a
Winning Company,” by Ashok
Divakaran, Gary L. Neilson, and
Jaya Pandrangi, s+b, Autumn
2013; and “10 Minutes on
Organizational DNA” (pwc.com/
us/en/10minutes/
organizational-dna.jhtml].
Exhibit 1: The Eight Elements of Organizational Design
Grouped by purpose (the four rungs) and
formality, these components can be
combined into a design that matches each
organization’s strategy and purpose. When
initiating an organizational redesign, start
with two or three elements.
FORMAL
• Governance forums
• Decision rights
• Decision processes
• Decision analytics
• Monetary rewards
• Career models
• Talent processes
• Key performance indicators and metrics
• Information flow
• Knowledge management systems
• Organizational design
Roles and responsibilities
processes
INFORMAL
• Values and standards
• Expectations and “unwritten rules”
• Behaviors
Commitments
How people are inspired to contribute
• Shared vision and objectives
• Individual goals and aspirations
• Sources of pride
Mind-Sets
How people make sense of their work
• Identity, shared language, and beliefs
• Assumptions and biases
• Mental models
• Relationships and collaboration
• Teams and other working • Organizational influence
Motivators
How people are compelled to perform
Information
How the organization formally processes data and knowledge
Structure
How work and responsibilities get divided
Networks
How people connect beyond the lines and boxes
• Role
• Business pro
Norms
How people instinctively act or take action
Decisions
How decisions are made
g units
uence
on
Source: Strategy&
4. www.strategy-business.com
3
more companies making smart use of digital informa-tion
technology to differentiate themselves. But these
changes can also be low-tech. One company boosted its
performance by setting up regular meetings to ensure
that people at the top and the bottom of the hierarchy
were regularly talking together, and information flowed
more effectively among them.
9. Informal factors change when you focus on what
works. The best approach for improving intangibles like
norms and commitments is to use them as a force for
transformation. So, instead of trying to change the cul-ture
of your company, use your intangible strengths to
help improve it. Suppose your company is losing cus-tomers
despite having a deep commitment to customer
service. By focusing attention on a few powerful and
positive behaviors, you can draw out that commitment
and boost customer retention rates.
10. High performance can’t be isolated. Rarely do
departments or business units work in isolation. Chang-es
are more likely to last when they’re made holistically,
across a company or division. Manufacturing needs to
know what sales intends to sell, and sales, in turn, needs
to know what marketing will promote. The more con-nectivity
among different groups or functions, the more
effective they can become. +
building blocks: decision rights and norms, motivators
and commitments, information and mind-sets, and
structure and networks. The way that the building
blocks combine determines your company’s aptitude for
execution. It is crucial, then, for companies that want to
improve their execution to consider the building blocks
as a whole and not individually.
6. The org chart isn’t the solution. Many company
leaders fall into a common trap: They think that chang-ing
their organization’s structure will solve their prob-lems.
They may remove significant management layers
and temporarily reduce costs that way—but all too
soon, the layers creep back in and the short-term effi-ciencies
disappear. We see structure as the capstone, not
the cornerstone. It’s better to change other formal ele-ments
first, like decision rights, motivators, and infor-mation
flows, and then figure out the structural changes
needed to support the revitalized company.
7. Intangibles matter. Those formal organizational
DNA elements are attractive to companies because
they’re tangible. They can be easily defined and mea-sured.
But they’re only half the story. Companies often
realize this after they’ve made significant changes—re-assigned
decision rights, reworked the org chart, estab-lished
new incentives, or set up knowledge-sharing sys-tems—
yet don’t see the results they expect. That’s
because they ignored the informal, intangible elements.
These include norms (what people think is the right way
to behave), commitments (the promises people feel
motivated to keep) mind-sets (deeply held attitudes and
beliefs), and networks (connections among employees
outside the formal structure). They add up to influence
the ways people think, feel, communicate, and behave.
Until you learn to influence these factors, your efforts to
build performance will be unbalanced.
8. Decision rights and information flows deliver. De-cision
rights and information traits are twice as power-ful
as structure and motivators in driving organizational
effectiveness. We analyzed dozens of strong-execution
companies and discovered that information had the
strongest correlation to execution, at 54 percent, and
decision rights correlated at 50 percent. Structure came
in at 25 percent. That may be why we see more and