Does this sound familiar? You spend hours clarifying roles that remain stubbornly convoluted. Chains of communication break down frequently. Decisions are being made in side conversations, often between the wrong parties. The board is meddling and your staff respond out of fear. Your metrics aren’t living up to the potential you know exists. And resilience? That sounds like a fairy tale.
You know this isn’t how things have to be. You know that defined lines of communication, authority, and accountability to and from your board and team will help the organization grow in resilience—and in profitability—but what is the optimal organizational structure to use?
Great question. We agree: It doesn’t have to be like that. The Secret Formula for Organizational Effectiveness is a model that, while uncomplicated, has the potential to uncomplicate all these things for you and your people..
The Secret Is Out
Think of the Secret Formula for Organizational Effectiveness like a map. Use it to guide you as you establish clarity in terms of the roles and relationships at play within your organization.
Note the lines: straight lines, flowing clearly in particular directions. Pay attention to the narrow middle: Each critical role doesn’t have the same access to each other. It might feel “simple” but insisting on this level of clarity is foundational to organizational health. If you cannot be clear about who does what, and who doesn’t, your organization will suffer.
Every effective organization—while unique unto themselves—has five critical roles, as illustrated above:
- Owners
- Board
- CEO/Executive Director (the Senior Staff Person)
- Staff
- Customers
A rose by any other name…sure. Your organization and its context may require different terminology or labels—but these are the people in your “neighbourhood,” so to speak. For both short-term gains and long-term results, you must acknowledge these essential players and clarify their roles. It is vital to understand the interdependencies and intricacies amongst them.
The secret to ongoing effectiveness is no secret at all. In fact it is quite the opposite: Clear, transparent lines of communication, authority, and accountability. Ignoring or violating these channels leads to chaos and creates an organization filled with dysfunction and discontent.
The Five Essential Roles In Effective Organizations
Sometimes, people assume more than one role. Think of an owner who is also a customer or a senior leader who is also a board member. The key is to recognize the role a person is inhabiting in any given situation and relate to them through that lens.
Owner
This is anyone—and everyone—who has a vested interest in the success of the organization. It could be an individual, but more often “owner” refers to shareholders or members. It could be the government, regulatory agency, or thousands of individuals. Regardless, they have “skin in the game.”
Board
From the pool of owners, a board is selected. This way, the interests and motives of the directors are aligned with those of ownership. While a board member may be from a particular region or align with a particular constituency in terms of values and goals, they do not represent these subsets but rather the whole organization.
Boards serve to “direct and protect” the organization, ensuring the best interests of the whole are pursued. They don’t guide the granular how but rather the big picture what. Because of this, they won’t spend time addressing each individual customer concern: That delivery was late. That customer had a complaint. This person did X, Y, Z, and the other did A, B, C.
These concerns do matter—but to someone else! The board must be careful not to get stuck in the weeds. Focusing on these details prevents them from doing their real job. Their best posture is noses in, fingers out.
Bottom line: There are always concerns in any organization. But they are not always board concerns.
Senior Staff
CEO. Executive Director. General Manager. President. Whatever the term or title, the role is both different from, and subordinate to, that of the board. This senior leader is accountable to the whole board and must communicate with that in mind. They are charged with putting the board’s strategic plan into action. While the board handles what, the senior staff handles how.
This role is pivotal. If relationships with the board (and other stakeholders) are not well-managed, it can create real vulnerabilities for the organization.
Staff
Vital to any organization’s success, employees and volunteers put the strategic plan into play. While under the oversight of senior staff, these are the people who are instrumental in achieving goals and results. Staff must feel truly empowered to handle customer concerns, focusing their energy on serving these folks with efficiency and fairness—and without the fear of board interference or meddling.
Customers
This is why we’re all here. To serve customers, and they are entitled to expectations regarding the products and/or services we deliver. As end-users, they are typically encouraged to raise valid concerns and issues. A big but… But, in effective organizations, these are addressed by the staff. The board focuses on addressing owner issues. The line is clear.
Members (Or Owners & Customers)
What if an owner is also a customer? This happens in organizations, such as co-ops, credit unions, churches, and industry associations. Here, members act as “owners” when they structure the board, consider the bylaws, and review results. But when they receive services such as newsletters, reduced fees, or other benefits, they act as “customers.” Remember what we said about acknowledging the role someone is playing in any given situation? It certainly applies here.
But an owner/customer is not two people. They have both owner and customer concerns. For example, as an owner, you’d want to ensure that the organization is charging reasonable prices that enable it to grow and build equity for a rainy day. As a customer, though, you want to pay the lowest price! How do they navigate this conflict?
Simple: When “customers” have concerns, staff will address them. When “owners” have governance matters to discuss, it is board territory. Say a member (acting as customer) has issues with fees, wait times, access to information, etc., empowered staff are there to help. If a member (acting as owner) has concerns with the organization’s culture or trends transforming the workplace, for example, it is under the board’s purview.
A Simple Solution to a Complex Challenge
Organizational health and effectiveness is not an easy topic. Not by any stretch of the imagination. However, The Secret Formula provides a simple structure that serves to clarify the roles and accountabilities of each crucial stakeholder and open up clear lines of communication between the right people at the right times. Straight lines enhance effectiveness.
To implement the formula:
- Start by identifying the owners of your organization. What are their collective interests?
- Clarify the board’s role in relation to the owners and the staff’s role in relation to customers.
- Commit to becoming and being a governing board (what not how).
- Clear any obstacles and remove any indirect lines of authority.
- Organize committees as either staff or board committees to maintain clarity and role accountability.
- Develop policies that empower effective communication.
- Implement a monitoring system to shore up accountability.
- Develop a strategic plan that provides direction to the organization.
- Keep your finger on the pulse. Monitor (but don’t meddle) in order to maintain an effective, healthy organization.
You need to draw straight lines of authority, accountability, and communication. This involves knowing and owning your role, understanding how it works in conjunction with others, and what issues/concerns are under your control/area of responsibility.
Your Healthy Organization
Using The Secret Formula will reduce conflict and improve the overall effectiveness of each stakeholder in their unique role. Clear, straight lines will empower each person to step fully into their role and create a healthy whole.
Is simplicity the key to organizational effectiveness and health? Is this the real secret? It can be. With The (Not-So) Secret Formula for Organization Effectiveness, you have a clear map that shows you the way.
It’s up to you to make the journey.
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