Organisational Improvement – 4 operating modes

Improving organisational capability is critical to raise productivity. Organisational improvement occurs in different ways. The language of disruption is common but true disruption creates new markets and industries.  Most firms don’t do that.  They adapt and change but they do so on a smaller scale. 

Four Operating Modes for Organisational Improvement

I find that organisations tend to have four operating modes which drive improvement. Some will use more than one operating mode but one mode will predominate. Those modes are:

1. Disruptive improvement: creating a new niche.
2. Project-driven improvement: strategy creates projects which drive change
3. Continuous improvement: an ongoing process of identifying, analysing, and making incremental improvements to systems, processes, products, or services
4. Reactive improvement: changing when obsolescence, regulation, external events or other compliance factors force it to happen

Which organisations use which modes to improve?

Disruptive improvement is rarely the prime mode of organisations.  In this mode, something new occurs so the intended improvement is to the market or society at large.

Project-driven improvement is popular.  Ideally there is a coherent strategy that drives a portfolio of projects and programmes that raise capability.  Change management and improvement occurs within projects and programmes and should be systemic across the organisation.  Good benefits management helps. In practice, improvement tends to be much more fragmented.

Continuous improvement exists in many businesses. A customer focus drives regular customer feedback, better processes, new products and services, waste reduction, push for new markets, upskilling and better systems.  Some public sector organisations and not-for-profits adopt continuous improvement by choice. They seek more value for service users and for their funders and donors.

Many public sector agencies and businesses have a prime mode of reactive improvement.  Projects are ad hoc and reactive e.g. a system needs replacement, a technology is obsolete, the market changes, new legislation is passed, a new policy is created by a change in political leadership, a court case requires improved processes.

Do your improvement initiatives match your operating mode?

• Are you using the language of disruption when other approaches might be better suited?
• If you have a PMO, how does your project portfolio drive systemic improvement? Does it?
• If you like the idea of continuous improvement, how much do you know about making it work and creating the right culture?
• If reactive improvement describes your organisation, how can you leverage each reaction to move your organisation forward?

Every organisation is different and there is no “one-size-fits-all” approach.   One thing is true and that is that every organisation can improve. 

Improvement can happen in lots of little ways, using a wide range of approaches used in ways that work for you. It can also be done with modest initial steps.  Whatever your operating mode, there are clear benefits in ensuring that your strategic investments increase your organisational capability. We love to help make that happen. Please get in touch.

Phil Guerin, Consultant/Director, Hague Consulting Ltd. © Hague Consulting Ltd 2024.

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