Best practices: Performance improvement is hard

Leaning on these three pillars can make your efforts more systematic and successful.

by Ryan Rackley

When credit unions think about organizational performance, they can have a tendency to focus on performance reviews, job descriptions and merit-based compensation structures. Credit unions that excel in these important areas can still struggle to meet the challenges of continuously improving organizational performance.

The reality is that organizational performance improvement is hard … really hard, and it can only be achieved by looking at an organization’s individual situation. However, common pillars can be applied to understand the challenges of achieving any sort of real improvement. These common pillars are flat organizational structuring, benchmarking, and measurement. A deeper look into these areas can produce a systematic approach to ongoing performance improvement.

1.  Flat Organizational Structuring

Obtaining and maintaining a flat organizational structure is part skill, part leadership and part art. Siloed thinking and fiefdom-building is commonplace in America. The “what’s in it for me?” line of thinking is widespread and often accepted as an unavoidable issue within organizations.

While there is no one standard that can be applied, a general rule of thumb is to start with no or as few as possible levels of reporting between staff level employees and management. As a guideline, eight to 10 staff employees report to management and three to four managers report to upper management. This guideline applies to such support departments as accounting, information technology and human resources where knowledge-based workers are typical. The guideline will tend to increase as the core work function transitions from a knowledge basis to a task basis, such as in the call center and retail branch, where managers typically have many more than 10 direct reports.

A streamlined organizational structure allows for more time spent on mission and producing results. A flat structure also drastically reduces the communication drag that comes with an overabundance of managers and supervisors. Each added layer of supervising or management in an organization or department generally adds two hours of weekly meetings for all involved.

There is also a direct relationship between level of coordination needed to make decisions and the speed with which decisions can be made. While a debate could be had between flat vs. hierarchical structures–and there are certainly advantages and disadvantages of each–credit unions that can remain nimble and react quickly to changing member needs will win.

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