September 17, 2021


Is it a bird? Is it a plane? No, it’s organisational effectiveness …

US foundations give away billions of dollars a year to improve human development around the world. Most of the money goes to organisations, which in turn make efforts to bring about change among key populations. For that money to be spent well, organisations need to be well organised and ‘effective’. Not surprisingly, foundations such as Ford, Hewlett, Packard, the Open Society Foundations and others have turned their focus to improving organisational effectiveness amongst the organisations they fund. But what exactly is organisational effectiveness? To answer this, it’s first worth discussing what an organisation is …

Mainstream discourse

Most basic definitions of an organisation embrace the idea that organisations are groups of people, acting together in pursuit of common goals or objectives. As I point out in a recent OTT paper, mainstream discourse about organisations often describes organisations as comprising a strategy, a structure, leadership, certain processes and systems, technologies, policies, practices, performance measures and a culture, among many other things. Getting these elements ‘right’ and ‘doing them better’ are said to contribute to overall organisational effectiveness. And they do so through a simple ‘if you do this, you’ll get that’ logic informed by engineering principles where improvements in organisational effectiveness can be controlled and predicted in advance – usually by those in charge, often with the help of external consultants. Most of us know that organisational life does not work like this. This approach relies heavily on abstractions and idealisations, with imperfections, constraints and ambiguities being conveniently swept away. As this paper by USAID says, many organisations have successfully brought about change in the absence of such characteristics, while organisations that were seemingly effective as judged by formal assessments wilted.

A systems–psychodynamics approach

A more robust assessment of what an organisation is and how it might become more effective is offered by the Tavistock tradition. It brings together systems theory and psychoanalysis to form a systems–psychodynamics approach.

From a systems perspective, an organisation is a system that has a boundary separating it from its environment, including other systems. Within the system, people (perhaps comprising sub-systems), occupy roles, conduct activities and engage in relations with others. The system is an open one that imports materials, labour, money, information and emotions from its environment, including from other systems, and converts them, through the undertaking of a primary task, into outputs, money and information, which it exports to its environment, including other systems.

Changes in the organisation’s environment can affect the sub-systems of an organisation, while changes to one component in the system have effects on other components due to their interconnectedness. A system comprises technical and social aspects that are interconnected. An open system maintains ‘equilibrium’ with its environment and between its parts through feedback (once again drawing on engineering principles). Leaders manage the system’s boundary (including its inputs and outputs) and regulate it (including the people and relationships among them) so that the system is protected, adapts accordingly and maintains equilibrium.

From a psychoanalytical approach, when people come together as a group, each brings with them patterns of behaviour learnt as infants and laid down in the unconscious. When levels of anxiety and uncertainty increase, behaviour can regress to those infant behaviours. Wilfred Bion describes how these behaviours manifest in groups. He identified two major tendencies in the life of a group. The first is to work on its primary task, known as work group activity, where members can think rationally and learn. The second tendency, operating in parallel, is to avoid the primary task, where members take up their personal predisposition to interact (unconsciously) with others in particular ways to reduce their anxiety and/or conflict within or between group members.

This tendency sees group members lose their capacity to stay in touch with reality and its demands, and to bear frustration. To address the underlying anxiety and enable the group to think, people require ‘containment’, which allows people to tolerate the feelings they are experiencing long enough for them to reflect on them, find meaning in them, return them to their source and bring about change.

From a systems-psychodynamic perspective, a group or organisation has a mind and personality of its own, which its members give voice to, but who are separate from it. Improving organisational effectiveness from this perspective would mean bringing collective levels of anxiety down to a level where people could think and be in touch with reality, which in turn could be encouraged by ensuring:

  • Clarity of the primary task.
  • Clearly defined roles and authority relationships among them, all related to the task.
  • Appropriate leadership regulation at the boundary of the organisation.
  • Procedures and structures that help people cope with, and contain, the anxiety they are experiencing.
  • High levels of individual maturity and autonomy among individuals.

Complex responsive processes of relating

Colleagues from the University of Hertfordshire’s Complexity Management Centre, however, argue that a group or organisation is not a system, is not separate from individuals and does not have a mind of its own that different people give voice to. They instead draw on a combination of the complexity sciences, processual sociology, pragmatic philosophy and the group analytic tradition to argue that an organisation arises out of an intricate web of formal and informal overlapping relationships where individuals are conversing and communicating with one another. The net effect is – paradoxically – a pattern of interactions between people, which shapes, and is shaped by, local interactions between individuals, and where no one is in overall control, despite the power and influence of senior managers.

Given that individuals need each other, there is a potential for withholding what others need – which is a basic manifestation of power. Individuals, usually in the form of groups, formal and informal, will generally aim to promote their interests. But there are also intra-group rivalries. Cooperation and Competition can subsequently play out at multiple levels in an organisation.

Whether an organisation needed to be more effective would depend on one’s interests, the nature of one’s relationships and how much power one had. Improving organisational effectiveness would require changing the patterning of relationship, which in turn would require potentially difficult conversations. This can be done by encouraging staff to reflect on the quality and nature of what’s happening among them and on a regular basis. Helping people to pay attention to their own practice with others can be transformative for them and the people they work with. This suggests that there are no fixed solutions to problems that organisations face. They can only be addressed through an iterative approach, involving experimentation and a greater focus on learning from experience. And any actions that senior managers in an organisation take would result in a combination of the expected, the unexpected and the unwanted – the result of what everyone is doing in their interactions with others.

Read the good practice paper “Improving organisational effectiveness: what are funders doing beyond providing general operating support?” here.

Read more from: Ajoy Datta