The outputs of an organization are the services and products it provides to generate profitability or, especially in the case of public sector and nonprofit organizations, to meet mission-related goals. Additional outputs are also important: the satisfaction of organizational members, the growth and development of the competencies of the organization and its members, and customer satisfaction (to name just three). These outputs need to be defined and measured as attentively as profitability, return on investment (ROI), or numbers of clients served.
The above model reflects how one would look at the organization as a whole. However, this same approach can be adapted to look at internal parts of an organization that supply inputs or services for another part of the enterprise. The level of success of the organization in producing desired outputs becomes part of the feedback loop and a new input to the organization. In a well- functioning organization, feedback will provide input when contemplating modifying the strategy or internal alignments. Chapter 10 focuses on the measurement of change.
Change leaders need to recognize that “what gets measured is what gets done.” They need to select key measures that will track the change process.
In their work, Nadler and Tushman make three critical statements. First, the system is dynamic. This means that a diagnosis of how the organization should operate will change over time if external or internal conditions change or if different concerns and objectives emerge. Second, the “fit” or congruence between components is significant in diagnosing why the organization performs well or poorly. And third, the better the fit is among organizational components and their alignment with the environment, the more effective the organization is. The organizational change challenge is to align the system’s components to respond to changing external and internal conditions.
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