Organizational Assessment and BY STEVEN RODRIGUES

ASSESSMENT TEAM LEADER

Star Capital Mortgage OGL 357

Today’s Agenda

Lesson 1. What is our objective?

Lesson 2. What is organizational assessment?

Lesson 3. Why are organizational assessments

important?

Lesson 4. What assessment model will we use

and why?

Lesson 5. How does this assessment model

work?

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What’s going on? What’s our objective?

In the past year at Star Capital Mortgage:

The company has reached new all-time highs for sales revenue.
A new CEO was appointed.
Employee turnover has increased slightly.
Quarterly revenue growth has declined at an accelerating rate.
The board of directors has put together this organizational assessment team to collect information about what
can be done to resolve these issues.

What we will do today:

Learn about organizational assessment and its importance to the health of a company.
Learn the key concepts of the Good to Great assessment model why we’re using it.
Learn how we will assess Star Capital Mortgage using the Good to Great model.

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What is an organizational assessment?
Definition and Framework

Definition: An organizational assessment is a systematic

process of information about the performance of an
organization, and the factors that influence its
performance.
Organizational Assessment Framework:
Understanding the enabling environment
Examining organizational capacity
Determining organizational motivation
Measuring organizational performance

Image source

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What is an organizational assessment?
Definition and Framework – Enabling Environment

Definition: The enabling environment consists of the administrative, technological, political, economic,
socio-cultural, and stakeholder factors that shape the character and performance of an organization
(Lusthaus, 2002).
When assessing organizations, the enabling environment is made up of three components:
Rules – formal laws that influence the behavior of organizations.
Ethos – the informal rules present in society.
Capabilities – the current resources available to an organization.

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What is an organizational assessment?
Definition and Framework – Capacity

Definition: Capacity is the ability of

an organization to use its resources
to achieve its business objectives.
Capacity underlies an organization’s
performance.
There are eight areas of
organizational capacity, each having
their own separate components.
These components vary in
importance from one organization to
another.

Image: (Lusthaus, 2002, p. 42)

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What is an organizational assessment?
Definition and Framework – Motivation

Definition: Organizational motivation comes from four aspects of the business that shed light on the
underlying personality of the organization: history, mission, culture, and incentives (Lusthaus, 2002).
History – Date and story behind the organization’s founding, significant accomplishments and failures,
stage in the organizational life cycle, and changes in size, programs, and leadership.
Mission – Evolution of its mission statement, organizational goals, valued research projects, how the
mission statement provides purpose and direction.
Culture – Values, beliefs, norms, and employee attitudes about working, colleagues, and clients.
Incentives – intellectual freedom, autonomy, recognition, opportunity for advancement, bonus
structure.

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What is an organizational assessment?
Definition and Framework – Performance

Definition of good performance: Work is done effectively and efficiently, the organization maintains
relevant to stakeholders and is financially viable (Lusthaus, 2002).
Effectiveness – Extent to which the organization reaches its goals
Efficiency – A ratio of outputs accomplished to costs incurred.
Relevance to stakeholders – Meeting the needs of each group of stakeholders.
Financially viable – Ability to raise the funds needed to meet functional requirements.

Levels of Performance:
The individual employee
The team or small group
The program or department
The organization

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Why are organizational assessments important?

Organizational assessments uncover “crucial information about strengths, areas for improvement, and
potential investment strategies for achieving performance benefits” (Perkins, 2010, p. 9).
An organizational assessment is essentially a “snapshot” of an organization’s health that enables
managers and executives to make more well-informed decisions to improve performance.
Stakeholder groups have different reasons for initiating an organizational assessment (Lusthaus, 2002).
Leaders of the organization: to celebrate performance, improve decision making, and to provide a basis for
future strategy deployment.
Board of Directors: to exercise accountability, make investment decisions, and to provide data for a strategic
planning process used to increase performance.
External investors: to plan an investment strategy that achieves its purpose, and to monitor and evaluate
investment outcomes.

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What assessment model will we use and why?

 We will be using the Good to Great organizational assessment model to evaluate Star Capital Mortgage
This model is widely applicable to a variety of different organizations and industries (Perkins, 2010).
Reasons why it is a good match with our company:
Star Capital Mortgage is already a good company and financially stable but has not made the jump to being a
great company yet.
This assessment model is very leadership focused and will provide a good evaluation of Star Capital Mortgage’s
new CEO.

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 How does this assessment model work?
Overview

The Good to Great assessment model is based on a set of principals, referred to as inputs, that were identified
in good companies that made “a substantial and sustainable increase in performance” (Perkins, 2010, p. 4).

Inputs Outputs
 Stage 1: Disciplined people  Delivers superior performance relative to its mission.
 Stage 5 Leadership
 First who, then what  Makes a distinctive impact on the local community
 Stage 2: Disciplined thought within which it is located.
 Confront the brutal facts
 Hedgehog Concept  Achieves lasting endurance beyond any one idea,
 Stage 3: Disciplined actions leader, or setback.
 Culture of discipline
 The flywheel
 Stage 4: Building greatness to last
 Clock building, not time telling
 Reserve the core and stimulate progress

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How does this assessment model work?
Scoring

Data is gathered from a number of different Input components are evaluated by

sources. This can require meeting numerous types employees according this graded scale:
of stakeholders, observing relevant facilities, and
observing the social dynamics and interactions
among people.
The eight inputs are broken down into
subcategories, which are then addressed in the
assessment survey.  Input components and output results are
then evaluated according to this scale:

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How does this assessment model work?
Stage 1: Disciplined People Inputs and Components

Level 5 Leaders – Ambitious for the cause and not themselves, willing to do whatever it takes, and are a
blend of humility and professional will.
Put level 5 leaders in the most powerful positions.
Create a level 5 leadership culture

First who, then what – Get the right people in the right positions and roles before deciding what to do.
Get the right people on the bus.
Get the right people in the right seats.
Get the wrong people off the bus.
Put who before what.

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How does this assessment model work?
Stage 2: Disciplined Thought Inputs and Components

Confront the brutal facts – Stockdale paradox: must have faith

you will prevail despite the difficulties while confronting the most
brutal facts about your reality.
Create a climate where the truth is heard.
Get the data. Hedgehog Three Circles
Embrace the Stockdale paradox

Hedgehog concept – Hedgehog leaders have a simple business

plan for achieving greatness, foxes are always trying cunning,
elaborate plans.
Keep it simple, be a hedgehog and not a fox
Get your three circles right.
Act with understanding, not bravado.

(Collins, 2010, p. 28)

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How does this assessment model work?
Stage 3:Disciplined Action Inputs and Components

A culture of discipline – Operate with freedom, within a framework of responsibilities.

Focus on your hedgehog.
Build a system of extreme freedom and responsibility within a framework.
Manage the system, not the people.
Practice extreme commitment.

The flywheel, not the doom loop – Greatness comes from persistently building momentum until…BAM!
Build cumulative momentum.
Be relentlessly consistent over time.
Create alignment by results.
Avoid the doom loop: those who quit or slow down will fail.

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How does this assessment model work?
Stage 4: Building Greatness to Last Inputs and Components

Preserve the core & stimulate progress – Challenge and change everything except for your core values.
Change how you do things, not what you stand for.
Core guiding philosophy: core values and reason for being there that goes beyond just making money.
Change and improve everything except your core values.
Create a passionate culture that preserves the core and stimulates progress.
Achieve big hairy audacious goals.

Clock building, not time telling – Adapting through multiple generations of leaders and multiple
ideas/programs, build mechanisms to stimulate progress.
Build a system that can be great beyond a single idea or leader.
Create catalytic mechanism.
Manage for the quarter century.

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How does this assessment model work?
Output Results

Superior performance:
For businesses, this means financial results and achieving the purpose.
For social sectors, this means results, and efficiency in delivering the social mission.

Make a distinctive impact:

If the organization were to disappear from te local community, it would leave a hole not easily filled by any other
organization.

Achieve lasting endurance:

Delivers exceptional results over a long period of time beyond any single leader, great idea, market cycle, or
successful program.
The organization bounces back from setbacks even stronger than before.

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References

Collins, Jim. (2010). Good to Great [PowerPoint slides]. Retrieved from

https://canvas.asu.edu/courses/45322/files/11809063/download?download_frd=1
Collins, Jim. (2006). The good to great diagnostic tool. The Good to Great Project LLC, 1.0(1), Retrieved
from https://www.jimcollins.com/tools/tools.html
Lusthaus, C. (2002). Organizational assessment: a framework for improving performance. Washington:
Inter-American Development Bank.
Perkins, L. N., Nightingale, D., Valerdi, R., & Rifkin, S. (2010). 6.3.2 Organizational Assessment
Models for Enterprise Transformation. INCOSE International Symposium, 20(1), 809–823.
https://doi.org/10.1002/j.2334-5837.2010.tb01106.x

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