Measuring Organizational Inertia
    Category: Column By : Andrew Tani Read : 936 Date : Sunday, July 10, 2016 - 20:06:41

    A plan hastily put together to meet a management deadline. An interpersonal conflict causing collateral damage to a project’s cost and timeline. Unclear decisions reached at the end of team meetings. Collectively these scenarios would slow down any organization from achieving its goals. They are the cause and their effect is called organizational inertia.

    Organizational inertia is the lack of skill, energy or enthusiasm in an enterprise. It is indicated by sub-optimum results due to management, leadership and or technology imperfections. Zero organizational inertia is the goal of any top management team.
    Sustainability is a state of business excellence whereby the organization can achieve and retain over time optimum levels of profitability, liquidity and productive harmony from assets deployed with agility, flexibility and efficiency (read: zero organizational inertia). These capabilities are enabled  by good management and good leadership, and can be multiplied by process digitization.

    My employer, AndrewTani Research, have formulated a set of tools to calibrate the level of inertia in any group, based on the postulate: inertia = AVG (100 less Quality of Management, 100 less Quality of Leadership, 100 less Process Maturity Score). Inertia is indicated by the average level of sub-optimization occurring due to management, leadership and or technology imperfections. The baseline to measure those imperfections consists of ten key management processes to indicate the quality of management, five leadership objectives to indicate quality of leadership, and 10 management tools to indicate the maturity of process digitization.

    Unwittingly calibrating inertia is what we did at Astra International in the 1990s when we used feedback reports of more than 4,000 upper and middle managers after training them on the way of the manager-leader. Held responsible and rewarded for increasing organizational effectiveness, managers were assessed by direct reports in their compliance with prescribed 21 manage by head and 17 lead by heart practices. By measuring the individual manager’s compliance with the way of the manager-leader, we pinpointed where sub-optimization occurs in the organization and dealt with it.

    High scores for quality of management and leadership indicate two critical prerequisites of growth: (1) the capability to execute the right business strategy; and (2) the available space for organizational innovation and continuous improvement. Low scores reveal the triggers for sub-optimization and indicate organizational inertia. It is a hidden value that CEOs should capture to further improve business results. CEOs can use the resulting metrics to determine their organization’s position in the Orbex Sustainability Matrix by plotting results achievement on the Y-axis, and process quality on the X-axis.

    The goal is to stay in the green quadrant, where the company is best positioned to sustain excellent operating results and innovation with agility, flexibility and efficiency. More and more family-owned or entrepreneurial firms that are in the upper yellow quadrant hire professionals and consultants to move them to the green quadrant by raising the bar on management, leadership and technology. Companies already in the lower yellow quadrant will improve business results in due course. CEOs can and should measure and minimize organizational inertia by pinpointing sub-optimization and holding managers responsible to raise organizational effectiveness relentlessly.