What are the core theories of organizational success? (Down)

In the last article, we mentioned that having a clear theory of success allows organizations to continuously test to assess the positive or negative impact various action plans can have on the company. So what would a theory of success be in a learning organization?

Using theory as a guide for intervention

The most important point of systems theory is that success does not come from any single variable in the loop, but from the loop itself; all variables are important for the working of the theory, because if one of them doesn't work, the loop doesn't work. Can't loop. If we are to believe that this loop creates a successful theory for our organization, it is imperative to focus on what all the variables do and how each variable affects the others in the loop.

For example, we can use the core theory of success to observe a common phenomenon in business: Organizations prefer quick, short-term results. When results fall short of expectations, management usually helps lower- and middle-class employees through immediate improvement. We can think of the impact of an intervention as an "accelerator" that can lead to good outcomes, but at the same time the intervention also produces a "brake" that counteracts any positive effects of the intervention , which may lead to a lot of waste of resources in the end, and cannot improve the status quo of the organization as a whole.

In the absence of a core theory, we may focus only on the "accelerator" aspect of an intervention and consider the intervention successful when we see improvement in the short term. We don't necessarily link the long-term negative effects of "antagonism" to the initial intervention, and when the results worsen again, the pressure to seek improvement reappears, so we may re-use what we thought worked well in the past to deal with it. However, through theory and corresponding loops, we can see how a holistic approach can have a negative impact and use additional measures to counteract that impact.

To illustrate how this "acceleration and antagonism" works in a given situation, let's look at an example: Curtis Nelson, president and CEO of Carlson Hospitality Worldwide, wrote in his company magazine: "Take care of yourself. Your employees, motivating them, allowing them to reach their full potential and show their individuality, they will have higher job satisfaction. This in turn stimulates better commitment by employees and increases guest satisfaction.”

Although Nelson doesn't draw a loop in his "Hotel Core Success Loop," he puts it in words to lay out the core theories of his hotel and cruise business success. The graph shows that investing in employee potential increases job satisfaction, which builds commitment and translates into higher guest satisfaction and higher revenue. At the same time, increased revenue also means increased profits and more resources to devote to employees.

Now, suppose that something unexpected happens that reduces profits, such as a rise in airfare prices leading to less business travel. Top managers are likely to take "cost-cutting" measures to improve the profit profile, and in the near term, we expect profits to rise. However, such measures can lead to a significant reduction in the company's investment in employees, which can lead to lower job satisfaction. Decreased job satisfaction reduces profits in the long run because less employee engagement leads to lower customer satisfaction. Lower profits will trigger another wave of cost-cutting, repeating the cycle of "accelerate and antagonize." In this way, an external disturbance may trigger a long-term internal cyclic response.

In addition, through the core theory of success, we can focus more on the short-term and long-term consequences of behavior. In particular, our theory prevents inadvertently breaking the cycle upon which past success has relied.

In a real corporate environment, the core theory of success may involve many loops, not just one, the loops will be interconnected in many ways, and their dynamic behavior will always be invisible, so establishing And understanding theory requires more than a one-time investment to create a quick overview; we need to shift our mindset to see theory building as an important, ongoing project within the organization.

When managers become researchers, theory builders

To survive in the new economic order, organizations must focus on producing long-term, sustainable results. Managers at every level need a broader view, or "theory," to understand how their organization can create and sustain success. Theoretical framework is no longer seen as a separate thing from management, it must become an integral part of management, so managers must play the new role of researcher and theory builder, and invest in and develop new skills and capabilities (see " Applying the Disciplines of the Learning Organization”), just as we will rely on accountants and financial statements to help manage complex businesses, perhaps one day we will rely on theory builders and organizational strategy maps and models to adapt to the turbulent future of business surroundings.

Article source: What is Your Organization's Core Theory of Success

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