Characteristics of a Well Managed Organisation

My experiences whilst working with KPMG, Philips and De Beers have given me a detailed understanding as to what constitutes a well managed organisation. I have put together my personal “top ten” list of the characteristics of a well managed organisation.

1. The organisation has a mission statement which is clearly communicated, and understood, by all members of the organisation. This will form the basis of the bsuiness plan.

2. The organisational structure is clearly defined, understood and appropriate for the activities carried out. Specifically, with regard to human reporting lines, there should be no dual/dotted reporting lines; these clutter up the clarity of the decision making process and cause conflict within the organisation. With regard to the actual organisational structure, this should be as “clean” and transparent as possible; complex off balance sheet arrangements at best confuse, and worst are deliberate attempts to obfuscate reality from interested parties (such as the Internal Revenue Service). In respect of the latter, I draw your attention to Enron.

3. The management of the organisation should clearly delegate responsibility for activities to those most appropriately qualified to perform them.

4. Targets and key performance indicators should be appropriate to the organisation’s mission, and be clearly communicated and understood. They should be stretching, but achievable; above all they should be measurable.

5. Management information must be timely, accurate, relevant and reliable. What gets measured gets done!

6. Management should take appropriate, timely, corrective actions in the event that targets are not being achieved.

7. There must be appropriate segregation of duties to ensure that one person’s ego does not take the organisation down the path to oblivion; specifically the roles of President, CEO and CFO must be separated.

8. There should be an independent supervisory board of appropriately qualified independent non executive directors. In my view, it is not merely enough for these non executives to posses titles and a string of directorships. They must be able to demonstrate that they deserve to hold office, and be proactive and “muscular” in their role; the non executives of, for example, Marconi and Cable and Wireless singularly failed in their roles.

9. There should be an independent, well qualified, proactive internal audit department which reports to an independent audit committee.

10. The organisation should have a code of conduct which is in the public arena and which is seen to be, and used as, a living document. See my article on Codes of Conduct (click here to read it) for more details.

Now, take a look at the organisation that you are dealing with/working for; does it posses all of the above? If not; then you should consider moving on, and dealing with/working for another better run organisation.