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Most Organizations Are Unable to Turn Critical Decisions into Action, According to New Global Survey by Booz Allen Hamilton; European Organizations Are More Effective Than Those in the U.S. - China Reports a High Rate of Healthy Organizations.

NEW YORK New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 -- Dysfunctional dys·func·tion also dis·func·tion  
Abnormal or impaired functioning, especially of a bodily system or social group.

 Companies Found in All Industries; Larger Organizations Are More Unhealthy

Most organizations exhibit "unhealthy" traits and behaviors that prevent them from turning decisions into action, according to according to
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

 new research by management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business
service industry - an industry that provides services rather than tangible objects
 firm Booz Allen Hamilton Booz Allen Hamilton, Inc., referred to as Booz Allen is one of the oldest strategy consulting firms in the world.[1] The firm formerly had two consulting divisions: WCB (Worldwide Commercial Business, also known as “The Commercial Side”) and WTB . Globally, the U.S. has a higher rate of ineffective organizational profiles than every country in Europe. By contrast, China ranked near the top of the study in organizational health.

Booz Allen based its results on more than 50,000 responses to both an online evaluation tool and individual company surveys. The Org DNA DNA: see nucleic acid.
 or deoxyribonucleic acid

One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes.
 Profiler(SM) diagnoses distinct organizational personalities by examining a company's structure, decision rights, motivators and information. Companies are then sorted into one of seven distinct organizational DNA profiles, defined below. The Profiler captured data from 24 industries, 100 countries, and more than 10 internal departments and functions. Key findings of the study include:

Most organizations are unhealthy. By a margin of nearly 2 to 1, respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy.  declare their own organizations are ineffectual. Only 31% of those who filled out the survey at reported traits and behaviors found in a healthy organizational profile. The survey found "passive-aggressive" to be the most common corporate type, at 27%. Such an organization seems congenial con·gen·ial  
1. Having the same tastes, habits, or temperament; sympathetic.

2. Of a pleasant disposition; friendly and sociable: a congenial host.

, even conflict-free, yet still resists meaningful change.

Booz Allen's research has found that healthy organizations are defined by their ability to turn important decisions into action. "Healthy organizations are good at execution - they get things done," said Gary Neilson, Senior Vice President of Booz Allen, and author of the recently-published book, "Results: Keep What's Good, Fix What's Wrong, and Unlock Great Performance," by Gary Neilson and Bruce Pasternack Bruce Pasternack (born September 20, 1947) was the President and CEO of the Special Olympics International from 2005-2007. He currently serves on the board of directors of Codexis, a private biotechnology company based out of Redwood City California, as well as BEA Systems (NASDAQ:  (Crown Business). "By contrast, unhealthy organizations stumble and eventually stagnate stag·nate  
intr.v. stag·nat·ed, stag·nat·ing, stag·nates
To be or become stagnant.

[Latin st
 - they can't execute."

Organizational health varies by country, and the U.S. trails most of the world. More than 15,000 responses reported the country of origin, and these responses revealed significant differences across regions and countries. The news is not good for the U.S. Every European country, bar none, has a higher ratio of healthy to unhealthy profiles than the U.S., and only Japan, Canada, and Australia ranked lower. A second arresting finding is that China is one of the most robust nations when it comes to organizational health. More than half (54%) of all surveys completed in China resulted in a healthy profile, versus 31% in the overall sample and 33% in the U.S. Japan had the lowest percentage of healthy profiles, at 19%.

Larger organizations are more unhealthy. Profiles often change as organizations adapt to changes in culture and the competitive environment. However, these changes are usually for the worse, not the better. Large organizations are more likely to exhibit dysfunctional traits and behaviors and report an unhealthy profile than smaller firms. Smaller organizations, those with revenues up to $500 million, reported 41% healthy and 59% unhealthy profiles, compared to only 27% healthy and 73% unhealthy for those with revenues over $10 billion.

Some industries are unhealthier than others. No industry emerged as particularly healthy, and the utilities industry had the highest proportion of dysfunctional organizational types, with 76% unhealthy and 24% healthy profiles. Other "unhealthy" industries include energy, healthcare, capital goods Capital Goods

Any goods used by an organization to produce other goods.

Examples of capital goods include office buildings, equipment, and machinery.
See also: Capital Expenditure, Disinvestment

Capital goods
, and technology hardware. The "healthiest" industry is real estate (45% healthy vs. 55% unhealthy), followed by commercial services and supplies, food/beverage/tobacco, and retail.

Unhealthy organizations lack clear decision rights and don't share information effectively. Overall, only 45% of respondents believe that people in their organization have a clear idea of what they are accountable for. Among "unhealthy" profiles, that number drops to 23%. In ineffective organizations, only 16% believe information flows freely within their organizations, and only one in five feel that they and their colleagues have the information they need to understand the bottom line impact of their day-to-day choices.

Healthy organizations are nearly twice as likely to be profitable as their unhealthy peers. Not surprisingly, 48% of respondents who generated healthy profiles report better-than-industry-average profitability versus 27% of those who describe their organizations as unhealthy.

Senior management sees a far rosier ros·y  
adj. ros·i·er, ros·i·est
a. Having the characteristic pink or red color of a rose.

b. Flushed with a healthy glow: rosy cheeks.

 picture than the rest of the organization. Sharp differences emerged between the attitudes of senior management and those of lower-level groups. Senior management was consistently more optimistic op·ti·mist  
1. One who usually expects a favorable outcome.

2. A believer in philosophical optimism.

 in their assessment of organizational health, suggesting that executives are out of touch with the rest of their organization.

Additional details from the evaluation include:

--Within Europe, Switzerland (64% healthy vs. 36% unhealthy) ranked highest, followed by Italy (55% vs. 45%), Finland (46% vs. 54%), France (45% vs. 55%), Sweden, (44% vs. 56%), Germany, (43% vs. 57%), the Netherlands, (38% vs. 62%), and the UK (36% vs. 64%). The U.S. had 33% healthy profiles, compared to 67% unhealthy profiles.

--Overall, 54% of senior managers view their organization as healthy, compared to 33% in middle management, 30% of business unit staff, and 29% of corporate staff and line management.

--78% of respondents in healthy organizations feel that everyone has a good idea of the decisions/actions for which he or she is responsible, compared to 23% of respondents in dysfunctional organizations. In addition, 77% of respondents in unhealthy organizations said that decisions were often second guessed, compared with only 37% in healthy ones.

--Information flows freely across boundaries more often in healthy organizations vs. unhealthy (61% vs. 16%). In healthy organizations, 78% said conflicting messages are rarely sent to the marketplace, compared to 39% of unhealthy organizations.

--The organizational types most likely to be more profitable than their peers are Resilient See resiliency.  (51%), Just-in-Time (47%), and Military Precision (40%). Passive Aggressive (28%), Fits-and-Starts (27%), Outgrown (26%), and Overmanaged (23%) are least likely to have above-average profitability.

Booz Allen designed this evaluation tool to provide insight into the basic elements of organizational effectiveness Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce. The idea of organizational effectiveness is especially important for non-profit organizations as most people who donate money to non-profit . "The first step in resolving execution breakdowns is to understand how the inherent traits of an organization influence - and even determine - how each individual thinks and acts on the job," said DeAnne Aguirre, Senior Vice President of Booz Allen. "That behavior is what drives results."


More than 50,000 respondents overall completed an online evaluation to identify the "organizational DNA" that affects employee behavior and corporate performance. Approximately 30,000 respondents identified their organization's structure by completing Booz Allen's online evaluation, which is available at An additional 20,000 participated in client-specific surveys set up for corporate, government, and not-for-profit organizations. The data includes responses from twenty-four industries, 100 countries, and more than ten internal departments and functions. Position or level within an organization as well as revenue size is included in the data.

Organizational Profiles

Of the seven organizational types identified by Booz Allen, three are considered "healthy":

--Resilient: Flexible enough to adapt quickly to external market shifts, yet steadfastly focused on and aligned behind a coherent business strategy.

--Just-in-Time: Inconsistently prepared for change, but can turn on a dime when necessary, without losing sight of the big picture.

--Military Precision: Often driven by a small, involved senior team, it succeeds through superior execution and the efficiency of its operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. .

Four organizational profiles were identified as "unhealthy":

--Passive-Aggressive: Congenial and seemingly conflict-free, this organization builds consensus easily but struggles to implement agreed-upon plans.

--Outgrown: Too large and complex to be effectively controlled by a small team, it has yet to "democratize de·moc·ra·tize  
tr.v. de·moc·ra·tized, de·moc·ra·tiz·ing, de·moc·ra·tiz·es
To make democratic.

" decision-making authority.

--Overmanaged: Multiple layers of management create "analysis paralysis Analysis paralysis is an informal phrase applied when the opportunity cost of decision analysis exceeds the benefits. Analysis paralysis applies to any situation where analysis may be applied to help make a decision and may be a dysfunctional element of organizational behavior. " in a frequently bureaucratic bu·reau·crat  
1. An official of a bureaucracy.

2. An official who is rigidly devoted to the details of administrative procedure.

 and highly political environment.

--Fits-and-Starts: Contains scores of smart, motivated and talented people who rarely pull in the same direction at the same time.

A complete copy of the report and more information on Organizational DNA can be found at

About Booz Allen Hamilton

Booz Allen Hamilton has been at the forefront of management consulting for businesses and governments for 90 years. Booz Allen, a global strategy and technology consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee
consulting company

business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a
, works with clients to deliver results that endure.

With more than 16,000 employees on six continents Six Continents is a large retail PLC in UK which split into Six Continents Retail known as Mitchells and Butlers plc. The hotels and soft drinks business of Six Continents PLC is now known as InterContinental Hotels Group PLC. , the firm generates annual sales of $3 billion. Booz Allen provides services in strategy, organization, operations, systems, and technology to the world's leading corporations, government and other public agencies, emerging growth companies, and institutions.

Booz Allen has been recognized as a consultant and employer of choice. In a recent independent study by Kennedy Information, Booz Allen was rated the industry leader in performance and favorable fa·vor·a·ble  
1. Advantageous; helpful: favorable winds.

2. Encouraging; propitious: a favorable diagnosis.

 client perceptions among general management consulting firms List of Management Consulting Firms
1. McKinsey & Company
2. Marakon Associates
3. Boston Consulting Group (BCG)
4. A.T. Kearney
5. Booz Allen Hamilton (BAH)
6. Monitor Group
7. Bain & Company
8. Roland Berger
. Additionally, for the past six years, Working Mother has ranked the firm among its "100 Best Companies for Working Mothers" list. And in 2005, Fortune magazine named Booz Allen one of "The 100 Best Companies to Work For."

To learn more about the firm, visit the Booz Allen Web site at To learn more about the best ideas in business, visit, the Web site for strategy+business, a quarterly journal sponsored by Booz Allen.
COPYRIGHT 2005 Business Wire
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Publication:Business Wire
Geographic Code:1USA
Date:Nov 1, 2005
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