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Performance reviews can motivate employees, boost employee engagement, and help meet organizational goals. But they only work when done effectively.

Many managers struggle with not knowing what to write or how to deliver their feedback in a constructive way.

Navigating a performance review is a challenge that requires sensitivity and preparation. Understanding the performance review process can help you conduct more effective performance reviews.

So let's take a deep dive into a few areas around performance reviews:

What performance reviews are

What to include in performance reviews

Ten tips for effective performance reviews

The future of performance management

What is a performance review?

An employee performance review is a process by which a manager gives an employee feedback on their work. The manager evaluates the employee's performance based on the expectations for their role.

When done well, performance reviews can help employees understand:

What is expected of them

What they're doing well

How they can improve

How their work supports the company's goals

Managers can recognize high-performing employees and correct issues along the way. Performance reviews encourage growth and development and build employee engagement.

Performance reviews have evolved from annual reviews to an ongoing process. A manager and their direct report discuss their goals, performance, strengths, and weaknesses.

This ongoing conversation helps the employee improve their performance and meet organizational goals.

A performance review may also be called a performance appraisal or evaluation.

What is involved in the performance review process?

The performance review process is cyclical. It has three main phases:

1. Goal setting

2. Follow-up

3. Performance conversation

Let's take a look at each stage in detail, as well as performance review examples of what each of these stages looks like.

1. Goal setting

In the first step of the appraisal process, an employee has an opportunity to discuss goals with their manager. This usually happens at the beginning of the year. This conversation sets expectations for the year and helps the employee know what they are striving to achieve.

2. Follow-up

Throughout the year, the manager and employee can meet regularly to discuss the employee's performance.

They can explore whether the employee has met their goals and where they might need to improve.

In some companies, these meetings take place with regularity, such as quarterly or monthly. The manager documents their feedback in writing.

In other organizations, these discussions are more informal and do not require written documentation.

3. Performance conversation

The final step of the performance review is a formal discussion of how the employee performed throughout the year.

The manager provides written feedback to the employee, and together they discuss how the employee performed. From this review conversation, they set new goals for the following year.

Let's take a closer look at how to write a good employee evaluation.

What should you include in an employee review?

Effective employee reviews generally cover three things:

The employee's self-review

An assessment of how well the employee met goals

An evaluation of how they worked throughout the year

Let's take a look at each in more detail.

1. Self-review

The employee's self-evaluation helps the manager understand how the employee sees themselves. It also gives them an idea of what they are expecting to discuss.

It gives the manager the information they need to set expectations and steer the conversation. You can consider using some performance review questions to help guide this evaluation.

2. Assessment of progress on their goals

This part of the performance evaluation is the manager's assessment of the employee's performance goals.

Here, the manager describes how the employee performed well or how they did not meet expectations.

Managers should always be specific and include examples. This will help the employee see specific instances related to their work.

3. Evaluation of how they work

The performance review should include an evaluation of how the employee fulfilled their role.

These evaluations describe whether the employee worked in ways that support the company culture. It also helps the manager evaluate their core competencies.

What are some effective phrases to include in an employee performance review?

The most useful feedback is clear, specific, and measurable. People managers should take care to offer feedback that is easy to interpret and actionable to address.

Effective performance reviews use clear and concise language. They describe how an employee's performance compares to expectations.

Reviews include key accomplishments and examples of both strengths and weaknesses. They should also include expectations and goals for the coming year. This will guide the employee's performance.

Performance reviews should focus on observable and measurable performance.

They include specific examples and next steps to take. In other words, employees should be clear about how they can make improvements.

Managers should avoid vague statements or exaggerations. They should point out opportunities for learning and adjustment rather than focusing on failures.

Effective performance review phrases could include:

Improved production by X% by...

Exceeded the original goal of X by X% through efforts to...

Created a program that delivered X results, which were beyond our goal of Y...

Continuously seeks to improve processes by...

Effectively communicates status updates on important projects to key stakeholders...

Has built strong working relationships with key partners, including...

Initiates and executes innovative ideas such as...

Makes a concerted effort to learn new skills and stay up-to-date on industry trends such as...

Has made considerable progress offering solutions to problems, including...

Goes above and beyond in their work. Examples include...

Could be even more effective if...

Can exceed goals next year by improving...

These phrases are a start, and you can use them to create a performance review template. But they should be followed with relevant examples, numbers and data, and ideas for future improvement.

10 tips for how to write a performance review

According to research by Gallup, only 14% of employees agree that performance reviews motivate them to improve in their work.

This is a challenge for managers, who need to find new and more effective ways to carry out performance reviews.

But you might be wondering how. Let's take a look at 10 performance review tips to help you get started.

1. Set expectations and goals from the start

Managers should ensure employees are clear about what the company's expectations are and what their goals are. Doing this from the outset makes the feedback process clearer.

2. Gather relevant information

Managers should gather useful inputs, such as the employee's self-review and goals, as well as helpful data and examples.

This can include:

Documenting performance and gathering data throughout the year makes it easier to write reviews.

3. Make the time

It can take time to write a thoughtful and helpful review. Managers should set the necessary time aside to ensure they have ample opportunity to be as thorough as possible.

4. Keep the review objective

Managers should base their comments and feedback on observations and data and not opinions.

5. Use a coaching mindset

It is important to approach the review as an opportunity to coach the employee. Offer feedback on strengths and key areas for improvement. Developing a mentor-mentee relationship with your employee can help make the performance review process more effective.

6. Use language carefully

Language matters. Managers should make sure their language is specific and measurement-oriented. They should use powerful action words. They should focus on the individual and avoid comparisons to others.

7. Include the positive

Performance reviews are an opportunity to reinforce great performance. Managers should take the time to capture what has gone well and how the employee has performed positively.

8. Share constructive criticism

At the same time, it's important for managers to share constructive criticism in the review.

Constructive criticism can provide employees with clarity on how they can improve in order to be even more effective.

9. Avoid biases

When writing reviews, managers should take extra care to avoid key biases.

Avoid:

The halo effect (seeing everything an employee does as positive)

The horn effect (seeing everything an employee does as negative)

The just-like-me bias (rating someone positively because you perceive them as similar to the manager)

10. Prepare for the discussion

Beyond writing a review, managers should take time to prepare for the discussion.

Consider:

How will you share feedback?

What questions will you ask the employee?

How will you structure the discussion?

The performance review discussion is critical for clarifying expectations and shaping future performance.

What is the future of performance management?

Performance reviews have a long history within organizations and will continue to evolve in the future.

There are four main trends to watch as performance reviews evolve:

1. Use of performance management software

2. Frequency

3. Future focus

4. Whether to do performance reviews at all

Let's take a closer look at each trend.

1. Performance management software

Most organizations no longer rely on paper versions of reviews. Performance management software systems are now available to streamline the review process.

Performance review software helps to:

Guide the process

Support the manager in documenting helpful feedback

Encourage the manager and employee to follow all the steps in the process

These tools encourage collaboration and transparency in the performance review process. In the future, more organizations will leverage this type of software for their performance reviews.

2. Frequency

Many organizations are rethinking the frequency with which reviews take place.

We have long known that frequent feedback is more effective and helps to guide employee performance. Ongoing conversations help ensure that employees understand what to do to improve before too much time has passed.

The traditional model of annual feedback is too infrequent. Many organizations have moved to weekly, monthly, or quarterly reviews.

But companies will need to balance employees' need for feedback with ensuring they are not creating too much work for managers.

3. Future focus

Many companies are considering making their performance review process more future-focused. This is in contrast to traditional reviews that focus on past performance.

In a survey at Deloitte, more than 58% of the executives said their performance review system didn't deliver the intended results because it focused too much on past behavior.

They found their traditional performance review process was no longer meeting their needs. Setting goals and receiving feedback annually didn't give them the agility to meet emerging challenges.

So, Deloitte shifted the focus of their performance reviews to the future rather than the past.

They look at how the employee should plan to work and behaviors they expect to see. Many organizations are following this example by redesigning their performance review processes.

4. Whether or not to even have employee performance reviews

Employees like the predictability of knowing when they'll receive feedback. However, performance reviews have come under fire in the last decade for many of the reasons covered here.

That's why some organizations have experimented with eliminating formal performance reviews altogether. They replace them with more informal conversations about performance.

For some organizational cultures, the elimination of performance reviews has gone well.

Managers have stepped up to offer more continual feedback, and they have foregone the formalities of the process.

Other companies have eliminated reviews but found that employees stopped receiving feedback.

Managers need to continue to find ways to help employees understand what is expected of them. This requires ensuring they have feedback on how they're performing.

This may take place as a traditional performance review process or as something completely different.

Time will tell whether more organizations will eliminate performance reviews or simply find ways to make them more relevant.

Performance reviews at work are evolving

The goal is for the performance review to be accurate, timely, and future-focused.

Rather than spending too much time on the past, effective performance reviews focus on the employee's future actions.

The best managers set expectations, review priorities, give feedback, and provide guidance along the way. Whatever performance review process a company follows, managers need to be empowered and trained properly.

The future of performance management promotes speed, agility, and constant learning. This is good for the employee and good for the company.

If you need support adapting your performance review process, discover how BetterUp's expert coaches can help you.

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10 Performance Review Tips to Drastically Move the Needle

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Performance reviews are evolving. Discover the future of performance management and reviews plus ten tips for writing better employee performance reviews.

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What are the most effective measures of organizational performance?

An organization's performance depends on many factors, such as:

The efficiency of business processes

Employee productivity

How effectively organizations meet their objectives

The alignment among business functions, as well as those functions' alignment with the organization's strategy

Organizational culture and climate

All of these contribute to how efficiently an organization operates and how well it performs in the marketplace.

But what are some effective measurements, metrics, and KPIs that can be used to measure progress, performance, and effectiveness?

Before choosing those metrics, the first step is to define a model and a concept of organizational effectiveness.

Modeling Organizational Effectiveness

A model of organizational effectiveness acts as a baseline for measuring performance.
Many models of organizational effectiveness revolve around the concepts covered above, such as:

How efficiently and effectively an organization achieves its stated aims

How well an organization can obtain and utilize resources

The efficiency of business processes and operations

A cohesive set of business systems, such as communication, leadership, workforce productivity, and delivery

There are quite a number of perspectives on how to best define organizational effectiveness.

Therefore, before measuring organizational performance, it is a good idea to clearly define what "organizational effectiveness" means to your organization.

With that definition as a guide, it will be easier to set performance goals, track progress, and make improvements.

Some of the Top Measures of Organizational Performance

Building off of some of the concepts of organizational effectiveness already covered, let's look at a few ways to measure organizational performance.

Achievement of Organizational Objectives

One of the most common ways to evaluate organizational effectiveness and performance is how well a business achieves its stated goals.
This approach would evaluate factors such as:
Some models of organizational effectiveness, as mentioned, revolve exclusively around goal-setting and achievement.

Others include other metrics such as those covered below.

Business Process Efficiency

The efficiency of individual business processes can also be used to gauge organizational performance.
Business processes, units, and functions can be measured by, for instance:

Speed

Cost-efficiency

Results and productivity

Agility and adaptability

Measuring every business area or function can help organizations spot inefficiencies as well as growth opportunities.

Results of Business Investments and Projects

Another measure of organizational performance is how effectively and efficiently an organization can execute business projects.
High-level metrics for evaluating individual projects can include:

Financial returns

Project results

Project efficiency

Projected costs versus actual costs, measured against the derived benefits

As with the other performance indicators covered here, it is important to keep these measurements in the context of a model of organizational effectiveness.

Though some measurements are more valuable than others, no single metric should be used as a catch-all to determine performance.

Marketplace Performance

How well a business performs in the marketplace can also demonstrate is effectiveness and performance.
Areas to measure can include:
Among other things.

Organizational alignment can refer to the synchronization between:

The more aligned that workers and business units are with the organization, the better an organization will perform.

The workplace and the workforce experiences play major roles in how well an organization performs.

Skilled, motivated employees are more engaged, more productive, and more profitable.

To determine how the employee experience affect organizational performance, a business should focus on measurements such as:

These can offer insight into strengths, weaknesses, and opportunities for improvement.

How to Improve Organizational Performance: Model, Measure, Change

As mentioned earlier, no single measurement should be used to gauge organizational performance.

Instead, a set of metrics should be used against the backdrop of a model of organizational effectiveness.

That model, combined with appropriate measurements, can offer deep, actionable insights into organizational performance.

This information can then be used to manage change and make performance improvements.

Change management frameworks, for instance, provide a straightforward approach to assessing needs, designing organizational change solutions, and managing those changes.
A change management roadmap could include steps such as these:

Develop or follow a model of organizational effectiveness

Assign appropriate measures of organizational performance based on that model

Measure and analyze

Identify areas that need improvement

Develop a roadmap for organizational change

Follow a change management framework to initiate, execute, and manage change

Measure the results

Because each business is different, each model of organizational effectiveness will be unique.

Business leaders, managers, and other professionals should work together to define organizational effectiveness and establish the right measurements for that definition.

If business professionals commit to the process seriously, then they can gain deep insights into their business.

And, more importantly, they can generate substantial improvements to their organization's performance.

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What Are the Best Measures of Organizational Performance?

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What are the most effective measures of organizational performance? An organization's performance depends on many factors, such as: The efficiency of business processes Employee productivity How effectively organizations meet their objectives The alignment among business functions, as well as those functions' alignment with the organization's strategy Organizational culture and climate All of these contribute to how efficiently an organization operates and how well it performs in the marketplace.

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Effective executives do not make a great many decisions. They concentrate on what is important. They try to make the few important decisions on the highest level of conceptual understanding. They try to find the constants in a situation, to think through what is strategic and generic rather than to "solve problems." They are, therefore, not overly impressed by speed in decision making; rather, they consider virtuosity in manipulating a great many variables a symptom of sloppy thinking. They want to know what the decision is all about and what the underlying realities are which it has to satisfy. They want impact rather than technique. And they want to be sound rather than clever.

A version of this article appeared in the January 1967 issue of Harvard Business Review.

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Effective executives do not make a great many decisions. They concentrate on what is important. They try to make the few important decisions on the highest level of conceptual understanding. They try to find the constants in a situation, to think through what is strategic and generic rather than to "solve problems." They are, therefore, [...]

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Title: What is Organizational Structure? - YouTube

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The would-be analyst of leadership usually studies popularity, power, showmanship, or wisdom in long-range planning. But none of these qualities is the essence of leadership. Leadership is the accomplishment of a goal through the direction of human assistants-a human and social achievement that stems from the leader's understanding of his or her fellow workers and the relationship of their individual goals to the group's aim.

To be successful, leaders must learn two basic lessons: People are complex, and people are different. Human beings respond not only to the traditional carrot and stick but also to ambition, patriotism, love of the good and the beautiful, boredom, self-doubt, and many other desires and emotions. One person may find satisfaction in solving intellectual problems but may never be given the opportunity to explore how that satisfaction can be applied to business. Another may need a friendly, admiring relationship and may be constantly frustrated by the failure of his superior to recognize and take advantage of that need.

In this article, first published in HBR's September-October 1961 issue, W.C.H. Prentice argues that by responding to such individual patterns, the leader will be able to create genuinely intrinsic interest in the work. Ideally, Prentice says, managerial dominions should be small enough that every supervisor can know those who report to him or her as human beings.

Prentice calls for democratic leadership that, without creating anarchy, gives employees opportunities to learn and grow. This concept, along with his rejection of the notion that leadership is the exercise of power or the possession of extraordinary analytical skill, foreshadows the work of more recent authors such as Abraham Zaleznik and Daniel Goleman, who have fundamentally changed the way we look at leadership.

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The would-be analyst of leadership usually studies popularity, power, showmanship, or wisdom in long-range planning. But none of these qualities is the essence of leadership. Leadership is the accomplishment of a goal through the direction of human assistants-a human and social achievement that stems from the leader's understanding of his or her fellow workers and the relationship of their individual goals to the group's aim.

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How to Write a Business Management Organization Plan for Your Business

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Consider if you will the following quotations, each from executives at Philips, the global technology company-one in the late 1970s and one quite recently:

1. "We typically lose out when a market commoditizes and we no longer differentiate, further aggravated by us being too slow or expensive."

2. "The matrix is too slow-we are in a very turbulent market with great potential, and we have far too many low-cost competitors. We need very short communication lines, quick decisions, alertness-we've got to be able to adapt fast."

The first statement, from current chairman and CEO Frans van Houten, is the new one; it appeared in a 2013 working paper from the MIT Center for Information Systems Research. The second, older statement, from a Philips product manager, initially appeared in a 1978 Management Today article and was quoted by Tom Peters in his first McKinsey Quarterly piece, " Beyond the matrix organization."

The similarity of these statements, from thoughtful leaders at a well-run company, speaks to the difficulty of the global corporation's perennial challenge: how to capture scale across borders while differentiating products and services to suit the needs of local customers-all without letting complexity get in the way of speed and agility.

Aspects of this persistent challenge have played out over the years in recurring fashion in major corporations, in the marketplace for management ideas, and in the Quarterly. Surveying the range of heroic efforts by great practitioners and thinkers to solve these challenges once and for all, you come away convinced that there is no silver bullet to the global company's challenge. Indeed, faith in one-dimensional solutions-redrawing organizational boundaries, constructing matrices, winning the war for local talent, reengineering business processes, moving the global headquarters-is arguably dangerous. The fact is that solutions need to combine changes across organizational structures, people, and processes.

We recognize that the absence of a simple solution may not be entirely satisfying and defies the impulse to fix everything at once through a single "big bang" change to one of these elements. But we think that's more realistic, too. We also believe that, within this mix, a focus on processes is taking on greater importance-not in place of people and structure but as a means of influencing them. Thanks to digital technologies, the growing connectivity between knowledge workers, and the more collaborative organizational behavior this connectivity supports, ours is a time of significant process innovation both inside and across corporate boundaries. These process innovations may provide new ways forward in dealing with the persistent difficulties of managing complex global organizations and meeting the urgent need for greater efficiency in the face of rising global competition.

The evolving organizational challenge: A brief tour

In 1959, five years before the birth of McKinsey Quarterly, an ambitiously titled article appeared in the Harvard Business Review: "Creating a world enterprise." Written by McKinsey's Gilbert H. Clee and Alfred di Scipio, it made the radical proposal (radical, at least, for its day) that expansionist American corporations, instead of treating international activities as subdivisions of their domestic businesses, should turn the US organization into a subdivision of the wider global one.

The Clee and di Scipio article, calling as it did for "major revisions in business thinking," was pertinent as well as provocative. In the late 1950s, after all-with the reconstruction of Europe well under way after World War II and new industrial forces stirring in Asia-growing numbers of North American executives were eyeing overseas pastures for the first time. Faced with economic pressures and foreign competition at home, and lured by bright prospects abroad, a majority of representative executives questioned in a McKinsey survey of the time (and cited by Clee and di Scipio) reported that these companies were actively stepping up the ratio of their foreign-to-domestic investments.

Opening such profit opportunities beyond their borders, though, created new planning, resource-allocation, and management-control issues, as well as unprecedented organizational strains. Old structures and relationships that had worked smoothly for an export-oriented domestic company were no longer appropriate as global engagement increased.

In many ways, that organizational response is the story of multinational enterprises over the past 50 and more years. In a 1965 article featured in the Quarterly 's third-ever issue, Clee and McKinsey consultant Wilbur Sachtjen set out some evolving organizational patterns for global companies. There were several such models. The traditional international-division structure and its variants (Exhibit 1) all involved a shift in responsibility for policy and worldwide strategic planning to the corporate center. Then the international division was replaced by subsidiaries in assigned geographic areas, run by locally based senior line managers bearing full operating responsibility, notably in production and sales. Next, product-based and business-based structures replaced the international division with units run by senior line managers bearing worldwide responsibility for the P&L of their divisions.

Some of these approaches, particularly the last one, contained the seeds of the matrix organization, which gained favor in the 1970s as a solution for large organizations struggling to coordinate decision making and activities that cut across functional and business-unit lines. The theory was strong, but when Tom Peters appraised the scene, in the late 1970s, "the matrix 'solution' had brought with it problems at least as knotty as those it was supposed to cure."

The quest for an alternative led Peters, Julien Phillips, and Bob Waterman to assert that "Structure is not organization" (as another of their Quarterly articles in that period was titled) and McKinsey to develop the 7-S framework of organizational effectiveness and change. Interestingly, four of the seven (skills, staff, style, and shared values) pertain to people, one (systems) to processes, and one to structure. The seventh, strategy, spoke to the important and still-relevant idea, first articulated by Alfred Chandler in his 1962 book, Strategy and Structure, that the structure of an organization can be designed only after it has formed its strategy. The underlying focus of the 7-S framework on structure, people, and processes still represents a useful summary of the challenges in global organizational design today. In our experience, corporate leaders devote most attention to the first two and probably not enough to the third-even though processes can greatly influence both structure and talent.

Processes admittedly came to the fore during the business-process reengineering movement of the 1990s, which involved "rethinking and, if necessary, fundamentally reengineering how a company delivers value to its customers." Such a rethinking, according to a 1993 Quarterly article, "inevitably runs up against the company's entrenched business system and organizational structure," requiring process redesign to "help managers break through these barriers." For large, complex organizations, taking a clean-sheet approach to processes rather than automating existing ones as information technology advanced was a sensible step. But it was far from sufficient to ensure a smoothly humming, healthy organization.

Continued advances in technology and connectivity have allowed companies to push well past process reengineering to new forms of engagement within and across organizational boundaries. Social networks are an obvious element of this development. But even before the full flowering of Facebook (and its equivalents behind corporate firewalls), McKinsey's Lowell Bryan, in a 2007 Quarterly article, asserted that "in the digital age, there is no better use of a CEO's time and energy than making organizations work better." In his view, that involved "remaking the organization to mobilize the mind power of the workforce and tap into its underutilized talents, knowledge, relationships, and skills." Companies have begun realizing this vision by crowdsourcing ideas and holding "values jams," as IBM famously did. They have even been throwing open the strategy process "to enhance the quality of dialogue, improve decision making, and boost organizational alignment," as Arne Gast and Michele Zanini wrote in a 2012 Quarterly article.

As the world turns

We survey this scene with respect both for the continually shifting nature of organizational opportunities and challenges and for the relentless efforts of leading companies and management minds to respond to them. Large global companies are often beset by complex structures and country-specific processes that proliferated over years of geographic expansion, not to mention cultural differences that can undermine smooth operations. By necessity, these companies have been at the forefront of formulating those responses, even if, at times, only by assimilating the innovations of smaller, more swiftly moving companies. Despite these efforts, high-performing global companies consistently score lower than more locally focused ones on several critical dimensions of organizational health, according to a decade-long study-of hundreds of businesses-that we highlighted in a 2011 Quarterly article. These critical dimensions include direction setting, coordination and control, innovation, and external orientation.

Our research and experience suggest that the existence and persistence of a "globalization penalty" isn't just a function of today's context, typified by rapid growth in emerging markets and technological change. It also reflects the continuation of a journey that global organizations have been on for many years. Continually remaking the organization to embrace change is a messy endeavor-and one that's likely, at any given time, to be accompanied by growing pains.

If that's true, there's no substitute for fairly regular soul searching to adapt structures, people, and processes to create the most effective organizational designs (Exhibit 2). Experimentation continues along each of these dimensions. L'Oréal has emphasized its people credentials by establishing itself as the top employer for female sales and marketing talent in South Korea through a conscious emphasis on empowerment, communication style, and manageable working hours. Philips has recently identified three core processes-idea to market, market to order, and order to cash-it uses to create standard models for the products, services, software, and systems that flow through most of its global operations. Although standardization has been imposed on these core processes, exceptions are permitted, and the idea is to drive greater speed and flexibility, more localization, and higher efficiency simultaneously.

Experiments like Philips's point toward more process-oriented structures, which are likely to become increasingly useful given the power of technology and connectivity to transcend traditional boundaries both within and across companies. Process improvements today can go beyond the cost-oriented "denominator" of corporate productivity to embrace the "numerator" of learning-based performance-enhancement networks and spaces where innovation and growth occur.

The possibilities are particularly alluring for large global organizations, where these process-oriented structures can help harness the specialized capabilities of a distributed network of business partners. In the apparel industry, for instance, Li & Fung has organized and coordinated a fully fledged supply network of more than 10,000 business partners. The flexible scalability of this network, which uses processes to address the structural aspects of organizational design, speaks to the global corporation's long-standing difficulty in coordinating complex and far-flung production operations.

These distributed process structures are proving powerful inside companies, as well-for instance, by bringing diverse participants into the strategy-creation process. For example, in 2009, 3M reinvigorated its Markets of the Future process, which provides critical input to its strategic planning. The company's crowdsourcing of the strategy process to more than 1,200 employees in 40 countries helped energize creative talent-the people side of the organizational-design conundrum-while identifying nine new future markets with an aggregate revenue potential in the tens of billions of dollars.

Similarly, learning environments where teams of participants interact with other teams around sets of processes designed to enhance performance not only help solve difficult operational challenges but also enable employees to continue the learning and development that create meaning in their professional lives. Consider, for example, how the software company SAP drew together participants from a wide range of otherwise unrelated companies, in 2003, to help speed the adoption of its new NetWeaver technology architecture. The processes in this network structure supported peer-to-peer collaboration and learning among customers, systems integrators, and independent service vendors, while helping SAP to achieve its own strategic objectives. These newfangled process-oriented solutions to the structure and people part of the perennial organizational challenges contrast-and yet coexist-nicely with the more traditionally standardized routines, which remain suitable for wringing scale-based cost efficiencies from less varying (and often industrial) processes. The trick is to recognize which process-based structure is best for which objective and then to proceed accordingly.

We're starting to see glimmers of global organizational redesign reflecting these new realities. One international engineering company, for example, has restructured to put its commercial-project process (including decisions about whether to bid on a contract and then the preparation of the offer) at the heart of the organizational structure. This model enables more effective team-based problem solving that transcends organizational silos and geographic boundaries, in part through the use of collaborative technologies.

It's still too early to paint a definitive picture of what the global organization of the future will look like as efforts like these become more commonplace. What we're confident about is that "process-centric" thinking will be a more prominent feature of organization design than it has been in the past, even if the peculiarities of culture suggest that each process-based structure is likely to be a custom fit. Leaders should bear in mind these principles as they pursue their own solutions:

Tomorrow's answer will be different from today's. As markets, competitors, and strategies evolve, so will the structural, people, and process elements of a coherent design system.

The specification of globally consistent roles and processes should be kept to a minimum. The most effective companies allow business units to tailor their organizations to local conditions so as to better achieve their wider commercial goals.

Technology has made location less important than it used to be-but it still matters. While videoconferencing and social media keep far-flung executives connected, co-location brings additional benefits. Companies should always seek ways to bring people physically together.

If the last 50 years are any guide, the most important organizational structure, process, and people issues will continue to ebb and flow as the environment evolves and organizations respond. But new opportunities for organizational innovation will present themselves, and those companies able to recognize and willing to embrace them will gain huge competitive advantage by doing so.

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The past and future of global organizations

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Consider if you will the following quotations, each from executives at Philips, the global technology company-one in the late 1970s and one quite recently: "We typically lose out when a market commoditizes and we no longer differentiate, further aggravated by us being too slow or expensive."

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Top-level managers creating business plan

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Middle managers communicating goals to first line managers.

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All levels of management working together is necessary to achieve the goals of an organization.

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Why Middle Management is the Hardest Job | Simon Sinek

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How to get serious about diversity and inclusion in the workplace | Janet Stovall | TED