Employees Often View Their Companies as "Passive-Aggressive" or "Overmanaged"

NEW YORK, December 15, 2003 — Half of all employees view their companies as either "passive-aggressive" or "overmanaged," according to a new online evaluation tool created by Booz Allen Hamilton. Respondents complete a five-minute Web evaluation and then receive an immediate diagnosis of their company's type in one of seven categories, each with distinct "organizational DNA" that affects employee behavior and corporate performance.

Over 3,100 businesspeople have already completed Booz Allen's online evaluation, which is available at www.orgdna.com. Almost half (48%) of the responses have come from senior or middle management, and the industries best represented are professional services (21%) and software (11%). Companies of a broad range of sizes are represented, with 38% of respondents working for companies that have annual revenues of $500 million or more.

The diagnostic tool found "passive-aggressive" to be the most common corporate type, at 32%. Such an organization seems congenial, even conflict-free, yet still resists meaningful change. "This is the 'everyone agrees but nothing changes' organization," said Booz Allen Senior Vice President, Gary Neilson. "Building a consensus to make major changes is no problem; it's implementing them that proves difficult. Line employees tend to ignore mandates from headquarters, assuming 'this too shall pass.' In such an apathetic organization, instituting change is like trying to nail Jell-O to the wall."

The next most common corporate type is "overmanaged" at 18%, with bureaucracy and politics hindering action. The "outgrown" organization, which does not expand decision-making authority to match its size, was the least common type, at only 2%.

Other findings from the evaluation include:

• Of employees who viewed their companies as Overmanaged, the highest percentages work in IT (25%), manufacturing (24%) and sales (21%).



• Of employees who viewed their companies as Resilient, most work in finance (16%). Employees working in R&D/PD/Engineering are most likely to report that their organizations are Passive-Aggressive (39%).



• Nearly half (48%) of insurance industry employees consider their companies Passive-Aggressive, compared to only 18% of capital goods employees.



• No employees in the insurance, consumer durables or real estate industries believe their organizations are Outgrown.



• Small companies ($0-$500M) are more likely to be seen as Resilient (16%) than mid-sized ($1B-$10B) companies (10%).



• Small companies are also least likely to be viewed as Overmanaged organizations (17%).



• Senior managers have a different view of their companies than other employees:



• 22% of senior managers report their organizations are Resilient, compared with only 10-12% of other levels of employees.



• Fewer senior managers tend to see their organizations as Overmanaged (13%), compared with 19-22% of other levels of employees.



• Senior managers are also the least likely to view their companies as Passive-Aggressive, (26%) compared with 34-36% of remaining levels of employees.

The evaluation tool was designed as a first step toward improving organizational performance, to help companies gain insight into what is not working in their organizations, how it got that way and what to do about it. "The ability to execute is embedded in the management processes, relationships, measurements, incentives and beliefs that constitute an organization's DNA," said Neilson. "This tool allows companies to identify and treat the root causes of dysfunction in a company, not just the symptoms."

The Organizational DNA Assessment diagnoses distinct corporate personalities by examining a company's structure, decision rights, motivators and information. Companies are then sorted into one of seven distinct organizational DNA profiles:

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



• The Outgrown Organization: Too large and complex to be effectively controlled by a small team, but has yet to "democratize" decision-making authority.



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



• The "Overmanaged" Organization: Multiple layers of management create "analysis paralysis" in a frequently bureaucratic and highly political environment.



• The Military Organization: Often driven by a small, involved senior team, it succeeds primarily through the will and foresight of its leaders.



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



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