Use 6.  Comparing organizations

There is sometimes a need to compare organizations in completely different areas, such as a retail group with a hospital.  The usual financial analysis is not appropriate because each organization uses completely different accounting principals, financial reports and measures for success. The model can evaluate how well the management of each organization is in control – what we call its ‘management grip rating’- and this can form the basis for a useful comparison. Each organization, although in completely different fields can be asked identical questions, e.g. do you know which skills your people actually have, or, do you have a strategy for dealing with the major threats to your operation?  Answers given to questions formulated with the help of the model will be different, but what is being discovered is whether there is an answer and how well it is thought out - in other words, do the management know what is going on in their organization and how well are they exercising control over it?

Quantitative comparisons: The scoring system explained before in the section on 'Evaluating management grip', can be used to provide a quantitative comparison.  The higher the score the better the management control.  However, the organization is not necessarily more successful (this is measured by the performance aspect and there may be many reasons why the organization is not successful - market conditions, catchment area or government action). A single large organization with separate divisions can employ this technique to evaluate the calibre of its management in each of its divisions.

Application: We leave it to the reader to apply the concept of comparing different organizations, but offer a few examples.
A government agency, charity or lottery deciding who to allocate funds to among a number of claimants including a museum, a theatre and a sports club would find  traditional financial analysis of  little value.  The model will not necessarily show the most deserving cause but it will show which organization is the most effectively managed and therefore which is likely to use the money to greater advantage.
Large organizations comparing the management competence of subsidiaries or departments would find traditional methods inappropriate, for example, comparing a retail subsidiary with a manufacturing subsidiary or the sales department with the research department.  Our model can be applied to all, to highlight the most effective management team.
A subset of the model can also be used to compare a single aspect of two different organizations – the culture of a government department with that of a large retail group. >>>