Confusing organisation with enterprise

May 16, 2017 in Organisation

Vernier_CaliperDo you work for an organisation or an enterprise? Chances are that you work for both. Many people use the two words interchangeably because they are almost synonymous with each other. Who could imagine undertaking a sizeable enterprise without some sort of organisation?

And yet organisations are not the only way to undertake an enterprise. They are simply the most efficient and therefore ubiquitous way of doing so. So much so, that in many people's minds the two words have come to mean the same thing.

But there is a hidden danger in the extent to which we use the two word interchangeably, and it can be seen in the metrics that we typically use to measure our performance. When we talk about organisational metrics, we typically mean enterprise metrics, but the tendency to refer to them as the same thing hides from us the fact that we really don't have any organisation metrics to speak of. Most of our metrics concern financials, inputs and outputs. They assess our efficiency as an enterprise in the same way that a one-person set-up might. But they do very little to assess the quality of the structure and relationships that enable the organisation to effect that enterprise.

Is that a problem? Well yes. If we accept that an organisation is a more effective and efficient way of effecting an enterprise than a non-organisation would be, then it is reasonable to assume that the degree of organisation is a factor in that success, and therefore a better 'organisation' would effect the enterprise more successfully than a poorer 'organisation' would.

Of course the performance of an enterprise is also determined by a number of other factors: geography; IP; legislation; market factors, in addition to organisation, and most enterprise metrics are influenced by all of these things. The problem therefore is that it is not possible to tell from enterprise metrics whether the organisation is making best use of the geography, IP, legislation, and market factors or not. What we think of as a 'good' organisation may simply be an enterprise which has been blessed by other factors - many of which we have little control over.

We do however have control over how we organise, but if we are to make best use of that control, we need a better set of metrics to help guide us in that.