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Impact of External Factors on Your Service Model, Org Design and Performance

External environmental events can have a large impact on your organization’s performance. External factors of influence can include policy changes, funding changes, broader economic or social/political trends.

For community organizations, I argue that for Community sector organizations in particular, external factors can have a huge influence on organizational design, service delivery model design, and even in the end job design.

One of the main elements in achieving peak performance is to ensure there is alignment between your external inputs and factors, with your vision/strategy, and ultimately your organizational model.

An easy example is the massive impact that Covid 19 has had on Community Organizations: in many cases they are experiencing an increase in client needs (and volumes), while seeing a decrease or a flatlining in services. So, they are left with delivering more services to more clients with less funding (or at least greater debt).

This isn’t just anecdotal too – this study noted there was a correlation between political, technological and financial external influences and the performance of small organizations. But the study also found that external environment factors outside the control of a company can influence the choice of direction and action, organizational structure and internal processes of the company.

How Can you Limit or Control These Influences?

Unfortunately, there are no easy ways to protect your organization from undue external influences. But some other studies do point to interesting considerations.

Consider this study of child welfare organizations in the United States that found that strong, knowledgeable staff can help inoculate against negative pressure. The organizations studied did not change their organizational structure or their service delivery model to bow to the pressure of the day, due to experienced knowledgeable staff (who apparently knew when to pay attention, and what to do). Several other studies underscore this factor – that a strong management team and solid strategy can offset external factors (even from your funder).

A decentralized or networked organizational model has been shown to be more effective at dealing with external pressures. The staff in these organizations were empowered to be creative in responding to challenges caused by external forces.

Finally, consider incorporating alignment of external factors into your strategy development or organizational design activities. Using a framework that includes external factors is a great way to ensure you incorporate those factors into service delivery design.

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