nadler-tushman-congruence-model

Nadler-Tushman Congruence Model In A Nutshell

The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University.  The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.

Understanding the Nadler-Tushman Congruence Model

For example, congruence can occur between shareholders and management through the implementation of attractive salaries and incentives.

Appropriately compensated, management becomes more motivated in growing the company and the resultant share price.

However, congruence is not always present. The presence or absence of congruence explains why some organizations thrive while others fail to turn a profit

The four elements of the Nadler-Tushman Congruence Model

To help determine the causes of underperformance, management must first identify key performance drivers.

The Nadler-Tushman Congruence Model assigns key drivers to four categories:

Task

The work carried about by employees. What are the tasks or processes being carried out regularly? What steps are being taken to maximize task efficiency and efficacy? Is the work meaningful or fulfilling and if not, what are the challenges in making it so? 

People

Do the employees possess the requisite skills or knowledge? Does the business tend to hire staff with a certain personality type? Are they suitably compensated? These questions must be asked of every employee, from upper management to process workers.

Organizational structure

organizational-structure
An organizational structure allows companies to shape their business model according to several criteria (like products, segments, geography and so on) that would enable information to flow through the organizational layers for better decision-making, cultural development, and goals alignment across employees, managers, and executives. 

Encompassing the standardization of policies, processes, procedures, and systems. How many levels of management are there between executives and employees? To what extent are decision-making capabilities assigned? Here, it is also helpful to consider the physical structure – how many business units are there? Are divisions product, region, or function-based? Are they centrally located or do they occupy several locations? 

Culture

One of the hardest categories to define yet also the category most critical to success. Culture refers to tangible aspects such as values, vision, and leadership style.

But it also includes intangible aspects of employee-management relations.

In other words, how much trust do the employees have in management? What level of engagement or support is offered to decision-makers? Are the ethics of management expectations sound?

Analyzing the interaction of the four categories

Next, arrange the categories into six pairs and analyze the interactions that occur between each:

  1. Work and people. Are employees skilled enough to carry out the work? Is the work aligned with employee needs or expectations? How could this relationship be improved?
  2. Work and structure. Does organizational structure support the nature of the work? How could policies or procedures affect the quality of work?
  3. Structure and people. Is structure creating an ideal work environment where employees are engaged and fulfilled? If not, why not?
  4. People and culture. How do people influence culture, and vice versa? Is there a general feeling of contentment or unease? Are employee beliefs and values aligned with those of the organization?
  5. Culture and work. Does culture support or detract from work performance? Can improved culture result in more efficient work?
  6. Structure and culture. Do structure and culture work harmoniously? For example, an innovative culture that favors speed and collaboration may clash with a hierarchical structure where cumbersome decision making is confined to upper management.

Building and maintaining congruence

The basic premise of the Nadler-Tushman Congruence Model is that a business can only achieve high performance when the four categories are congruent.

In other words, categories only reach congruence if decision-makers reach their desired output.

At this stage of the process, caution must be exercised. A single change that is made to one category pair may negatively impact one or more other pairs. As a result, each incongruence should be analyzed in detail to identify gaps and adjust where necessary.

It is important to note that Nadler and Tushman’s model does not provide a means of solving congruency problems. Decision-makers will need to choose a third-party diagnostic tool specific to the category pair where the incongruence exists.

Nadler-Tushman congruence model example

Let’s now take the fast-food company McDonald’s and use the company as a hypothetical example of the Nadler-Tushman model at work.

mcdonalds-business-model
McDonald’s is a heavy-franchised business model. In 2021, over 56% of the total revenues came from franchised restaurants. The long-term goal of the company is to transition toward 95% of franchised restaurants (in 2020 franchised restaurants were 93% of the total). The company generated over $23 billion in revenues in 2021, of which $9.78 billion from owned restaurants and $13 billion from franchised restaurants. 

We will skip ahead and look at the interaction of the four categories in six pairs outlined in a previous section:

1 – Work and people

While some of the tasks in its fast-food restaurants could be considered menial, McDonald’s is well known for its standardized processes and procedures that streamline tasks across locations around the world.

Frontline staff are trained via a combination of interactive and computer-based training, with shift leaders educated at a training headquarters otherwise known as Hamburger University.

The company also provides extensive training to franchisees, helping them build healthy relationships, support communities, resolve conflict, and best represent the McDonald’s brand.

Much of the work is aligned with employee needs and expectations, with many employees using their skills and experience at McDonald’s to further careers elsewhere.

In fact, many employers see the McDonald’s training program as a desirable skill on a resume.

2 – Work and structure

McDonald’s has a divisional organizational structure where each division handles specific strategic objectives or operational areas.

There is also a global hierarchy where the CEO passes directives to all areas of the business via middle managers, restaurant managers, franchise owners, and frontline staff. 

This structure supports the consistent and extremely standardized nature of the work that is carried out in each McDonald’s restaurant.

Indeed, uniform policies and procedures ensure that the quality of a Big Mac in Los Angeles is the same as one served in Sydney.

3 – Structure and people

As hinted at earlier, the skills a McDonald’s employee learns in their role are useful in many other contexts.

The hierarchical managerial structure of the company supports top-down employee training and direction which is ideal since many job applicants are young, inexperienced, or applying for their first job.

While the structure of McDonald’s supports this way of learning, it should be noted that there is some scope for employee autonomy.

In 2019, the company launched the Where You Want To Be initiative to provide the education, tuition assistance, and career tools necessary for employees to advance their careers – either at McDonald’s or elsewhere.

4 – People and culture

McDonald’s is committed to empowering its employees to ensure they feel welcomed, valued, and integral to its community.

It also strives to foster a safe, inclusive, and respectful workplace with careers available to all.

According to Comparably, 68% of employees left a favorable review of McDonald’s as a place to work. People and culture are also aligned with the company’s mission to make delicious, feel-good moments for everyone.

The cultural diversity of employees in a McDonald’s restaurant is reflected in the company’s ability to develop region-specific menu items that respect the customs, cultures, and religions of countries around the world.

5 – Culture and work

With most employees having a positive experience as a McDonald’s employee, it is likely the organizational culture is one that supports on-the-job performance

Standardized procedures and processes support company values that put customers first and earn their trust, with many based on a set of core values McDonald’s uses to define how its restaurants are run.

6 – Structure and culture

The organizational structure of McDonald’s supports the company’s cultural values that pertain to diversity, consistency, fairness, trustworthiness, and equality.

The structure also dictates a set of procedures that help the company deliver on the customer-focused aspect of its culture, which is based on value, cleanliness, quality, and safety.

These procedures also serve as pseudo-laws that must be followed by employees and franchise owners alike.

While there is a clear preference for top-down managerial control under a global hierarchy, employees – regardless of race, religion, expertise, or otherwise – are afforded the freedom to learn new skills and advance their careers with McDonald’s or utilize them elsewhere.

The esteem with which McDonald’s training programs are held enables the company to create a relatively favorable culture despite its top-down approach and preference for control.

Key takeaways

  • The Nadler-Tushman Congruence Model is a performance evaluation tool based on the degree of congruence between four key categories: task, people, structure, and culture.
  • Nadler and Tushman argue that high performance in a business is contingent on all four categories being congruent. All inputs must contribute to a desired final output.
  • The Nadler-Tushman Congruence Model identifies incongruences but provides no support in addressing them. Decision-makers must use specific diagnostic tools to complete the whole process.

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