In Sickness and in Health

We often hear and talk about the ‘healthy organization’ and whilst corporate health is talked about quite a lot, a true understanding of the importance of monitoring the underlying health of the company seems to be missing from many leadership team’s agenda.

The concept is simple in theory – it is a discipline based on the simple metaphor of human health, which improves when cared for and deteriorates when neglected. So, given the familiarity with the concept of human health, why do so many leaders struggle to pay any attention to the nurturing of health in the context of an organization?

Perhaps the biggest issue is the constant trap of the here and now – the fires that have to be put out, the shareholders that need to be satiated and the administrative workings of the corporate machine. Furthermore these here and now issues are self-validating and the rewards are almost always immediate.  Organizational health is a longer burn process and the rewards may not be seen in the near term.

Second is the issue that ‘organizational health’ as a concept seems a bit, well ‘fluffy’ – and that chasing fluffy stuff at the expense of short-term performance is potentially career limiting…..

Third is the strategy of the overweight smoker – “I’ll change my habits soon, before it does me any long term damage” but of course we all know that rather than health problems arising at some unknown future point, the issues are taking hold now, in the present.  The damage is underway.

So what does a truly healthy company look like?  It is important to understand this so that a) we can compare and b) we will know if and when we have been successful.  In our view a healthy organization consistently demonstrates the following:

Excellence in Execution – there is nothing that matters more than execution, provided of course that you are executing the right thing.  Companies that can execute well make good decisions, get the basics right, focus on the right things and make good trade-offs.  They allocate resources effectively and always work on the fundamentals – revenue, costs and risk.

Alignment – Cohesiveness of purpose is a hallmark of healthy companies.  They have few, if any silos, they have a compelling vision, shared values, coordinated stakeholder engagement plans and a strong set of corporate values.

Resilience – The business world is unpredictable but healthy companies are experts in identifying and mitigating key risks.  They are expert at identifying potential opportunities and maneuvering to take advantage of those opportunities.  These healthy corporations build robust frameworks, processes and systems that enable them to be agile and to shift and adjust as the environment changes.

Innovation – It is a truism that any company that stands still is doomed to die and healthy organizations are constantly looking to be innovative to create new ways of generating value.  They leverage their core competencies to compete in new markets or with new products, delivery models and customer service interactions. 

Change Management – Healthy companies have the ability to adapt to change - culturally, competitively and strategically.  They recognize that change is a constant and invest significant efforts in change programs and change leadership.  They are able to engage the hearts and minds of their people so that when the need for change arises they are suitably adaptable and capable of shifting direction quickly and efficiently and importantly, faster than the competition.

Learning Capability – Any healthy company needs to be a learning organization, one that takes time to reflect, review and learn from its mistakes and its successes.  Only by learning can the organization improve and get better.  Improving and getting better is fundamental to achieving success and sustainability.

Any leadership team should ultimately be judged on their ability to consistently deliver a strong performance year after year.  Delivering good results in one year where the stars have aligned may provide some short-term gratification but sustainability and consistency is the key.  Unless leaders embed health consciousness in their key management processes, the goal of sustained performance will remain elusive…….