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Total Performance Leadership Blog Post #27: Total Performance Leadership-Organizational Health

August 5, 2020

Why Checking your Organizational Health is Critical During the Pandemic

Henning Strubel, Senior Partner with The Boston Consulting Group, said in a recent article published in HR Technologist that “organizational complicatedness is the biggest barrier to high performance” and that smart simplicity, stakeholder management and organizational health are critical to peak performance. “Organizational Health is an organization’s ability to function effectively, to cope with change appropriately, and to grow from within which results in high performance.” I agree.

I’ve long been a fan of Patrick Lencioni and have read all eleven of his books. Lencioni says organizational health trumps everything. He notes that a successful organization has to be smart and healthy in order to reach peak performance. He also points out that most leaders “pay too much attention to the former [smarts] and not nearly enough to the latter [health]” According to Lencioni, a smart company is good at strategy, marketing, finance, operations, and technology. Meanwhile, a healthy company has minimal politics and confusion, high morale and productivity, and very low employee turnover. I concur not only with his definition of health, but also with his conviction in its importance.

The reason organizational health is so often overlooked is due to what Jim Collins calls “the quantitative bias”. It’s easier to look for answers around things we’ve measured for decades, what we have studied in college and business school. However, most organizations are full of smart people who know how to do their jobs. The most substantial barriers to their success is not incompetence, but rather a work environment riddled with politics and confusion. In these situations, the biggest opportunity for exponential improvement is to focus on building a culture of peak performance. Volumes have been written on the subject; I agree with most of them.

Agreeing with what countless authors and researchers have written about is one thing and doing something about it is another. Our own study has examined dozens of companies like QuikTrip, Southwest Airlines, Wegmans, Waste Connections, UPS, H-E-B, ONEOK, Nordstrom, Sewell Automotive Group, Sheetz, Pappas Brothers, Home Depot, Darden, Disney, Johnson & Johnson, Panera Bread, 3M, Costco, Harley-Davidson, GSD&M, L.L. Bean, just to name a few.

It’s important to note that some of the organization’s we’ve examined have been on and off our list of peak performance organizations. Peak performance in the past is no guarantee of peak performance in the present. Just like having regular physical examinations, regular checks on your organization’s cultural health are absolutely critical, both for organizations aspiring to reach peak performance and for peak performing organizations who want to maintain their achievements. Just like your physical health, taking your organizational health for granted can be fatal.

One of my best golf buddies came dangerously close to death because he didn’t think he need to get a colonoscopy. My friend’s wife harassed and harangued him until he was well past 50, when he finally acquiesced. When he woke up from the procedure, he found his wife and daughter sobbing hysterically. He had been diagnosed with stage four colon cancer. Two years and many painful chemo treatments later, he now appears to be cancer free and is a poster child for regular colonoscopies. He is lucky.

Now hear this: Your organizational health is every bit as fragile as your physical health. Peak performing culture, which constitutes the only sustainable competitive advantage of which we are aware, is incredibly perishable. Our study indicates there are nine principles at work in organizations that perform at the very top of their sectors. I recommend that you measure your cultural health against those principles. That’s what we do with our Organizational Health Index.

While a full description of our Organizational Health Index is beyond the scope of this paper, try answering these questions with: Strongly Agree, Agree, Neutral, Disagree or Strongly Disagree.

  1. While your competitors struggle to staff their critical positions, your employment brand, culture, purpose and practices ensure a full pipeline of candidates waiting for positions to open in your organization; and all your seats are occupied by A Players who are head-down, happy and just not interested in going anywhere else.
  2. While your competitors bemoan the millennials and their disengaged workforces, you sleep well at night knowing your purpose is clear, and your workforce is engaged, involved, informed, aligned, and working hard to help achieve your organization’s most important objectives, and loving it!
  3. While your competitors struggle with politics, confusion, and dysfunctional leadership, you rest well knowing your senior leadership team engages in healthy debate, owns the issues and makes excellent decisions, and that your leadership is aligned from the very top of your organization to the front lines.
  4. While your competitors whine about price pressures and fickle customers, you swell with pride knowing the experience your customers enjoy and the relationship they value with you, cause them to be intensely loyal and to tell stories raving about and promoting your organization.
  5. While your competitors suffer from confusion and lack of direction, your employees and customers know precisely what you stand for, what your value proposition is, where you’re going, how you’re going to get there, how they fit in, and what’s in it for them.
  6. While your competitors struggle with balancing the needs and desires of their stakeholder groups, your balanced approach to engaging shareholders, management, employees, providers and community is allowing you to experience a level of synergy and collaboration few organizations enjoy.
  7. While your competitors lose enterprise value through quantitative bias and studying financial statements until blind, you’re taking market share and enhancing profits by measuring and making adjustments to everything that counts, including how your organization is doing compared to organizations that are mastering the principles practiced in peak performing cultures.
  8. While your competitors struggle with expenses spiraling out of control, you’re able to concentrate, knowing your systems are removing all costs from your business not needed to deliver great service and experience to your stakeholders.
  9. While your competitors rest on their laurels, your team is constantly aware and practicing the kind of healthy paranoia that leads to new opportunities, constant improvement and an organization that gets better year after year.

I encourage you to examine your answers and ask yourself, “is this a healthy way to work?”

The pandemic has changed us. It has changed our businesses and our lives forever. We’ll never be the same and there is no way around it. The question is not, “when will we go back to how it was before?” Rather, we must ask, “how will my organization emerge from this season of change even stronger than before?”

If you’re open to finding a straightforward suite of diagnostics that will help eliminate confusion and politics in your workplace, give us a call.

 

Warmest Regards,

Rob