All the competitive advantages we’ve been pursuing during our careers are gone. That’s right. Advantages such as strategy, technology, finance and marketing are gone.
These disciplines have not disappeared. They are all alive and well in most organisations. And that’s good, because they’re important. But as genuine differentiators that set one company apart from another, they are no longer anything close to what they once were.
That’s because virtually every organisation, of any size, has access to the best thinking and practices around strategy, technology and related topics. Companies use the same consultants, they go to the same conferences and business schools and managers leave one business for another taking their ideas with them.
Information and knowledge is all around us and it’s become almost impossible to sustain an advantage based only intellectual ideas. It is no longer just the best idea and smartest people that set a company on a winning course.
There is one remaining, untapped competitive advantage out there, and it’s more important than all the others ever were. It is simple, reliable and virtually free. It’s called organisational health. A healthy organisation has all but eliminated politics and confusion from its environment. As a result, productivity and morale soar and good people almost never leave.
None of this is touchy-feely or soft. It is as tangible and practical as anything else a business does, and even more important. Healthy organisations can actually execute on their strategies because they create high performance environments that tap into every bit of talent, resourcefulness and intelligence available to it.
The truth is that the smartest organisation in the world, even the one that has mastered strategy, finance, marketing and technology, will eventually stumble and fall behind if it is unhealthy.
So if all this is true then why haven’t more companies embraced and reaped the benefits of organisational health? Patrick Lencioni, author of The Advantage and global expert on organisational health, thinks there are 3 reasons for this.
Firstly, it’s hard. It requires real work and discipline over a period of time, and it must be maintained. Secondly, it is not overly sophisticated. Leaders who have been trained for years in an essentially intellectual approach to their roles have a bias for sophistication and find the practical simplicity of it disarming. Moreover, in spite of its power and impact on almost every part of the business, it is hard to measure in a precise and accurate way.
But the biggest reason he suggests that organisational health remains untapped is that it requires courage. Leaders must be willing to confront themselves, their peers, and the dysfunction within their organisation with an uncommon level of honesty and persistence. They must be prepared to walk straight into uncomfortable situations and address issues that prevent them from realising the potential that eludes them.
Can a healthy organisation fail? Yes. But it almost never happens. When dysfunction, politics and ambiguity are reduced to a minimum, people are empowered to design products, serve customers, solve problems and help one another in ways that unhealthy organisations can only dream about. Healthy organisations recover from setbacks, attract the best people, repel the others, and create opportunities that they couldn’t have expected.
At the end of the day employees are happier and much more engaged, the bottom line is stronger, and executives are at peace because they know they’ve fulfilled their most important responsibility of all: creating an environment of success.
How does an organisation become healthy? Next month we will write about the 4 essential disciplines for an organisation to master to become healthy.