Smart + Healthy = Enduring Success (a guest blog written by my smart big brother, Mark Abbott)

Whether you are a large company or a small one, the probability that you will have enduring success increases dramatically if your organization is both “Smart” and “Healthy.”

 

“Smart” means being really good at the hard skills: strategy, sales, marketing, product development, customer service, finance, etc.  “Healthy” means excelling at the soft skills: communicating well, collaborating well, cooperating well; minimizing politics and confusion; and fostering an open and honest environment where 

people genuinely enjoy working together.

Want some proof that healthy pays?  

If you invested $10,000 in the S&P 500 at the beginning of 1997, your investment would have grown to about $17,400 by year-end 2011.  If you invested the same $10,000 in Fortune's 100 Best Companies to Work For, you would have had $39,500.

 

Why? 

Healthy organizations excel at tapping into the collective knowledge, experience, and intellectual capital of not only their employees, but those of their customers and vendors as well.  Consequently, relative to their peer group, they have lower employee turnover (typically less than half as much), higher productivity (less shrinkage, better safety ratings), less customer turnover (higher customer services ratings) and better reputations (making it easier to acquire new customers).

So how does a company become “Healthy?” By getting everyone on the "Same Page."  By that, we mean Healthy organizations have an overall integrity with regard to what the business is, where it is going, how it is going get there, and who is responsible for what. It's actually really simple but most organizations don't take the time to make sure everyone is on the Same Page at the senior leadership level with regard to these fundamentals—let alone throughout the entire organization.

Why is that? 

Our experience in teaching the Entrepreneurial Operating System® to over 550 companies suggests that 95% of leadership teams are not even halfway to being on the Same Page.  There are a range of reasons for this. It may be too complicated—leadership feels there are too many things to worry about and doesn’t even know where to start. It could be that leaders simply have not done the hard work to get everyone on the Same Page. They might be reluctant or afraid to address issues, or they may not have the time or appreciate the value. Another possibility is that they may be waiting to add or change out one of their senior leadership members. 

Whatever the reason, many leadership teams struggle to get everyone on the Same Page and achieve Health in their company.

So how do we get everyone on the Same Page?

Getting everyone on the Same Page starts with the leadership team agreeing to look at, and run, the business as a unified team. They need to work from the same playbook, or what we refer to as an operating system. Truth is, one of the many reasons most organizations are not on the Same Page and are not particularly healthy is there are more playbooks or operating systems out there than there are companies. (If you give this observation even a moment of reflection, suspect numerous memories, thoughts and emotions will flow.) 

The other truth is, at their core, good playbooks or operating systems need to be just two things: simple—for a host of obvious reasons (easier to master, easier to teach), and inclusive. They need to codify the core principles and activities that define the who, what, when and how so that everyone within the organization is truly on the Same Page, operating from the same playbook. 

Our experience, working with hundreds of companies, has led us to teach leadership teams how to master an operating system comprised of just six “Key Components:”

1. Vision: Who are we (core values), what is our purpose (core focus), where are we going and why (inspiring goal)? How are we going to get there (marketing strategy), and what do we need to do to get there (near-term to do's and goals)?

2. People: How do we best organize ourselves to meet our near, medium, and long-term goals (with a focus on what we absolutely have to accomplish over the next nine to twelve months)? That is, what seats do we need to have, what are the roles and responsibilities associated with each of them, and do we have the right people to fill those seats? If not, what do we need to do?

3. Data: Do we have a short list of key measurables that give us a weekly pulse for our business? Do we know who is responsible for what and if not, what do we need to do?

4. Issues: Do we have an open and honest environment where issues are raised and efficiently dealt with? If not, what do we need to do?

5. Processes: Do we have a simple, consistent, documented, and measurable way of executing each of our core processes (e.g., Sales, Marketing, HR, etc.) so that our way of doing business is scalable and understood by all, and if not, what do we need to do?

6. Traction: Do we have a clear sense for who is responsible for what by when? Do we have a consistent and efficient process for not only ensuring accountability and discipline but effectively coming together to identify, prioritize, discuss and address our challenges and opportunities? 

If not, what do we need to do?

I know, this is all easier said than done.  That said, Healthy leadership teams—those genuinely building enduring organizations—are masters at managing the above Six Key Components of running their 

business and then getting the rest of the organization on the Same Page.

About Mark

Mark Abbott has significant senior executive, investor and advisory/board experience with start-ups, early stage and small to mid-sized companies.  Mark’s background includes helping build and later running Heller Financial’s industry leading merchant banking platform which he grew from less than $2 billion and about 120 employees to almost $5 billion with more than 200 employees.  Mark was also a senior partner of a successful middle-market oriented private equity firm and the founding CEO of a quarter billion dollar commercial finance company.  Mark’s investor experiences include $12+ billion in leveraged loans to 450+ companies, direct private equity investments in 100+ companies (2.5+ times return on monies invested), and investing in 40+ different private equity funds. Mark’s board experiences include serving as Chairman of the Board of four companies, board level positions on an additional eight, and a number of advisory board positions.