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.
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.
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