Tablegroup Video Placeholder

The Real Differentiator

Organizational Health

Twenty years ago, a few colleagues and I launched a consulting practice to help leaders build more effective organizations through practical, non-touchy-feely work around leadership, teamwork, clarity, communication and human systems. We believed then—and still do today—that far too many organizations were not fulfilling their potential because they struggled with politics, confusion, morale and productivity problems, and high employee turnover. More importantly, we believed we had a solution that worked.

At the time, we struggled with what to call that solution. We decided on ‘organizational health,’ but agreed that we should revisit that name if we came up with something better. Regardless of what we called it, we were convinced that most companies had more than enough intelligence, experience and domain expertise to be wildly successful, but that few of them could create the kind of healthy culture which would allow them to tap into that intelligence. From the Silicon Valley to Wall Street to the small—and medium—sized companies throughout the country, we met frustrated executives who couldn’t figure out why their enterprises weren’t able to achieve the results that their strategic plans had promised.

Well, we still haven’t found a better name than organizational health (OH), and we still believe that it is the single greatest competitive advantage in business, partly because it remains largely untapped. Companies that embrace and figure out OH will differentiate themselves from competitors in a way that is hard for strategists and analysts to understand.

If we had any doubts about the efficacy of OH, those went away a couple of years ago when I found myself sitting on a plane next to Alan Mulally. Alan is the CEO who led the turnaround of the Ford Motor Company, from 2006 to 2014. What he accomplished at Ford is, perhaps, the single greatest revival of a company in American history. During that flight from Iowa to California, Alan did something that stunned me. Reaching into his travel bag, he pulled a copy of my book, The Advantage, and began quoting from it, showing me all the places where he had underlined paragraphs and written notes in the margin. Then he said, “they asked me to write a book about how I turned Ford around. I told them the book has already been written. This is it.”

Now, please, please understand that Alan turned Ford around before he read my book, or had even heard of it. I really don’t want you to think that I had anything to do with it. I mention the story not to make myself look smart, but because what Alan did that day was confirm the power of organizational health. And he proved it in one of the most difficult, culturally entrenched environments possible.

Unfortunately, those kinds of stories are all too rare, which is a tragedy in many ways. So many organizations are not bringing their ideas and products to the people who need them because they are mired in bureaucracy and infighting. And so many people in those organizations are dreading going to work every morning—and coming home frustrated at night—because organizational dysfunction is preventing them from accomplishing what they want to accomplish. The fact is, the world would be a better place if more companies reduced the politics, confusion, frustration and turnover that drive leaders, employees, even customers crazy.

And that is why we have created this thing we call The Hub, to help more people understand that the single most powerful—and untapped—competitive advantage in business is not about strategy, finance, marketing or technology. As it turns out, those are secondary disciplines. The context for those disciplines, the real differentiator, lies in the ability of a leadership team to create a healthy organization. Our goal is to make OH a standard in companies around the world, the same way that quality or distributed technology or cost accounting is. Until then, we’ll continue to spread the word, and help as many leaders as we can achieve the unique advantage that we call organizational health.