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Generating Cash by Improving Organizational Health

Organizational health is something most leaders don’t pay enough attention to. We think that’s because it’s a) hard to know what to do when an organization is ill or sick and b) even if you know what to do, it’s hard to do what needs to be done.

The symptoms of organizational ill-health or illness are, poor results, poor morale, good people leaving (turnover), poor problem solving and resolution, “drifting” (the opposite of goal directed activity), etc. All of these symptoms waste people’s time and energy and, by extension, the organization’s CASH.

While most organizations exhibit some of the symptoms mentioned above, the organizations that are paralyzed by them need to act sooner than later. It is like a flu. If you are able to get through the day and be fairly productive, it’s okay to see if the symptoms pass. If you’re unable to get out of bed, however, it’s time to see the doctor.

There is a relatively simple recipe for improving organizational health: improve the health of the team that leads the organization and have those leaders take what they’ve learned about being healthy back to their teams–spreading health and chasing away dysfunction.

This recipe reflects a couple of simple truths. Organizational health or ill-health always starts at the top and the cure of organizational ill-health must be top down.

Improving the health of the team that leads an organization is not a trivial task but it is achievable. There are some great resources to help organizations improve their leadership team health starting with the classic, The Five Dysfunctions of a Team by Patrick Lencioni.

What it all comes down to, in our opinions, is establishing a culture where people strive for what’s best for the team (organization) and can speak their minds without fear of being harmed (personally or professionally). It may be an oversimplification but healthy teams are made up of people who are fiercely dedicated to the success of their organization and who are also willing to put their ego and fears aside for that success.

In closing, improving an organization’s health improves communication, accountability, problem solving and retention. Improving an organization’s health also generates cash by reducing the wasted time and effort of employees and by decreasing turnover. It may not be easy to improve an organization’s health but it’s like found money when it’s done.

 

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How Organizational Alignment Generates Cash

Improved organizational alignment generates cash by improving productivity and reducing the rate of new hires (because people produce more). Both increased productivity and reduced hiring puts cash in the bank for an organization.

Skeptical? Well, surveys estimate that between 25 and 40% of a worker’s time is wasted in non-productive activities including work toward unclear objectives and participation in ineffective meetings. What impact would you expect to your bottom line if you captured even half of the three to nearly four months wasted every year by your average employee?

So, what can you do to combat wasted time and the cash drain it represents?

You can start by working on setting the priorities for your organization and then getting everyone aligned behind those priorities.

To get people aligned consider four ingredients: clear expectations, progress milestones (metrics), a clear timeline and set priorities for when expectations conflict. In our experience, clear expectations are pretty common. Less common are the metrics that measure progress, a defined review period and a strategy for resolving conflicts between expectations.

When all four ingredients are present, there is tremendous focus and little uncertainty about what exactly needs to be done by when. For example, there is a big difference between the directives: “grow sales” and “your top priority is to make new connections with prospective customers. We expect you to make 10 new connections and to touch base with 25 connections that you have made in the past six months, each week. We expect these contacts to result in two or more sales each week. We will meet every other week to assess your activity and progress.”

This type of focus produces three outcomes: 1) a clear roadmap of how a person needs to behave to be successful, 2) the results you are looking for, or 3) nowhere to hide for the subpar or marginal performer.

The bottom line of this type of focus is ultimately more cash in the bank–put there by the discipline of organizational alignment.