There are a lot of important components that have to come together in order to build a great business. Innovation is essential. Planning is absolutely critical. You’ve got to have the right people in the right position. You need to manage your resources (financial and otherwise) wisely. You can probably add a few other things to that list.
According to business guru, Patirick Lencioni, however, there’s one component that is more important than all the others if you what to give your business an advantage: Organizational health.
While most executives tend to focus on organizational intelligence or (things such as strategy, marketing, finance, and technology), Lencioni maintains that companies are actually better served when they focus on organizational health (things such as minimal politics, minimal confusion, high morale, high productivity, and low turnover).
It sounds a bit counter-intuitive, but Lencioni explains his reasoning:
“a good way to look at organizational health – and one that executives seem to respond to most readily – is to see it as the multiplier of intelligence. The healthier an organization is, the more of its intelligence it is able to tap into and utilize.”
It’s not an “either/or” choice. It’s not that strategy, marketing, finance, and technology aren’t important. They are, but companies that focus on their organizational health are better able to execute in those areas. So why don’t more organizations do that? Lencioni suggests that businesses focus on the business intelligence areas (he actually calls these things “business smarts”) because they are easier to address—and less messy.
How does Lencioni suggest that businesses tackle the important organizational issues? He delves into four critical business elements that build on each other:
- Building a Cohesive Leadership Team
- Creating Clarity
- Over-communicating Clarity
- Reinforcing Clarity
If you want to know more, check out Lencioni’s new book, The Advantage: Why Organizational Health Trumps Everything Else In Business.
What do you think? Based on your experience, is organizational health the most important factor to creating a great business? Does it really trump everything else in business?
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