Do you want a healthy organization or a smart one?

Is your organization healthy or smart?

Since when are smart and healthy mutually exclusive?

They’re not. But if you spend too much time trying to be smart and not enough time trying to be healthy, you’ll end up looking pretty dumb.  

In a presentation, Patrick Lencioni from the Table Group explained: 

According to Lencioni, a smart company is good at strategy, marketing, finance, and technology. In most companies, these subjects get 95% of the leader’s attention. A healthy company has minimal politics and confusion, high morale and productivity, and very low employee turnover.

Since getting better at strategy, marketing, finance, and technology can occur through study and measured practice, focusing on becoming a smart company seems easier and a wiser investment of resources. However, the politics and confusion that reign in unhealthy organizations lead to a lot of dumb behavior. Dilbert explains well what happens when just one of the key elements of organizational health, clarity, is missing. His boss laments how Dilbert has, once again, accomplished nothing all week. "No one will tell me our company's strategy," Dilbert replies. "So, anything I did would be random flailing."

In a healthy organization, in contrast, leaders agree on and communicate strategic clarity throughout the organization, managers consistently support individuals who understand the relevance of their work, and systems and tools are deployed in ways that enable teams and individuals to maximize efficiency.

Jim Collins, in the book, Good to Great, said something similar. He explained that technology can accelerate momentum in a company, but can never create it. Mediocrity doesn’t come from the failure of technology or resources but from management failure.

Leaders of most of the companies profiled as going from good to great didn’t even mention technology as one of the top five factors in achieving greatness. Collins quoted one CEO who said, "The primary factors were the consistency of the company, and our ability to project its philosophies throughout the whole organization, enabled by our lack of layers and bureaucracy.”

That sounds a lot like an effective leadership team eliminating silos, reducing confusion and politics, and enabling individual people to do their best work in support of a strategy clearly established by an effective leadership team.

So, you don't have to choose between being a smart or a healthy organization. But, making one the priority will make you more successful. Lencioni notes in a summary of organizational health,

. . . [A] healthy organization will always find a way to succeed, because without politics and confusion, it will inevitably become smarter and tap into every bit of intelligence and talent that it has.