Organizational Performance and Plate Spinning

Research by McKinsey & Company shows that the success over the long term for an organization is the result of focusing on “enabling” matters whose immediate benefits aren’t always clear such as leadership, purpose, and employee motivation.

McKinsey refers to companies that focus on these matters as healthy organizations because:

*They are internally aligned around a clear vision and strategy.

*They can execute to a high quality thanks to strong capabilities, management processes, and employee motivation.

*They renew themselves more effectively than their rivals.

Management gurus will tell you that to achieve superior performance a company must focus on financial and operational goals by pursuing multiple short-term revenue-generating initiatives and meeting tough individual targets.

Healthy organizations don’t follow this guru advice and actually perform in what might be considered a counterintuitive or irrational way.

Healthy companies have realized 3 things:

#1 Change comes about more easily and more quickly in organizations that keep many things stable.

#2 Organizations are more likely to succeed if they simultaneously control and empower their employees.

#3 Business cultures that rightly encourage consistency (i.e., in the quality of services and products) must also allow for an acceptable range of variability and at times failure that goes along with trying new things.

HR POINTER: John Mackey, CEO of Whole Foods has said, “We have not achieved our tremendous increase in shareholder value by making shareholder value the only purpose of our business.”  Yes, a business must make money in order to survive.  However if the only purpose for your business is to make money, then employees and customers will quickly sense this self-centered objective and move on.

The fact is that managers in healthy organizations are like circus performers who spin plates and attempt to keep them all moving and upright.

These managers need to balance the tensions of grounding the business with a sense of stability that reassures employees while focusing employees on the processes that generate new ideas and move the company forward.

True leaders have learned how to navigate these inconvenient contradictions of organizational life.

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