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ARTICLE 

The Real Value of Org. Health

BY: RICARDO ARAYA
OFFICIAL TRAINING PARTNER, ENTERPRISE AGILITY UNIVERSITY 

Many of my clients say to me, “Ricardo, help us evaluate what we can find in agility so we can get our products to market faster.“

Confronted with this, the first thing I tell them is that speed moves with the times and cannot be acquired immediately. And the value of what is delivered is crucial.

We can get some quick wins, but unless the culture of the company changes, agility is not the silver bullet to eliminate inefficiencies.

If there are inefficiencies, it is because teams are pressed for speed and likely not meeting customer expectations, and that’s where organizational health comes in. This is the optimal management of talent and responsibilities so that employees can achieve their goals, add value to the marketplace, and maintain their psychological safety.

The next point that comes into the conversation is:

–Okay, sounds good.

Now how do we initiate this change?

We need to start with the board and management (top down) by building trust in the teams to do their jobs. And when they make mistakes, take it as part of the learning process.

 

What actions affect the health of the organization?

  • Micromanagement;
  • Bureaucracy;
  • Low-value delivery to the marketplace;
  • Low employee engagement;
  • People who are resistant to change;
  • High staff turnover;
  • Low tolerance for error.

There can be a long list of actions and/or tools that affect us and prevent us from moving forward and being flexible. Now you may ask how can we start to improve organizational health?

First, we need to sit down and analyze how we are doing, how our employees are feeling, what were the big introductions we made, and if our customers are happy with our product or service.

Second, we need to take action: We need to align the perspectives of people in the organization so they are looking at the same place, but respecting the different visions.

When we talk about aligning perspectives, I do not just mean communicating change in a way that everyone understands, I mean focusing on taking the actions that will make those changes real. And that people are willing to change. This applies to every level of the organization: from the manager down.

Why do we need good organizational health?

Organizational Health is connected to business goals. Achieving business goals is directly related to the performance of our organization’s talent and value proposition. Today, various industries, consumers and businesses are constantly changing to keep up with consumer demand. We too must be willing to change on a regular basis. If we do not have this capability in the organization, it’s time to develop it or it will end up costing us dearly. To promote change, you need motivation. One way to do this is through microhabits.

For example, if I do not like exercising but want to be healthy, starting with an hour of exercise a day may not be the best thing to do, and eventually I may give up and not reach my goal. But if I build confidence and create habits with small quick wins that have a positive impact on me, my chances of success increase. In this case, it would be to start with five minutes of exercise a day and once the micro habit is created, move up to ten minutes (so it does not cost me as much to increase the time).

This is very useful when we have an organization with low motivation. Microhabits that enable the achievement of quick wins increase employee motivation and the organization starts to achieve better results.

However, this cannot be achieved if only one person thinks of them or executes them. Management support is necessary. Especially when it comes to organizational change, management must lead by example.

We have already talked about organizational health in terms of employees. Now let us look at value delivery. Some questions that need to be answered are:

  • How is the company responding to market changes?
  • Are we positioning ourselves with our products and services?
  • Are we delivering value to our customers?

All of these need to be measured. For example, calculate the Net Promote Score (NPS), behavioral surveys, know the complaint rates and so on. Such information can be used as input in Design Thinking to find some innovations or improvements for our products or services that are low in customer perception.

This can be done with a multidisciplinary team given the necessary tools. And by that I mean trust, some budget (even willing to lose), time, space and tolerance for failure, because if only the results are evaluated, the team will feel pressured and will have little motivation to try riskier or more creative ways.

After that, we need to measure the impact on our customers, because if we do not meet their expectations with our products, we fail.

As you can see, organizational health is a very broad topic and we can address it with tools and techniques such as:

  •  Management 3.0;
  • Lean Startup;
  • Agile;
  • Business Model Canvas; and
  • Value Proposition Canvas.


But the most important thing is to understand the dynamics of the organization, how individuals interact in the medium and long term, and how people think and move forward with their conclusions in a highly changing environment.

Organizational Health is psychological safety plus the creation of sustainable business value in perpetuity
Erich R. Bühler, Leading Exponential Change

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So if you want to use techniques at work, whatever they are, you should ask yourself if you want to increase agility, if you want to improve the delivery of products to the market, or if you want to change the organization to better adapt it to the new market situations that are highly changing (without forgetting the wellbeing of employees!).

In short, you should use the agile mindset not only to respond “faster” to markets, but also to improve the health of the organization. And that’s where Enterprise Agility comes in, bringing a new set of science-based paradigms and tools that enable the company to be more agile and resilient—for the long haul.

Enterprise Agility moves away from traditional agility and focuses on new theories and practices that make it possible to have highly diverse teams working together.

Enterprise Agility enables companies to adapt to new market conditions to create a competitive advantage without negatively affecting organizational health
 Erich R. Bühler, Leading Exponential Change

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Modern enterprise teams are no longer just made up of software people. Now you need groups of individuals with completely different careers, profiles, mindsets, and values. You might have a team where you need innovation specialists, lawyers, accountants, software people, marketing, etc. And they all work together. The challenge is to get them all to connect well so that the work flows and they feel comfortable, no matter where they are from.

In the end, it does not matter if your company uses techniques and ideas from classic agility, Lean, Management 3.0, or others. All of these models and ideas have one common denominator… they require high organizational health.

Nor does it matter which path is taken or how advanced or less advanced the techniques and practices employed are. In no business model or organization will it be possible to innovate sustainably, retain employees, or even discover new ways of doing things without having high organizational health.

Ricardo Araya is a Certified Training Partner at the Enterprise Agility University in Chile, and Director of Diacos Asesores