I want to share with you an insight about two management concepts: effectiveness and efficiency. People interpret these concepts differently. Some languages do not even have a clear distinction between these words.

As times become more and more uncertain, many organizations have a difficult task in budgeting as a vehicle for planning. Leaders that are risk-averse (i.e., the (A)-style leaders) will default to the most conservative budget. They know that it is prudent not to spend money too liberally in a time of uncertainty. But the side effect of conservative budgeting is that it might dampen a company’s commitment to doing its best.

One of my clients always hired the managing director of the law firm, the most expensive lawyer. I challenged him: “Why do you pay the top price when you can get someone much cheaper?” His answer was that the expensive ones always pay for themselves because they provide the best service and don't go back to do things over and over again. The less-costly ones make mistakes that cost much more than what he pays to attract the best candidates.

The professional literature and the consulting industry, by and large, promote the following sequence in treating problems: structure follows strategy. On the surface, it makes sense. How do you know what structure you need in order to fulfill a function unless you first know what that function is? The same sequence is practiced in architecture and in new product development. My experience as an organizational therapists for more than 50 years, as well as that of my associates at the Adizes Institute serving clients in more than 70 countries, this sequence makes sense if you’re starting totally from scratch. Then, in theory, without an already-established organizational structure, you decide where you want to go and organize it to get there.

The Bible tells us that when the people built the city of Babel, God confused their language and they could not communicate very well with each other. Why would a confusion of language happen at that point in time? When they decided to build the city, humans were moving from being a nomadic society to a settled society. It was a major change. Why would the language get confused? Because language reflects experiences, and agricultural society uses analogies from agriculture that are different from those of a nomadic society. Our nomadic ancestors learned a lot from trees, starting with how to adapt to changing seasons. Once we settled into developed communities, we derived our analogies from streets, buildings, infrastructure and objects. Today our language is driven by images from technology. We say things like “I am fading,” “tone it down” and “my system is overstressed.”

We live in a time of major and rapid change, and one of the most significant changes is the digital transformation of companies. In managing change, we cannot ignore the significance of the Digital Revolution that has followed the Industrial Revolution. How should these changes be managed so that digitalization is successful? The process that you want to digitalize must be solid, robust and serve your function.

When a founder starts a company, profit is a distant dream. If a company is founded solely for the purpose of making profits, the founder is going to be disappointed . There are no profits in a start up and as far as the long run is concerned, it is not promised nor assured. 95% of startup bite the dust. A healthy start-up is one in which the founders started the company because they identified a need in the marketplace that was either not being satisfied at all, or that they believed they could satisfy better than others. With a start-up, the purpose of building a company is to satisfy a need.

The concept called “span of control,” refers to how many people report directly to you in your organization? Usually, this question is relevant for a Go-Go company where, since the start-up stage, everyone in the company reported to the CEO. He or she continues to hold on to this responsibility, even as the company is expanding and growing and changing.

Everything in this world is system. You as a human being, you are a system. A family is a business. A country is and so is business. The globe, planet is a system called an ecosystem. By definition, every system is comprised of subsystems. A company has a marketing subsystem, sales subsystem, production subsystem, financial, human, capital subsystems. A human being has the nervous subsystem, the blood flow subsystem, the respiratory subsystem, etcetera. And a country has the legal subsystem, the economic subsystem, the technological subsystem, the social subsystem.

Healthy Company How and Why?Presentation by Prof. Ichak Adizes to Merge FoundationAll these achievements I could not do if I was not healthy. So, how should we produce profits in the short and the long run? By being healthy. If the organization is not healthy, it cannot produce the profits. Maybe it can produce in the short run, but it will not be sustainable. I started asking myself : "What does it mean to have a healthy company?"