Defining Organizational Health

This is the beginning of my forthcoming book on the theory and practice of organizational therapy. First, it will present a definition of organizational health. Then, what makes it sick, and which of the dysfunctionalities are normal, abnormal, or critical, and why.  Next, it will discuss how to treat the dysfunctionalities or organizational maladies contingent on where the organization is on the life cycle.

It is all based on my work in the field and my observations and clinical work in developing the theory and applying it in practice. It was tested in almost any industry, in over fifty-two countries, and in organizations from start-ups to Fortune 100's. Adizes certified associates validated that the theory and practice are transferable and achieves the same results I would have achieved if I had done the work.  It is thus a scientifically proven methodology to heal organizations and bring them to their peak performance.  ( see Adizes.com for testimonials.

In this piece, I define what I understand is a healthy system. The principles presented here apply to different types of organizations, for and not-for-profit, public, private, or government, and it applies to families or countries as well.

Defining Health

A healthy organization is symb-ergetic, both symbiotic and synergetic.  

Symbiotic means that the components that comprise the organization have a mutually beneficial interdependency. For that to happen, there must be mutual trust that each contributing element believes, has faith, and trusts that there is a common interest and that it will eventually benefit from the interdependency to which it contributed.

Synergetic means that the above-mentioned contributing elements exchange information and learn from the exchange, and thus, create a new value as an outcome of that learning. For that to happen, however, there must be a diversity of complementary subsystems, functions, that complement each other with their differences in knowledge and information.

In short, the components of the organization collaborate and cooperate to create value from which they benefit. The organization is growing through synergy, and this growth is sustainable because there is symbiosis; The components that contribute to the system benefit from their contribution.

The importance of complementary diversity

An organization without diversity, each part of the organization just repeating existing knowledge or just reinforcing available knowledge or information does not stimulate an exchange, cross-pollination which creates new information and knowledge.

The diversity, however, should be complementary. Each component, sub-system, or function contributes what the others do not have or are not strong in. It means the weakness that one subsystem has, another one has it as a strength.

Take a marriage.  A healthy one is a complementary team. What one partner is weak at, the other is strong in. For instance, one partner is an imaginative risk-taker. The other is conservative, detail-oriented, and risk-averse.  Together they make better decisions, balancing each other. It will happen, however, only if there is mutual respect. Respect meaning, to follow Emanuel Kant, each party recognizes the sovereignty, the undeniable right, of the other to think differently. Otherwise, there'll be no constructive exchange, and without such an exchange, there will be no learning, and without learning, there will be no creation of new value.

It, however, cannot be any complementarity. It should be such that the complementary subsystems make the total system to be both effective and efficient in the short and the long run. A system that is not both effective and efficient in the short and long run is not healthy. It is either ineffective now or in the future or inefficient now or in the future.

The indispensability of mutual trust and respect

A healthy organization is both effective and efficient in the short and long run. For that, it is comprised of a diversity of complementary sub-organizations or functions. Different functions achieve different goals. For instance, in a business organization, marketing should focus on long-run effectiveness, sales on short-run effectiveness, culture development on long-term efficiency, and Human Resource Management on short term efficiency.

The subsystems, the complementary functions, inhibit each other.  The short-run focus competes for focus with the long-run, and vice versa, and effectiveness inhibits focusing on efficiency and vice versa.  In order to collaborate and cooperate and thus create value, they must operate in a culture of mutual trust and respect. It is an indispensable prerequisite for synergy and symbiosis.

  To enable symbiosis, there must be a perception of common interests derived from a common vision and values. For synergy, the organization must be structured correctly. Each function should not be mitigated structurally by other conflicting roles (for instance, marketing must be separate from sales.) The correctly structured diversified organization must exchange information with mutual respect; There must be a systemic, disciplined decision-making process that nurtures it. Furthermore, people that staff the organization, those that exchange information, should be people that command and grant respect and trust. Without mutual trust and respect, the conflicting diversity of the organizational functions and the styles that lead them will generate destructive conflict. The exchange will be dysfunctional rather than constructive, symbergetic.

Summary :

A healthy organization is symbergetic, both synergetic and symbiotic.

To generate symbergy, the organization must have a culture of mutual trust and respect.

For that,  there must be:

Common vision and values,

A correctly diversified complementary organizational structure that will make the organization both effective and efficient in the short and long run,

A systematic, structured decision-making process,

Leadership positions staffed with people that command and grant mutual trust and respect and whose style matches the requirements of the function they lead.

Validating Health

The health of an organization can be validated with the following formulae:

 Health = f (External Integration/Internal DISintegraton)

A healthy organization serves clients for which the organization exists in the short and the long run. That is measured by the external integration of the organization with the environment in which it operates. For a business organization, it will be market share or repeated sales. For a country, the ratio of immigration to emigration. For a marriage, the desire to stay or split the marriage. For an individual, the rate of career advancement.  

Since energy at any point in time is fixed, any energy wasted because of internal disintegration reduces the energy that can be dedicated to external integration.

A culture of mutual trust and respect minimizes disintegration and the waste of energy. And that applies both to internal and external environments.

To integrate itself with the market and society the organization operates in, there must be a relationship of mutual trust and respect, or clients will not be repetitive. The organization needs to respect and trust the economic, political, and social systems within which it operates and be a trusted trustee of the physical environment it operates in. Otherwise, resources will be withheld, depleted, or corrupted, making integration with the market and society more and more difficult.

Summary:

A healthy organization is integrated externally and internally. It does not waste the fixed energy available. It is symbergetic, for which a culture of mutual trust and respect is needed and for that, common vision and values, correctly designed diversified organizational structure, systemic disciplined decision-making process, and leaders that command and grant respect and trust are a must.

Written by
Dr. Ichak Adizes