The answer to the question above is key to those of us who spend time thinking about organisational development. A business is a ‘thing’, a linear entity that takes money in, pits it against the costs of creating this money and kicks out a profit. It is monitored by the sole metric of ‘money created’.
An organisation is the exact opposite. It is considered to be a living, breathing, layered organism that at any given time is thriving, or struggling, or changing, or resting, or ramping up. It is alive and it is responding to stimuli all the time: from leaders, from customers, from markets, and from employees. It responds to things done well. And it responds to things done badly.
From a leadership perspective, it is important to be clear about how you view the entity you’re leading.
If you are seeing it as a business, your task is to manage the business within this narrow field. This has upsides and downsides: on the upside, it is a simpler existence – you will inquire less, manage fewer metrics, and simply watch the P&L. The downside is that you have fewer options available to you in trying to leverage performance, and especially so when times are bad. For some leaders it may be reasonable to take this simpler view of a business. If an individual is not drawn toward complexity, then a simpler world view is easier to manage.
I do have reservations about this approach, however. The business world of today brings many complexities into play: rapid technology advances; the evolving nature of the employee; the more nuanced understanding of leadership and the impact it is now known to have; disintermediation; and the greater autonomy and power of the consumer.
Leaders need to embrace complexity and push themselves to think about topics that aren’t naturally considered to be relevant.
- What is your view of the current ‘health’ of your organisation, and how do you know this?
- How is your organisation currently changing and what is it evolving from/evolving to?
- How do other people experience you as a leader, and what are the implications on the greater organisation that you’re leading?
- What is the primary shaper of your organisation’s behaviours?
- How well is your organisation performing relative to its full potential? (Look at metrics beyond just revenue and profitability.)
- What is your talent most motivated by?
Your reaction to these questions might be: “Who cares?” And to a business builder interested solely in kicking out profit, that may be a fair enough answer. However, if you are interested in building an organisation that is sustainable, nimble, responsive, and that can improve continually, these are the questions that will ensure that you are overseeing this sort of entity.