Why Your Company’s Health is at Risk & What To Do About It

Businesses, like people and products, go through what is called the life cycle. The four stages are birth, growth, maturity and decline.

I want to zero in on the second half of the maturity phase as it relates to organizational health. It is in this time frame, maturity that “health problems” emerge in many companies.

To put things into perspective, at the start of each calendar year many individuals write a list of resolutions. At the top of nearly every list is something about improving personal health: eating healthier, losing weight, watching less TV, taking more time off from work and taking long vacations, getting more sleep, quit eating “junk food” and to exercise so many times a week. Research suggests that this is the essence of what most New Year’s resolutions consist of.

These lists are written because we know what we have been doing to our body is not the best for our short term or long term health. Every time we look in the mirror we are aware that we need to address both the causes and the results of our behaviors, if for no other reason than to improve our image and how our body functions.

Let’s make the translation from the individual who sits down at the kitchen table on January first a company in business to provide a service or product, deliver it efficiently and create a profit for shareholders.

As companies move into middle age, the first noticeable sign something is not right is the extra weight being carried. Often these “extra pounds” are around the middle.

This did not happen overnight. Additional layers of management: leads, supervisors and managers were added through the years as the company grew in size and scope. Managers were hired to supervise other managers. Supervisors were brought on board to manage leads. More leads were added to direct a growing workforce. This all comes at a cost; additional payroll, and associated payroll expenses such as worker’s comp and taxes.

There is also additional “baggage” in the middle of the profit and loss statement. I’m referring to expenses such as unproductive and empty office, telephone lines, land, cell, fax and internet that are paid for but not used at all, are overused at a higher cost, or perhaps even underused where the company is not using the asset as it should; additional paper, printing, mailing costs; utility expenses; travel and entertainment.

Just about every expense on a profit and loss statement increases over time if not carefully managed. Most companies do not manager these expenses well. Sometimes they spiral out of control.

The additional weight of people and expenses can impact how quickly the company can move. More people bring more meetings; additional layers of decision-making and time to process and put into effect decisions made by leadership. More space and contracts for expenses related to that space may not be easily ended.

Something else happens in the company, not universal, but selectively: “hardening of the attitudes”. Turf wars begin; communication, once universally dependable, slows down and in some cases, ceases all together.

The company may divide into camps, sometimes new hires versus old timers, or factions are created of internal versus external personnel and functions.

Some of this is simply a result of function, as an example, people working in an office do not understand when sales people arrive late and leave the office early. The office team does not realize the sales person was on the phone speaking with customers and prospects while the office worker was sound asleep.

This “us versus them” mindset and “loyalty and royalty” can either be a symptom or a result of the attitudes hardening.

Toxins also build up and spread. This is not restricted to just people, and their attitudes but policies and procedures. Many companies chose not to deal directly with the few who don’t or won’t or can’t follow organizational policies.

What happens instead is that all held to a tight standard instead of dealing directly with those not complying. While this brings the minority under control, it also may alienate the ones who were following policies and procedures all along and who chafe at the new tighter controls. Once these toxins spread, it can be difficult to eliminate them.

Because things are working as they should have, or used to, yo get things done timely and efficiently, more force is used by management. This is akin to high blood pressure. HBP, as the medical profession will tell you, if left unchecked, will do severe damage in many different ways. When force is used to accomplish things, it is a very bad sign for the organization.

The extra weight, hardening of the attitudes, toxic build up, and the need to use force did not suddenly appear overnight; each was added through the years to the company. Addressing any of these won’t be easy or without pain. The symptoms can be ignored. However, if left unaddressed, ant one of them could kill your company.