Search ExecHQ

Organizational Fitness Improves Business Turnarounds

Download the presentation slides here: Organizational Fitness and Turnarounds for Distressed Companies

Companies Need to Know Their ‘Fitness’ Level

Piloting an organi­zation through calm seas can be challeng­ing enough. But when skies darken, winds howl and the full fury of a storm engulfs a business, there is a need for leadership to step up, calm fears, set the tone and show the way. Using the Organizational Fitness framework, you can chart that course. It is based on seven principles.

Strategy: How competitive advantage will be achieved.

Systems: Formal processes and busi­ness practices that produce results.

Structure: How tasks and people are divided — the roles responsibilities and reporting relationships.

Skills and Capabilities: Coordination, commitment to task/results, not function.

Style of Leadership: Do leaders func­tion effectively and what style is used for achieving cultural change.

Staff: Your people, their backgrounds, competencies and values — the “DNA” of the organization.

Shared Values: Culture: habits, beliefs and behaviors of the organization; the operating style of the organization.

The ‘New Normal’

It is important for executives to inform everyone that the current situation, as painful as it is, could be the new normal. To deal with this “new normal,” leaders must determine what will create sustain­able success by reviewing the following criteria:

What essential elements must be pres­ent for strategy implementation?

Is the organization currently designed to “fit” these capabilities?

Do the managers of the business have the capacity to learn what they don’t know about the organization and their own effectiveness?

Achieving the Mission

Simple as these may be, the answers are complex and require a great deal of thought. Organizational Fitness is an objective process that assesses the company’s commitment to its mission and vision, protecting the vitality of the company against the root cause of flag­ging revenue and profits. The concept tests whether the organization is aligned with its objectives, strategy, tasks and governing values. This allows a business to be able to learn and adapt to change while being organized in a way that fos­ters leadership within its ranks in order to produce the desired results.

As a company engages in the Orga­nizational Fitness framework, there are additional questions to ask, including:

Do leaders have the courage to con­front difficult business, organizational and human issues?

Do managers have the courage to:

  • Listen, question assumptions and cre­ate change?
  • Realign the basic design of the orga­nization as needed?
  • Replace those who cannot or will not learn?

Is there an ongoing disciplined inquiry process and supporting norms that value valid data and a non-defensive dialogue?

For many organizations, the time spent on a fitness review is well worth it. The outcome will be a roadmap that improves management team effectiveness in plan­ning and execution of the strategic plan. It could mean the difference between not just navigating through a recession but also guiding a business to long-term success.