Real Leaders

Are You Building an Organization or a Business?

The answer to this question is key to those of us who spend time thinking about organizational 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 organization is an exact opposite.

An organization 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’s alive and is responding to stimuli all the time: from leaders, customers, markets, and 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 worldview is easier to manage. I do have reservations about this approach. 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;
• Disintermediation; and
• The power of the consumer.

Leaders need to embrace complexity and push themselves to think about topics that aren’t naturally considered to be relevant.

Questions to think about:

  1. What is your view of the current ‘health’ of your organization, and how do you know this?
  2. How is your organization currently changing, and what is it evolving from/evolving to?
  3. How do other people experience you as a leader, and what are the implications for the greater organization you’re leading?
  4. What is the primary shaper of your organization’s behaviors?
  5. How well is your organization performing relative to its full potential? (Look at metrics beyond just revenue and profitability.)
  6. 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 a profit, that may be a fair enough answer.

However, if you are interested in building an organization 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.

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