McKinsey directors Scott Keller and Colin Price, authors of Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage, say focusing on organisational health – the ability of an organisation to align, execute and renew itself faster than competitors can – is just as important as focusing on the traditional drivers of business performance.
Organisational health is about adapting to the present and shaping the future faster and better than the competition, they say. “Healthy organisations don’t merely learn to adjust themselves to their current context or to challenges that lie just ahead; they create capacity to learn and keep changing over time. This, we believe, is where ultimate competitive advantage lies.”
Getting and staying healthy involves tending to the people-oriented aspects of leading an organisation – and it’s hard work. It shouldn’t be confused with other people-related management concepts, such as employee satisfaction or employee engagement. Nor should you study what other companies do and then apply their approach, say Keller and Price.
“While you can always learn helpful things from others, we have found that the recipe for excellence in particular organisation is specific to its history, external environment, and aspirations, as well as the passions and capabilities of its people. Creating and sustaining your own recipe – one uniquely suited to these factors – delivers results in way that your competitors simply can’t copy.”
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