By True North Learning Director and Senior Facilitator: Errol Amerasekera
Operational Excellence means that organisations have the capability to deliver a particular project or task to the required specifications and standards, on time and on budget. Whether or not an organisation achieves operational excellence by meeting its KPI’s is important. However, what is more important is how an organisation approaches the challenge of moving towards operational excellence. So, in building a healthier organisation, the old business adage of the process being more important than the outcome, is definitely true. In this case, the how relates primarily to the efficiency by which an organisation achieves a particular set of results.
Efficiency can be defined as the amount of resources that a business consumes to produce a particular outcome relative to the benefit of that outcome. In an organisational context, there are three key categories of resources — money, time and people. Obviously, these three categories of resources have significant overlap. The more staff on a particular project, the more money it costs the business in wages, but hopefully, the less time it takes. While all three resource categories are important, I believe the most valuable one is time. This is because if money is misspent or lost, it can be made again. Staff members can leave their roles and be replaced, and staff that have a reduced motivation or disengage from a particular task can be re-engaged. Therefore, as important as money and staff are in terms of the resources a business has access to, they can be considered renewable resources. In contrast, time is a non-renewable resource. Once time is spent, that minute, that hour, that day cannot be renewed or recreated. Unfortunately, there are no Mulligans (a golf term used when the golfer is given a second chance to play their shot) or Groundhog days (in reference to the cult movie with Bill Murray) for spent time. Thus, the efficiency at which organisations use their time is probably the most important ingredient in delivering operational excellence and therby showing how healthy that organisation is.
The True North Learning Organisational Health model is designed to do one thing — increase the efficiency which an organisation utilises its resources — time, money and staff, but especially time.
For example, we have worked with clients at their strategic planning days where a list of ten actionable items has been developed; each one of which has the potential to improve the business and its effectiveness in some aspect. Three months later, only a small minority, if any, of these strategies have been actioned in accordance with the implementation plan formulated at the strategic planning meeting. Hence, the one day those eight senior managers took and the associated resources have been effectively wasted. If we do the sums, 8 managers on an eight hour strategic planning day, the cost of transport, venue hire, catering, etc, probably thousands of dollars all for just about zero return. Those managers may well have taken that time and money and gone to the pub — at least they would have had a good time. The return on investment of those resources would effectively have been the same. I know this sounds a bit harsh, and I do admit that I am being a little tongue in cheek in order to make a point. Most of us have been in teams or worked in organisations where creative and talented minds come up with amazing strategies, but because of a lack of capacity somewhere in the organisational system, these strategies never come to fruition. Therefore, the strategies do not provide a benefit to the organisation (or a return on investment on the resources that it took to create them). In fact, one could argue that not only does this have a minimal return on investment, but it actually also has a negative impact on organisational effectiveness. This is because when senior managers invest their time, ideas, passion and experience into developing a strategic plan only to repeatedly experience those items not coming to fruition, it builds the degree of hopelessness and cynicism in the effectiveness of their organisation. This then affects the extent to which those managers are prepared to invest themselves at future strategic planning days.
By True North Learning Director and Senior Facilitator: Errol Amerasekera
What is the current health status of your organisation?
Naturally, the answer to that question is dependent on how we define “health”. As I shall discuss later, there is a big difference between a healthy organisation and one that is simply performing well. That is not to say that performance is not somewhat based on the health of the organisation, but from an organisational health perspective, what’s more important is the efficiency of how organisations achieve that performance, and the cost or toll to the organisational system itself.
What we have observed with our own clients, which is confirmed by much of the literature, is that there are some trends which are of concern in terms of the long-term viability of organisations and the sustainability of the people that lead them. The three key things we are noticing are firstly, the survival rate of organisations themselves; secondly, the increasing demands and expectations of leadership; and finally, but by no means least, the rising incidence of burnout, stress disorders and mental health issues amongst executives.
Organisational Survival Rates
In 1996, Jim Collins and Jerry Porras wrote an iconic business book, Built to Last. In this book, they studied 18 of America’s most iconic and successful companies. They attempted to break down and decipher a code or the key elements which make those businesses highly successful and consistently outperform their competitors over a period of time.
In 2006, just 10 years after the book was written, and two years before the GFC of 2008, 20% of those beacons of the corporate landscape no longer existed, 46% were struggling and no longer outperforming their competitors, and only 34% were able to maintain their success and competitive advantage.
So, it appears that having a robust recipe for performance, even in comparison to one’s competitors, gives an organisation no guarantee that it will continue to be in existence, let alone successful, into the future.
The Demands on Leadership
These days, when we ask managers and leaders how they are doing, the answer almost invariably comes back as some version of “we are ridiculously busy.” I am often curious if I asked a similar cross-section of managers that same question 10 years ago, would the answer they came back with be any different? It certainly does appear and feel like the pace of business is accelerating at a rapid rate and, as a result, managers feel there are more demands being placed on the limited time that they have to perform effectively in their role.
A survey conducted by McKinsey and Company on Leading in the 21st Century, had similar findings to what we are observing with our clients. They summarised their findings as follows:
When we meet with the men and women who run the world’s largest organizations, what we hear with increasing frequency is how different everything feels from just a decade ago. Leaders tell us they are operating in a bewildering new environment in which little is certain, the tempo is quicker, and the dynamics are more complex. They worry that it is impossible for chief executives to stay on top of all the things they need to know to do their job. Some admit they feel overwhelmed.
Executive Burnout and Well-being
The incidence of executive stress, burnout and mental health disorders such as depression and anxiety is at an all-time high. And what is even more frightening is that the incidence is actually rising at an alarming rate.
A 2006 study, conducted by The Australian Safety and Compensation Council and sponsored by the Australian Government, found that, in 2002, mental stress claims comprised 5% of all workers’ compensation claims in Australia. This mechanism of injury/disease recorded the highest median claims cost ($9,700) and the second highest average cost ($16,400) as a result of the very high median and average time lost for this mechanism. Almost two-thirds (64%) of adults were classified to low levels of psychological distress, 23% to moderate levels, 9% to high levels and 3.6% to very high levels. In other words, 99% of people within the workplace experience some level of psychological distress, with 35% experiencing moderate to very high levels. This costs the Australian economy an estimated $20 billion a year.
What is Organisational Health?
I believe the solution to these challenges is a focus on organisational health.
An organisational health approach means that the need for short-term performance and long-term sustainability don’t need to be mutually exclusive. In fact, in our experience, including an organisational health approach to business in conjunction with traditional performance-based initiatives delivers both short-term performance as well as long-term viability.
Organisational health is the ability for organisations to outperform their competitors in short- to medium-term performance based metrics whilst not impacting on the long term viability of the organisation. In short, organisational health is all about performing at a high level, but also in a manner that is so adaptive, efficient and aligned that it enhances the longevity of an organisation rather than detracting from it.
The fundamental differentiator of healthy organisations in contrast to their less healthy counterparts is their philosophical approach to business. Healthy organisations have a systemic and holistic approach to organisational development, change and challenges. This means that healthy organisations have developed the thinking and behavioural capabilities to examine the challenges they encounter through a multi-focal and long-term approach. In other words, they appreciate that inefficiencies within the organisation rarely have one simple cause; they are usually multi-factorial. Hence, their thinking allows them to achieve operational excellence by addressing multiple causative factors within the various levels of the organisational system.
At True North Learning, we have found that when you distil organisational challenges down to the bare bones, and start to examine the underlying dynamics and behavioural processes which gave rise to the original problem, the vast majority are symptomatic of a lack of capacity and effectiveness in one or (usually) more of eight key elements within the organisational system. We have observed the substantial impact of the lack of aptitude in these eight key elements and how they adversely affect the performance and sustainability of organisations across various sectors of business, and also throughout different types of organisations, e.g. private and public sector, non-profit and social enterprise.
What we are effectively saying is that even though there is a range and complexity to the various types of challenges that organisations are confronted with, there are only a finite number of fundamental elements that give rise to those problems. This is simply because if you take those eight key capabilities and arrange them; there is an almost infinite amount of permutations and combinations of them, each of which contributes to manifesting as a particular set of symptoms within the organisational system.
The beauty and power of working to build capacity in these eight elements is that it addresses the underlying dynamics which give rise to organisational problems, rather than simply providing symptomatic relief. This means that building capacity in these “eight pillars” of organisational health actually supports short-term performance as well as the long-term viability of an organisation. This is organisational health.
Over the following months I shall discuss and explore, one at a time, each of the key elements that we consider to be “The Eight Pillars of Organisational Health”.
So please stay tuned and enjoy …
 Cranier, S. and Dearlove, D. Excellence Revisited Business Strategy Review, March 2002, updated to 2006
 Barton, D., Grant, A., Horn, M. Leading in the 21st Century, McKinsey Quarterly, June 2012
 Work-related Mental Disorders in Australia, The Australian Safety and Compensation Council, April 2006
 Based on definition of “Adaptive” according to Heifetz, R. et al The Practice of Adaptive Leadership Harvard Business Press 2009,BostonMA
Facilitating programs using an Experiential Learning approach requires a slightly different skills set and can lead to very different interactions during the program when compared to more traditional, didactic, ‘chalk and talk’. It gives participants the opportunity to create their own meaning and guide their own learning from the programs. As in all programs some will take the learning directly from the intent of the program, while others determine their own relevance and meaning. As a facilitator of this style of learning I have found these 5 key points central to helping the learners get the most from our programs.
Like many trainers and facilitators I felt the need to ensure people were getting something from my programs. I took it as my responsibility to ‘help them learn.’ If we provide the right environment and program the learners can and will make experiential learning opportunities work for them. To be an effective facilitator of experiential learning you have to believe that they have the potential to make progress and be committed to the fact that your role is to provide the opportunity and support them in that rather than ensure they are learning.
Because the learning is ‘experiential’ no two learners will have exactly the same experience. You cannot predict the learning an individual will take the same messages from any single event. Being prepared for and curious about how individuals assign meaning to an experience is something I have found extremely helpful in facilitating those different thoughts.
It might seem simple to state this but in traditional, didactic learning the trainer / facilitator / teacher is often the centre of attention. The success of the experiential approach depends on the learner’s engagement. Learners can only make best use of their opportunities if they are ready, willing and able to become personally involved in the process. Our role as facilitators is to provide context for that to happen. Learners have to be prepared to actively develop their understanding, critique and evaluate the messages in their context.
An observer is in a privileged position, often seeing aspects that are not obvious to others. If you observe a point that isn’t raised during a reflection it is legitimate to raise it, but best through observations and questions. If, despite you stating what you saw or understood to be happening and then questioning, individuals don’t relate to the point, there is no benefit in pursuing as any ‘learning’ will not be theirs.
A learning activity is a means to an end, not an end in itself. The purpose of an experiential learning activity is to create an opportunity for reflection, new ways of thinking (or being) and a memorable personal learning. The ideal activity will engage, challenge and stimulate with learners becoming absorbed in the task in their own persona or natural behaviour. The activity must be designed and facilitated carefully so that the activity has impact, but doesn’t override the impact and memory of the learning. The size and scope of the activity doesn’t need to have all the ‘bells and whistles’ in order to be memorable and provide real learning. In fact, sometimes the simpler the activity, the more poignant the learning.
To find out more about True North Learning’s Experiential Learning Methodology click here: http://truenorthlearning.com.au/pages/experiential-learning-methodology.php