David Cummings on Startups

Organizational Health as the Next Corporate Frontier

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David Cummings

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Yesterday I started reading The Advantage: Why Organizational Health Trumps Everything Else in Business by Patrick Lencioni, one of my favorite authors. So far, it’s another must-have book in an entrepreneur’s collection.

Lencioni uses the term “organizational health” and explicitly says he doesn’t like the term “corporate culture” because it’s over used. I disagree. He uses the subtitle “Why Organizational Health Trumps Everything Else in Business” and corresponding book content is nearly identical to my favorite saying that corporate culture is the only sustainable competitive advantage completely within the control of the company.

Another interesting point he makes is that management teams are so strong, on average, with strategy, operations, marketing, etc that those are much less of a differentiator than they used to be. Talent is still extremely important but for companies of size the managers are good enough in the main functional areas. Now, the real differentiation comes from organizational health and the softer, internal people side of the business.

I’m looking forward to reading more of the book and can already recommend it to entrepreneurs that believe a strong corporate culture is critical to success.

Note: The Six Critical Questions for Every Entrepreneur.

Comments

2 responses to “Organizational Health as the Next Corporate Frontier”

  1. shawnpitman Avatar
    shawnpitman

    It’s an interesting point you’re calling attention to here. As an engineering management consultant, I often see exactly what you’re talking about: a corporate structure designed to suppress outlying data points. It’s a recurring motif in mid-sized businesses that have lost their start-up edge.

    Marketing and engineering are much more closely entwined than modern corporate culture will admit. In my short post about “Growth Hacking in Engineering” I outline a simple argument in favor of involving your engineering group in assessing marketing decisions (http://shawnpitman.com/2012/04/10/224/):

    “…if your market share is declining because your competitor released a higher through-put product your options are to either (a) cost reduce to stay competitive, or (b) beat them at their own game [by raising production through-put]. What other solution is there? And who could make that [assessment] if not an engineer?” (Source: http://www.shawnpitman.com)

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  2. asteinb Avatar
    asteinb

    Corporate culture is probably undervalued in comparison to Smarts.

    Having a deep bench full of incredibly smart people can make up for a lot. Smart people – and a company that wins – makes it much easier to have a winning culture. The analogy is you always hear about the great culture of winning teams, like the Colts, on ESPN – you never hear about the great culture of the Cleveland Browns.

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