Wisdom Without Waiting: How long since your company had a physical exam?
© John L. Mariotti 2004
A while back, I was visiting my doctor for the annual physical exam, he asked what I had been doing (he has known me since my corporate executive days), and as I explained, he began telling me about his role as a managing director of a large medical group (85 doctors). By the time he finished, we agreed that we both did much the same thing--he diagnoses and treats physical illnesses and prescribes both treatment and healthier life habits when no illness is evident. I often do the same thing with companies.
The parallels between the practice of medicine and the management of business are too striking to miss. Perhaps that's why Peter Drucker called his first break-through book "The Practice of Management" (Harper & Row, 1954). The first step in a physical exam is asking a lot of questions about history, prior problems, current health issues or complaints, and life health practices like exercise, diet, etc. The same thing happens when a consultant undertakes a new engagement. Next the doctor checks the file, updated with the statistics from a variety of standard tests and measures, and compares them against "normal ranges." Sounds like a review of the financial and operating statements to me. Here are the most obvious parallels--and a guide to giving your company a physical exam.
- Brain function: Strategy and plans--are the instructions to the rest of the bodily functions based on input from sensory organs getting through to the rest of the body, clearly?
- Nervous system: How responsive are the information technology and communications systems as they deliver messages to and from the brain. (Reflex checks are just one of these--tap goes the little hammer on the knee, and the foot jumps! How are the reflexes of your business?)
- Eyes, ears, nose, mouth: These sense the outside world like a good sales and marketing group should. Listen, look, smell, taste, and feed it all back to the brain for processing and instructions. Are your senses telling you what the customer says and feels?
- Arms, hands, legs, feet, and their associated muscle groups: This is the operations organization--acquiring materials, making things, and then delivering them--converting energy into motion, constructively and with purpose. What kind of shape is your operating structure in? Is it muscular, lean and agile, or is it fat and slow?
- Lungs, digestive system: This is where the resources (money which is transformed into goods and services and/or the energy to run things) are taken in and processed. Waste is filtered out and eliminated here too. Are you using resources efficiently, and getting rid of waste?
I saved one organ for last--the heart. This organ and its failure is the leading cause of death among people of our society. When overweight conditions prevail, and too little time and attention are spent on fitness and replacing fat with muscle, the blood pressure goes up, the blood chemistry goes bad, the human heart suffers and the body often dies.
Such it is also with the modern corporation. The heart of the corporation is its culture, its sense of purpose and meaning, the muscle that contracts and expands thousands of times each hour carrying fuel--blood, nutrients, etc. necessary to keep the brain and the body functioning in a normal healthy manner. The healthy heart is a coordinated and strongly beating one. Fewer stronger beats rather than many small aimless ones make for a strong body. The most highly conditioned athletes usually have the slowest heart rate and the fastest recovery to a strong resting heart rate after stressful activity.
It is the same with companies. Lots of small, uncoordinated moves in random directions are like the deadly fibrillation of a diseased heart. Poor flow of blood means the brain and nervous system shut down and information flow is cut off to the remaining bodily functions. Why, then do so many companies cut off information flow just when the need for it is the greatest--in times of stress? And why do they shift direction rapidly, aimlessly, over and over, like the fibrillating heart--instead of establishing a strong, steady rhythm, pulsing with energy and sending strength giving nutrients throughout the organism.
Doctors check the body by doing tests of chemistry, pressure, temperature, reflex action, strength, muscle tone, and by testing the senses--sight, hearing, etc. Analyzing a company uses parallel tests--except the measures and diagnosis is often far from as well quantified, as it should be. Maybe my doctor and I have professions that are not so far apart after all. Now, let's see where I put my stethoscope...
