Is Your Business Fit?

For me, fitness is everything. Having been woken up a few years ago to the fact that I might not be as fit as I thought I was, it figures centrally in life. It requires more than simply eating right and exercising…two things that many people struggle with. It demands a mental discipline that few people are equipped to handle alone. Fortunately, I had a nutritionist and cardiologist to assist me.

The concept of fitness, though, is not confined to the human body. It extends to bodies of people, aka organizations. And in the context of business, the rigor of discipline required to achieve and sustain fitness is even more complex, requiring expert guidance.

3DcoverResizeLuckily, a new book by Daniel Markovitz entitled Building the Fit Organization lends that helping hand.

In it, he proposes six core principles that embody the discipline needed to bring your business to a level of fitness that will enable it to achieve peak performance, which he defines as strength, speed, and agility.

I caught up with Dan to ask him a few questions about organizational fitness.

 

 

What’s your definition of “fit” in the context of business, and how does it differ from, say, operational excellence, or any other definition of excellence, for that matter?

Dan_MarkovitzThere’s nothing wrong with operational excellence of course, but in my view, that’s merely one aspect of organizational fitness. For one thing, operational excellence feels like a static notion to me—you’re either excellent or you’re not. Also, operational excellence can simply mean that you get a great return on assets. Nothing wrong with that, of course, but it completely ignores the raison d’etre of any organization: the consumer. There are plenty of companies that are absolutely terrific at making, selling, and shipping stuff. . .stuff, though, that customers don’t really want. You can see examples of that in the food industry right now. The big legacy brands like Kraft or Budweiser are dynamite at delivering products that consumers are increasingly walking away from.

By contrast, my definition of a fit organization is a dynamic, constantly improving, profoundly customer-focused entity that delivers superior performance and results over the long haul. Like personal physical fitness (especially for, ahem, older people like you and me!), it’s a continual journey. Not only do you have to work to maintain fitness, but there’s no end point. You can always get fitter—stronger, more flexible, faster, greater cardiovascular capacity, etc. The same is true for an organization that strives to be fit.

Much of what you write is what I would categorize as “lean thinking,” so I’m wondering if organizational fitness is like human fitness in that you be “lean” but not necessarily “fit”?

Well, I think we both share a background based on lean principles, which trace their origins to Toyota. My goal with this book was to take the jargon and the mystery out of lean (as well as the Japanese) and make it accessible to a much broader community of professionals who aren’t necessarily lining up to worship at the church of Toyota.

Yes, the core concepts of the book derive from lean thinking, and I would never suggest that people interested in continuous improvement ignore the classic books on the subject. However, I think it’s equally important for people to feel free to find their own path to “fitness,” rather than slavishly following what some other company has done in the past.

This book is an attempt to provide readers with new language and new metaphors to talk about an old subject. Frankly, I couldn’t care less if people use my athletic metaphors, or they create their own language based on playing the violin, or making a watercolor painting, or cooking. The goal is for leaders in organizations to communicate these principles in a way that resonates with their team.

Amen! Another thought: are younger companies naturally more fit than more mature companies?

I’m not sure that the key issue is the age of the company. I think the size of the company is more important—although obviously there’s a correlation between youth and small size.

Younger/smaller companies have an easier time getting fit than older firms. If you look at the startups in Silicon Valley, for example, you see organizations that are, to use my language from before, dynamic, constantly improving, profoundly customer-focused entities. And, they are the ones that will deliver superior performance over the long haul. When all you have in the firm is twelve engineers and a dog, you don’t have to deal with functional silos, internecine battles, or a loss of focus on the one core value proposition that you’re delivering to customers.

That doesn’t mean that larger or older companies can’t become fit. It’s just harder for them, because their organizational ships have become encrusted with the barnacles of internal policies and politics, diffusion of clarity, and in the case of public companies, a need to satisfy the quarterly demands of Wall Street. Some firms, like W.L. Gore and Dana Corporation, mitigate these problems by setting limits on the size of their facilities. Others, like Johnson & Johnson and 3M, actually spin off divisions when they reach a certain size.

I can easily recognize a fit athlete being by watching their performance. How would I be able to recognize a fit organization from the outside?

You can spot a fit organization by its long-term performance. Not one quarter, not one year, but sustained performance over a long period of time. In this regard, I think, you can compare a “fit” company to what Jim Collins calls a “great” company. You can only identify it after many years have passed.

The truth is that it’s tough to identify a fit organization from the outside. A fit organization is focused on its processes—or to use Tom Johnson’s locution, “management by means.” It trusts that the right processes will deliver the right results over the long run. So unless you’re able to walk the halls and see the processes with your own eyes, you can’t really tell whether the company has embraced continuous improvement, whether it practices scientific thinking, whether it truly respects its employees, etc.

You can only judge by the long-term results. And I’m convinced that while there are plenty of companies that do well in the short term, in the long run, only the fit will survive. Take a look at the Detroit three automakers—they couldn’t sustain their performance over the long haul once they were exposed to serious foreign competition.

You generously offer a free, downloadable assessment, in which you list the Plan-Do-Check-Act cycle as a key indicator of fitness. Here’s the thing: I know and work with several companies that don’t use it at all, and that I consider far more fit — stronger, faster, more agile—than some I work with that do use it companywide. Care to comment?

Obviously, it would be foolish for me to opine without knowing the specifics. (Or it would make me a politician.) But I would say that Plan-Do-Check-Act is one element of fitness. It’s an important one to be sure, but it’s only one element. There are plenty of runners who have amazing cardiovascular capacity, but no upper body strength. Are they fit? Well, yes, from one perspective—they’re not morbidly obese and are unlikely to suffer a coronary—but they could definitely benefit from some time in the weight room. The companies you have in mind might be in a similar situation—very fit in some aspects of their operations, but needing to improve in their PDCA thinking.

It’s important to remember that the real value of PDCA thinking is that it makes the organization more responsive, more flexible, more able to adapt to changing circumstances over the long term. It might not matter this year that the company practices PDCA, but if everyone becomes, essentially, a scientist, the organization has an enormous capacity to weather challenges that might sink more rigid competitors. And I’d rather rely upon the (scientific) wisdom of the crowds than the inspiration of one or two leaders.

What’s the one thing you want people to take away from this book?

That there are a few fundamental principles that will enable you to improve and thrive as an organization, and that you don’t need to study Japanese or visit Toyota to learn it. Sorry. That’s two things.

Building the Fit Organization is available at Amazon for $28 (hardcover).