People & Strategy Winter 2015 Vol. 38 Issue 1 - 28

strongly from the top down by analyzing
external trends and developing a clear strategy for where the market is going.
The fourth and final recipe, talent and knowledge core, is found frequently among successful professional-services firms, professional
sports teams, and entertainment businesses.
Such organizations emphasize building competitive advantage by assembling and managing a high-quality talent and knowledge base.
They typically focus on creating the right mix
of financial and nonfinancial incentives to

showed clearly that the appropriate recipe was
execution edge. After an action-planning
workshop, executives developed interventions
to encourage the most important practices for
this recipe: knowledge sharing, employee
involvement, and a creative and entrepreneurial environment. Efforts were made to redefine
the role of frontline supervisors (including
retraining), to engage the frontline workforce,
and to step up the impact of employee communication. These initiatives led to greater
employee involvement in decisions and more
bottom-up knowledge sharing.

While most organizations use career opportunities to
motivate employees, companies in [the leader-driven]
cluster use career opportunities as a leadershipdevelopment practice. Role modeling and real
experience are more important than passing along
sage lessons.
acquire the best talent and then focus on
motivating their employees and giving them
opportunities. In contrast to companies in the
leader-driven group (whose value is created
through teams directed by a strong leader),
talent and knowledge-core organizations
succeed thanks to highly skilled individual
performers.

Implementing a
Healthy Recipe
The case of a global chemical manufacturer
we know highlights the power of the recipe
approach. This company faced increasing
energy costs, intensifying international competition, stricter environmental regulation,
and the shutdown of one of its sites in an environmental permit dispute. It had to move
quickly to reduce its costs, improve its maintenance productivity, and raise production.
This company's mining operation had approximately 450 employees distributed in an area
more than five times the size of Manhattan. A
health-feedback session where the voice of the
organization was "mirrored" back to it
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PEOPLE & STRATEGY

For example, the company introduced regular
one-on-one visits between miners and supervisors to discuss productivity strategies, review
progress meeting production targets, and
engage in "micromine planning." Supervisors
became the bottom-up conduit for crossfertilizing these ideas in daily shift-production
meetings, weekly "step back" meetings, and
monthly management meetings.
Other miners and supervisors, motivated no
doubt by the continuing emphasis on accountability for production, voluntarily adopted
the best solutions. Not unexpectedly, the miners and supervisors began to feel greater ownership of their work, and employee
engagement increased by 20 percent.
As for the operational-performance goals,
wrench time5 increased to 45 percent, from a
baseline of 22 percent. Productivity, in turn,
rose by 50 percent over a two-year period,
generating additional profits of $350 million.
Costs fell sharply, with annual run-rate
savings of approximately $180 million.
It is worthwhile noting that the transformation blended health objectives with perfor-

mance goals. Neither was treated in isolation.
One reinforced the other, making each immediately relevant and maximizing the likelihood that the organization will sustain
performance and respond successfully if challenged again by severe market disruption.

Building a Healthier
Organization
What can be learned from the four healthy
organizational clusters our latest research
identified? How can companies adapt
accordingly?
We certainly wouldn't suggest that organizations blindly seek to replicate one of the
cluster recipes, ingredient by ingredient or
practice by practice. Just as great chefs don't
copy and paste the recipes of others, companies must take these general archetypes as
inspiration and identify the pattern of
healthy practices that best fits their own
organizations and strategies. In the continuing search for a better-functioning organization, companies should consider the
following issues.

The Imperative of Alignment
Between Strategy and Health
Successful companies match their organizations to their aspirations. Once a company
has identified the most appropriate organizational recipe for the chosen strategy, it should
align the organization as far as possible with
that mix of practices. If its most important
day-to-day practices do not support its strategy, or are not consistent with the direction
communicated by its leadership, the misalignment can often undermine both overall
performance and health.
Such misalignments often happen in strategic
shifts. A large technology company we know
changed its product and service mix and rapidly accelerated its globalization strategy. It
then realized that what it really needed was
a new focus on developing high-potential
leaders who could direct next-generation
businesses and operate with a global mindset. Such moves would bring the company
closer to the leader-driven recipe. Its old
execution focus was no longer a powerful
competitive weapon.

People & Strategy Winter 2015 Vol. 38 Issue 1

Table of Contents for the Digital Edition of People & Strategy Winter 2015 Vol. 38 Issue 1