Organizations risking their corporate health

2007

Many corporate leaders are too focused on managing day-to-day crises to see that their organizations have serious underlying corporate health issues which could effect their long-term survival and competitiveness.

A new study co-sponsored by the Iacocca Institute of Lehigh University and SAS Institute's BetterManagement.com claims that nearly half of all organizations have serious corporate health issues, with more than half also suffering from employee retention difficulties.

While many respondents expressed overall optimism about near-term financial performance, almost half are concerned about some of their organizations' fundamental underpinnings.

These concerns centred particularly on their organization's strategy for the future as well as its ability to translate this strategy into action and execution - including leadership effectiveness and aligning the workforce.

"The study's results are a 'wake up call' to organization leaders regarding the importance of continual diagnosis and attention to core principles," said Robert A. Rudzki, whose corporate health assessment framework forms the basis of the study.

"In the current, dynamic business environment, it is easy to become consumed with daily emergencies and managing complexity. Senior leadership of organizations must set aside time to focus on periodic and comprehensive health checkups for their organizations and pay attention to core principles on an ongoing basis.

The study reveals that when it comes to gauging corporate health, some major disconnect exists between the views of the most senior-level executives and other levels of the organization.

For example, four out of 10 senior mangers rated their organizations' employee retention as either "fair" or "not good." But this proportion rose to more than six out of 10 for all other levels of respondents.

Poor employee morale is another widespread problem, with some four out of 10 respondents suggesting that morale of their top management was fair or not good and six out of 10 saying the same about the morale of their non-supervisory personnel.

"It is not a matter of choosing between the short term or the long term. Managing complexity and leading into the future both deserve attention and resources," Robert Rudzki added.

"Corporate executives and boards endanger their organization's long-term health by not paying continuous attention to the core principles of building and preserving corporate health."

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