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Organizational energy

What it is, how it’s created, and how it’s destroyed

One of the most powerful and elegant concepts in physics is energy. While not a fundamental metric like mass, length, time, and charge, energy is precisely defined from these fundamentals. Its power in allowing us to understand how physical things work has always seemed almost magical to me. Without the concept of energy and its properties, the physical world would appear to us as an unintelligible mess, not much better than the Dark Ages.

The notion of energy is also used in everyday language to describe humans or collections of them, and while this kind of energy is not precisely or even loosely defined, we seem to know what it means, at least contextually. Sports teams have high- or low-energy games. One day the legs are made of springs, and the collective brains are alert and anticipative. In the next game, these same people have legs made of wet cardboard and seem to have the collective psyche of a bag of rocks. Individuals can be described as “high energy” if they seem to be constantly in (physical or mental) motion, always aware, and always ready to work or contribute.

We tend to admire high-energy companies. We view them as always at the top of their game. They tend to succeed in any economic environment. They are a major player in whatever competitive landscape they play in, and they attract and keep the best talent.

We know that to succeed, companies need something called organizational energy, even though it seems to be hard to define. We also more or less assume, from experience or intuition, that every team and company needs high-energy individuals, even if it’s just one.

An organization is much more than the sum of the characteristics of the people that make up its roster. Other factors are at work. It’s quite possible to have a low-energy organization consisting of high-energy people. This happens when all the motion, awareness, and readiness are consistently wasted. Eventually the people in such an organization become low-energy individuals. Conversely, it’s possible to have a high-energy organization made up of people with average energy and just a few (or even one) high-energy people. This happens when the available motion, awareness, and readiness are not dissipated but directed and focused.

Whether they know it or not, organization managers and supervisors work with this energy issue every day. Most find it to be an abstract, confusing, even mysterious concept. Let’s see if we can get our arms around this by associating organizational energy with more familiar things.

First, let’s attempt to create a rough working definition of organizational energy: An organization’s collective awareness of the environment and its current state in it; and the organization’s fitness and will to act to improve the environment, its current state, or both. The key concepts are “awareness” and “fitness and will to act”—there must be both for an organization to have any energy.

Awareness

People need to be aware of the external environment in which their organization operates. This includes the characteristics of competitors, available customers, and their sourcing policies and tendencies. This also includes being aware of noncommercial factors such as current and future regulatory and tax policies.

They also need to be aware of the organization’s internal environment. This means they can accurately assess the fitness of people, machines, company policies, and other resources to successfully operate in the external environment.

Company leaders sometimes conduct comparative studies to improve their awareness of both internal and external environments. Management books call this benchmarking. This puts a metric of sorts on the current state.

High-awareness marks give an organization a strong foundation for being a high-energy place. But a company with low awareness can be only a low-energy place, since the energy of its people can’t be effectively directed. In practical terms, awareness translates into knowing who you are, what makes you special, where and why you make money, how you compare to others, and what can blow you up.

Awareness is at the heart of that great book of competitive truth, Only the Paranoid Survive, by Andy Grove of Intel, one of the world’s highest-energy companies. Be very aware of awareness.

Fitness and Will to Act

Once people are aware, they must lead and take ownership of improvement initiatives. This involves a credible and actionable formulation of the challenges and opportunities that exist, as well as the range of solutions. Essentially, this means defining “why” in clear and simple terms, and “how” in believable ones.

In an organization with the will to act and improve, leaders regularly monitor and coach others. They make sure everyone has the means to act, and they expect more action will follow. The organization’s leaders also define progress and success and provide reinforcing feedback for wins along the way.

These leaders tolerate mistakes, missteps, and negative interim results, yet do not tolerate inaction. They tolerate questions and challenges of the status quo, yet do not tolerate indifference. And they enlist and engage workers in self-reinforcing initiatives.

Communication is clear and constant. People know about initiatives, their progress, and, most important, why anything is being done in the first place. People also feel comfortable admitting failure and convey excitement when trying something else.

Clearly, leadership is critical in a high-energy company, but that leadership needn’t be associated with one person. In fact, it rarely is. The leadership in a high-energy company is most often highly diffused and delegated.

All these are the factors that characterize an organization that has the will to improve. Note that some factors are procedural and managerial, while others are cultural. The cultural part is nothing more than what the organization views as acceptable or desirable behavior. But the most important factor goes back to defining “why” and “how.” At the end of the day, “why” is the most important word in a high-energy organization.

Energy Destruction

When I visit low-energy organizations, I see some or all of what follows as common denominators. These organizations have poorly defined or badly managed improvement initiatives, or no improvement initiatives at all. Intolerant of questioning anything, they have a culture of keeping one’s head down. It’s a culture of sacred cows.

Leaders focus on the trivial and remain oblivious to the important. They tend to make grand pronouncements but neglect the means of resourcing or managing them. Or they practice “history major management,” which tends to overrate the glories of the past while neglecting (actually fearing) the opportunities of the future.

These traits are very human, and they exist even in high-energy companies, but usually at a minimal level. At a low-energy organization these traits are pervasive. They bleed energy and, if sufficiently severe, eventually kill the entire company.

A low-energy company can transform into a high-energy one simply by dumping the factors that bleed energy and replace them with ones that generate energy. Interestingly, the companies with very high energy often get that way because they were facing failure. They had been low-energy dullards before they got the life-or-death message in very clear terms. This does tend to focus the mind and generate organizational energy. Great companies keep that energy and continually regenerate it. Others lurch right back to their prior state and repeat the process until failure is absolute.

Winning Begets Winning

It all goes back to having awareness as well as the fitness and will to act. In fact, we can stipulate that the qualitative measure of organizational energy is the product of the “awareness” and “fitness and will” components.

And we can add another key characteristic of organizational energy: reinforcing feedback. This means that low energy (or, more accurately, the factors that contribute to low energy) tends to lower future organizational energy or keep it the same, while the factors that contribute to high energy tend to drive higher energy in the future. This is simply a generalization of what anyone who plays or follows sports knows: Winning begets more winning and losing begets more losing.

Organizational energy is not the energy of physics. It’s not conserved. It can be created or destroyed. But like in the physical world, it’s best to treat it as indispensable.

About the Author

Dick Kallage

Dick Kallage was a management consultant to the metal fabricating industry. Kallage was the author of The FABRICATOR's "Improvement Insights" column from May 2012 to March 2016.