On Management

Dec. 21, 2004
Give your company a physical.

During a recent annual physical exam, my doctor -- who has known me since my corporate-executive days -- began telling me about his role as a managing director of a large medical group with 85 doctors. By the time he was finished, we agreed that we both did much the same thing. He diagnoses physical illnesses and prescribes both treatments and healthier life habits. I often do the same thing with companies. The parallels between the practice of medicine and the management of a business are striking. Perhaps that's why Peter Drucker called his breakthrough book The Practice of Management (1954, Harper). The first step in a physical exam is to ask a lot of questions about the patient's history, prior problems, current health issues or complaints, and lifestyle factors such as exercise and diet. (The same thing happens when a consultant undertakes a new engagement.) Next, the doctor checks the file, updated with results from a variety of stand-ard tests, and compares the data with "normal" ranges. (Sounds a lot like a review of the company financial and operating statements.) Here are some of the most obvious parallels -- along with a guide to giving your company a physical exam: Brain function -- In a business, this would be strategy and planning. Are the instructions governing various corporate functions -- based on input from the "sensory organs" -- getting through to the rest of the organization clearly? Nervous system -- How responsive are the information technology and communications systems as they deliver messages to and from the corporate brain? (In checking reflexes, the doctor taps his little hammer on the knee and the foot jumps. How are the reflexes of your business?) Eyes, ears, nose, mouth -- These organs sense the outside world, just as a good sales and marketing group should. They listen, look, smell, taste -- and feed it all back to the brain for processing and instructions. Are your "sensors" accurately telling you what the customer says and feels? Arms, hands, legs, feet, and their associated muscle groups -- This is the operations organization that acquires materials, makes things, and then delivers them. It converts energy into motion -- constructively and with purpose. What shape is your operating structure in? Is it muscular, lean, and agile -- or is it fat and sluggish? Lungs, digestive system -- This is where the resources (money and/or the energy to run things) are absorbed and processed. Waste is filtered out and eliminated here, too. Are you using resources efficiently and getting rid of waste? I saved one vital organ for last. The heart -- This is the muscle that contracts and expands thousands of times each hour, carrying the oxygen and nutrients needed to keep the brain and the body functioning in a healthy manner. Fewer, stronger heartbeats, 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 pulse rate after stressful activity. It is the same with companies. The heart of the corporation is its culture, its sense of purpose and meaning. 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, which then cuts off the flow of information to other bodily functions. Why is it that 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, sending strength-giving nutrients throughout the organism? Doctors check the body with a series of analytical tests. Diagnosing a company requires similar tests -- although the results, unfortunately, are seldom as well quantified as they should be. Next time you give your company a "physical," make sure your diagnostic instruments are in good working order. Now, let's see, where did I put my stethoscope? John Mariotti, a former manufacturing CEO, is president of The Enterprise Group, a consulting business. He lives in Knoxville. His e-mail address is [email protected].

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