Health within business and the business world

OPINION

The other day my wife took an elegant 1950s wind-up watch into the watch maker to have it serviced under a repair guarantee. It just wasn’t keeping time. 

The technician placed the watch on a precision machine, listening to its heartbeat and it all seemed fine.  He then asked if her hand-bag has a magnetic clasp on it because that can affect old style watches.

It made me aware that with a focus on convenience and competitive pricing there come unknown hazards and risks affecting precision and true value. The watch mechanism is affected by the magnetic forces every time it brushed close to the bag. In the same way, business health is affected by the dictates of convenience and lack of understanding of how different factors can impact precision.

An interesting aspect when considering the various issues of business health is the issue of safety. We have been focusing on the wrong definition of health by assuming the meaning of health is the same as a doctor would discuss. Surely it means the wellness of people! It does to a point. But there is something missing.

Many factors correspond to health, applying not only to our bodies but our minds, our souls, the environment in which we live, work, society’s values and standards we live and abide by.

Could I give you a definition of health? In The Turning Point by Fritjof Capra, he discusses health at length with its history and comparing Western orientation towards health compared to Eastern beliefs and systems.

According to Mr Capra, the Western world is hampered because it ignores what it cannot measure or observe and literally everything else is irrelevant. The Eastern beliefs and systems have a different approach towards health and the overall wellbeing of an individual. They take a holistic approach and include the environmental impact upon an individual and the entity. They include those factors that cannot necessarily be measured or verbally explained.

My personal definition of health would therefore be “a general sense of wellbeing and balance within ourselves (physically and mentally as a whole) and how we relate to the immediate environment, our family members and fellow work mates.”

Can we apply this feeling of general wellbeing and balanced approach to health of the business? What does that approach look like? Is there a path that we as business leaders must take or at least be aware to focus on health of our businesses? 

All too often important facets of business health are impacted negatively by accountants and economists whose primary  focus on ratios and KPIs is to solely to make the year end results appear in good order for the shareholders, partners and bank. 

Are these measures too narrow and actually hiding some really crucial imbalances that will lead to some tipping point or disaster down the road? For instance, how can Pumpkin Patch, the darling of the New Zealand retail industry for 25 years no longer be in existence? What illness was being hidden or not recognised before it was too late?

Can we as leaders ensure that our business is healthy not only in the books of accounts but also within the culture of the business? Symptoms that are often taken for granted are:

•    Claims for motor vehicles accidents
•    Errors and omissions in documentation
•    Errors in production orders
•    High staff turnover
•    On-site injuries
•    Absenteeism

These are all very revealing symptoms which are often ignored by business leaders.

We have to ask some serious questions because something else is going on. What pressures are causing stress not only on your management but also on those people working for you?

For example, I spoke to a gentleman the other weekend who works for a seemingly very successful company (a New Zealand company exporting its products overseas). The owner of the business is so successful that the business buildings are all mortgage free. As we delved deeper into the business it was revealed that the business has experienced a turnover of 25% of its staff within 12 months. 

This is IP and historical knowledge walking out the door as well as huge collateral damage not being measured. This is a symptom of an illness within the business. In addition motor vehicle accident insurance claims are high and this is another symptom. The business may be healthy financially but there is an imbalance.       

As an individual if you were to start continually falling over you would want to go to the doctor. The body is telling you that you are out of balance. The same applies your business. Your doctor may prescribe some pills for your imbalance and hopefully the problem will go away. Insurance products are like pills in that they only deal with the symptom (hopefully). It doesn’t actually deal with the root issue.

As leaders we tend to scoff at stress and use the phrase “toughen up.” How often have we heard “stress is good for us,” “it’s part of the job.” But the level of stress is killing us. Would there be a change to the business, us as leaders and our people if there was not this constant stress placed upon the business? The simple answer: the number of accidents and claims would reduce.

These are symptoms of many factors impacting upon your team daily. This can’t go on forever without a price to be paid but for many it does and the consequences are severe and are not easily measured.  The life of your business cannot be saved by the silver bullet of insurance. 

So health of a business is quite encompassing and we need to understand that if we don’t understand the symptom then - like our bodies or any organism - the law of entropy requires a rebalancing if the entity is to survive or it will surely die. 

Before there can be safety there needs to be health of the business requiring an understanding of all the factors affecting the business and to take a holistic approach to the healing of the business. So what factor of convenience are you using in your business that is actually damaging its operational value?

John Barley is managing director of Barley Insurances Ltd