The stories people tell about their businesses are vital to business success. They fall into two camps: either building for future health or indicating a slow progression into decline.

Businesses are built on the belief that narratives create our reality. Individuals, teams, whole organisations, regions, religions, tribes and nations forge their identities through the stories they tell each other, and those they share with outsiders. And we treat these ‘truths’ as self-evident. As such, business leaders have a great deal of responsibility around determining the nature of their organisation’s narrative. As Harvard Professor of Psychology Howard Gardner observes:

“All successful leaders – political, military, religious, academic or industrial – are successful to the extent that they tell and embody persuasive stories about where the institutions they lead should be going and how they will get there.”

Leading Minds, Howard Gardner

The story you tell as a leader will shape how your organisation moves forward. Here’s what you need to know.

The way people talk about themselves and their activities is important. People experiencing personal illness, for example, construct narratives around their illnesses. They try to make sense of their experiences by standing back from the immediacy of the trauma, pain, shock of discovery, potential limitations, even the finality of the diagnosis. All this is a necessary step towards resolution.

Framing the experience well can make a significant difference to the illness’ future course, and the language we use to reinforce people’s agency in the experience really does make a significant difference to outcomes. Seeing the significance of the illness in wider terms helps enhance the person’s power, even when everything else feels out of control. For the individual, a vestige of control plus positive willfulness helps counter overwhelming feelings of powerlessness and loss of control. And not being ‘a victim’ creates subtle hormonal changes that help us cope.

Organisations also go through periods of serious illness in the shape of downturns, crises, serious loss of markets and nose-diving sales. As a business leader the ways you address the problem, take action and remedy things are all worth careful consideration. Again, not being a victim helps everyone feel that, despite everything, there are still some things they can control.

As a leader it’s your job to be straightforward and real, to speak directly to the whole organisation with integrity. Who has agency in this crisis? What can be done under the circumstances? What can be salvaged from the crisis? At times like this the best leaders step up and show their mettle. People look to their leaders to speak openly and honestly about the problems afflicting the business. And crafting the narrative to counter negative, energy-sapping stories of victimhood is a good start.

For Boards of Directors, Trustees and senior teams, a positive narrative means a lot. How can this organisation function healthily? How can this business be healthy? What is Organisational Health?

As business consultant Patrick Lencioni says in his book, The Advantage: Why Organizational Health Trumps Everything else in Business: “Organizational health will one day surpass all other disciplines in business as the greatest opportunity for improvement and competitive advantage.” You can read more here.

In an interview published on his website, he claims that organisational health has several key elements. First and foremost, a cohesive leadership team needs real clarity of direction. They trust each other enough to hold honest conversations, even if they’re difficult. They communicate clearly to the rest of the organisation with messaging that everyone can understand, and which makes perfect sense.

“Simply put, an organization is healthy when it is whole, consistent and complete, when its management, operations and culture are unified. Healthy organizations outperform their counterparts, are free of politics and confusion and provide an environment where star performers never want to leave.”

For more insight, you can listen to Patrick here

CEOs, Chairs, NEDs and Senior Executive teams need to take the organisational health of their enterprises seriously, because doing so will help create a huge competitive advantage for the organisation. As Lencioni also says:

“Addressing organizational health provides an incredible advantage to companies because ultimately health becomes the multiplier of intelligence. The healthier an organization is, the more of its intelligence it is able to tap into and actually use. Most organizations only exploit a fraction of the knowledge, experience and intellectual capital available to them. The healthy ones tap into all of it. Addressing health helps companies to make smarter decisions, faster, without politics and confusion.”

If you are a CEO or a Chair and you want to focus on the health of your organisation and change your narrative to a health narrative, what do you do? Well, an obvious first step is to move away from business-as-usual. Take the leadership team or Board off-site together. Take a day or two for some clear, focused, honest, disciplined discussion – and do the diagnostics together. It’s an enormously practical process, examining everything from how the team behaves to what being successful will look and feel like, and what are the most important priorities.

A good first session will often wake up the leadership collectively to their fundamental responsibility as guardians of the organisation’s health. It can also create the momentum the team needs to lead the organisation to sustainable health. And when that happens, your bottom line will ultimately feel the benefit.

If you’re interested in how your leadership team or Board can refocus your business’ narrative to achieve good organisational health, we can help you do that. Please get in touch