By Frank Bournois

Whether its high turnover of staff, absenteeism, psychological withdrawal, or interpersonal conflict – any organisation may suffer from dysfunctionalities. Just as truly pure air can only be found in a laboratory, a completely dysfunction-free organisation is neither realistic nor scalable. That said, minimising the symptoms of dysfunctional management by addressing their root causes is a critical consideration for any organisation, regardless of its size, sector or internal composition.

To do this effectively and consistently – since dysfunction is multi-faceted and must always be revisited – leaders must think like a doctor of medicine. They must think of their organisation as a patient in need of careful diagnosis and treatment, using the right tools in the correct manner.

A question of SCOPE – The organisation as an organism

An organisation, be it a government department, a wholly private enterprise, or anything in between, can be assessed as a system with five distinct but interconnected parts, which we can refer to as SCOPE:

Strategy – What the purpose or ambition of the organisation is, i.e. its medium and long term objectives

Culture – The organisation’s inherent values, history, habits, rituals, expectations of leaders and followers, and its attitude towards partners and end users

Organisation – Makeup of the organisation’s various departments, leadership structures, key teams, and frontline employees

People – Everyone working within the organisation, including leaders, executives, managers, employees, and contractors, along with the recruitment and reward systems in place

Environment – The space and circumstances within which the organisation operates, encompassing competitors and governmental laws and regulations

Together, these five elements cover the most pertinent aspects of what makes an organisation unique. They also provide sufficient SCOPE for any observer to look for symptoms of organisational dysfunction and trace them back to their root causes. Trying to understand how the various subparts inter-relate is key, and identifying potential inconsistencies helps decrease dysfunctional management.

When doctors diagnose a patient, they don’t just look at the body or specific organs in front of them; they also consider the patient’s whole lifestyle. Their diet, exercise habits, living conditions, job and workplace conditions, their family history – these are all invaluable lines of inquiry that can provide relevant information that points towards the most likely area in which the real problems can be found. In Western medicine this is called a psycho-somatic approach (mind and body approach). In the same way, organisations possess visible or measurable indicators along with less visible or tangible characteristics (for example rumours, hidden management practices, cultural habits).

Accordingly, managers and leaders investigating dysfunctions must be able to look across all parts of the organisation, maintaining an open mind while focusing on specific problem areas in a timely manner.

Just as there are five parts to an organisation, dysfunction can be addressed in five steps:

Audit

Any successful attempt to root out dysfunctional elements of an organisation begins with auditing. This isn’t just the literal process of carrying out audits of various operational structures and processes; it’s a much broader process of listening and observing the true state of things. Like listening to a patient’s heartbeat, auditing means stepping back from the daily operational side of the organisation and listening to what makes it tick. Also trying to see how the measurements evolve over time.

Recognise symptoms

A classic mistake in both medicine and organisational management is to confuse symptoms with root causes. Symptoms of dysfunction can often be easy to spot, but their true cause may be more subtle.

For example, imagine a bottled water factory that finds itself with far too much stock. This may seem like a clear-cut case of poor inventory management, suggesting a simple realignment of logistical processes. However, the root cause could potentially lie in a completely different area, such as key sales team members overpromising but underdelivering on sales, ultimately creating a supply imbalance.

Managers need to think beyond the immediate symptom in front of them, resist the urge to immediately attack it with the first tool to hand, and demonstrate enough patience to search more widely for the root cause. A lot of information may be found in asking customers about problems they see that insiders may not see. Likewise, exit interviews can help find out why some talented employees made the decision to quit.

Make a risk matrix

Even if there are no immediate symptoms of significant organisational dysfunction, it always pays to consider future risks and potential solutions to them. Much like a doctor might examine a healthy patient, spot a potential health concern (slightly high blood pressure, for example) and then suggest measures to ameliorate the issue, a risk matrix is an essential method for preventing or alleviating future sources of dysfunction.

Filling a risk matrix requires managers to look across the organisation and ask employees at every level what may impact their work negatively in the future as well as today. Understanding trigger effects can be vital in assessing the things that may accelerate dysfunction – for example, how might moving our headquarters place additional stresses and challenges on certain workforce elements?

When you think about risks, you’re thinking about prevention. This enables the anticipation of future problems and the creation of intelligent, relevant policies based on alerts, whistleblowing, arbitration, psychological support, and the discouragement of bad behaviours in the workplace. It is preventive healthcare, rather than reactive. Producing a risk matrix also allows us to see whether the evaluation of risks is shared within the top management team.

Position talent correctly

The effectiveness of any measure deriving from your risk matrix analysis will depend largely on the quality of the managerial talent put in place to enact them. A GP (General Practice) doctor may discern the right course of treatment for a patient, but they are unlikely to deliver all the healthcare treatments alone. Instead, they may defer to specialists like physiotherapists, nutritionists, surgeons, and psychiatrists. Similarly, any organisation must realise who is best suited to implement the right remedies, and then empower them accordingly.

Revisit

As individuals, we go for health check-ups regularly (or, at least, we should!) rather than assuming that we’ll never be sick again simply because a doctor found and resolved a prior medical problem. Similarly, organisations must be vigilant in regularly reassessing their organisational health.

Such regular ‘checkups’ give any organisation a better chance of reducing risks, reducing symptoms of dysfunction, and tailoring their approach to better fit the changing composition (SCOPE) of the organisation itself.

Thinking like a doctor across all the five points discussed above is a smart way to tackle the multifaceted causes of organisational dysfunction, preventing the similarly widespread types of losses and damages they can inflict on an otherwise healthy entity.

Frank Bournois is Vice President and Dean of China Europe International Business School (CEIBS). He joined CEIBS in April 2023. Prof. Bournois specialises in corporate governance and the study of how large European firms identify, manage and develop their future leaders.