Since the nineteenth century physicists have followed the law of conservation of energy: energy is neither created nor destroyed, it merely changes its form or location. For example, fuel for a car can turn from chemical energy into kinetic energy (leading to car movement, sound and heat), but the total energy in the system will remain constant.
Organizations are similar. As a leader you cannot change the overall level of energy in your business (unless you add more people or assets), but you can change its form and location. Your priority is to maximse your ability to turn other forms of energy into ‘kinetic energy’ – the energy that relates to the movement of an object. To maximise your organization’s ‘kinetic energy’ you must understand and deal with the areas where energy is wasted and turned into ‘unproductive’ energy, because once it has changed its form it is very hard, if not impossible, to get it back to productive energy.
Too many managers simply let the sources of unproductive energy continue, inhibiting their companies’ ability to move, progress and grow. Which of these five types of ‘unproductive’ energy are inhibiting your ability to get things done and decelerating the growth of your business?
- Heat energy. Where is there the maximum friction in your organization? Where do processes and activities become stuck? The friction and heat may result from differences of opinion and disputes between managers, bottlenecks in key processes or inappropriate management of customer issues. Whatever its source, you must ensure that the friction is minimised. Where is your business generating excessive heat?
- Sound energy. These are the complaints and issues – both from within your business as well as from your customers – which you must deal with if you are to accelerate growth. As with physical objects, sound energy is often associated with heat energy. Where are the main noises coming from within your business and what do they tell you about your ability to grow?
- Chemical energy. This is the energy that’s stored in fuel and is essential to your organization’s ability to operate. Your ‘chemical energy’ includes your financial resources, your fixed assets and working capital and, of course, the health and vitality of your people. If all you do, however, is store your chemical energy your ability to grow and thrive will, over time, be diminished. Apple Inc, for example, is currently sitting on over $100 billion in cash reserves, and this money could be more usefully utilised by returning it to shareholders or investing in new businesses, products and services. Where are you storing excessive levels of ‘chemical energy’ in your organization?
- Elastic potential energy. When an object is twisted or stretched, it gains elastic potential energy. This can be turned into kinetic energy quite rapidly, once the stretch or twist is released, but it can also be lost through heat and sound if it is stretched and twisted excessively. Where is your organization being routinely stretched too much and how is that process wasting your ability to gain movement on your most important objectives?
- Gravitational potential energy. This is the energy an object gains as it moves higher from the ground. Organizationally, it is the energy of teams and departments that are underutilized, and where capabilities have been highly developed but are not being fully deployed. Recently, for example, one of my retail clients was able to accelerate the implementation of a new customer insight system by switching the leader of the project from someone who was a good general manager but had few of the technical skills required, to someone who could both lead the team and get the best out of the system. Turning the new leader’s ‘potential energy’ into ‘kinetic energy’ has, in the view of my client, reduced the implementation time by at least six months. Where do you have high potential people who are not in a position to fully turn their potential into organizational progress?
How are you managing the energy of your organization, and how are you ensuring that turn these five sources of energy into productive, kinetic energy that will drive your company’s growth?
© Stuart Cross 2013. All rights reserved.