When was your last corporate cholesterol test?

Leadership

Over time, informal networks mirror the formal structure, which is how silos develop. Restructuring gets people to start forming new networks, making the organization as a whole more creative. ~Freek Vermeulen, Phanish Puranam, Ranjay Gulati

Cholesterol. It clogs your arteries, not quickly, but very slowly. So slowly that you probably don’t even realize it’s happening. It’s even possible to appear quite healthy, but have arteries clogged to the point of near death.

The same thing can be true of organizations. It’s reflected by growing silos, stifling processes and procedures (i.e., routines), and individuals who have amassed influence well out-of-bounds of their position.

The trio of Vermeulen, Puranam, and Gulati developed an assessment, a corporate cholesterol test, to determine if it’s time for re-structuring or a re-org to clear your arteries and get back to a healthy and sustainable organization. I found their questions really helpful. What’s your cholesterol score?

Assessment: A Corporate Cholesterol Test

The quality of communication and collaboration

  • Do employees interact only with people from their own group? Y/N
  • Are there strong subcultures that align with departments or divisions? Y/N
  • Are there breakdowns in communication caused by the formation of silos? Y/N
  • Has collaboration between groups decreased over the past five years? Y/N
  • Total Yes Answers _____

The capacity to adapt

  • Are many people uncomfortable with change? Y/N
  • Do people and groups operate according to well-established routines? Y/N
  • Has it been a long time since your organization developed a significant new revenue stream? Y/N
  • Has the percentage of revenue from new streams decreased over the past five years? Y/N
  • Total Yes Answers _____

The balance of power among groups

  • Do influential groups or individuals use most of the organization’s resources? Y/N
  • Is it difficult for people outside the organization’s central group to obtain resources? Y/N
  • Do influential groups or individuals impede decision making? Y/N
  • Have the groups or individuals that were influential five years ago extended their influence? Y/N

Final Score

  • 0-2 yes answers: There’s no need for change just yet.
  • 3-7 yes answers: It’s the perfect time for a change.
  • 8-12 yes answers: You’re late already; your organization needs substantial change.