Most Companies Are Not Realizing Their Potential

You win at your business by creating a valuable, differentiated company with significant market share that makes a lasting, positive impact in the world. Whether you’re a seasoned CEO or a first time founder, you’ve probably learned already that creating a consistently high performing organization, one in which everyone is bringing their best every day, is one of your greatest challenges.

If you’re like most CEOs, you’re determined to succeed and willing to do whatever it takes. Maybe you run a marketing agency or a software company. Or maybe you’re in management consulting or health care services. Whatever your business, you know how important competitive advantage is but also how elusive and ephemeral it’s become.

As talent, technology and capital have become widely available across every marketplace, achieving sustainable competitive advantage has never been more difficult. In fact, “sustainable advantage” as we understood it may be an outdated idea. The only sustainable advantage may come from the ability to nimbly shift sources of advantage in response to a continuously changing marketplace.

For example, while technology may give you some short-term advantages, unless you happen to hold deep proprietary intellectual property (which is not most of us), you’re most likely not going to count on technology as a source of sustainable competitive advantage. It’s too easily copied, diffused, and innovated around.

And, unless you enjoy the day-to-day brutality of a commodity business, you probably don’t want price to be your competitive advantage.

So with old sources of sustainable advantage gone — even the concept of “sustainable” questionable — how do you play in this new world? How do you execute at a level that creates an admired and strong brand in the eyes of your customers? How do achieve ‘stickiness’ with your customers in technology? How do you create a loyal cadre of customers that can serve as a reference for future customers?

In today’s world, competitive advantage comes from qualities like product and service design skill, a strong delivery ethic and customer orientation, productive network relations, a capacity for continuous innovation, and strong, consistent brand building. As diverse as these seem, they all depend on a key organizational ability — strong, cohesive teams in which every member brings the best they have every day.

The importance of strong, committed teams is hardly a new idea. But, if data tells us anything (The Gallup Survey over 20 years shows employee disengagement consistently at 70%), it’s that we are not particularly effective at actually achieving the engaged workforce that is increasingly our most important source of competitive advantage.

“Just an HR issue?”

Let me be clear: this is not simply an ‘HR issue’. This is about business leaders creating the conditions and incentives for a workforce to contribute all the effort, ingenuity, and creativity it’s capable of. While HR can play a critical role in implementing strategies and programs to realize that outcome, it’s line business leaders who have the organizational power and responsibility to ensure that their company is making best and highest use of all its resources. No one is more centrally concerned with a business’s ability to thrive and adapt over the long-term than those who are charged with leading that business and being accountable for the results it achieves.

Over the years, HR departments have come in for their share of criticism for lacking a business-oriented, strategic connection to the organizations they support. It is also true that many line business leaders are more sensitive to the role of technology and process than the role of people in driving business success.

After talking to many CEO’s and senior HR execs, it is apparent that both groups can feel very frustrated with one another and there is often great unrealized opportunity for forging more productive relationships that contribute to, rather than diminish, the strength of a business. One telling comment from these interviews is the comment from a CHRO at a Fortune 1000 organization who complained that his budget for talent engagement and retention initiatives was roughly 1/10th the size of his budget for healthcare benefits.

Needless to say, we are at a turning point where the very best business leaders realize that all competitive advantages are eroding quicker than ever. Execution is all that matters but to reiterate, the only path to optimal execution is the strongest team possible.

The statistics around this topic are mind-boggling and reinforce the importance of a highly engaged, committed team that has what we refer to as the ‘founder mentality’. As a founder of my own business, this mentality is what every founder/CEO should be striving for in their team.

Imagine if every member of your team felt that it was their company and they were a founder. How would they treat their function? How hard would they work to achieve innovative solutions, drive sales productivity, create compelling marketing copy, and ensure that customers experienced nothing but the best?

Creating (and Scaling) the Strongest Team in the Business

No doubt many articles and books have been written on the multitude of tactics that a leader can employ to foster stronger team performance. One of the greatest contributors to this space has been Google. Their team spent years looking at this issue and their findings are available here.

Google’s research reveals that, what they call, an environment characterized by ‘psychological safety’ was far and away the best indicator of a team’s likelihood of success. Such an environment is one in which team members feel like their individual contributions are valued and recognized and they can speak up without fear of destructive criticism. In such an environment, ideas and actions can be evaluated on their own merits and teams can truly be greater than the sum of the parts.

Yet, for many leaders these findings do not create an obvious ‘next step’. Based on working with a number of customers in this space, I will outline below some tactics that we’ve seen companies employ to foster a high-performance team environment.


One key idea is promoting activities that diminish hierarchy and ‘level the playing field’ between members of the team,whether leaders, managers, or staff.. The goal is reducing the social barriers to team members bringing their best personal efforts to their work.

We have seen organizations adopt the idea of “challenges” to foster an environment where leaders, managers, and staff can all participate together for the sake of a common cause. While fitness challenges (e.g. steps, water, nutrition) work very well, other types of challenges (that span from wellness to professional to personal types of challenges) can be used to break down barriers between layers and colleagues.

The “challenges” you offer and track are only limited by your imagination. A challenge that was issued to your entire team could be strategic for the business such as generating ideas to improve your core product with recognition/rewards to the top winners. Or a challenge could be to lunch with a co-worker that you were randomly paired with to foster greater community. Or a challenge to go meatless for a week to improve your health? All of these tactics are being employed by our customers and leading organizations that tie recognition/rewards to fun challenges and innovate their businesses at the same time.


Closely related to the concept of challenges are events that can be used to encourage more interaction between and amongst levels within the organization. Many of the ‘top’ companies employ strategies to bring folks together in person and virtually for social, community service, wellness, and professional related events throughout the year.

We have learned by now that Millennials, who now outnumber baby-boomers in the workplace, want different things from their work lives than did the workers they are replacing, . They care more about work-life balance, the opportunity to collect experiences more than things, and having work environments in which the sense of community is high. They have tended to shun the trappings and work-life imbalance of the high finance and consulting careers that were popular when Gen Xers were graduating from college in favor of more meaningful work and personal experiences.

The key word here is experiences. Millennials are motivated to commit to do their best in an environment that provides an opportunity for the experiences they value. In a social media-oriented culture they value connectivity, engagement, sharing, and recognition. If you’re not creating enough opportunities for the ‘social collisions’ (both remotely and in-person) that foster team familiarity and cohesion, you’re), likely missing out on a important opportunity for growing stronger commitment to your work and your mission.


The virtues of more public and frequent individual and team recognition are outlined in numerous studies.

For the new generations of workers, recognition has moved from tenure-based rewards (which have largely no effect on engagement or retention) to more social, public, and frequent modes of recognition. The most effective organizations are deploying strategies to enable line leaders to more easily provide regular, timely recognition to their employees.

“OK, but we do all of these things!”

Many of the tactics outlined above are ‘common sense’ to leaders of some of the top workplaces. They understand the social nature of the workplace and the needs of their employees and turn that knowledge to their business advantage.

Yet, there is something that differentiates the BEST companies from those that are taking well-intentioned “stabs in the dark”……Data!

These world-class teams and companies have the capacity to gather data that enables them to know which of their efforts are truly producing a benefit to the business.

Even if you feel like you’re investing in your people do you know where your investments are going and how well they’re doing?

Can you answer detailed questions about whether a wellness program is resonating? If it’s resonating with a particular segment of your population? If learning initiatives are working well? Are they working better with your developer team or sales folks? How about community service? Are participants coming from your accounting department? Why is your Chicago office doing much more recognition within the finance department versus your sales team leaders in Atlanta?

Even ‘Top’ workplaces are often stumped trying to answer these kind of questions. Yet, how does Google manage to stay on top and be recognized as arguably one of the world’s best company to work for? The answer lies in data and measurement.

Data and Metrics: What Differentiates the Best from the simply Great

For a number of reasons, we act like the investments we make in our team do not deserve the same level of analytical rigor as the investments we make in marketing efforts. We put a level of diligence into analyzing our personal market holdings but the most important determinant of competitive advantage as company leaders is being largely left to ‘blind faith’ in programs that may or may not be working.

To be fair, one of the toughest challenges to overcome in this regard is the inability to easily pull data from the multitude of systems that often hold answers to many of these questions. While initiatives like recognition might be managed by technology platforms, creating linkages from that data to particular divisions/teams/offices often is cumbersome or impractical (or in many cases, impossible).

Systems for tracking participation in initiatives like diversity, wellness, community service, learning/development, and social activities are often dispersed residing in emails, shared calendars, local computers, or even worse, on paper.

From an employee’s perspective, the lack of meaningful data creates another set of issues altogether; being able to track and document professional progress.

As an employee, how did I increase my credibility in a skill like inbound marketing? Over the past year, if I’ve attended numerous lunch ‘n learns, received recognition informally for my skills in this area, and quietly created decks on this topic without larger recognition. How can I vouch for my credibility in this area during a performance review with my manager? What about my involvement with community service for which others have complimented my leadership? Where does this data go today?

After working with a wide range of customers on these issues, we see that the very best leaders recognize that achieving a Top Workplace ranking one year isn’t nearly sufficient to drive long-term business success.

It’s year after year effort, continued innovation, data-driven insights and management of their ‘people investments’ that differentiates the most successful leaders of the very BEST workplaces and positions them to continue to enjoy the fruits of their efforts in the form of dominant market share, increased share prices, financial results, and overall organizational performance.

I would welcome your feedback and comments, as well as the opportunity to hear about your own experience in meeting these challenges. I would also be delighted to share more of my experience and perspectives as co-founder of Cooleaf. If you’d like to reach me directly, feel free to reach out at pbhatia (at)