The one skill you need to build a high-performance organization

“What is the most important skill for me to develop to bring my company to the next stage?” This great question was put to me by a Series C scale-up CEO I recently started to work with.

For the last decade, I’ve coached startup executives on building high-performance organizations (HPOs) — that is, organizations that can scale fast without losing the magic that made them great when they were small. After coaching dozens of executives, a bell curve of success has emerged. Some CEOs pick up the key skill right away and see impressive results across their org within a few weeks… and some don’t.

The CEOs who get the best results are the ones who really try to look at the world through the “eyeglasses” I offer — a different way of looking at what drives growth and performance. This lens does not have the usual focus on revenues, OKRs and KPIs. Instead, it’s a lens that focuses on organizational effectiveness. Those who really try this lens on and adjust their vision are often amazed by what they see — and by the opportunities they spot to make the business perform better. As a result, they quickly commit to wearing these glasses much more often, and they encourage their CXOs to do the same.

But this shift in focus doesn’t come so easily for other CEOs. They find the lens of organizational effectiveness interesting, but they remain convinced that for them to drive performance they need to focus on pulling business levers more than organizational levers. For these CEOs my glasses aren’t as compelling, and as a result they don’t encourage others to wear them either. Their approach also works fine… until it doesn’t. At some point nearly all scale-ups get bogged down by organizational frictions, and if the CEO isn’t good at spotting or addressing the sources of these frictions, growth suffers.

What’s the difference between CEOs who get it quickly, and those who take longer? What is the skill that CEOs need to strengthen to keep their companies scaling smoothly?

It all comes down to OQ.

OQ = Organizational Intelligence

You already know about emotional intelligence, or EQ. EQ measures your ability to perceive, predict, and influence emotional states in yourself and other people. Notice that EQ entails three skills:

1. Understanding what people are feeling
2. Anticipating how they’ll react to things, and
3. Influencing them to elicit specific emotional states.

EQ is all you need if you’re only interacting with a small group of people. But what happens when you’re the CEO of a company with several hundred staff spread across multiple locations? Then you need Organizational intelligence (OQ). OQ is the ability to project these same three skills across a large group of people, over both space and time.

Let’s say by chance I sit in on a meeting I don’t normally attend in which Ted, a senior manager, behaves somewhat aggressively toward Sadiq, a more junior manager. A small dose of EQ is enough to know that Sadiq might leave feeling uncomfortable, and wanting to check in with him. A bit more EQ might have me considering how the other meeting attendees felt witnessing this behavior, and considering what I should do about that.

But if I have high OQ, I’ll also think about that meeting in the broader context of the company. If Ted is behaving that way and no one seems too surprised by it, how many others might he have left feeling bruised. And if I haven’t heard about it, what does that say about our culture? Does that mean we might have other managers behaving in the same way? How would I know? Could this kind of behavior cause us to lose valuable employees? Has it already?

This kind of thinking would lead to a whole different set of questions and perhaps future actions on my part.

Turn your EQ into OQ

EQ is a prerequisite for OQ. CEOs with low EQ tend to see and value productivity above all else. Like the CEO above, they tend to view each interaction as a one-off transaction rather than as an opportunity to build (or undermine) trust.

When I tell them they need to strengthen their EQ and learn to project it over time and scale, they nod, but privately they might think “Nah, it’s really all about just getting shit done.”

But it’s not.

In fact, overcoming that mindset is the first step to becoming an HPO-building CEO. As long as you believe getting shit done always trumps influencing people’s emotional states, a high-performance organization will be out of your reach.

The key assumption they’re getting wrong? They think that time spent on “people’s feelings” is time taken away from getting shit done. But when done properly, Productivity & Positivity are not in tension, or even uncorrelated. They work in harmony. Gaps in Positivity interfere with Productivity, and vice versa.

So if you’re one of these CEOs, you’ve got to believe in the value of EQ and OQ. Then, you have to practice them. To strengthen your EQ, you need to learn to observe people, listen to them, and put yourself in their shoes.

But strong EQ doesn’t automatically give you high OQ. To project EQ across your entire organization and over time requires two additional skills: systems thinking and political thinking. In other words, thinking like a chess grand-master and an expert social influencer.

Systems thinking is the ability to foresee the potential ripple effects of yours and others’ words and actions, just as a chess player predicts how one move might lead to various threats and opportunities. Your organization is a complex web of relationships. If you take an action, how will its effects ripple out across the company? What precedents might it set? How might it unintentionally encourage or inhibit certain behaviors?

Political thinking is the ability to shape opinions across large groups, using just a few words, images, or symbols, just like a master influencer does. That means paying close attention to how your decisions are likely to be seen — not just their literal outcomes but also their symbolic value.

CEOs with excellent OQ are able to leverage their EQ together with these skills to see clearly how small things — like what happens in a meeting, or a change to a company policy — are likely to affect Productivity and Positivity across the organization.

That’s why they’re able to build HPOs. And when I share my tools, they quickly see how they can use them to make their organization work better, so they run with them. Their enthusiasm and commitment in turn inspires everyone else to focus on organizational effectiveness, and soon the entire org is a smooth-running machine.

Set yourself up for success

As CEO, you are the key to building a high-performing, scalable organization. To have the best possible chance of success, you need to do three things:

1. Recognize the value of Positivity and how it supports Productivity.
2. Strengthen your EQ on an interpersonal level.
3. Turn your EQ into OQ by combining it with systems and political thinking.

Most entrepreneurs who reach C are great at getting shit done — otherwise they wouldn’t have made it that far. But from that point onward, OQ is the skill that sets the very best scale-up CEOs apart from the rest. Develop this skill, and watch your company scale smoothly while your competitors struggle with internal conflicts and friction.