Can You See Who is Healthy?
The Organisational CT Scan: See Beyond the Surface
Using human homeostasis insights to prevent financial collapse
1. Introduction: The Illusion of Health
Look around you. Can you reliably tell who is genuinely healthy and who might be harbouring a hidden ailment or illness simply by looking at them? Age, gender, ethnicity, and even BMI are not foolproof indicators of underlying well-being or health. Someone seemingly fit could have high blood pressure or underlying inflammation, which are not visible. While someone appearing less robust might possess surprisingly healthy biomarkers.
The same rules apply to the corporate world. A company with a gleaming headquarters, impressive press coverage, or strong quarterly earnings might appear to be the picture of health. Yet, beneath this polished surface, unseen issues like inefficiencies, eroding customer trust, or toxic cultural elements could be slowly and silently compromising its long-term viability. Often, this decline is slow enough to go unnoticed. Judging human health requires looking beyond appearances, akin to never judging books by their covers. Assessing organisational health demands a deeper, unseen, unexplored diagnostic approach.
This article explores how principles of human homeostasis provide a powerful lens to diagnose organisational health, helping prevent financial collapse before surface symptoms become critical.
This isn't just conjecture. Leading research, including extensive studies by firms like McKinsey, consistently confirms that organisational health is arguably the strongest predictor of long-term value creation. Indeed, the healthiest companies deliver multiples of the shareholder returns generated by their less healthy peers. The critical challenge, however, lies in accurately diagnosing this underlying health beyond broad strokes.
Surfacing 'unhealthy' unseen markers has been my life's work.
2. Mapping Human Homeostasis: A Model for Organisational Balance
Human homeostasis is the body's remarkable natural ability to maintain a stable, balanced internal environment despite external changes. It maintains a dynamic equilibrium across complex interconnected systems – regulating temperature, blood sugar, hydration, and countless other variables to ensure our bodies function optimally. Crucially, this internal balance point, or ‘baseline’, isn’t fixed or always optimal. Just as an individual’s baseline blood sugar level might settle too high, the body maintains stability around that higher set point. This established equilibrium, the new norm, itself can sometimes be unhealthy.
Being undiagnosed long enough can lead to long-term, often preventable Type 2 Diabetes, which has many consequences. Therefore, health might require maintaining balance and proactively ‘resetting’ or ‘recalibrating’ this baseline to a healthier, more efficient level through conscious intervention (like dietary changes and movement). However, that optimised “baseline” goal isn’t identical for everyone; everyone has a unique homeostatic balance influenced by genetics, lifestyle, environment, etc. This is why “One size fits all”, no matter how beautifully it’s packaged, doesn’t work.
This concept translates powerfully to every organisation. 'Organisational health' represents the state of its dynamic internal balance, adaptability, and effective functioning. This state is relative to the organisation's specific context, including its ambition, industry, size, culture, market position, and strategic goals. It’s about:
Balance: Equilibrium between competing demands – short-term profit vs long-term investment, innovation vs efficiency, sales targets vs operational capacity, employee well-being vs productivity.
Interconnectedness: Recognition that departments and functions don't operate in isolation. Dysfunction in one area (e.g., poor leadership communication) inevitably impacts others (e.g., low morale, project delays, customer dissatisfaction).
Adaptability: The capacity to sense and respond effectively to market shifts, competitive threats, and technological disruptions, much like a body's immune system.
Contextual Health: Understanding that what constitutes peak health for a nimble tech startup differs vastly from that of a mature, regulated financial institution.
Ignoring the need for understanding this unique, context-specific balance is often where organisational ‘malaise’ seeps in and financial collapse begins.
This concept of measuring an organisational health unseen baseline holds profound lessons for organisations. On the surface, a company might appear stable, consistently hitting specific targets – effectively maintaining its ‘organisational homeostasis’. However, like the individual with undiagnosed high blood sugar, this unseen malaise might be a symptom of a suboptimal or even damaging baseline. Merely reacting to surface symptoms (Section 3) fails to address whether the underlying organisational equilibrium needs recalibration. True organisational soundness requires interpreting health deviations from the current state and whether the current state represents an optimal organisational baseline for resilience and peak growth performance (Section 4).
3. The Danger of Symptom-Based Management
When something feels wrong in our bodies, our first instinct might be to treat the symptoms, and if that does not work, visit our general practitioner or family doctor.
Take being very thirsty, passing urine (doing a wee) more often than usual, feeling tired, feeling hungry, blurred vision, frequent infections, including urinary tract infections (UTIs), and having wounds that heal slowly. Each is treatable individually. Often, they go unnoticed for many years or even decades. However, collectively, these are also the early undiagnosed signs of a person with unregulated blood sugars. The damage is already there before a diagnostic is requested.
Merely treating the symptom offers no lasting solution and ignores the underlying imbalance.
Organisations frequently fall into the same trap:
Symptom: High Employee Turnover.
Symptomatic Fix: Offer hiring bonuses and implement superficial perks (more free snacks!).
Potential Root Causes: Toxic management, lack of career development, poor work-life balance, unclear company direction causing frustration, and feeling undervalued.
Symptom: Declining Sales.
Symptomatic Fix: Initiate aggressive discount campaigns and boost short-term ad spend.
Potential Root Causes: Product/service becoming obsolete, poor customer experiences damaging loyalty, misalignment with market needs, ineffective sales processes.
Symptom: Missed Project Deadlines.
Symptomatic Fix: Implement more status meetings and demand stricter reporting.
Potential Root Causes: Unrealistic planning, resource constraints (staff, budget), poor cross-functional communication, skill gaps, conflicting priorities.
Treating only the symptoms is costly and unsustainable and allows the underlying organisational pathology to worsen, potentially leading to chronic dysfunction or even collapse. An organisation's unseen health is measurable.
4. Adopting a Diagnostic Mindset: The Organisational CT Scan
How do we move beyond symptom-based management to accurately measure organisational health? We need reliable diagnostic tools that can look “beyond the surface,” much like medical science uses advanced imaging technology. Imagine trying to reliably predict a person’s risk of a heart attack over the next decade based solely on how they look, even with a standard blood work panel. It’s unreliable. However, a specific tool and approach like a Coronary CT calcium scan can detect hidden plaque buildup, providing a strong statistical indicator of future risk and enabling preventative action. A result that is meaningful and actionable. A simple, non-invasive ten-minute procedure offering ten-year assurance.
Therefore, a deep diagnostic tool akin to an organisational ‘CT Scan’ is essential. Its purpose isn’t just to spot immediate problems or deviations but to assess the fundamental health of the organisation’s baseline equilibrium. It helps answer the question: Is the organisation simply maintaining a flawed status quo, or is it operating from a truly healthy, efficient baseline? Identifying this is the first step towards the necessary ‘reset’ required for sustainable health and preventing collapse.
Established frameworks like McKinsey's OHI offer valuable insights by benchmarking management practices based on employee perspectives. However, pinpointing and quantifying the direct financial impact of specific, hidden issues like operational problems or negative customer sentiment requires a different diagnostic lens. Understanding the precise cost of unseen friction – the ‘unrealised revenue’ potential – demands a framework and model capable of acting like a financial ‘CT Scan’.
My proprietary SØRENSEN framework and model serve this function precisely – acting as an organisation’s “CT Scan” health check. It moves beyond traditional financial reporting or surface-level surveys to quantify a brand’s underlying health and efficiency.
Born from a decade-long pursuit of clarity and transformative growth, my approach meticulously analyses customer behaviour, competitor strategies, market trends, and operational efficiency. It focuses on the critical link between customer sentiment and financial performance, quantifying each factor's impact on the bottom line. It reveals insights that standard due diligence often misses, illuminating unseen growth opportunities and potential risks.
The framework and model have been calibrated to calculate a Brand Efficiency Score (BES) to provide a clear, actionable metric. This score incorporates five key performance indicators (KPIs), each weighted based on its importance to overall brand performance:
Customer Experience: Measures customer satisfaction with all brand interactions, including service, product quality, and brand image.
Retail Excellence: Evaluates the effectiveness of retail operations, including store experience, online presence, and omnichannel integration.
Brand Management: Assesses the strength and consistency of brand messaging, marketing campaigns, and brand equity.
Operations: Analyses the efficiency of operational processes, including supply chain, logistics, and inventory management.
Financial Performance: Examines key financial metrics, such as revenue growth, profitability, and return on investment.
The Brand Efficiency Score is calculated as a weighted average of these five KPIs, providing a holistic view of the brand’s effectiveness in transforming actions into revenue and growth. This score isn’t just a number; it’s a diagnostic indicator directly correlating underlying issues, particularly customer disconnect and operational friction, with tangible financial impact – specifically, the unrealised revenue potential lost due to the organisations’ hidden health problems
5. Case Study: The SØRENSEN Framework in Action: Prada Group Acquisition Analysis - What due diligence won't reveal
One of many use case applications of this unique methodology is seen in the deep-dive report, which examines Prada Group's acquisition of Versace and possibly Jimmy Choo. It analyses each brand's customer base, financial implications, brand performance, and alternative strategies. Standard due diligence might focus on financials, market share, and obvious synergies. However, the SØRENSEN framework revealed key hidden insights that traditional due diligence often misses, including crucial aspects of customer alignment, unrealised potential, and customer sentiment.
Applying the framework and model yielded the following Brand Efficiency Scores:
Prada Group (consolidated view of Prada, Miu Miu, Church's): 33.6%
Versace: 26.5%
Jimmy Choo: 35.1%
These scores immediately indicated significant room for improvement across all brands. More importantly, they surfaced vast quantified amounts of unrealised revenue potential directly linked to customer disengagement stemming from underlying issues:
Prada Group: €3.2 Billion unrealised potential, linked to issues like delivery problems, poor customer service, billing/fraud concerns, and gift card policy friction.
Versace: €717 Million unrealised potential, driven by poor product quality, terrible customer service, delivery/returns issues, and price/quality concerns.
Jimmy Choo: €380 Million unrealised potential, connected to poor customer service, high prices relative to perceived value, defective products, and delivery/repair issues.
Furthermore, the analysis revealed minimal customer overlap between the brands, challenging assumptions about easy cross-selling synergies. Standard due diligence wouldn't typically expose the depth of these customer sentiment issues or quantify their direct financial impact in this way. Acquiring brands with significant underlying problems, without a clear plan to address the root causes identified by the diagnostic score, introduces considerable unseen financial strain and operational risk. This could jeopardise the entire group's health rather than strengthening it
The framework's diagnostic power extends beyond M&A contexts into deep product analysis as well. For instance, a separate analysis applied to CHANEL eyewear revealed how specific, often misunderstood, choices in acetate sourcing and manufacturing directly impacted customer perception of quality, contributing to significant unseen customer disconnect. The choice of acetate reveals an unrealised potential exceeding €222 million.
A copy of the full Prada Group Acquisition Analysis - What due diligence won't reveal report findings can be found here, and I hope they offer a helpful perspective on the value of looking beyond conventional analysis.
6. From Diagnosis to Treatment: Addressing Root Causes for Sustainable Futures
Identifying risk via a diagnostic approach like the Brand Efficiency Score is only the first step. Just as a CT scan's findings require interpretation, organisational diagnostic results demand careful analysis. A practitioner must interpret them, pinpoint root causes, and only then define targeted interventions addressing those causes, rather than just managing symptoms.
If the diagnosis reveals customer churn driven by poor service (as seen across Prada, Versace, and Jimmy Choo ), the “treatment” isn’t just apologising more; it’s investing in fundamental service training, empowering frontline staff, streamlining return processes, and potentially re-evaluating quality control.
If the diagnosis points to operational inefficiencies causing delivery delays, the solution involves optimising logistics, supply chains, and inventory management.
If brand perception suffers due to a price-value discrepancy, strategic decisions about pricing, product quality, or brand positioning are required.
Or, as is the case in most cases, a combination thereof.
Organisations build true resilience by addressing the core fundamental, often unseen issues once revealed. As of the writing of this article, the global economy shows signs we’re heading towards recession. Understanding an organisation’s fundamentals and root causes is critical to increase survivability. It helps reduce friction, unlocks trapped revenue, improves customer loyalty, enhances adaptability, and ultimately, creates the foundation (reset) for sustainable growth and prevents the slow decline towards financial collapse. As the Prada analysis suggests, focusing squarely on sustainable organic growth by improving and optimising their customer challenges could unlock €3.2 billion in value across the existing group. A statistically more efficient and less risky path than acquisition if the market size is the strategy. It is working for Brunello Cucinelli and Hermes. Both excel at quiet luxury and execute reliable growth flawlessly.
Addressing the fundamental issues revealed by an organisation's health scan unlocks significant trapped revenue and potential. This aligns with broader findings: genuine improvements in organisational health can yield dramatic performance increases, potentially tripling long-term shareholder returns compared to unhealthy peers. Advanced diagnostics like the Brand Efficiency Score provide a clear view of the road ahead and a roadmap to target interventions precisely where they will unlock the most value.
Ultimately, striving for organisational health means looking beyond surface stability. It requires embracing a diagnostic mindset borrowing from the principles of human homeostasis – including the critical understanding that sometimes, an organisation’s baseline itself must be reset. But only if you can see why. By identifying and recalibrating suboptimal operational equilibria, leaders can move beyond mere symptom management towards fostering truly resilient, adaptive, and optimally performing organisations capable of weathering challenges and preventing collapse.
Addressing the fundamental issues revealed by an organisation's health scan unlocks significant trapped revenue and potential. This aligns with broader findings: genuine improvements in organisational health can yield dramatic performance increases, potentially tripling long-term shareholder returns compared to unhealthy peers. Advanced diagnostics like the Brand Efficiency Score provide a clear view of the road ahead and a roadmap to target interventions precisely where they will unlock the most value.
Ultimately, striving for organisational health means looking beyond surface stability. It requires embracing a diagnostic mindset borrowing from the principles of human homeostasis – including the critical understanding that sometimes, an organisation’s baseline itself must be reset. But only if you can see why. By identifying and recalibrating suboptimal operational equilibria, leaders can move beyond mere symptom management towards fostering truly resilient, adaptive, and optimally performing organisations capable of weathering challenges and preventing collapse.
7. Conclusion: Cultivating Organisational Well-being
The health of any organisation, like that of a human, is complex and often hides beneath the surface and under many layers of polished, pristine veneer. Relying on outward appearances or superficial metrics is akin to guessing someone’s cardiovascular health based on their physique – dangerously unreliable. But annoyingly, the easiest and quickest option.
Leaders can gain a beyond-the-surface deep-dive insight into their company’s underlying health condition by embracing the principles of understanding the underlying mechanisms of homeostasis and adopting a rigorous diagnostic mindset using methods like the Brand Efficiency Score, which acts as a proactive organisational health scan.
This allows for the identification of root causes, enabling targeted and efficient treatment, rather than just symptom management. It enables the unlocking of significant value, fosters genuine resilience, and provides the foresight needed to navigate an uncertain future effectively. Moving beyond the surface to understand and cultivate deep organisational well-being isn’t just good practice; it’s essential for survival, sustainable growth, and the prevention of catastrophic failure.
