< All Blog Posts

What is Organizational Intelligence?

Few companies have a knowledge repository process. Within every enterprise, hidden/unknown information obscures significant opportunities for enhancing value and mitigating risk. This information is a leading source of innovation and performance improvement, because the vast majority of companies or enterprises are sub-optimizing.

What is Organizational Intelligence? 

Organizational Intelligence (OI) is the capability of an organization to comprehend and create knowledge relevant to its purpose. In other words, it is the intellectual capacity of the entire organization. Organizational intelligence makes it possible for enterprises to find and study their strengths and weaknesses in response to change and complexity.

Embracing both knowledge management and organizational learning, OI is the application of knowledge management concepts to a business environment. It incorporates learning mechanisms, comprehension models and business value network models, such as the balanced scorecard concept. Said another way, OI is the ability to make sense of complex situations, to interpret and act upon relevant events and signals in the environment, and to act effectively. It also encompasses the ability to develop, share and use knowledge relevant to the company’s purpose, as well as the ability to reflect and learn from day-to-day actions and experiences. 

Organizational Intelligence: A Brief History

While Organizational Intelligence may be a new term, the basic tenets go back to the early 20th Century, often manifesting as continuous improvement and business process improvement initiatives. Suggestion boxes and customer feedback have been used for decades to gather information and insight from various company constituents. 

Edwards Deming became known as the quality guru after creating a continuous quality improvement model that helped hasten Japan’s recovery from World II, and his processes were readily adapted by US industry. Fredrick Taylor developed the school of thought known as Scientific Management, but his cornerstone research project, the Hawthorne studies, revealed that people's work performance is more dependent on social issues and job satisfaction than on monetary incentives or good working conditions. Experts like Peter Drucker, Elton Mayo and Jim Collins furthered Management science and others like Henry Ford, Sam Walton, Bill Gates and Steve Jobs brought leadership innovation to global companies.

Organizational Intelligence: Business Intelligence Is Not Enough

Similar to OI, the role of Business Intelligence (BI) is to improve a company’s operational performance through the use of relevant data. What differentiates the two is that BI rarely measures or collects data on the primary drivers of P&L performance – leadership, culture, people and communication. OI does. It is an expansion of BI, offering a holistic view of the company and broadening leadership’s decision making, resource allocation, planning and growth opportunities.

Organizational Intelligence: More Than the Sum of Its Parts

While organizations in the past have been viewed from an operational perspective – as compilations of tasks, products, employees, profit centers and processes, today they are also seen as intelligent systems designed to manage knowledge. Organizations engage in learning processes using tacit forms of intuitive knowledge, hard data stored in computer networks and information gleaned from the environment, all of which are used to make sensible decisions. Because this complex process involves large numbers of people interacting with diverse information systems, Organizational Intelligence is more than the aggregate intelligence of its stakeholder network, it is the intelligence of the organization itself as a larger system.

OI helps companies understand the relationships that drive their business by identifying stakeholder groups, both internal and external, as well as employee workflow and collaborative communication patterns across geographies, divisions, and stakeholder networks.

Organizational Intelligence: Embracing Culture 

There is another dimension to the larger system that shapes Organizational Intelligence – the environment or culture of the company. Culture is the personality of an organization, or simply "how things are done around here."  Culture includes the attitudes, beliefs, emotions, values, and expectations shared by the stakeholders of an organization. It can be expressed in the company's communications, stories, hierarchy, organizational structure, spoken and unspoken values, HR policies, compensation structure and titles. Company cultures range from secretive to highly transparent, impacting the collection and sharing of information and knowledge.

In this 21st Century transition from a strictly operational perspective to one of an expanded sphere of operations and knowledge, few companies have an established knowledge repository. Thus, most companies have varying degrees of hidden and unknown information and knowledge.

Organizational Intelligence: Maximize Your Business Outcomes  

LEADERSCAPE® is an Organizational Intelligence application that searches for and reveals hidden value and risk information, gathers it in one place, and makes it actionable. 

Imagine what it would be like to capture and harness all the knowledge in your organization. What kind of exponential impact could it have on performance, efficiency, productivity and innovation?

The New Way to Guide Decisions
Organizational Intelligence

See how LEADERSCAPE<sup>®</sup> measures Organizational Intelligence giving you more opportunities for business with your clients.

Get a Demo