Balancing the Inner and Outer Sides of Business

In his body of work called The Human Element, Dr. Will Schutz spent his career working with organizations to improve the way people work together to achieve high performance. Through decades of facilitating work teams, Schutz determined that there is an “inner” and “outer” side to business, and both are critically important to an organization’s success. The outer side of business is composed of what the team does–its products or services–and how it organizes its business systems, reporting structure, processes, procedures, and technology. There is also the inner side of business, which includes who the team is as a group of individuals–employees’ values, preferences, motivation, attitudes, capabilities, level of self-awareness and self-esteem, and how the team relates to each other, including how employees influence each other, communicate, resolve conflicts, manage authority, collaborate, and create rules of engagement.

Consider which side gets the most attention on your team. Typically, it’s the outer side. Expectations, goals, and metrics tend to focus on the outer side of business. Day-to-day operational discussions and even coaching conversations revolve around the outer side. Performance appraisals are often weighted more heavily to the outer side of business, even for employees who are in people-management roles. While it is very important to focus on the outer side of business, Schutz recognizes that there is nothing in the outer side that can’t be undone by the inner side. A seemingly high-functioning team can quickly unravel if employees feel demotivated or devalued, or if communication across the team breaks down. Leadership requires an elegant balance of the inner and outer sides of business. As you assess your own leadership, consider how much of your time is spent on the inner versus outer side of business, and what the implications are for the balance or imbalance you’ve struck.