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Is Your Company Neurotic -- Or Is It Just You? It's not just people who can be neurotic -- companies can be, too. Find out if yours is and what you can do about it.

By Mark Chussil

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

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The following excerpt is from Benjamin Gilad and Mark Chussil's book The New Employee Manual: A No-Holds-Barred Look at Corporate Life. Buy it now from Amazon | Barnes & Noble | Apple Books | IndieBound

We all know neurotic people. We think companies can be neurotic, too -- especially when it comes to filtering inconvenient information, which directly relates to the skill of competing. To assess how your organization's neurotic behavior affects its skill at competing, use our new tool called the Neurotic Index, or NIX.

We were inspired to create the NIX by a personal experience with a Fortune 500 company. We've dealt with Fortune 500 companies our entire professional lives, so we're used to a certain level of neurosis. But this was different.

This company, an icon in the chemical industry that shall remain nameless to protect the innocent, asked Ben to participate in a half-day executive retreat. The role was to make a presentation to the CEO and her or his top echelon on the topic of external focus. This is a core expertise for Ben, to which he has devoted a considerable part of his professional life. He even wrote a book or two about it.

What followed was a series of calls and emails in which at least two VPs told him what to tell the CEO and his or her lieutenants, how to tell it, and, most important, what not to dare tell her or him. He turned this "opportunity" down, naturally, but it got him thinking.

We all assume that top executives are enlightened masters of their own fates. They're knowledgeable, smart, and well-informed.

Related: The 2 Business Obsessions You Need to Ignore

Well, they may be knowledgeable and smart, but in some companies, they're definitely not well-informed. In such companies, the information reaching the top of the top is totally and absolutely controlled, filtered, massaged, and directed by the subordinates. The CEO and others at the top of the information chain live in the dark as to what's really happening there.

But executives can't exercise their skill at competing without strategic intelligence. If middle management isn't allowed to deliver intelligence to the top, executives will do the equivalent of running on mountain trails at night while wearing a blindfold. You can run, you can even win a race, but at great and unnecessary risk.

Which brings us back to the topic of competing as a skill. The ability of a company to compete depends on a relatively unfiltered flow of strategic intelligence reaching the decision-makers who can act on it. Decision-makers don't need to know everything, but they do need to know something. They need at least a trickle of truth and insight. Some amount of filtering is to be expected. The internal competition among employees for the attention of the leader -- and by implication the power and resources that come with this attention -- is part of the skill of competing among individuals. But the ratio of competing internally to competing externally should be kept within reasonable limits.

That ratio is what we call the Neurotic Index (NIX). While scientists and statisticians haven't yet found a rigorous way to measure this ratio, we can think of ways to assess it.

Most managers recognize the state of neurosis in their companies. Let's assume that the NIX measures the focus on competing externally vis-à-vis competing internally. We can operationalize the NIX as follows:

NIX = effort and energy devoted to acting on intelligence reaching the top divided by the effort and energy devoted to filtering information from reaching the top.

On a scale of 1 to 100, how would you rate your company? The true number may not matter – what does matter is that you acknowledge the problem and attempt to fix it.

Overcoming denial and neurosis

One effective method to help overcome a tendency to filter inconvenient information is to create a community of practice (COP). COPs are groups of like-minded managers and experts sharing perspectives on issues without filters.

These informal flows of information don't compete with or replace formal channels, so they don't threaten the existing power structure. Instead, they empower middle management and, if used well, provide top management (CEO, business unit presidents, general managers, etc.) with sensible, useful context to competitive developments.

Related: Strategy Vs. Execution: Which Is More Important to Your Company's Success?

COPs thrive only if they're allowed to discuss issues freely without "supervision" and censorship. They need a positive, unorthodox-idea airing, left-field-watching attitude. Those who run COPs must gently, patiently, and invariably guide them away from griping and complaining. They can even grow into communities of collaboration, which take the discussions to the higher level of actual projects.

For executives, tapping into an informal group lower in your organization is sound advice. If you want to stop the problems that have been festering, the fat that has been accumulating, and the waste that has been piling up in your company, the COPs can help – but only if you listen to what they have to say.

Mark Chussil is the coauthor of The New Employee Manual and founder of Advanced Competitive Strategies, Inc. He’s a pioneer in business war gaming and an expert in competitive strategy, strategic thinking, and strategy simulation. His essays on competitive strategy have appeared on his ACS and Linkedin blogs, Entrepreneur.com and in Harvard Business Review. Mark has helped Fortune 500 companies across many industries add billions of dollars to their bottom line, and he is also an adjunct instructor at University of Portland's Pamplin School of Business.

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