A runner approaches the track. She stretches. Her muscles have been trained to move her exactly the way she needs for this specific race. Her health regiment is carefully calculated and specified for her sport.
She is trained to succeed and her body functions as one aligned unit, propelling her to the finish line.
Like a runner, business success depends on maintaining health and developing specific capabilities and strengths. Organizational health requires a concerted effort, training, and drive. During periods of change, it is essential for a company’s stability and resilience.
Organizational health is about alignment, execution & resilience
Organizational health means exactly what it sounds like: the health or wellbeing of an organization.
Mckinsey & Co. defines healthy organizations as those that are “high functioning and highly successful over long periods of time.”
High functioning companies are internally aligned. The departments are all in sync with one another and work symbiotically to support their combined efforts.
They execute their objectives decisively and effectively based on research and data.
Most importantly, high functioning companies are agile and resilient, allowing them to succeed long-term, even as they ride through waves of change.
Does your company need a check-up?
The health of your organization can be assessed similarly to the health of the human body. The holistic wellness of a body requires consistent care.
It depends on the required nutrients to develop and function, and it is prone to sickness, areas of weakness, and sometimes dysfunction. That’s why we exercise, eat a nutritional diet, live in safe environments and go to the doctor for regular check-ups.
An organizational check-up entails taking inventory of your company’s functionality, systems, and culture. Just like a body, a company is vulnerable and has a delicate system of health to maintain in order to survive, perform well, and grow.
Short-term performance vs. long-term health
Companies often underestimate how important organizational health is, and don’t give it the same level of priority as overall performance. But there is a direct correlation between companies that prioritize their health and organizations that stay successful.
In fact, research shows that “almost all companies perform better if they improve their health.” An extensive survey by the Health Enhancement Research Organization found that more than 90 percent of business leaders say that promoting workplace wellness affects employee productivity and performance.
If an athlete is training for a sprint, she’s going to methodically prepare herself for an explosive burst of speed but not necessarily longevity.
Company practices work the same way. If your goal is to achieve immediate and rapid performance growth, long-term growth will not be sustainable.
Performance rates are improved significantly when employees feel valued and engaged, when company strategy is concise and consistent, and when all departments have excellent communication. But these practices take time to build and develop. Investing in these qualities in your company might seem like a distraction from performance, but it’s actually building the corporate muscles for longevity.
If a sprint runner tried to maintain her sprint speed for a long-distance run, she would likely destroy her knees.
Organizational health will help you through the growing pains of change
Cultivating a healthy organization requires ongoing attention. The objective is to create an environment that inspires, and a system that drives steady and sustainable progress.
It’s extremely important for all of the leadership to be a part of the organizational health plan and process because the modeling of desired behaviors and attitudes by leaders is an essential healthy practice.
Periods of change are especially challenging for companies, but it’s during these crucial times that a company’s health can influence its longevity.
A healthy organization has a high level of internal alignment which means that the company can pivot and bounce back from new challenges together, supporting one another as a unit. When consumer demand shifts or there is a significant change in the market, a supportive and cohesive company can navigate the challenge together. A splintered and misaligned organization will be further divided and fragmented by change.
Fostering consistent and open communication is fundamental to sustaining long-term organizational health. If your company has healthy communication and engagement, then employees will have an open platform to voice their struggles with change. Easy-access dialogue means that issues can be addressed, and problems can be solved more quickly and efficiently.
Change is trialing for even the healthiest organizations, but those that have smooth systems for communication, leadership, and strategy, will be able to utilize their strengths and stick to long-term goals for success.
How to measure your company’s organizational health
It might be counterintuitive, but focusing on the financial performance of an organization is not a good way of assessing organizational health. While in theory, companies that improve their financial performance might be able to get their employees to align, execute, and improve resilience more effectively, the opposite usually occurs in reality, according to McKinsey.
When it comes to understanding organizational health, qualitative metrics like the state of the culture, employee experience, and engagement levels are a far more accurate indicator than financial results.
Feedback from staff is your most valuable tool for assessing organizational health, as some might have different ideas on how to approach change. But don’t make the mistake of only relying on what the leadership has to say.
In fact, McKinsey & Co. found that there is often a discrepancy between the leadership’s perception and the employees’ view of a company’s organizational health. Leaders often rate the company’s functioning much higher than employees.
Collecting feedback from employees across the entire organization is critical to getting an accurate pulse of your company.
Capitalize on direct communication and existing data
Compile a list of questions that address your company’s direction, employee experience, work environment, leadership dynamics, and strategy to understand how employees perceive the organization’s standing. Anonymous surveys will probably give you the most honest information, but one-on-one conversations can also be beneficial.
There are many areas that are important to assess when creating a plan for organizational health. To create your agenda, make sure to address leadership, marketing and sales strategy, and your company’s employee experience. You can use the Organizational Health Index to get detailed practices that should be rated. You want to make sure that the stability, transparency, and culture of each team and department within your company is inspected carefully.
Another useful diagnostic tool is analyzing data that comes from your organization’s various software systems. For example, HR analytics can provide profound insights into the state of the culture and employee experience. Analyzing the user journey, productivity, data integrity, and other metrics will give you an invaluable look into how well your software investments are being utilized.
Make organizational health an ongoing goal for long-term success
Organizational health keeps your company’s heart pumping and muscles strong for the corporate race. Keep your finger on the pulse to maintain health and to be equipped not just in the short-term, but for lasting and sustainable success.
Lia specializes in analyzing and forecasting the development of corporate culture in the digital era. Her experience in both NGOs and high-tech gives her a unique perspective and passion for exploring psychology, global business trends, and how technology is impacting the evolution of our culture.