Organizational Health
Oday Forster
Health and transformations. In large transformations, companies that embedded organizational-health investments and initiatives in their change programs across an 18-month period saw 35 percent higher TSR than companies that did not invest in health.
Health and resiliency. Healthy organizations are not just higher performers, they are also more resilient and better able to manage downside risk. For instance, from 2020 to 2021, during the COVID-19 pandemic, healthy organizations were 59 percent less likely than unhealthy organizations to show signs of financial distress.
Health and safety. Companies with superior organizational health are better able than their peers to provide safe work environments, thereby limiting their exposure to financial, operational, and reputational risks. Indeed, companies in the top quartile in organizational health have six times fewer safety incidents than those in the bottom quartile.
The research also reiterates that all forms of innovation are more likely to succeed when decisions are grounded in data and facts. According to the research, organizations that emphasize data-driven decision making are 63 percent more likely than others to adapt to a changing business environment.
Sustained organizational success really comes down to leaders gathering the data that will help them understand which behaviors can help them to meet their performance goals as well as the type and scale of health improvements their organization should target.
When the topic of organizational alignment is brought up, sales and marketing alignment is the first to come to our minds. However, the subject of organizational alignment relates to each and every department, including finance, IT, human resources, customer support, etc.
One of the strategies used to achieve organizational alignment is creating a documented single source of truth, which typically takes the form of a knowledge base. This resource will support transparency and allow employees across different departments to be on the same page.
Remote work has taken the reigns, and communication management has become a serious problem for distributed organizations. 33% of employees say communication has become more of a challenge with the shift to remote working.
35% of businesses see increased employee turnover as a result of poor internal communication. A healthy organization addresses the problem by creating comprehensive policies that regulate communication between employees, stakeholders, and the entire community.
To maintain a healthy organization, people managers should shift their focus from financial incentives to employee wellbeing. Workplace wellbeing depends on many aspects, such as the mental state of employees, workplace safety, physical health, social connections, and work attitude.
In 2021, 88% of employers were investing more in mental health support at organizations. Many of them have expanded paid leave policies, subsidized home office setup, and expanded virtual employee engagement activities.
The concept of organizational health is vague. Creating a system where you can measure it brings more clarity into the overall health of your organization and the benefits and success your organizational health initiatives have.
However, measuring organizational health is only effective when you have a benchmark to compare against. For instance, you could run different surveys for employees and leaders to see how their opinions align.
Leaders account for at least 70% of fluctuations in employee engagement scores, and for good reason. Great managers set the tone for entire teams, motivate top performers, and identify workplace issues early.
Ideally, you need to have all your internal processes documented. Creating a knowledge base or internal wiki will be a perfect solution allowing everyone at your organization access and contribute information needed to perform their best work.
Our recommendation is clear: start managing your organizational health as rigorously as you do your P&L, providing pathways for leaders at all levels to take part and embedding and measuring the new ways of working.
The key to speed is a rigorous approach. This starts with making the quest for organizational health an integral part of forward-looking leadership: senior leaders need to consider themselves architects, not passive bystanders. Then it means integrating health into monthly and quarterly performance reviews, with data to show how both are trending versus targets. Supporting priorities include tying financial incentives to accomplishing health goals; creating and holding accountable a health team dedicated to embedding the right behaviors in the organization; and weaving health into the performance initiatives already under way.
A global equipment manufacturer was under pressure from cost-competitive entrants, challenging its long run of dominance in a specialized, capital-intensive industry. With the development costs of its most recently released product coming in at several times its original budget, the company needed to drive down costs to maintain its market position. Leaders had been trying to address this problem, but their lack of results only led them to more frustration.
It requires strong leadership and role modeling for change to take hold quickly. But change is not a top-down exercise. Health improvement happens quickly and sustainably when you drive it top to bottom, bottom to top, and side to side. This is best done by engaging a committed community or network of formal and informal influencers.
After three months of using the survey technique of one question a day, the company found that it was making progress across all practices except rewards and recognition. Such a fast feedback loop enabled the team to intervene quickly, celebrate the successes, and revisit its approach to rewards and recognition. As a result, leaders combined their internal learnings with external best practices and redefined their interventions to improve the ways in which they rewarded and recognized high-performing teams and individuals.
When people are healthy, they are better able to take on physical stress, recover from illness and push themselves to achieve goals. Alternatively, ill health can leave individuals vulnerable to stress and disease.
Organizational health arose from occupational health, which broadly focuses on building a workplace where employees feel valued. Organizational health, however, connects that concept more explicitly to the overall success of a business.
While the definitions have slight differences, change remains a constant. Industries experience change in the form of environmental, political, social and economic events. Organizational health is a helpful concept for building the necessary resiliency within an organization so it can withstand and even thrive in the face of inevitable change.
Companies and corporations that pursue organizational health are ultimately investing in the well-being of their workplace amid challenges. All organizations experience hardships, but the choices that leaders make when they prioritize organizational health can drastically improve the experience of employees, overall morale and the longevity of an organization.
Cultivating organizational health is crucial because it directly affects employee morale, engagement and satisfaction. A positive workplace culture fosters loyalty, productivity and innovation among team members, which can lead to higher retention rates and lower turnover costs. By investing in their organizational health, companies can establish a solid foundation for sustainable growth and long-term success.
From executives to managers, leaders in the workplace are well placed to see how individuals fit into the larger company goals and mission. Managers can serve as role models by bringing their energy, honesty and empathy to every task and project. This can then motivate employees to bring those same traits into their work, which ultimately contributes to a coherent company culture that motivates employees to succeed.
Good direction sets up employees to work independently toward their objectives. Direction comes down to being crystal clear with employees about processes and workflows. Instead of asking their superiors for input on every minor task, they can be empowered with the right skills and understanding to overcome obstacles independently.
If direction describes how employees interact with their superiors, coordination describes how employees interact with each other. Poor coordination can result from ill-defined roles, uneven distribution of work or unclear processes.
Much like direction, coordination hinges on clearly communicated priorities and objectives, as well as positive working relationships among employees. Clearly defining the responsibilities of each employee within a team can help that team work as one.
Talking to employees directly is key to understanding what motivates them, and understanding what motivates employees can help leaders make that work more meaningful to the staff. Opportunities for professional development, for example, can help employees grow in their jobs. In addition, when employees find a connection between their work and their personal values, they can more easily find a purpose that motivates them to succeed professionally.
Company values can provide a sense of direction and purpose for employees. It is not enough, however, to articulate these values. Strong leadership must also serve as an example of putting company values into action. When employees see their leadership align with company values, they feel more motivated to align their own work accordingly.
Leadership is responsible for leveraging protocols and work processes to convey company values, roles and responsibilities. Furthermore, leadership must repeat this information as many times as necessary to guide every employee to the same page.
All organizations can benefit from employee input. Asking for this feedback frequently and directly can make employees feel included in decision-making without being overwhelmed by intensive questionnaires and surveys.
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