Do You Have Enough Organizational Health?

Defining Organizational Health
When we think about personal health, we rarely stop at merely feeling good. True well-being encompasses physical, mental, and social balance — but it also includes the resilience to recover from illness, setbacks, or unexpected challenges.

Organizational health operates on the same principle. It reflects the extent to which a company’s systems — from leadership to operations — function cohesively, while also maintaining the agility and resilience to rebound from competitive pressures or market disruptions. At its core, organizational health can be understood through four critical pillars: leadership, trust, capability, and climate. These elements collectively determine not just how a company performs today, but how well it can endure, adapt, and thrive over time.

What Good Organizational Health Means
Just as your own good health allows you to perform at your best, organizational health is the foundation for high performance. Without the right levels of leadership, trust, capability, and climate, it is problematic to ask people to lift their performance.  The good news is that healthy organizations dramatically outperform others in their industry.

In fact, McKinsey reports that the top quartile of the healthy publicly traded companies that they analyzed deliver almost three times as much value to their shareholders as those in the bottom quartile.  Reason enough to do all you can to promote good health in your organization.  But besides that, the good news is that promoting good health is easier than you think, and it can produce positive results surprisingly fast.

A Leading Indicator
Consider all the time and energy you put into managing profit and loss.  What if you applied the same rigor to corporate health? Instead of working on financial results which are a lagging indicator of success, try measuring and improving a major leading indicator of success — organizational health.

The Goal
We know the goal — a healthy culture that will promote and sustain high performance that leads directly to people and business success.

The Process
To reach the goal, you need to define what organizational health would look like for your specific business.  To start, assess your current level of organizational health and identify the key areas to monitor, maintain, leverage, and prioritize.  Then, think in terms of factors that can impact leadership, trust, capability, and climate at work to build a strong culture

• Leadership
  How do you attract, develop, engage, and retain strong, quality leadership within the organization at both the Senior Leader and Direct Supervisor levels in a way that improves your ability to lead, build trust, and inspire others?
• Organizational and Individual Trust
  At the organizational level, how do you create confidence in the future, transparent communications, and perceived fairness with employees, customers, and partners?

  At the individual level, how do you demonstrate trust in employees through respect, honesty, and empowerment?

• Individual, Team, and Organizational Capability
  At the individual level, how do you create employee confidence that they are in the right job with the potential for career growth based upon clear skill utilization, job fit, and job expectations?

  At the team level, how do you ensure that the team is highly effective at getting things done with high levels of talent alignment, process management, and resource allocation?

  At the organizational level, how do you ensure organizational efficiency, goal orientation, and performance excellence?

• Organizational Climate
  A healthy organizational climate promotes a safe and fair work environment that sets people up to be successful through high levels of physical and emotional safety, organizational learning, and fairness with employees.

Focus on What Matters Most in Your Unique Situation
If you want to see results fast, we recommend that, based upon a cultural health assessment, you choose one of the above areas to focus your efforts.  Choose the one that will have greatest impact on your organization after you factor in the current level of health and relative importance.

Research shows that organizations that focus on one key area are six times more likely to reap the benefits of top quarter health compared with organizations that do not concentrate their efforts.

The Bottom Line
Organizational health directly shapes both people and performance. Are you actively monitoring and strengthening it? When your organization operates at peak health, employees are more engaged, motivated to go above and beyond, and more likely to stay — creating a foundation for sustained business success.

To learn more about turning your workplace culture into a competitive advantage, download The 3 C’s of Culture that You Must Get Right to Perform at Your Peak