How a Healthy Workplace Culture Boosts Performance

A Healthy Workplace Culture Boosts Performance
We think of a healthy workplace culture as the values and behaviors that are consistently lived across an organization. In general, all organizations strive to be healthy, and people want to work in a healthy environment.  A healthy workplace culture encompasses the well-being of employees and their…

• ability to function effectively
• adaptability
• opportunities for growth
• effective use of resources

Cultural Health Matters
Our organizational alignment research found that workplace culture accounts for 40% of the difference between high and low performance in terms of revenue growth, profitability, customer loyalty, and employee engagement.  According to recent Mckinsey research, publicly traded companies rated in the top 25% of organizational health generate three times the total returns to shareholders compared to less healthy cultures in the bottom quartile.

A Word About Corporate Values
Corporate values represent the core beliefs you stand for collectively as an organization. Values drive leadership behaviors and act as the bedrock of a healthy and high performance culture by serving as a filter for key decisions and as the means to attract, develop, engage and retain winning talent.

How To Measure Cultural Health
In terms of cultural health, the combination of values and behaviors can be measured on a “bad-to-good” or “unhealthy-to-healthy” scale. And there are absolutely minimum levels of organizational health that must be attained for any company to thrive. However, while a healthy workplace culture has been proven to be necessary for success regardless of industry, it rarely, in and of itself, differentiates the performance of one company from another.

A Healthy Workplace Culture is Just the First Step to Differentiated Performance
Organizational health is just the first step required to create the high performing and aligned culture required to stand out from the pack. An organization must be healthy enough to drive differentiated performance; but health alone will not set you apart from your peers in terms of business results or talent management.

Two Steps to Create A Healthy Workplace Culture
To improve organizational health as the first move toward creating a high performing and aligned culture:

1. Assess Your Current Level of Organizational Health
   Clients typically use employee engagement or organizational health surveys to monitor and improve organizational health. Regardless of the method, a consistent and proven way to assess and monitor organizational health should be an initial building block of your talent management strategy.

   We typically measure seven dimensions or organizational health: Leadership, Organizational trust, Individual trust, Individual capability, Team capability, Organizational climate, and Organizational capability.

2. Take Action to Create a “Healthy Enough” Organization
   While we have yet to find a company with perfect organizational health, health must be good enough (especially around leadership and trust) to form a solid foundation to drive higher performance or to change cultural norms.

   Once you have assessed your organizational health, make sure that you take meaningful action by maintaining what is working, monitoring areas at risk of slipping, leveraging strengths, and prioritizing the critical few unhealthy areas that matter most.

The Bottom Line
A healthy workplace culture is the first step toward boosting performance.  In general, all organizations strive to be healthy, and people want to work in a healthy environment. But cultural health alone will not set you apart from your peers in terms of business results or talent management.

To learn how to create a healthy and high performing workplace culture, download The 3 Levels of Corporate Culture to Boost Performance