– The winds of change are blowing through organization, the branch of management concerned with the human side of the enterprise—topics such as employee engagement, change, culture, and leadership. While quantification and measurement have always been part of the toolkit, there is a growing imperative to collect and analyze hard data about what are sometimes seen as 'soft' management issues.
Such is the context for our new collaboration with Gallup, the analytics and advice firm that has 80 years of experience measuring engagement, talent, and management. The Organizational Science Initiative, backed by McKinsey and Gallup, is a joint effort to develop next-generation org analytics.
By pooling resources and working with leading thinkers in the field, the aim is to kindle new approaches and common data standards. The standards part is vital to enabling what data wonks call "cross platform analysis" across companies, industries, and regions.
Organizational health is a key concept in all of this, says Chris Gagnon, leader of our organization analytics group at McKinsey.
Executives have access to vast amounts of information about day-to-day performance—dashboards chock-full of data about productivity, sales, cash flow, and so on—yet the underlying health of the organization is often opaque. The mindsets and behaviors of employees, and the management practices that shape them, play a big role in determining future performance. Yet most managers are flying blind.
Says Chris: "The problem is that no single firm has the ability to take all this data and translate it into a complete picture of organizational health. Combining the data and knowledge is going to mean we can look at org health in ways that haven't been possible before.
(For more on the link between performance and health read The hidden value of organizational health—and how to capture it.)
Exactly how this will pan out is still being worked through. However, one of things that Gallup brings to the table is a trove of data from its Q12 employee engagement survey, which has been administered by hundreds of organizations since the late 1990s. From the McKinsey side comes data from the Organizational Health Index, a tool for measuring an organization's capacity to perform that's been used with about 900 clients globally.
"We think there's a lot to be gained by integrating our strength in organizational strategy and health with Gallup's deep insight into the attitudes and behaviors of individual employees," says Bill Schaninger, a McKinsey partner with a PhD in organizational psychology who leads advanced analytics for our global Organization Practice.
In the meantime, the joint Gallup-McKinsey team is busy creating a global advisory board for the new initiative, comprised principally of chief human resource officers from large organizations. There are also plans for a series of regional summits to bring advisory board members together with other executives and experts. The goal is to keep the Organizational Science Initiative grounded in the business priorities of practicing managers while also shaping a long-term research agenda for the field. There's nothing soft about it.