How does health relate to performance?
Organizational health does not just mean ensuring that people are happy. Nor is it about corporate culture for culture’s sake. The underlying concept is that performance and organizational health are inextricably linked. There is no long-term performance without real organizational health.
Why should leaders be thinking about health when they decide how to run their organizations?
Too often, the tendency is to look at financial performance alone, but that’s only half the equation. You have to manage financial performance and long-term organizational health with equal rigor. Our research underscores that: the healthiest companies in our database have total returns to shareholders that are nearly twice those of companies that are in the middle of the pack.
How does health affect engagement?
We define organizational health as the ability to sustain performance over the long term by having employees who continually demonstrate three key competencies: one, they understand where the organization is going and how it plans to get there; two, they have the tools, capabilities, and motivation to put those plans into action; and three, they are encouraged to innovate and adapt to change in order to keep the organization ahead of the game.
What is the vision for organizational health and its role in enabling our clients?
Organizational health is just that: creating a vision for the future. Right now, because of regulatory and reporting requirements, most companies focus on what I’ll call short-termism—that is, they are more concerned about the next 3 months than the next 3 years. We are trying to shift this thinking by helping leaders consider the impact of their decisions over the long term.
We developed the Organizational Health Index (OHI)—a survey-based tool—to help our clients assess their organization’s health, diagnose the culture, and identify paths to improve performance. The OHI predicts an organization’s capacity to perform over time and equips leaders with both the facts and proven programs to change culture and drive long-term success.
Why is it important to have a common language around health?
The best way to manage something is to measure it. Health is universal, and by adopting a common language and metrics, we are able to benchmark across organizations, industries, functions, and global locations. We’re on a mission to get measures of organizational health widely accepted as drivers of long-term performance.
Why did McKinsey partner with Gallup on organizational science?
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. Combining this data and knowledge is going to mean we can look at organizational health in ways that haven’t been possible before.