Human Capital Management, Leadership, Risk Management, Total Rewards
Why you Should be Thinking About “Organizational Health” as a Driver of Business Success
Culture and operational excellence are often perceived as distinct organizational concepts. However, managing a business in silos, with culture separate from strategy, fails to address how they are inherently driving each other. Business leaders must be intentional about developing their organization’s culture, connecting it to strategy, and getting buy-in from employees.
While culture and strategy are distinct concepts, they shouldn’t be managed as distinct functions. Research by James Heskett and John Kotter shows that purposeful culture (culture that is aligned to strategy) can account for as much as 50% of the competitive difference between organizations. Culture and strategy alignment centers on making conscious decisions about the unique ways people accomplish the organization’s goals. This alignment creates focus that allows organizations and its employees to outperform competition and achieve strategic objectives.
Organizational health takes a holistic approach to measuring a company’s alignment toward achieving improved business outcomes, customer, and employee experiences. It looks at your organization’s strategy, culture, and operational execution as parts of the whole, enabling leaders to assess the current and needed state to develop a comprehensive roadmap toward quantifiable improvement.
But why does organizational health work? Because it starts with leadership and funnels through the organization. Leaders, managers, and front-line employees are aligned. They know what work needs to be done, they know who’s doing the work, and they know how the work gets done. They know the mission – and they’re enthusiastic about achieving it.
A healthy organization and a purposeful culture doesn’t happen accidentally. It starts with leadership that continuously invests in, evaluates, and adapts to successfully drive sustained strategic objectives.
An organization’s health has the power to drive a company to success, but an unhealthy organization can produce the opposite result. There are tell-tale signs of an organization whose culture is disconnected from its overall strategic vision and mission. Leaders of these companies often find themselves wondering:
- “Do our employees really understand our strategic goals and how to achieve them?”
- “Are we getting the most out of our talent?”
- “How can we get our employees to be more excited and engaged in their work?”
- “How can we continue to provide innovative solutions to our clients’ problems?”
When organizations focus on organizational health and culture, the result is improved performance, employee engagement, and client satisfaction. In fact, employees with more positive experiences at work are half as likely to leave their organization compared to those with less positive experiences (21% vs. 44%). The key is to integrate your culture, the “secret sauce” into everything that you do. It isn’t extra work…it is the work.
Wondering how your organization can create a more purposeful culture to drive performance? Be on the lookout for part two of our Organizational Health blog post series: Evaluating Your Organizational Health and Culture.