Creating Accountability to Boost Organizational Performance

Assessing Organizational Health

Organizational health is critical to a company's success, yet it is often overlooked. This article provides an in-depth look at what organizational health is, why it matters, methods for assessing it, and steps leaders can take to improve it.

What is Organizational Health and Why Does it Matter?

Organizational health refers to a company's ability to align around a vision, execute on strategy, and renew itself through innovation. Healthy organizations adapt well to change and outperform their peers. Multiple studies have shown a strong correlation between organizational health and performance. According to research from McKinsey, the top quartile of companies in their Organizational Health Index deliver over 3 times the returns to shareholders compared to bottom-quartile companies. Some key signs of a healthy organization include:

• High employee engagement and morale
• Ability to attract and retain top talent
• Satisfied, loyal customers
• Consistently meets or exceeds targets
• Nimble and responsive to change Alternatively, unhealthy organizations exhibit:
• Low engagement leads to retention issues
• Slow and bureaucratic decision-making
• Silos and lack of collaboration
• Lagging innovation and competitiveness The costs of poor organizational health are clear. Focusing on improving it can yield quick performance gains.

Methods for Assessing Organizational Health

There are 3 key aspects of organizational health that leaders should measure:

1. Agility

How quickly and frequently can you gather insights about the organization? Can data be accessed instantly to inform decisions? Agility provides regular feedback to identify potential issues early. Ways to assess it include:

• Employee engagement surveys - Measure engagement continuously, not just annually.
• Performance management - Replace annual reviews with ongoing feedback.
• DEI surveys - Evaluate progress on diversity, equity, and inclusion.
• Pay equity analysis - Review compensation data across teams.

2. Accountability

Are people transparent about goals and metrics? Do they take ownership in driving outcomes? Improving accountability involves:

• Sharing insights - Be open with survey results organization-wide.
• Learning & Development - Invest in employee growth through training.
• Collaboration - Enable teamwork on key initiatives.

3. Alignment

Do all teams have a shared understanding of priorities and work towards common goals? Ways to boost alignment:

• Permission data access - Give stakeholders access to relevant data.
• Visibility into plans - Increase cross-team visibility through collaboration tools.
• Manager enablement - Equip managers with the data to guide their teams.

How to Improve Organizational Health

Improving organizational health requires a focus on leadership, mindsets, engagement, and measurement. 4 key steps:

1. Leadership commitment

Gaining leadership buy-in is essential. Senior leaders should act as architects and stewards of organizational health.

2. Define mindsets

Identify current mindsets that need to shift, along with the new mindsets to instill. Address unconscious beliefs that influence behaviors.

3. Engage employees

Engage influencers throughout the organization to role model desired mindsets. Create a movement, not a top-down mandate.

4. Measure progress

Use pulse surveys and feedback loops to track health regularly. Review progress and refine approaches.

Conclusion

Organizational health has a major impact on performance and the ability to drive strategy. Assessing and managing it should be a priority like any business metric. Focusing on improving agility, accountability, and alignment can yield quick gains. With commitment from leadership and engagement across the organization, companies can build a thriving culture poised for long-term success.