How healthy is your company? Have you conducted an organizational health assessment lately? Has your organization ever had a health checkup?
What is Organizational Health?
Organizational health is a company’s ability to work productively and positively toward a shared purpose. A healthy organization is capable of consistently setting goals and achieving them through highly engaged employee collaboration.
Related to organizational health is organizational development, which is a process of making improvements to set the stage for continued well-being and success. This also involves organizational change and evolution, which comes naturally to any healthy company.
An organization’s strong or weak health impacts almost every aspect of its vision, mission, culture, and ability to find continued success. It also impacts its employees on multiple levels: professionally, psychologically, and even physically.
Research from the CDC shows healthier companies tend to have:
- Elevated employee productivity
- Reduced absenteeism
- Improved morale
- Increased employee retention
An investment in organizational health almost always pays off. A McKinsey study found that when companies take concrete steps to improve organizational health, they see an average of 80% improvement in company performance.
That’s an enormous difference! Having good health can make or break your company.
How Do We Conduct an Organizational Health Assessment?
Many companies aren’t even aware of the need to assess organizational health. Although U.S. employers have created a surge in employee health and wellness programs in the past decade, organizational health is often overlooked.
Keep in mind that assessing organizational health isn’t the same as adding employee wellness programs, which usually involves things like offering blood pressure screenings, starting smoking cessation campaigns, and encouraging employees to get their annual physicals. Instead, we’re talking about the health of the organization itself.
An organizational health assessment takes the pulse of your organization and provides a picture of its overall health. It also highlights specific areas for improvement where the organization might show symptoms of poor existing health or an impending downward trend.
Unfortunately, organizations don’t always like to have health checkups. In many companies, there always seems to be an excuse to avoid assessing the organization’s true health. Fear, uncertainty, cost, time, and other pressures put organizational health on the back burner.
For example, in a decades-old company, top executives might assume that the company must be healthy enough to continue chugging along as-is. The thought is, “We’re already profitable. Why rock the boat?”
On the flip side, a new and fast-growing company might not make conducting an organizational health assessment the top priority with so much else going on. The company is probably focusing on gaining new clients rapidly, which could come at the expense of employees’ morale. That’s just not healthy.
An experienced strategic planning consultant can help illuminate the need for additional organizational development at key moments in the company’s lifecycle. A business consultant can also advise about the best way to foster positive organizational change so everyone gets the most out of the process.
How to Measure Organizational Health
While financial metrics have been a standard way to assess the health of a company, measuring organizational health is growing in importance. Organizational health is affected by many factors, including leadership, culture, engagement, and structure. In many ways, this type of measure is similar to an annual physical exam. It helps identify and prioritize areas for improvement. A review of an organization’s overall well-being is often called its organizational health index.
To boost your organizational health index requires consistent care. Healthy organizations build a culture and system that fosters progress and growth. Leadership must be part of this process and must model desired behaviors. During periods of change, companies often face challenges and run the risk of reduced organizational health. To make sure a company stays in business for a long time, leaders should implement organizational health initiatives that promote internal alignment.
A comprehensive evaluation of an organization’s health index should also include the health literacy of its staff. The employees of a health literate organization will be able to explain its policies and procedures and answer questions clearly.
Hallmarks of Healthy Organizations
Just like every person, every organization is unique. Good health takes many forms, so assessing organizational health isn’t a one-size-fits-all approach.
Still, certain factors and qualities tend to show whether an organization is functioning optimally. Below is a summary of common hallmarks of organizational health.
Healthy companies show:
- Resilience in the face of challenges
- An aptitude for proactive conflict resolution
- Good collaboration and communication skills
- Effective leadership styles that support manageable growth
- Clarity and cohesion in the mission, vision, and purpose of the organization
- Flexibility to spark organizational change when needed
- A clear desire to regularly perform organizational health assessments
When you look at these hallmarks of healthy companies, what do you see? How does your organization measure up?
It’s common for organizations to need help making transitions to healthier habits. If your company needs a fresh and healthy perspective, please reach out to Leadership Resources using the information below.
The Next Step: Organizational Development
Leadership Resources provides organizational health assessments for companies that want to grow and thrive. For the healthiest results, experts recommend engaging with our type of full-service leadership development programs instead of just sending employees to training.
We’re here to help companies achieve lifelong health. To learn more, click the link below to read our whitepaper about building healthy, emotionally intelligent leadership.