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The hidden value of organizational health--and how to capture it

https://www.mckinsey.com/business-functions/organization/our-insights/the-hidden-value-of-organizational-health-and-how-to-capture-it

mckinsey.com

The hidden value of organizational health--and how to capture it
For the past decade, we've been conducting research, writing, and working with companies on the topic of organizational health. Our work indicates that the health of an organization is based on the ability to align around a clear vision, strategy, and culture; to execute with excellence; and to renew the organization's focus over time by responding to market trends.

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Organizational Health

Organizational Health

According to a decade long research, the health of an organization is based on alignment with a robust strategy, deep-rooted culture, and a clarity of vision.

The health of an organization can also be defined as the capacity or ability to deliver superior financial and operating performance.

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Better Health = Better Performance

Better Health = Better Performance

Extensive Data studies have found a link between the health of an organization and its performance.

Robust health is crucial to an organization's long term success.

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The Four Organizational Recipes

The Four Organizational Recipes

Companies aligned with one of these four organizational recipes are more likely to be healthy and to deliver strong, sustained performance than those following random management styles:

  • Leader Driven
  • Market Focused
  • Execution Expertise
  • Talent and Knowledge-based

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Leader Driven Organizations

Leader Driven Organizations

Leader-driven organizations have the presence of great leaders, who are talented and are free to figure out ways to deliver results while being accountable for the same.

Leader-driven organizations have an open, trust-based culture, where creativity is valued.

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Market-Focused Organizations

Market-Focused Organizations

Market-focused organizations have a strong orientation towards competitors, business partners, and the community/marketplace.

They focus on where the innovation is, where the market trend is going, and like to stay ahead of the competition, making innovative products while ensuring the response is profitable.

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Execution Edge

Execution Edge

Organizations that follow the Execution Edge recipe focus on implementation, frontline execution, elimination of wastage of time and resources, and optimal utilization of data for efficiency.

They also use technology to foster better communication, last-mile delivery, and overall efficiency.

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Talent and Knowledge Core

Talent and Knowledge Core
The talent and knowledge core recipe is generally found in professional service firms, in various sectors like sports, consultancies, and entertainment.

They have star performers, and high-quality talent (physical or knowledge-based) to differentiate themselves and be profitable with the branding.

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SIMILAR ARTICLES & IDEAS:

“The biggest risk is not taking any risk. In a world that is changing really quickly, the only strategy that is gu..."

Mark Zuckerberg, CEO of Facebook

Skills Needed In Digital Leaders

  • Work together, complement each other, and function as a team.
  • Able to operate on and enable environments that are more dynamic, team-centric, and connected.
  • Lead and build teams and partner with the broader ecosystems, keep people connected and engaged, and drive a culture of innovation, learning, and continuous improvement.
  • Lead a workforce that includes contractors, the contingent workforce, and crowd talent.
  • Understand how different business functions, industries, and technologies come together to form solutions.
  • Comfortable and competent with risk-taking.

Demographics And Leadership Destiny

Millennials expect to be developed via opportunities, mentoring, and stretch assignments. However that is hard to come by in top-heavy companies. 

Most millennials think their roles provide little development while most companies report they have excellent or adequate programs for Millennials.

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The model of future work

By 2030, up to 30 to 40 percent of all workers in developed countries may need to move into new occupations or upgrade their skill sets. Skilled workers in short supply will become even scar...

Employers should lead the way

The pace and scale that technology disrupts is a social, political and business challenge.
Employers are best placed to make a positive societal impact, for example, by upgrading the abilities of their employees and equipping them with new skills. Employers will also reap the greatest benefit if they can successfully transform the workforce in this way.

Talent is the largest barrier

Talent is the largest barrier to the successful implementation of new strategies.

Many leading businesses realize that it is quicker and more financially prudent to look internally and develop the talent they already have. Yet only a third of global executives report that their organizations have launched any new reskilling programs.

Happiness

Happiness and satisfaction are subjective concepts – while for some of us monetary benefits can be equated with job satisfaction, some might strive for recognition of their hard-work and los...

Workplace Happiness defined

In a fundamental sense, workplace happiness comes when:

  • We enjoy doing the tasks assigned to us
  • We feel right about the people we are working with
  • We are happy with the financial benefits we get from the job
  • We have the scope of improving our existing skills
  • We feel respected and acknowledged at work

Importance Of Happiness At Work

Happy employees are compulsory for a growing business.

A study on organizational success revealed that employees who feel happy in the workplace are 65% more energetic than employees who don’t. They are two times more productive and are more likely to sustain their jobs over a long period of time.