Performance-Health Balance Important For Business Success
For optimal running of any business, it needs to be ensured that the right balance of short-term performance and long-term health is struck, says a new study by McKinsey.
“Companies that work on their health, we’ve found, not only achieve measurable improvements in their organizational well-being but demonstrate tangible performance gains in as little as 6 to 12 months. This holds true for companies across sectors and regions, as well as in contexts ranging from turnarounds to good-to-great initiatives,” the study said.
McKinsey says that they think organizational health as more than just culture or employee engagement. It’s the organization’s ability to align around a common vision, execute against that vision effectively, and renew itself through innovation and creative thinking. Put another way, health is how the ship is run, no matter who is at the helm and what waves rock the vessel.
Over the past ten years, the research firm has monitored the health of more than 1,500 companies across 100 countries.
The study shows that almost all companies perform better if they improve their health. Around 80 percent of companies that took concrete actions on health saw an improvement.
McKinsey lists four areas forward-looking leaders must invest in to build a healthy, performance-driven organization (besides, of course, ensuring that they are fully aligned with the business strategy; strategic and organizational misalignment are a surefire path to poor health and general operating dysfunction).
The first, most important step is choosing the performance culture—that will best drive their organization’s performance. Then it’s about moving to adopt that culture as quickly as possible, addressing the mind-sets that will drive new forms of behavior, building a committed team of people at all levels to get involved, and, finally, developing fast feedback loops to monitor progress and course correct if necessary. These actions will help companies target resources on the right priorities, move swiftly, and make the new habits stick, the study noted.
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