Leadership: Assessing Organizational Health

Leadership in a business context is challenging because its effectiveness depends not just on a leader’s key traits but also on organizational decision making, competitive forces and constantly changing external situation.

On the other hand, people want to work in healthier organization cultures where they can maximize their chances of adding value – both to their own selves as well as to their organizations.

Beyond visible numbers, how do we assess the health of an organization?

I read 2016-1 edition of McKinsey Quarterly with great interest. It is a rich resource with insights on theme “Organizing for the Future”. In one of the sections on putting leadership in context, authors point to an interesting 2009 research from McKinsey’s Alice Breeden, Aaron De Smet, Helena Karlinder-Ostlundh, Colin Price, Bill Schaninger, and Eilidh Weir on “Building healthy organizations to drive performance: The evidence”.

To be sure, certain normative qualities, such as demonstrating a concern for people and offering a critical perspective, will always be part of what it takes to be a leader. But the importance of other elements, such as keeping groups on task and bringing out the best in others, vary in importance depending upon an organization’s circumstances. Organizational health changes over time. Effective situational leadership adapts to these changes by identifying and marshaling the kinds of behavior needed to transition a company from its present state to a stronger, healthier one.

The exhibit offers 9 rules of thumb to assess health of an organization beyond numbers. Whether you are a leader responsible for organizational health or someone responsible for building leadership culture within organization, these rules of thumb for assessing organizational health will certainly help you clarify behaviors that lead to better health.

Please read the full report here for more context and insights. Meanwhile, here is a quick sketch note version of the exhibit.

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