What Does It Take to Have a Healthy Organization?

You’re supposed to go to the doctor for a yearly checkup, aren’t you? These regularly scheduled appointments are essential for maintaining good health and, optimistically, leading to a long and prosperous life.

Doesn’t it make sense that organizations should do the same?

In most cases, healthy organizations see employees who are happy and productive, customers who are satisfied and loyal, and the company fits or exceeds industry benchmarks for financial performance. In fact, research from McKinsey has found that healthy organizations generate total returns to shareholders three times higher than unhealthy organizations. And of course, the opposite is true: an organization that is suffering from organizational health experiences show low employee engagement, retention issues, and lagging morale, which creates a negative snowball effect for teams and the company as a whole.

Consequently, when you understand and prioritize your organization’s health, you help your organization respond to challenges more easily and take advantage of opportunities in a changing business environment.

As leaders, we need to deliver transparent, thoughtful, and informed solutions to identify core impact areas in health and wellness. The accumulating impacts of global conflicts and economic vagueness have shown us that we owe it to our employees, our clients or customers, and the wider public to deliver on health and safety.

We know that when people are healthy, they are better able to handle physical stress, recover from illness more easily, and press themselves to achieve goals. On the other hand, poor health leads to stress and disease in both the employees and your organization.

For years, we’ve seen organizations’ fortunes rise and fall based on their ability to react to and handle the political & regional shocks, economic uncertainty, competitors’ actions, and other disruptions quickly. Amid this instability, which in these days is quickening rather than declining, many organizations have a hard time. And yet, some organizations continue to thrive despite the challenges. Why do these companies succeed, year after year, in terms of operation, financials, and otherwise, while many don’t?

McKinsey research tells us that one of the main reasons is organizational health.

Organizational health includes how effectively leaders make decisions, assign resources, manage the day-to-day, and lead their teams to deliver high performance over the long-term. According to McKinsey, organizational health comprises three elements:

• how well the entire organization rallies around a common vision and strategy,
• how well the organization executes its strategy, and
• how well the organization innovates and renews itself over time.

With leadership undergoing a generational transformation, a question: Do ethical principles and business go together?

As you know, errors, bad behavior, and poor judgment in leadership can negatively impact a company’s staff, brand, and reputation. It is my belief that for business success, organizations must have ethical leaders.

Ethical leadership means that leaders and managers are making decisions based on the right thing to do for the common good, not just based on what is best for themselves or for the bottom line. Yes, profits are important, but ethical leaders take into consideration the customers’ requirements, the communities they serve, and their staff, including the organization’s growth and revenue, when making these critical business decisions.

Ethical leaders encourage their team members to model this behavior, too. They help to build a workplace culture that values transparency, collaboration, and inclusion, and where everyone feels safe to express their views.

Research has shown that organizations that highlight ethics experience measurable benefits across the organization, including operations and financial performance. Organizations that prioritize ethics benefit from:

• Increased customer trust and brand loyalty.
• Stronger employee attraction and retention.
• Healthier, more wide-ranging workplace cultures.
• Lessened legal, regulatory, and reputational risk.

Another question: How can business ethics shape company culture?

This can be achieved by fair compensation and progression procedures, respect for all employees and their rights as human beings, commitment to a cooperative environment, and mental safety and open communication.

Before I conclude, I do want to mention an example to avoid. Enron will serve as a long-lasting reminder that ethical breakdowns create systemic after-effects that expand far beyond a single company.

My concluding question to you is: What are you going to do to contribute to creating an ethical and healthy organization?