Part II: Organizational Health: Achieving the 5 A’s of Performance

This is the second of my two-part blog post on organizational health. In my first part, I defined organizational health, discussed why it is so important and explained the difference between health and performance. Organizational health is about adapting to the present and shaping the future faster and better than the competition, and is just as important as focusing on the traditional drivers of business performance.

Building health and achieving its accompanying performance benefits generally require transformational change. The approach we’ve found most effective for pursuing a conjoined health and performance matrix consists of five stages, which we refer to as the five frames of performance and health. For each stage, you must answer a basic question that applies to both performance and organizational health and then address a related performance- or health-specific imperative.

The Five Frames

Performance and organizational health can be viewed through five frames.

 

Performance imperative

Health imperative

Aspire:
Where do we want to go?

Develop a change vision and targets that are deeply meaningful to employees.

Determine what “healthy” looks like for the organization in view of its change vision.

Assess:
How ready are we to go there?

Identify and diagnose the organization’s ability to achieve its vision and targets.

Uncover the root causes of mind-sets that support or undermine organizational health.

Architect:
What must we do to get there?

Develop a concrete, balanced set of performance-improvement initiatives.

Reshape the work environment to create healthy mind-sets.

Act:
How do we manage the journey?

Determine and execute the right scaling-up approach for each initiative in the portfolio.

Ensure that energy for change is continually infused and unleashed.

Advance:
How do we keep moving forward?

Put in place a continuous-improvement infrastructure to take the company forward beyond one-time change.

Equip leaders to lead from a core of self-mastery.

Aspire
The importance of setting aspirations that emphasize health as well as performance has been well documented. Change programs with well-defined aspirations for both were more likely to be rated extremely successful than those with clear aspirations for performance alone. The best strategy is setting strategic objectives and then defining related health essentials.

Assess
Before moving from goals to actions, companies need to evaluate the their readiness to achieve their aspirations. What capabilities matter most to meeting performance goals, and how strong are they in the company today? What mindsets about “the way things get done around here” could undermine your quest for health, and what are their root causes? The value of such assessments of a company’s readiness to change can’t be overstated: in a 2009 survey by the Harvard Business Review entitled Corporations and Future Thinking, respondents at companies that diagnosed and addressed problematic mindsets were four times more likely to rate their transformations as “successful” than those that didn’t.

Architect
Once a company knows where it wants to go and how ready it is to go there, it must work out the way to get there. This is the hardest part of changing an organization, but it’s also the stage in a company’s journey when efforts to improve performance and organizational health start to fuse. They interlock and reinforce one another as a focused portfolio of performance-improvement priorities. The company then has a vehicle for shifting mind-sets toward health. Often, shifting mind-sets means changing formal systems, structures, processes, and incentives. Senior executives who have implemented initiatives to change their employees’ mind-sets and behavior during a transformation were more likely than others to report that it had succeeded.

Act
When it’s time to get moving, pilot programs are usually the right way to start working on performance. If things go well, successes can be replicated elsewhere; if they go awry, you can confine mistakes to a small area. One key to successful pilots is conducting them in two stages: first, a standard proof of concept and second, a proof of feasibility. But even the most carefully constructed pilots aren’t enough. Lasting, healthy change also requires an organization motivated to go the extra mile over and over again as employees carry out their routine, day-to-day tasks while fundamentally rethinking many of them.

According to Gartner CEO and Business Executive Survey, only some 30 percent of all executives who had been through a transformation thought their companies had been completely or mostly successful at mobilizing energy in it. The following four tactics can help create a powerful engine for change and drive success:

• Help people understand how the project they were working on will contribute to that year’s targets and, therefore, to the overall transformation program for the future.

• Ensure that the whole company feels ownership of the changes.

• Create an environment that identifies individual desires into company objectives and health – the WIIFM (What’s In It For Me) concept. Use progress evaluations as a final tactic for maintaining energy.

Advance
The final stage is to make the transition from the intensive work and constant upheaval of a transformation to a period of continuous improvement. According to Pew Research’s study entitled Corporate Success in the Post Recession World, companies that build a capacity of continuous evaluation and improvement into their organizations are 2.6 times more likely to consider their transformation programs a success over the long term. Continuous improvement can be cultivated during a major transformative effort by building an infrastructure, as you go, that includes leadership skills, knowledge sharing, learning methods and expertise to help the company continually improve.

If you want to change your organization for the better — and to make the changes stick — you must focus on its long-term organizational health, even as you push for higher performance now. We believe that business, and even society as a whole, will improve when organizations begin to report — and be judged — on their organizational health just as frequently and rigorously as they are on their fiscal performance.

When viewed through this lens, how healthy are you?

  1 Comment   Comment

  1. Thank you Russel for sharing this.

    I like the approach. I have not seen this model before, but I have been part of a similar setup. Good summery.

    I have scoured the net for the model and found alot of useful material.Now I can be even more clear with my clients. Thanks!

    //Håkan Bernhardsson
    Sales Process development
    CRM Competence

    Reply

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