I recently sat down with Drs. Jeff and Renee Hale of WellSpirit Consulting Group to talk about Healthy Organizations.   In their view, Healthy Organizations are not measured strictly by a series of financial factors, nor by employee longevity, market share, nor even profitability.  Instead, they are measured by a series of five key drivers that attempt to measure the overall organizational effectiveness.

Patrick Lencioni, in The Advantage: Why Organizational Health Trumps Everything Else in Business (Wiley, 2012) makes a distinction between Smart and Healthy.  In fact, his emphasis is on the results of implementing his 4 disciplines.  Lencioni helps leaders understand the definition of a Healthy Organization by describing “minimal politics and confusion, high degrees of morale and productivity,” and low turnover rates.

Along the same idea is the McKinsey & Company offering, Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage (Wiley, June 2011). Authors Scott Keller and Colin Price define organizational health as “the ability of your organization to align, execute, and renew itself faster than your competitors can”.  They further indicate that healthy organizations adapt and respond quickly to market conditions and grow in their ability to continue to change as required.

In contrast, the Hale’s approach organizational healthy by centering on the well-being of the customer.  It is this idea of caring for the customer that is the true measure of a healthy organization. From this focus, an organization is able to offer leaders and employees a purpose and goal beyond themselves.  It is the cornerstone for long-term organizational healthy. These organizations are:

  1. Customer Centered – the entire organization operates for the benefit of the customers’ well-being.
  2. Employees Caring – Healthy Organizations hire, train, resource, and reward employees for demonstrating care for the well-being of the customer.
  3. Cash Flow Creating – the revenue engine of the organization runs well when linked to the organization’s care for the well-being of its customers.
  4. Operations Connected – all the systems and processes are designed to allow employees to care for the well-being of the customer and deliver adequate cash flow.
  5. Leaders Committed – Leadership understands its role to serve the entire organization and consistently initiate the incremental and deep changes required to care for the well-being of the customers, care for the employees and ensure a sustainable cash flow and profit.

Think about your own organization and consider whether you could benefit from this approach.