Andres Mejia McKinsey is a Client Advisory Lead at McKinsey & Co, a global management consulting firm. He is focused on serving clients on organizational health and performance, organizational design, and talent management.
The term “organizational health” is generally defined as referencing an organization’s ability to function effectively: to stay (at least) one step ahead of your competitors, by renewing itself faster than anyone else. For an organization to be healthy, it must focus on its people – not so much on things like employee satisfaction or engagement, but on what it takes to lead the organization.
Since every organization is unique, the best organizational health is derived from its own history, external environment and goals. An organization should have its own unique strategies that are built around its own unique circumstances. This will deliver the best results that your competitors will be unable to emulate.
The health of an organization is directly related to its performance, and performance, of course, is what it’s all about. In business, an organization’s performance is measured in such things as operating profit, return on capital employed, stock turns, net operating costs, and total returns to shareholders. Organizational health is its ability to align and renew itself so that it can remain competitive over time. It consists of core organizational skills, such as leadership, that traditional metrics are unable to measure.