Wednesday 3 August 2011

Beyond Engagement – part 1: Organisational Health


   I’ve been posting quite a lot about engagement recently, for example on my attendance (1,2) and presentation at an event with the UK government supported Employee Engagement Taskforce.

I do support the concept of engagement and am cheered by the impact the taskforce is having. But I do have some concerns. The main ones are:

  • Engagement is too manipulative an idea – it’s a one-way, controlling sort of approach in which an employee has to give more to an employer without an obvious return. This means engagement is typically limited to added value – creating value needs more focus and more genuine concern for the employee.
  • The language is wrong. Engagement is a flat, non-engaging sort of term. We need to speak more in terms of things which really resonate with people – love, passion, beauty, these sorts of things.
  • It’s only part of the bigger concept of human capital and the even larger one of organisational capability. I’ve never really understood why we limit our focus in asking questions about outcomes rather than activities to engagement when there are so many other things we could survey people upon.


The last point is one Lauri Bassi is talking about at the moment – the buckets she uses are shown in the picture above.

But the best cross-organisational attempt to broaden our questioning on outcomes comes from McKinsey.  In their new book (based on an old survey), Beyond Performance, Scott Keller and Colin price present the firm’s Organisational Health Index that the authors suggest has a proven correlation to financial results and that therefore help create lasting change, excellence and competitive advantage:

“The pace of change is faster than ever, so organisation’s ability to adapt is more crucial than ever.  Furthermore, information is so readily available that most aspects of any organisation’s competitive advantage can be fairly easily copied by competitors.  What can’t be so easily replicated is the ability to grow from within through better ideas and better execution, ie better health.  This is why the authors call organisation health ‘the ultimate competitive advantage’.  And healthy organisations’ success isn’t in business alone: They serve a greater good, enabling workers to unlock their full potential in the workplace.”


(So organisational health is what I’ve been referring to as a capability, but in some ways it could be seen as more ‘ultimate’ than these as it could be seen as the capability which enables an organisation to create new capabilities [“organisational health is about adapting to the present and shaping the future faster and better than the competition”].)

The index is based on 9 elements which themselves consist of 37 management practices:

  • Alignment:
    • Direction
    • Leadership
    • Culture and climate
  • Execution:
    • Accountability
    • Capabilities
    • Motivation
  • Renewal:
    • Innovation and learning
    • External orientation.


It’s not a perfect tool.  For example, I’d have preferred an approach that actually describes these elements as organisational outcomes and measures these through the survey too.  Without this, health is just something which is developed through effectiveness in the 37 practices that leads to higher financial results (a bit like Gallup’s approach to engagement).  I think organisational health could be a lot more.

And I can’t agree with McKinsey’s suggestion that organisations need to demonstrate effectiveness in all of these practices.  As they note, there’s no such thing as a one size fits all approach, but to me a focus on doing some things extra well has to be balanced with an acceptance that some other things will be done less wonderfully.

But I do think that the OHI shows the direction in which the engagement measurement field needs to develop.



  • Consulting - Research - Speaking  - Training -  Writing
  • Strategy  -  Talent  -  Engagement  -  Change and OD
  • Contact  me to  create more  value for  your business
  • jon  [dot] ingham [at] strategic [dash] hcm [dot] com



  1. Jon,

    I'm really glad that you've picked this up. Like you I'm concerned that engagement has become too strong a focus within HR yet it is but one of several components that lead to organizational or workforce outcomes. On a related point far too many firms seem to rely entirely on the results of engagement surveys which to my eyes typically guide where to explore in more detail using other, probably more qualitative research techniques.

    We're currently running a Beta trials of a product ( which we hope complements the current approach. At the heart it brings two marketing concepts to HR: voice of the customer and segmentation. For the former we use a series of questionnaires at key stages of the employee lifecycle to understand what happened to an employee and how they perceived it (lots of open questions and text analytics). For the latter we use need based segmentation based on a model of 30 job attributes constructed through a choice experiments similar in philosophy to conjoint. We layer this data onto employee details & event based data using interactive dashboards. Clients explore what is happening, where, to whom & when it is happening and then can see earlier perception differences between groups based on how they later behave rather than where in the organization they sit.

    Our view is that employees all experience the organization and through a combination of these experiences, and their individual needs, they behave is a certain manner. Engagement fits in the middle of this but this is probably the hardest part to accurately measure, so we've chosen to measure the parts that are more measurable as sophisticatedly as possible. We're linking the two to enable HR to say 'this action, done in this manner is associated with that outcome within a particular type of employee group'. So for example we can link having a buddy on joining to selling complex, high margin products. The recommendations are far more granular, far more tangible than one sees from a typical engagement survey.

    I see engagement as a useful construct to explain how experiences and needs links to outcomes. However we are more able to manage experiences and deliver on known needs than influence engagement. The real focus needs to be on influencing the outcomes, not managing a construct called 'engagement' for its own sake.

  2. Hi Andrew, some interesting ideas here. I can't and won't comment on the product, but behaviours are definitely additional outcomes that HR should be focusing on, and measuring where possible. Time and motion studies gave the approach a bad name but I agree that there's a lot more to it than that, and technology is growing what's possible too.


Please add your comment here (email me your comments if you have trouble and I will put them up for you)