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.



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