Wednesday, 1 July 2009

We Express Our Concern

Organisational health is an oft quoted but mostly ambiguous term in today’s management circles. Is it employee health and its impact on productivity we are talking about, or is it the health of the organisation’s business relative to the environment in which it functions? There is, however, no question in the mind of chief executives that financial measures no longer provide enough data about the health of an organisation, and measuring human capital is a key element for assessing organisational performance and leveraging talent in the workforce.

There is evidence to show that improving workplace wellness and employee satisfaction can lead to a healthier bottom line. Managing companies for success across time frames, while dealing with the ever growing phenomenon of managing stock market sentiments from quarter to quarter - a requisite for achieving both performance and long-term health - is one of the toughest challenges in business. While this year has been especially hard on executives, with the turbulent economic conditions forcing them to concentrate on the short-term, research does show that stock markets value the long-term as much as they want to make quick gains. As markets mature and take lessons from the debacles, we will see the re-emergence of the wise investor, who will value the long-term over the short. Leadership must act today to ensure that it can convert growth prospects, capabilities, relationships, and assets (which in today’s economy more often than not is human capital) into future cash flows.

The good news is that leading companies are becoming health conscious on the rebound of a number of corporate health failures of yesteryears. Most board directors are today spending more time discussing future strategy, risks and talent management, issues that pertain to a company’s long-term health rather than the latest financial results. C-level executives are making it a point to visibly spend more time nurturing talent, and directing holistic reward strategies. A growing number of employers are beginning to capitalise on the convergence of these two trends, and are positioning health and wellness initiatives as valuable elements of a total rewards package. Just as the central tenet of a total rewards strategy is to align compensation, benefits and other incentives with business goals and employee needs, the same holds true when implementing effective health promotion strategies. In both cases, the objective is to understand the relevance and perceived value to the employee, and then design a programme that optimises the potential for achieving the organisation’s goals.

An impediment towards the acceptance of the ‘organisational health’ method has been the ambiguity surrounding the metrics which will allow an objective measure of health while directing us towards the prescriptions required, if any. What is more alarming though in organisations that are following the method, is the tendency to look for a ‘one size fits all’ approach, while management consultants prescribe cure-alls like the Balanced Scorecard. Companies should identify the health and performance metrics most important to them depending on their growth goals and the nature of their industry, which could mean technology and customer satisfaction for some, while talent retention and product innovation for others. The metrics should however necessarily include appropriate weightages for operations and processes, short- and long-term financial outlook, products and services, leadership and strategy, as well as continuous improvement and corporate governance.

While we look forward to change for the better, from the sweltering summer to a cooler monsoon, and from a depressing recession to a more positive economic climate, here is wishing you and your organisation the best of health.

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