

The majority of these companies moved up an entire quartile against all other companies in our database. Around 80 percent of companies that took concrete actions on health saw an improvement, with a median six-point increase in their overall health (Exhibit 1).

We do this by aggregating the views of their employees and managers (more than four million to date) on management practices that drive nine key organizational dimensions-or “outcomes,” as we call them. Over the past ten years, we’ve monitored the health of more than 1,500 companies across 100 countries. Put another way, health is how the ship is run, no matter who is at the helm and what waves rock the vessel.

It’s the organization’s ability to align around a common vision, execute against that vision effectively, and renew itself through innovation and creative thinking. We think of organizational health as more than just culture or employee engagement. Our recommendation is clear: start managing your organizational health as rigorously as you do your P&L, providing pathways for leaders at all levels to take part and embedding and measuring the new ways of working. This holds true for companies across sectors and regions, as well as in contexts ranging from turnarounds to good-to-great initiatives. Companies that work on their health, we’ve found, not only achieve measurable improvements in their organizational well-being but demonstrate tangible performance gains in as little as 6 to 12 months. The proof is strong-the top quartile of publicly traded companies in McKinsey’s Organizational Health Index (OHI) delivers roughly three times the returns to shareholders as those in the bottom quartile-so strong, indeed, that we’ve almost come to take it for granted.īut now we see new, longitudinal evidence that redoubles our conviction. Healthy companies, we know, dramatically outperform their peers.
