How much is your investment in organizational health worth for the company?
To understand organizational health, leaders today can use a variety of methods, including:
That said, how do you put a number to the subjective health of an organization and its people? What is it worth? Most people would answer that it cannot be measured— that health is both infinitely valuable and cannot be bought for money.
The question, however, changes when you ask it from a leader or a CFO.
How much is your investment in organizational health worth for the company?
This may seem like a cold-hearted question, especially when we all want to believe that companies today "really" care about their employees.
However, it's a critical question for today's leaders to ask.
Mental health issues are lingering after Covid-19. War and economic unrest have led to massive uncertainty and layoffs. And for the people staying in their seats, there's high pressure and a battle for top-level talent.
So, leaders are forced to face this question:
How much should I invest in organizational health? And how do I know if the investment is worth it?
That's the question we set out to answer in this article. And like anything involving people analytics, it is a challenging answer. So we're not going to dive deep into some scientifically validated, absolutely foolproof methodology around quantifying organizational health and company performance. But we can give you this: Four different models for evaluating the effectiveness of committing to improving organizational health at your company. Four models which can be relevant to leaders, specifically, and one straightforward diagnostic tool to help you get started quantifying organizational health at your company.
What follows are four ways to measure organizational health: what it is, some pros and cons, and what to consider if you decide to use this measure. But also, how relevant is the benchmark for your company? And should each approach can be used alone? Or should they be combined, compared, and contrasted? So, think: Where could I start measuring organizational health for my company?
Model 1: Measure changes in organizational health outcomes.
Concrete measures related to organizational health — before and after an intervention can include:
For example, LEON uses a 26-point organizational health diagnostic called Insight, which looks at individual and organizational health elements. In addition, we use follow-up diagnostics, using a machine-learning-based algorithm called "wellness intelligence," to quantify the impact of any interventions used at both the individual and organizational levels.
Model 2: Measure the return on investment of health programs
For organizations, investments must pay off over time (ask your CFO). Therefore, the most widely used financial indicator is Return on Investment (ROI). In short, ROI is calculated as the ratio of benefits (cost savings and/or increased output) to the cost of the intervention.
Model 3: Quantifying success against a targeted metric with a focused strategy.
Focus on a specific organizational health issue—e.g., mental health, psychological safety, or sleep—and do a targeted intervention—measure participants before and after the intervention.
An example of this would be:
Model 4: Measure changes in your people analytics
Every organization has some employee metrics in place. These metrics may include recruiting and retention data, culture assessments, or productivity. Most organizations also run an Employee Engagement Survey or pulse survey. Instead of simply measuring health, these expanded People Analytics metrics can be used to assess the impact of a complete organizational health strategy.
With the rise in awareness of organizational health and its potential impact on profitability, companies have begun to take more business-focused approaches to operationalize their organizational health strategy. In response, LEON has developed a framework to address this new complexity. One that arose fifteen years ago when we challenged ourselves to go beyond traditional components, like culture and engagement, and to measure organizational and people well-being in a more holistic way. 1,500+ clients and 3+ million data points later, we're doing just that.
The LEON 4P Matrix offers a systematic approach for a corporation to determine where best to invest in organizational health and, more importantly, the impact of that investment. Rather than rely on guesswork and implementing underutilized wellness benefits, the company can use a proven technology-enabled process built for improving organizational health in a modern company.
Prepare: As the initial step of the 4PMatrix, organizations use tools such as LEON Insight to measure the health and resilience of their company. These assessments typically involve gathering feedback from employees and evaluating various aspects of the organization's culture, structure, and processes. This process will help to establish a holistic baseline of the health of your company.
Plan: Once we have a clear understanding of the health of your organization using LEON Insight, you will use a process called "abstraction," and "grouping" where you will take deeper dives into problem areas using follow-up diagnostics and/focus groups to work towards a valid diagnosis. In your typical consulting engagements, this process would be similar in nature to a focus group, although instead of using a team of high-price and often billed-by-the-hour consultants, we let our machine learning-based algorithm tell us what type of follow-up data we need to work towards a plan of action.
Program: During the program phase, you will partner with key stakeholders to bring transformation experiences to your people and measurable growth to their organization.
This phase of the LEON 4P Matrix can include:
Perform: During the Perform phase, you will review and quantify the impact of any interventions taken using follow-up diagnostic data to further expand on the recommendation model and to quantify the impact of your investment using similar models discussed above. Furthermore, you can use external data sources to enrich the data set and move closer to measuring the impact and success of your organizational health strategy. This process allows us to use the four models discussed in this article to provide you both valid recommendations, but most importantly, a measurable and quantifiable approach to improving the health of your organization.
Rapid changes in the marketplace have now led organizations to try to understand issues such as employee burnout, mental health, and overall resiliency at a scale that would have been unimaginable just a few years ago. With LEON, it's now possible to maximize organizational health by using real-time intelligent data, and a predictive analytics framework to help you quantify organizational health.
This is what has been missing until now: previous iterations of company wellness solutions still relied on wellness perks and company culture and lacked a contextual understanding of the long-term adaptability of an organization. All of this meant they were still tied to a faulty sense of company wellness (because it was hard to quantify) and more importantly, how to improve it.
But when we discuss organizational health we don't imply businesses will necessarily be purchasing more gym memberships and hiking the Himalayas as a team.
Instead, we see businesses improving organizational health by using intelligent data, better recommendations and a quantifiable ROI. This is what LEON can offer. It gives you a deep understanding of team health, resiliency, and organizational culture. But more importantly, as the data set becomes more robust, we work towards making the investment in the health of your people and organization a process which has real, validated measures on ROI and an understandable impact on company profitability.